NY State Senate Bill 2019-S4301

Archive: Last Bill Status - In Senate Committee Budget And Revenue 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
Jan 08, 2020	referred to budget and revenue
Mar 07, 2019	referred to budget and revenue

2019-S4301 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§208 & 209, Tax L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S8170
2017-2018: S4624

2019-S4301 (ACTIVE) - Summary

Relates to the use of fulfillment services of certain persons.

2019-S4301 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4301

SPONSOR: RANZENHOFER
 
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 main-
taining 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::

2016 - S.8170-A - RULES
2017/18 - S.4624-A - INVESTIGATIONS/INVESTIGATIONS

 
FISCAL IMPLICATIONS::

To be determined.

 
EFFECTIVE DATE::

This act shall take effect January 1, 2020 and shall apply to taxable
years commencing after such date.

2019-S4301 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4301
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               March 7, 2019
                                ___________
 
 Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
   when printed to be committed to the Committee on Budget and Revenue
 
 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.
   §  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

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

                                                            LBD01733-01-9

 S. 4301                             2
 
 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
 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.
   §  3.  This  act  shall take effect January 1, 2020 and shall apply to
 taxable years commencing on or after such date.

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Senate Bill S4301

Sponsored By

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

2019-S4301 (ACTIVE) - Details

2019-S4301 (ACTIVE) - Summary

2019-S4301 (ACTIVE) - Sponsor Memo

2019-S4301 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S4301

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Sponsored By

Michael H. Ranzenhofer

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

2019-S4301 (ACTIVE) - Details

2019-S4301 (ACTIVE) - Summary

2019-S4301 (ACTIVE) - Sponsor Memo

2019-S4301 (ACTIVE) - Bill Text download pdf

Comments