Earlier this year the New York State legislature enacted a new provision of the Tax Law which provides for the suspension of a New York State driver’s license when an individual owes at least $10,000 in state taxes. This new law called for the Commissioners of the NYS Tax Department and DMV to reach an agreement on how to implement this new suspension program. That agreement has now been struck and the Tax Department has started to notify delinquent taxpayers. Once notified, taxpayers will have 60 days to pay the outstanding tax obligation or enter into a “satisfactory” payment arrangement to avoid the suspension. If a payment arrangement is set up, more than one missed payment in any twelve-month period will trigger a suspension of the license.
An individual’s ability to contest this proposed suspension is extremely limited. Drivers holding commercial licenses and individuals that are already subject to wage garnishments for child and spousal support obligations are exempt from this suspension process. Otherwise, anyone owing more than $10,000 (an amount that includes tax, interest and penalties) is subject to the new program.
Clearly this new provision is designed to motivate individuals to address their outstanding tax obligations. The impact of this new law could be quite disruptive for many people other than taxpayers, such as employers who depend upon their employee’s ability to drive. The State is just now beginning to issue notices under this new law and the effectiveness of this approach remains untested.