Opinion
November 22, 1994
Appeal from the Supreme Court, New York County [Seymour Schwartz, J.].
The taxing authority properly applied section 6-4 of the New York City Unincorporated Business Tax Regulations (19 R.C.N.Y. 28-06) retroactively to the facts of this case (see, Matter of Varrington Corp. v. City of N.Y. Dept. of Fin., 201 A.D.2d 282, lv granted 83 N.Y.2d 758). Tax legislation should be implemented in a manner that gives effect to the economic substance of the transaction (595 Investors Ltd. Partnership v. Biderman, 140 Misc.2d 441, 445) and the taxing authority may not be required to acquiesce in the taxpayer's election of a form for doing business but rather may look to the reality of the tax event and sustain or disregard the effect of the fiction in order to best serve the purposes of the tax statute (Higgins v. Smith, 308 U.S. 473; Matter of Chemical Bank v. Tully, 94 A.D.2d 1).
We have considered petitioners' remaining arguments and find them to be without merit.
Concur — Sullivan, J.P., Rosenberger, Ellerin, Kupferman and Williams, JJ.