Caprio v. New York State Dept. of Taxation & Fin.

At issue in this case was whether the three-and-a-half year retroactive application of the 2010 amendments to N.Y. Tax Law 632(a)(2) were unconstitutional as applied to Plaintiffs under the due process clauses of the federal and state constitutions. Plaintiffs, Florida residents, brought this action claiming that the 2010 amendments retroactively imposed a tax on the 2007 sale of the stock of their subchapter S corporation in a deemed asset sale, for which they utilized the installment method of accounting for federal tax purposes, and seeking a declaration that the application of the amendments was unconstitutional as applied to them. Supreme Court granted summary judgment for Defendants, determining that the amendments were curative and, because Plaintiffs failed to show reasonable reliance on any relevant pre-amendment law, retroactive application of the statute was justified. The Appellate Division reversed. The Court of Appeals reversed, holding that retroactive application of the 2010 amendments did not violate Plaintiffs’ due process rights. View "Caprio v. New York State Dept. of Taxation & Fin." on Justia Law