Senate Bill S536

                                 BILL NUMBER:  S536

 TITLE OF BILL :

An act to amend the tax law, in relation to establishing the
recordkeeping voluntary compliance program for purposes of sales tax
liability

 PURPOSE :

This bill would add a new section 1135-a to the tax law to require the
establishment of a sales tax recordkeeping voluntary compliance
program which will provide an incentive for taxpayers to facilitate
and modernize their recordkeeping ability for purposes of complying
with the state sales tax law.

 SUMMARY OF PROVISIONS :

Section 1: Adds a new section 1135-a to the tax law to require that
the Commissioner of Taxation and Finance develop and administer a
voluntary recordkeeping sales tax compliance program which would allow
the Commissioner to enter into agreements with eligible taxpayers and
require that they maintain books and records for purposes of complying
with the sales tax in the future which may include, but is not limited
to the use of a point of sale system.

              

Section 2: Adds a new tax law section 1138 to provide that a taxpayer
who is a party to a recordkeeping voluntary compliance agreement may
not be subject to an estimation of sales taxes due which is based upon
the department's use of external indices, unless the taxpayer is in
substantial non-compliance with the voluntary recordkeeping agreement.

Section 3: Sets forth the effective date.

 JUSTIFICATION :

New York State has hired hundreds of new auditors over the past few
years and they have caused much hardship upon unsuspecting business
taxpayers who may not have been fully aware of the complexities of New
York State's sales tax requirements. Thousands of retail merchants
across the state have been subject to new audit tactics apparently
designed to generate as much revenue as possible. The best way to
avoid a sales tax assessment is to be properly informed of the sales
tax laws and to keep books and records in accordance with the
Department of Tax and Finances requirements. Failure to do so will
result in a merchant's sales tax assessment being determined based on
an external index which may reflect much higher prices for goods and
services than the price actually received by the merchant and
reflected on the merchant's books and records. The current system can
result in extremely high and inaccurate assessments. Relatively small
errors in recordkeeping by retail merchants can expose them to large
and sometimes outrageous assessments for outstanding sales taxes.

This bill provides an incentive to retail merchants to take certain
actions designed to ensure they maintain complete auditable sales
records. It increases the likelihood that these merchants will comply
with the sales tax laws, generating more revenue for the state and
reducing the need for sales tax enforcement expenditures. In addition,
by providing this incentive to retail merchants, the state is also
helping to ensure their long term stability. Given the significant
economic benefits these small business owners generate for the state,
helping them to succeed is a worthwhile government venture.

 LEGISLATIVE HISTORY :


2015,2016: S.1977/A.4520 Referred to Investigations and Government
Operations
2013,2014: S.2691/A.5937 Referred to Investigations and Government
Operations
2011,2012: S.4944/A.8069 Referred to Investigations and Government
Operations

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect immediately.