NY State Senate Bill 2015-S8170A

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Oct 05, 2016	print number 8170a
Oct 05, 2016	amend and recommit to rules
Jul 29, 2016	referred to rules

Bill Amendments

Original

A (Active)

2015-S8170 - Details

Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Amd §§208 & 209, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S4624
2019-2020: S4301

2015-S8170 - Summary

Relates to the use of fulfillment services of certain persons.

2015-S8170 - Sponsor Memo

                                 BILL NUMBER:  S8170

 TITLE OF BILL :

An act to amend the tax law, in relation to the use of fulfillment
services of certain persons

 PURPOSE :

To provide that a foreign corporation does not subject itself to New
York State taxation simply by virtue of the use of fulfillment
services other than an affiliated person

 SUMMARY OF PROVISIONS :

Section 1 amends section 208 of the Tax Law to add a new paragraph 13
to define fulfillment services.

Section 2 amends subdivision 2 of section 209 of the Tax Law to add to
the list of activities that will not deem a foreign corporation to be
doing business, employing capital, owning or leasing property, or
maintaining an office in the state, or deriving receipts from activity
in this state, for the purposes of Article 9 of the Tax Law paragraph
(f) the use of fulfillment services of a person other than an
affiliated person and the ownership of property stored on the property
of such person in conjunction with such services.

Section 2 contains the effective date.

 JUSTIFICATION :

Prior to January 1, 2015, the Tax Law contained language similar to
that contained in this bill. By virtue of legislation in 2014, this
language was removed from the Tax Law.

Unfortunately, fulfillment services are very cost sensitive and
extremely mobile. They can usually store goods in warehouses in any of
the states surrounding New York just as easily as in New York, and if
using New York warehouses subject these foreign companies to expensive
New York taxes, there is in most cases simply no reason for them to
locate or remain in New York, and ample reason to leave.

The upshot of this is that with the changes in law passed in 2014,
which took effect in 2015, fulfillment operations in New York are
closing. The workers who were employed at these facilities are losing
their jobs. The owners of the warehouses are losing their tenants.
With warehouse buildings becoming vacant, localities potentially face
reductions in their assessment rolls. New York faces diminishing tax
benefits as the fulfillment industry leaves the state.

 LEGISLATIVE HISTORY :

New Bill.

 FISCAL IMPLICATIONS :

To be determined.

 EFFECTIVE DATE :
This act shall take effect January 1, 2017 and shall apply to taxable
years commencing after such date.

2015-S8170 - Bill Text download pdf

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

                                  8170

                            I N  S E N A T E

                              July 29, 2016
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in  relation  to  the  use  of  fulfillment
  services of certain persons

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

  Section 1. Section 208 of the tax law  is  amended  by  adding  a  new
subdivision 13 to read as follows:
  13.  THE  TERM  "FULFILLMENT SERVICES" SHALL MEAN ANY OF THE FOLLOWING
SERVICES PERFORMED BY AN ENTITY ON ITS PREMISES ON BEHALF OF A  PURCHAS-
ER:
  (A)  THE  ACCEPTANCE  OF  ORDERS ELECTRONICALLY OR BY MAIL, TELEPHONE,
TELEFAX OR INTERNET;
  (B) RESPONSES TO CONSUMER CORRESPONDENCE OR INQUIRES ELECTRONICALLY OR
BY MAIL, TELEPHONE, TELEFAX OR INTERNET;
  (C) BILLING AND COLLECTION ACTIVITIES; OR
  (D) THE SHIPMENT OF ORDERS FROM AN INVENTORY OF PRODUCTS  OFFERED  FOR
SALE BY THE PURCHASER.
  S  2.  Subdivision  2  of  section  209  of the tax law, as amended by
section 5 of part A of chapter 59 of the laws of  2014,  is  amended  to
read as follows:
  2.  A  foreign  corporation  shall not be deemed to be doing business,
employing capital, owning or leasing property, or maintaining an  office
in this state, or deriving receipts from activity in this state, for the
purposes  of  this  article,  by  reason  of (a) the maintenance of cash
balances with banks or trust companies in this state, or (b) the  owner-
ship  of  shares of stock or securities kept in this state, if kept in a
safe deposit box,  safe,  vault  or  other  receptacle  rented  for  the
purpose,  or if pledged as collateral security, or if deposited with one
or more banks or trust companies, or brokers who are members of a recog-
nized security exchange, in safekeeping or custody accounts, or (c)  the
taking  of any action by any such bank or trust company or broker, which
is incidental to the rendering of safekeeping or  custodian  service  to
such  corporation,  or (d) the maintenance of an office in this state by

