Senate Bill S4557A

                                
 
BILL NUMBER: S4557

SPONSOR: GOUNARDES
 
TITLE OF BILL:  An act to amend the tax law, in relation to the impo-
sition of sales taxes on goods or services purchased from small busi-
nesses

 
PURPOSE OR GENERAL IDEA OF BILL:

This legislation will help small businesses by lowering the sales tax
rate for goods and services purchased.

 
SUMMARY OF PROVISIONS:

Section one of this bill amends the opening paragraph of Tax Law section
1105 to provide that the State sales tax for purchases from a small
business, as defined in Economic Development Law section 131, shall be 2
percent. Section 131 provides that "a small business shall be deemed to
be one which is resident in this state, independently owned and oper-
ated, not dominant in its field and employs one hundred or less
persons."
              

Section two of this bill provides that this act shall take effect on the
first day of the sales tax quarterly period, as described in subdivision
(b) of section 1136 of the tax law, next commencing at least 90 days
after this act shall have become a law and shall apply in accordance
with the applicable transitional provisions of sections 1106 and 1217 of
the tax law.

 
CURRENT LAW:

Currently, unless an exemption applies, the State sales tax on goods and
services purchased within New York is 4%.

 
JUSTIFICATION:

According to the statistics released by the United States Small Business
Commission, in 2018, 50.2% of New York employees were employed by one of
the 2,143,667 New York small business.  Additionally, in 2015, the top
industries with the greatest percentage of small business employees
were: Agriculture, Forestry, and Fishing and Hunting (92.1%),
Construction (90.7%), and Other Services (except Public Administration)
(86.2%).

Further, New York's small businesses accounted for over half of the
State's exports in 2015.

While these statistics are impressive, for New York ranked 36th in busi-
ness employment growth at 0.4%. We need to help increase the growth of
jobs in New York. Small businesses, which represent over half of the New
York employers, are poised to expand and increase employment. This bill
will help them expend in New York's second largest employment sector,
retail trade.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:
To be determined.

 
EFFECTIVE DATE:
This act shall take effect on the first day of the sales tax quarterly
period, as described in subdivision (b) of section 1136 of the tax law,
next commencing at least 90 days after this act shall have become a law
and shall apply in accordance with the applicable transitional
provisions of sections 1106 and 1217 of the tax law.