The New York State Senate

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

                                 8056--A

                            I N  S E N A T E

                             March 13, 2020
                               ___________

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

AN ACT to amend the tax law,  in  relation  to  establishing  a  tax  on
  digital ads

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

  Section 1. This act shall be known and may be cited as the "digital ad
tax act (DATA)".
  § 2. The tax law is amended by adding a new  article  15  to  read  as
follows:
                               ARTICLE 15
                           TAX ON DIGITAL ADS
SECTION 330. DEFINITIONS.
        331. IMPOSITION OF TAX.
        332. RETURNS.
        333. TAX PAYMENT.
  § 330. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  1.  THE  TERM "ANNUAL GROSS REVENUES" MEANS INCOME OR REVENUE FROM ALL
SOURCES IN NEW YORK  STATE,  BEFORE  ANY  EXPENSES  OR  TAXES,  COMPUTED
ACCORDING TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
  2.  THE TERM "ASSESSABLE BASE" MEANS THE ANNUAL GROSS REVENUES DERIVED
FROM DIGITAL ADVERTISING SERVICES IN THE STATE.
  3. THE TERM  "DIGITAL  ADVERTISING  SERVICES"  INCLUDES  ADVERTISEMENT
SERVICES ON A DIGITAL INTERFACE, INCLUDING ADVERTISEMENTS IN THE FORM OF
BANNER ADVERTISING, SEARCH ENGINE ADVERTISING, INTERSTITIAL ADVERTISING,
AND OTHER COMPARABLE ADVERTISING SERVICES, THAT USE PERSONAL INFORMATION
ABOUT THE PEOPLE THE ADS ARE BEING SERVED TO.
  4.  THE TERM "DIGITAL INTERFACE" MEANS ANY TYPE OF SOFTWARE, INCLUDING
A WEBSITE, PART OF A WEBSITE, OR APPLICATION, THAT A  USER  IS  ABLE  TO
ACCESS.

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

                                                           LBD15815-03-0

S. 8056--A                          2

  5. (A) THE TERM "PERSON" MEANS AN INDIVIDUAL, RECEIVER, TRUSTEE, GUAR-
DIAN,  PERSONAL REPRESENTATIVE, FIDUCIARY, OR REPRESENTATIVE OF ANY KIND
AND ANY PARTNERSHIP, FIRM, ASSOCIATION, CORPORATION, OR OTHER ENTITY.
  (B)  THE  TERM "PERSON", UNLESS EXPRESSLY PROVIDED OTHERWISE, DOES NOT
INCLUDE A GOVERNMENTAL ENTITY OR A UNIT OR INSTRUMENTALITY OF A  GOVERN-
MENTAL ENTITY.
  6.  THE  TERM  "USER"  MEANS  AN  INDIVIDUAL  OR  ANY OTHER PERSON WHO
ACCESSES A DIGITAL INTERFACE WITH A DEVICE.
  § 331. IMPOSITION OF TAX. 1. THERE IS HEREBY IMPOSED AND SHALL BE PAID
A TAX ON THE ANNUAL GROSS  REVENUES  ANY  PERSON  DERIVES  FROM  DIGITAL
ADVERTISING SERVICES IN THE STATE.
  2. THE TAX IMPOSED SHALL BE APPORTIONED TO THE STATE BY THE APPORTION-
MENT  FACTOR  DETERMINED  PURSUANT  TO  THIS  SECTION. THE APPORTIONMENT
FACTOR IS A FRACTION, DETERMINED BY INCLUDING ONLY THOSE  RECEIPTS,  NET
INCOME,  NET  GAINS,  AND OTHER ITEMS DESCRIBED IN THIS SECTION THAT ARE
INCLUDED IN THE COMPUTATION OF THE TAXPAYER'S BUSINESS  INCOME  FOR  THE
TAXABLE YEAR. THE NUMERATOR OF THE APPORTIONMENT FRACTION SHALL BE EQUAL
TO  THE  SUM OF ALL THE AMOUNTS REQUIRED TO BE INCLUDED IN THE NUMERATOR
PURSUANT TO THE PROVISIONS OF THIS SECTION AND THE  DENOMINATOR  OF  THE
APPORTIONMENT  FRACTION  SHALL  BE  EQUAL  TO THE SUM OF ALL THE AMOUNTS
REQUIRED TO BE INCLUDED IN THE DENOMINATOR PURSUANT TO THE PROVISIONS OF
THIS SECTION.
  3. (A) THE ANNUAL GROSS REVENUES OF  A  PERSON  DERIVED  FROM  DIGITAL
ADVERTISING  IN  THE  STATE  SHALL  BE  INCLUDED IN THE NUMERATOR OF THE
APPORTIONMENT FRACTION. THE ANNUAL GROSS REVENUES OF  A  PERSON  DERIVED
FROM  DIGITAL  ADVERTISING IN THE UNITED STATES SHALL BE INCLUDED IN THE
DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (B) THE COMMISSIONER SHALL ADOPT REGULATIONS TO DETERMINE  THE  AMOUNT
OF REVENUE DERIVED FROM EACH STATE IN WHICH DIGITAL ADVERTISING SERVICES
ARE PROVIDED.
  4. THE DIGITAL ADVERTISING GROSS REVENUES TAX RATE IS:
  (A)  TWO AND ONE-HALF PERCENT OF THE ASSESSABLE BASE FOR A PERSON WITH
GLOBAL ANNUAL GROSS REVENUES OF ONE HUNDRED MILLION DOLLARS THROUGH  ONE
BILLION DOLLARS;
  (B) FIVE PERCENT OF THE ASSESSABLE BASE FOR A PERSON WITH GLOBAL ANNU-
AL  GROSS  REVENUES  OF  ONE  BILLION  ONE  DOLLARS THROUGH FIVE BILLION
DOLLARS;
  (C) SEVEN AND ONE-HALF PERCENT OF THE ASSESSABLE  BASE  FOR  A  PERSON
WITH  GLOBAL  ANNUAL  GROSS REVENUES OF FIVE BILLION ONE DOLLARS THROUGH
FIFTEEN BILLION DOLLARS; AND
  (D) TEN PERCENT OF THE ASSESSABLE BASE FOR A PERSON WITH GLOBAL ANNUAL
GROSS REVENUES EXCEEDING FIFTEEN BILLION DOLLARS.
  § 332. RETURNS. 1. EACH PERSON THAT, IN A CALENDAR  YEAR,  HAS  ANNUAL
GROSS REVENUES DERIVED FROM DIGITAL ADVERTISING SERVICES IN THE STATE OF
AT  LEAST  ONE MILLION DOLLARS SHALL COMPLETE, UNDER OATH, AND FILE WITH
THE COMMISSIONER A RETURN, ON OR BEFORE APRIL FIFTEENTH THE YEAR FOLLOW-
ING THE EFFECTIVE DATE OF THIS ARTICLE.
  2. (A) EACH PERSON THAT REASONABLY EXPECTS THE PERSON'S  ANNUAL  GROSS
REVENUES  DERIVED  FROM  DIGITAL  ADVERTISING  SERVICES  IN THE STATE TO
EXCEED ONE MILLION DOLLARS SHALL COMPLETE, UNDER OATH, AND FILE WITH THE
COMMISSIONER  A  DECLARATION  OF  ESTIMATED  TAX,  ON  OR  BEFORE  APRIL
FIFTEENTH OF THAT YEAR.
  (B)  ANY  PERSON REQUIRED TO FILE A DECLARATION OF ESTIMATED TAX FOR A
TAXABLE YEAR PURSUANT  TO  PARAGRAPH  (A)  OF  THIS  SUBDIVISION,  SHALL
COMPLETE AND FILE WITH THE COMMISSIONER A QUARTERLY ESTIMATED TAX RETURN