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

                                                           LBD15932-01-6

S. 8170                             2

one or more officers or directors of the corporation who are not employ-
ees of the corporation if the corporation otherwise is not  doing  busi-
ness in this state, and does not employ capital or own or lease property
in  this  state, or (e) the keeping of books or records of a corporation
in this state if such books or records are not kept by employees of such
corporation and such corporation does not otherwise do business,  employ
capital,  own  or lease property or maintain an office in this state, or
(f) THE USE OF FULFILLMENT SERVICES OF A PERSON OTHER THAN AN AFFILIATED
PERSON AND THE OWNERSHIP OF PROPERTY STORED  ON  THE  PREMISES  OF  SUCH
PERSON  IN CONJUNCTION WITH SUCH SERVICES, OR (G) any combination of the
foregoing activities. FOR PURPOSES  OF  THIS  SUBDIVISION,  PERSONS  ARE
AFFILIATED  PERSONS WITH RESPECT TO EACH OTHER WHERE ONE OF SUCH PERSONS
HAS AN OWNERSHIP INTEREST OF MORE THAN FIVE PERCENT, WHETHER  DIRECT  OR
INDIRECT, IN THE OTHER, OR WHERE AN OWNERSHIP INTEREST OF MORE THAN FIVE
PERCENT, WHETHER DIRECT OR INDIRECT, IN THE OTHER, OR WHERE AN OWNERSHIP
INTEREST  OF MORE THAN FIVE PERCENT, WHETHER DIRECT OR INDIRECT, IS HELD
IN EACH OF SUCH PERSONS BY ANOTHER PERSON OR BY A GROUP OF OTHER PERSONS
WHICH ARE AFFILIATED PERSONS  WITH  RESPECT  TO  EACH  OTHER.  THE  TERM
"PERSON" IN THE PRECEDING SENTENCE AND IN PARAGRAPH (F) OF THIS SUBDIVI-
SION  SHALL  HAVE  THE  MEANING  ASCRIBED  THERETO BY SUBDIVISION (A) OF
SECTION ELEVEN HUNDRED ONE OF THIS CHAPTER.
  S 3. This act shall take effect January 1, 2017  and  shall  apply  to
taxable years commencing on or after such date.

2015-S8170A (ACTIVE) - Details

Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Amd §§208 & 209, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S4624
2019-2020: S4301

2015-S8170A (ACTIVE) - Summary

Relates to the use of fulfillment services of certain persons.

2015-S8170A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S8170A

 TITLE OF BILL :  An act to amend the tax law, in relation to the use
of fulfillment services of certain persons

 PURPOSE :

To provide that a foreign corporation does not subject itself to New
York State taxation simply by virtue of the use of fulfillment
services other than an affiliated person

 SUMMARY OF PROVISIONS :

Section 1 amends section 208 of the Tax Law to add a new paragraph 13
to define fulfillment services.

Section 2 amends subdivision 2 of section 209 of the Tax Law to add to
the list of activities that will not deem a foreign corporation to be
doing business, employing capital, owning or leasing property, or
maintaining an office in the state, or deriving receipts from activity
in this state, for the purposes of Article 9 of the Tax Law paragraph
(f) the use of fulfillment services of a person other than an
affiliated person and the ownership of property stored on the property
of such person in conjunction with such services.

Section 2 contains the effective date.

 JUSTIFICATION :

Prior to January 1, 2015, the Tax Law contained language similar to
that contained in this bill. By virtue of legislation in 2014, this
language was removed from the Tax Law.

Unfortunately, fulfillment services are very cost sensitive and
extremely mobile. They can usually store goods in warehouses in any of
the states surrounding New York just as easily as in New York, and if
using New York warehouses subject these foreign companies to expensive
New York taxes, there is in most cases simply no reason for them to
locate or remain in New York, and ample reason to leave.

The upshot of this is that with the changes in law passed in 2014,
which took effect in 2015, fulfillment operations in New York are
closing. The workers who were employed at these facilities are losing
their jobs. The owners of the warehouses are losing their tenants.
With warehouse buildings becoming vacant, localities potentially face
reductions in their assessment rolls. New York faces diminishing tax
benefits as the fulfillment industry leaves the state.

 LEGISLATIVE HISTORY :

New Bill.

 FISCAL IMPLICATIONS :

To be determined.

 EFFECTIVE DATE :
This act shall take effect January 1, 2017 and shall apply to taxable
years commencing after such date.

2015-S8170A (ACTIVE) - Bill Text download pdf

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

                                 8170--A

                            I N  S E N A T E

                              July 29, 2016
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on  Rules  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the  tax  law, in relation to the use of fulfillment
  services of certain persons

