senate Bill S2710

When external indices are utilized to determine sales and use tax due, requires such indices to reflect local economic conditions

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Bill Status


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

  • 23 / Jan / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 30 / Apr / 2013
    • REPORTED AND COMMITTED TO FINANCE
  • 11 / Jun / 2013
    • REPORTED AND COMMITTED TO RULES
  • 11 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1243
  • 12 / Jun / 2013
    • PASSED SENATE
  • 12 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 12 / Jun / 2013
    • REFERRED TO WAYS AND MEANS
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 14 / Jan / 2014
    • REPORTED AND COMMITTED TO FINANCE
  • 06 / May / 2014
    • 1ST REPORT CAL.533
  • 07 / May / 2014
    • 2ND REPORT CAL.
  • 12 / May / 2014
    • ADVANCED TO THIRD READING
  • 20 / Jun / 2014
    • COMMITTED TO RULES

Summary

Requires the commissioner of taxation and finance, when using external indices to determine sales and compensating use tax due because of failure to file a return or filing of an incorrect return, to use external indices which reflect local economic conditions.

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Bill Details

See Assembly Version of this Bill:
A5936
Versions:
S2710
Legislative Cycle:
2013-2014
Current Committee:
Senate Rules
Law Section:
Tax Law
Laws Affected:
Amd ยง1138, Tax L
Versions Introduced in 2011-2012 Legislative Cycle:
S4943, A8129

Sponsor Memo

BILL NUMBER:S2710

TITLE OF BILL: An act to amend the tax law, in relation to the determi-
nation of sales and compensating use taxes due

PURPOSE: This bill would require that any external economic indices
used by the Department of Taxation and Finance in estimating sales tax
payments due must utilize regional economic indices to reflect the wide
variation of the costs of goods and services sold throughout the state.

SUMMARY OF PROVISIONS: This bill would amend subdivision (a) of section
1138 of the tax law by adding a new paragraph (5) to require that when-
ever the Commissioner of Taxation and Finance is determining the amount
of sales tax owed, in instances in where a required sales tax filing has
not been made or there has been an incorrect or insufficient sales tax
payment, the Commissioner must utilize a regional economic index to
estimating the correct tax payment to be made.

JUSTIFICATION: New York State has hired hundreds of new auditors over
the past few years and unleashed them on unsuspecting taxpayers. Thou-
sands of retail merchants across the state have been subject to new
audit tactics apparently designed to generate as much revenue as possi-
ble. The most insidious of these tactics is the practice of determining
a merchant's sales tax assessment based on external indices rather than
the merchant's records. Oftentimes the external indices are not based on
local standards thereby leading to drastically distorted assessments far
exceeding any reasonable estimate. One of the most common indices used
by the Department is based on an analysis of less than 100 businesses.
The Department continues to use this index in spite of a specific note
by the study's authors that it is not statically reliable for such
purposes. This bill would prohibit the Department of Tax and Finance
from using any external index that does not reflect local economic
conditions. It ensures that anytime a sales tax assessment is imposed on
a retail merchant not based on the merchant's records it will be more
fair since the merchant's local area will be the basis of comparison.
These business owners are the backbone of the state's economy and
deserve to have their taxes determined in a fair manner. This bill will
restore fairness to the tax assessment process and help retail merchants
in New York live up to their legitimate tax assessments.

LEGISLATIVE HISTORY: 2011,2012: S.4943/A.8129 Passed the Senate

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  2710

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 23, 2013
                               ___________

Introduced  by Sens. YOUNG, RANZENHOFER -- read twice and ordered print-
  ed, and when printed to be committed  to  the  Committee  on  Investi-
  gations and Government Operations

AN  ACT  to amend the tax law, in relation to the determination of sales
  and compensating use taxes due

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

  Section  1.  Subdivision (a) of section 1138 of the tax law is amended
by adding a new paragraph 5 to read as follows:
  (5) WHENEVER A RETURN REQUIRED BY THIS ARTICLE IS NOT FILED, OR  IF  A
RETURN  WHEN  FILED  IS INCORRECT OR INSUFFICIENT, AND THE AMOUNT OF TAX
DUE IS DETERMINED BY THE COMMISSIONER FROM SUCH INFORMATION  AS  MAY  BE
AVAILABLE  PURSUANT  TO PARAGRAPH ONE OF THIS SUBDIVISION, ANY  EXTERNAL
INDICES USED TO ESTIMATE THE TAX DUE SHALL REFLECT  THE  LOCAL  ECONOMIC
CONDITIONS.
  S 2. This act shall take effect immediately.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06950-01-3

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