Appellate Division, Third Department · February 5, 2026 · 251 AD3d 57
Matter of Gelco Corp. v State of N.Y. Tax Appeals Trib.
Read the official decision: 251 AD3d 57
Holding The court held that under Tax Law § 1111 (i) (B), the taxable base for long-term commercial vehicle leases with terminal rental adjustment clauses (TRAC) is the consideration actually contracted to be given, which includes lease-end adjustments. Consequently, a lessor is entitled to a credit for sales tax paid on provisional rent amounts that are later refunded to the lessee.
The court’s words
The operative statutory phrase here is ‘‘consideration . . . contracted to be given,’’ which plainly defines the taxable base in terms of the parties’ contractual obligations
251 AD3d 57, at the official text
any amount refunded to the lessee was never truly contracted to be paid and therefore exceeds the statutory tax base
251 AD3d 57, at the official text
Tax Law § 1111 (i) (B) therefore must be read to entitle the taxpayer to recover overpaid tax
251 AD3d 57, at the official text
| Court | Appellate Division, Third Department |
|---|---|
| Decided | February 5, 2026 |
| Citation | 251 AD3d 57 |
| Area of law | Tax |
| Week | Week ending February 7, 2026 |
| Official text | Official decision: 251 AD3d 57 |
| Source feed | New York advance sheet: 26nyadv35.pdf |
| Law Watch record id | 72 |
| Caption in the source feed | GELCO CORP v NY TAX APPEALS |
Recommended citation
ESQ HQ, New York Law Watch, Matter of Gelco Corp. v State of N.Y. Tax Appeals Trib., 251 AD3d 57 (Appellate Division, Third Department, February 5, 2026), https://esqhq.com/decisions/251-ad3d-57/
How this record was made
Holding drafted by Law Watch’s in-house model, graded by three reviewers; every quotation verified word for word against the official text.
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