senate Bill S5140B

Signed by Governor

Establishes the taxpayer refund choice act and affirms the right of state residents to receive personal income tax refunds by paper check

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor
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actions

  • 03 / May / 2011
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 02 / Jun / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 03 / Jun / 2011
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 03 / Jun / 2011
    • PRINT NUMBER 5140A
  • 08 / Jun / 2011
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 08 / Jun / 2011
    • PRINT NUMBER 5140B
  • 13 / Jun / 2011
    • REPORTED AND COMMITTED TO RULES
  • 13 / Jun / 2011
    • ORDERED TO THIRD READING CAL.1195
  • 16 / Jun / 2011
    • PASSED SENATE
  • 16 / Jun / 2011
    • DELIVERED TO ASSEMBLY
  • 16 / Jun / 2011
    • REFERRED TO WAYS AND MEANS
  • 16 / Jun / 2011
    • SUBSTITUTED FOR A6997B
  • 16 / Jun / 2011
    • ORDERED TO THIRD READING RULES CAL.373
  • 16 / Jun / 2011
    • PASSED ASSEMBLY
  • 16 / Jun / 2011
    • RETURNED TO SENATE
  • 05 / Aug / 2011
    • DELIVERED TO GOVERNOR
  • 17 / Aug / 2011
    • SIGNED CHAP.479

Summary

Establishes the taxpayer refund choice act and affirms the right of state residents to receive personal income tax refunds by paper check and requires the department to fully describe any debit card or direct deposit program.

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Bill Details

See Assembly Version of this Bill:
A6997B
Versions:
S5140
S5140A
S5140B
Legislative Cycle:
2011-2012
Law Section:
Tax Law
Laws Affected:
Add ยง3013, Tax L

Sponsor Memo

BILL NUMBER:S5140B

TITLE OF BILL:
An act
to amend the tax law, in relation to
establishing the taxpayer refund choice act and
affirming the right of state
residents to receive personal income tax refunds
by paper check
and requiring the department of taxation and finance to
fully describe any debit card or direct deposit program; and
providing for the repeal of such provisions upon expiration thereof

PURPOSE:
To ensure the right of state residents to continue to receive personal
income tax refunds by paper check in addition to any other options
that may be offered.

SUMMARY OF PROVISIONS:
Adds a new section 3013 to the Tax Law to provide that,
notwithstanding the adoption by the Tax Commissioner of any prepaid
debit card or direct deposit program for payment of personal income
tax refunds, all taxpayers are entitled: (1) to receive their
personal income tax refund by paper check; and (2) to opt out of any
prepaid debit card or direct deposit program.

The Department shall provide taxpayers with a clear written statement
setting forth these rights. If the Department implements a program to
pay refunds by prepaid debit card or direct deposit, the income tax
forms shall indicate that the taxpayer has the option of receiving
his or her refund by various methods, including by personal check,
and boxes shall be provided on the income tax forms to allow the
person to select the desired option.

In any written notice regarding prepaid debit cards, the Tax
Department shall describe all features of such program, such as
provisions and fees regarding making withdrawals at ATMs or making
purchases at the point of sale.

JUSTIFICATION:
Every year millions of New Yorkers overpay their state and local taxes
on the wages they receive. These overpaid funds remain the rightful
property of the taxpayers. Taxpayers are entitled to the timely
refund of their overpayment and should be able to receive their
refunds in a manner that is most convenient, understandable and best
suited to their individual financial needs.

Currently, the New York State Department of Taxation and Finance plans
to transition all personal income tax refund payments to a mandatory
direct deposit/prepaid debit card platform.
Although prepaid card programs may appear to be attractive due to

potential cost savings to the agency itself, they include fees and
costs to taxpayers which may be difficult to understand or keep track
of, including ATM usage fees, negative balance fees, bank fees and
other charges.
Additionally, many taxpayers do not have bank accounts or convenient
access to bank branches in their communities. Due to minimum balance
requirements, overdraft fees, and other requirements, many low and
moderate income consumers are unable to maintain bank accounts, and
likely do not have access to direct deposit accounts. Thus, any
program that forces New Yorkers to receive tax refunds in a manner
that is not suited to their individual circumstances will negatively
and disproportionately impact low-and moderate-income citizens and
their communities.

