New York: New York City Finance Department Determines CRT Treatment of Amounts Paid Under Lease Termination Agreement

The New York City Department of Finance (DOF) March 12 determined in a letter ruling the commercial rent tax (CRT) treatment of amounts paid under an agreement for the early termination of a lease. Taxpayer and its landlord entered into the termination agreement with a termination date contingent on the landlord obtaining lender consent to the termination. Taxpayer, in the interim, made a rental payment and later sought clarification of the application of CRT. The DOF noted that: 1) the termination fee paid in monthly installments under the termination agreement wasn’t considered rent subject to CRT; 2) the interim payment ...