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

  Section  1.  Section  208  of  the  tax law is amended by adding a new
subdivision 13 to read as follows:
  13. THE TERM "FULFILLMENT SERVICES" SHALL MEAN ANY  OF  THE  FOLLOWING
SERVICES  PERFORMED BY AN ENTITY ON ITS PREMISES ON BEHALF OF A PURCHAS-
ER:
  (A) THE ACCEPTANCE OF ORDERS ELECTRONICALLY  OR  BY  MAIL,  TELEPHONE,
TELEFAX OR INTERNET;
  (B) RESPONSES TO CONSUMER CORRESPONDENCE OR INQUIRES ELECTRONICALLY OR
BY MAIL, TELEPHONE, TELEFAX OR INTERNET;
  (C) BILLING AND COLLECTION ACTIVITIES; OR
  (D)  THE  SHIPMENT OF ORDERS FROM AN INVENTORY OF PRODUCTS OFFERED FOR
SALE BY THE PURCHASER.
  S 2. Subdivision 2 of section 209  of  the  tax  law,  as  amended  by
section  5  of  part  A of chapter 59 of the laws of 2014, is amended to
read as follows:
  2. A foreign corporation shall not be deemed  to  be  doing  business,
employing  capital, owning or leasing property, or maintaining an office
in this state, or deriving receipts from activity in this state, for the
purposes of this article, by reason  of  (a)  the  maintenance  of  cash
balances  with banks or trust companies in this state, or (b) the owner-
ship of shares of stock or securities kept in this state, if kept  in  a
safe  deposit  box,  safe,  vault  or  other  receptacle  rented for the
purpose, or if pledged as collateral security, or if deposited with  one
or more banks or trust companies, or brokers who are members of a recog-
nized  security exchange, in safekeeping or custody accounts, or (c) the
taking of any action by any such bank or trust company or broker,  which

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

                                                           LBD15932-02-6

S. 8170--A                          2

is  incidental  to  the rendering of safekeeping or custodian service to
such corporation, or (d) the maintenance of an office in this  state  by
one or more officers or directors of the corporation who are not employ-
ees  of  the corporation if the corporation otherwise is not doing busi-
ness in this state, and does not employ capital or own or lease property
in this state, or (e) the keeping of books or records of  a  corporation
in this state if such books or records are not kept by employees of such
corporation  and such corporation does not otherwise do business, employ
capital, own or lease property or maintain an office in this  state,  or
(f)  THE  USE  OF  FULFILLMENT  SERVICES,  PROVIDED  RECEIPTS, INCLUDING
RECEIPTS PURSUANT TO SUCH SERVICES, DO NOT EXCEED THE THRESHOLD  SET  BY
PARAGRAPH (B) OF SUBDIVISION ONE OF THIS SECTION, OF A PERSON OTHER THAN
AN  AFFILIATED  PERSON AND THE OWNERSHIP OF PROPERTY STORED ON THE PREM-
ISES OF SUCH PERSON IN CONJUNCTION WITH SUCH SERVICES, OR (G) any combi-
nation of the foregoing activities. FOR PURPOSES  OF  THIS  SUBDIVISION,
PERSONS  ARE  AFFILIATED PERSONS WITH RESPECT TO EACH OTHER WHERE ONE OF
SUCH PERSONS HAS AN OWNERSHIP INTEREST OF MORE THAN FIVE PERCENT, WHETH-
ER DIRECT OR INDIRECT, IN THE OTHER, OR WHERE AN OWNERSHIP  INTEREST  OF
MORE  THAN  FIVE  PERCENT,  WHETHER DIRECT OR INDIRECT, IN THE OTHER, OR
WHERE AN OWNERSHIP INTEREST OF MORE THAN FIVE PERCENT, WHETHER DIRECT OR
INDIRECT, IS HELD IN EACH OF SUCH PERSONS BY  ANOTHER  PERSON  OR  BY  A
GROUP OF OTHER PERSONS WHICH ARE AFFILIATED PERSONS WITH RESPECT TO EACH
OTHER.  THE TERM "PERSON" IN THE PRECEDING SENTENCE AND IN PARAGRAPH (F)
OF THIS SUBDIVISION SHALL HAVE THE MEANING ASCRIBED THERETO BY  SUBDIVI-
SION (A) OF SECTION ELEVEN HUNDRED ONE OF THIS CHAPTER.
  S  3.  This  act  shall take effect January 1, 2017 and shall apply to
taxable years commencing on or after such date.

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Senate Bill S8170A

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Bill Amendments

2015-S8170 - Details

2015-S8170 - Summary

2015-S8170 - Sponsor Memo

2015-S8170 - Bill Text download pdf

2015-S8170A (ACTIVE) - Details

2015-S8170A (ACTIVE) - Summary

2015-S8170A (ACTIVE) - Sponsor Memo

2015-S8170A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8170A

Share this bill

Sponsored By

Michael H. Ranzenhofer

Archive: Last Bill Status - In Senate Committee Rules Committee

Bill Amendments

2015-S8170 - Details

2015-S8170 - Summary

2015-S8170 - Sponsor Memo

2015-S8170 - Bill Text download pdf

2015-S8170A (ACTIVE) - Details

2015-S8170A (ACTIVE) - Summary

2015-S8170A (ACTIVE) - Sponsor Memo

2015-S8170A (ACTIVE) - Bill Text download pdf

Comments