It is the existing policy of the State of New York that its citizens
have the choice to receive their wages in the manner which best suits
their needs. Existing state law requires that private employers, who
seek to utilize prepaid debit "payroll" cards for delivery of
employee wages, must offer their employees the ability to "opt-out"
of such payroll card programs and the right to continue to receive
paper checks. Likewise, these same considerations should also be
extended to taxpayers who are owed personal income tax refunds.

FISCAL IMPLICATIONS:
This legislation should not result in additional
costs, since refunds are already being paid via direct deposit and
personal checks.

EFFECTIVE DATE:
The ninetieth day after it shall have become law, and
shall expire and be deemed repealed five years after such effective
date.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5140--B

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by Sens. FARLEY, DeFRANCISCO, GRIFFO, GRISANTI -- read twice
  and ordered printed, and when printed to be committed to the Committee
  on Investigations and Government Operations -- reported favorably from
  said committee and committed to the Committee on Finance --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee  --  committee  discharged,  bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the tax law, in relation to  establishing  the  taxpayer
  refund  choice  act  and  affirming  the  right  of state residents to
  receive personal income tax refunds by paper check and  requiring  the
  department of taxation and finance to fully describe any debit card or
  direct   deposit  program;  and  providing  for  the  repeal  of  such
  provisions upon expiration thereof

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  This act shall be known and may be cited as the "taxpayer
refund choice act".
  S 2. The tax law is amended by adding a new section 3013  to  read  as
follows:
  S  3013. METHOD OF PAYMENT OF PERSONAL INCOME TAX REFUNDS; NOTICE. (A)
NOTWITHSTANDING THE ADOPTION BY THE COMMISSIONER OF  ANY  PREPAID  DEBIT
CARD  OR  DIRECT  DEPOSIT  PROGRAM  FOR  PAYMENT  OF PERSONAL INCOME TAX
REFUNDS, ALL TAXPAYERS ARE ENTITLED:
  (1) TO RECEIVE PERSONAL INCOME TAX REFUNDS BY PAPER CHECK; AND
  (2) TO OPT OUT OF ANY PREPAID DEBIT CARD OR DIRECT DEPOSIT PROGRAM FOR
PAYMENT OF TAX REFUNDS.
  (B) THE DEPARTMENT SHALL PROVIDE TAXPAYERS WITH A CLEAR WRITTEN STATE-
MENT SETTING FORTH THE TAXPAYER'S RIGHT:
  (1) TO RECEIVE TAX REFUND PAYMENTS BY PAPER CHECK; AND
  (2) TO OPT OUT OF ANY PREPAID DEBIT CARD OR DIRECT DEPOSIT PROGRAM.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10324-08-1

S. 5140--B                          2

  (C) IN THE EVENT THAT THE COMMISSIONER ELECTS TO IMPLEMENT  A  PROGRAM
PROVIDING  FOR  PAYMENT  OF PERSONAL INCOME TAX REFUNDS BY PREPAID DEBIT
CARD OR DIRECT DEPOSIT TO A DESIGNATED  ACCOUNT  OF  THE  TAXPAYER,  THE
DEPARTMENT  SHALL  AMEND  THE  FORMS  USED  TO  FILE PERSONAL INCOME TAX
RETURNS  TO REFLECT, IN THE AREA DESIGNATED FOR SELECTION OF OPTIONS FOR
PROCESSING OF REFUNDS, THAT THE TAXPAYER HAS THE OPTION OF RECEIVING HIS
OR HER TAX REFUND BY PERSONAL CHECK AND SHALL PROVIDE A  BOX  WHICH  THE
TAXPAYER MAY CHECK TO SELECT THAT OPTION.
  (D)  IN  ANY WRITTEN NOTICE REGARDING A PREPAID DEBIT CARD PROGRAM FOR
THE PAYMENT OF TAX REFUNDS, THE DEPARTMENT SHALL DESCRIBE  TO  TAXPAYERS
ALL  OF  THE FEATURES OF THE DEBIT CARD PROGRAM (E.G., WITHDRAWAL AT ANY
ATM OR POINT-OF-SALE USE), INCLUDING  ANY  FEE  OR  FEES  WHICH  MAY  BE
CHARGED TO THE TAXPAYER IN ACCESSING HIS OR HER TAX REFUND.
  S  3.  This  act shall take effect on the ninetieth day after it shall
have become a law and shall expire and be  deemed  repealed  five  years
after such effective date.

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