Payment Processor Disputes Pay-First Rule In New York Top Court

Corporations don’t have to pay sales taxes as a prerequisite to contest them under New York’s constitution, a payment processor told the state high court Tuesday in its challenge of a $3.86 million sales tax bill.

The prepayment-in-full rule, which requires corporations to pay sales taxes so their suits challenging those taxes can be heard in court, is unfair and violates the New York Constitution because corporations have the right to sue as “natural persons,” Metro Enterprises Corp. said. Natural persons in New York don’t have to prepay sales taxes in order for their case to be heard in court, ...