S. 8056--A                          3

ON OR BEFORE JUNE FIFTEENTH, SEPTEMBER FIFTEENTH, AND DECEMBER FIFTEENTH
OF SUCH YEAR.
  3. ANY PERSON REQUIRED TO FILE A RETURN PURSUANT TO THIS SECTION SHALL
FILE  WITH THE RETURN AN ATTACHMENT THAT STATES ANY INFORMATION THAT THE
COMMISSIONER REQUIRES TO DETERMINE ANNUAL GROSS  REVENUES  DERIVED  FROM
DIGITAL ADVERTISING SERVICES IN THE STATE.
  4.  ANY PERSON REQUIRED TO FILE A RETURN UNDER SUBDIVISION TWO OF THIS
SECTION SHALL MAINTAIN RECORDS OF DIGITAL ADVERTISING SERVICES  PROVIDED
IN  THE STATE AND THE BASIS FOR THE CALCULATION OF THE DIGITAL ADVERTIS-
ING GROSS REVENUES TAX OWED.
  § 333. TAX PAYMENT. 1. EXCEPT AS PROVIDED IN SUBDIVISION TWO  OF  THIS
SECTION,  EACH  PERSON  REQUIRED  TO  FILE  A RETURN UNDER SECTION THREE
HUNDRED THIRTY-TWO OF THIS ARTICLE SHALL  PAY  THE  DIGITAL  ADVERTISING
GROSS  REVENUES TAX WITH THE RETURN THAT COVERS THE PERIOD FOR WHICH THE
TAX IS DUE.
  2. ANY PERSON REQUIRED TO FILE  ESTIMATED  DIGITAL  ADVERTISING  GROSS
REVENUES  TAX  RETURNS UNDER PARAGRAPH (B) OF SUBDIVISION TWO OF SECTION
THREE HUNDRED THIRTY-TWO OF THIS ARTICLE SHALL PAY:
  (A) AT LEAST TWENTY-FIVE PERCENT OF THE ESTIMATED DIGITAL  ADVERTISING
GROSS REVENUES TAX SHOWN ON THE DECLARATION OR AMENDED DECLARATION FOR A
TAXABLE YEAR:
  I.  WITH  THE DECLARATION OR AMENDED DECLARATION THAT COVERS THE YEAR;
AND
  II. WITH EACH QUARTERLY RETURN FOR THAT YEAR; AND
  (B) ANY UNPAID DIGITAL ADVERTISING GROSS REVENUES  TAX  FOR  THE  YEAR
SHOWN ON THE PERSON'S RETURN THAT COVERS THAT YEAR WITH THE RETURN.
  §  3.  The  tax law is amended by adding a new section 1816 to read as
follows:
  § 1816. DIGITAL AD TAX. ANY WILLFUL ACT  OR  OMISSION  BY  ANY  PERSON
WHICH  CONSTITUTES  A  VIOLATION  OF ANY PROVISION OF ARTICLE FIFTEEN OF
THIS CHAPTER SHALL CONSTITUTE A MISDEMEANOR.
  § 4. This act shall take effect immediately and shall apply to taxable
years beginning on and after January 1, 2021.