Senate Bill S3013

                                 BILL NUMBER:  S3013           Revised 04/27/16

 TITLE OF BILL :

An act to amend the tax law, in relation to the determination 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 :

Section 1: Amends subdivision (a) of section 1138 of the tax law by
adding a new paragraph (5)to require that whenever 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
several years and unleashed them on unsuspecting taxpayers.  Thousands
of retail merchants across the state have been subject to new audit
tactics apparently designed to generate as much revenue as possible.
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.

The state legislature and the executive have most recently
acknowledged the need for the state to accommodate regional
differences in pricing, wages and purchasing power through the
enactment of a minimum wage law that imposes a differing minimum wage
threshold based upon regional economic differences within the state.

This bill would expand this policy by prohibiting 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 equitable 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 :

2015: S.3013/A.4569 Passed Senate
2014: S.2710/A.5936 Committed to Rules
2013: S.2710/A.5936 Passed Senate
2011,2012: S.4943/A.8129 Passed the Senate

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect immediately.