
    John KELLY, Anne Kelly, d/b/a Kelly Refrigeration, Plaintiffs-Appellees, v. NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, Defendant-Appellant.
    No. CIV.-85-444E.
    Bankruptcy No. BK-83-12059M.
    United States District Court, W.D. New York.
    Dec. 20, 1985.
    
      Howard Kleiman, Buffalo, N.Y., for plaintiffs-appellees.
    Patrick 0. McCormack, Asst. Atty. Gen., Buffalo, N.Y., for defendant-appellant.
   MEMORANDUM and ORDER

ELFVIN, District Judge.

This appeal from a February 26, 1985 Order and Judgment rendered by United States Bankruptcy Judge Beryl E. McGuire, 47 B.R. 602, involves a single legal issue — viz., whether a sales tax obligation to the State of New York is to be viewed as a non-dischargeable trust fund under section 507(a)(6)(C) of the Bankruptcy Code or as a dischargeable excise tax under section 507(a)(6)(E) of the Code. Judge McGuire had ruled that the taxes in issue were excise taxes and therefore dis-chargeable.

On April 22, 1985 the United States Court of Appeals for the Second Circuit rendered its decision in DeChiaro v. New York State Tax Com’n, 760 F.2d 432 (1985), holding in circumstances akin to those presented by the case at bar that such sales taxes are trust funds and hence not dischargeable.

Having considered appellees’ contentions regarding the hardships that would be imposed upon them due to a reversal of the Order of Judge McGuire as well as their argument that, in spite of the cited decision, the Order of the Bankruptcy Judge should be upheld as legally correct, this Court finds appellees’ positions to be unpersuasive.

Accordingly, it is hereby ORDERED that the February 26, 1985 Order and Judgment of Judge McGuire is reversed and that this action is remanded to the Bankruptcy Court for entry of a decision consistent with the holding in DeChiaro v. New York State Tax Com’n, supra.  