NY State Senate Bill S971

senate Bill S971

2019-2020 Legislative Session

Requires when external indices are utilized to determine sales and use tax due, such indices to reflect local economic conditions

download bill text pdf

Current Bill Status - In Senate Committee Finance Committee

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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Actions

view actions (1)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 09, 2019	referred to finance

Co-Sponsors

S971 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: Tax Law
Laws Affected:: Amd §1138, Tax L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S4943
2013-2014: S2710
2015-2016: S3013
2017-2018: S561

S971 (ACTIVE) - Summary

Requires the commissioner of taxation and finance, when using external indices to determine sales and compensating use tax due because of failure to file a return or filing of an incorrect return, to use external indices which reflect local economic conditions.

S971 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S971

SPONSOR: YOUNG
 
TITLE OF BILL:  An act to amend the tax law, in relation to the deter-
mination of sales and compensating use taxes due

 
PURPOSE:

This bill would require that any external economic indices used by the
Department of Taxation and Finance in estimating sales tax payments due
must utilize regional economic indices to reflect the wide variation of
the costs of goods and services sold throughout the state.

 
SUMMARY OF PROVISIONS:

Section 1: Amends subdivision (a) of section 1138 of the tax law by
adding a new paragraph (5) to require that whenever the Commissioner of
Taxation and Finance is determining the amount of sales tax owed, in
instances in where a required sales tax filing has not been made or
there has been an incorrect or insufficient sales tax payment, the
Commissioner must utilize a regional economic index to estimating the

correct tax payment to be made.

 
JUSTIFICATION:

New York State has hired hundreds of new auditors over the past several
years and unleashed them on unsuspecting taxpayers. Thousands of retail
merchants across the state have been subject to new audit tactics appar-
ently designed to generate as much revenue as possible. The most insid-
ious of these tactics is the practice of determining a merchant's sales
tax assessment based on external indices rather than the merchant's
records. Oftentimes, the external indices are not based on local stand-
ards thereby leading to drastically distorted assessments far exceeding
any reasonable estimate. One of the most common indices used by the
Department is based on an analysis of less than 100 businesses. The
Department continues to use this index, in spite of a specific note by
the study's authors that it is not statically reliable for such
purposes.

The state legislature and the executive have most recently acknowledged
the need for the state to accommodate regional differences in pricing,
wages and purchasing power through the enactment of a minimum wage law
that imposes a differing minimum wage threshold based upon regional
economic differences within the state.

This bill would expand this policy by prohibiting the Department of Tax
and Finance from using any external index that does not reflect local
economic conditions. It ensures that anytime a sales tax assessment is
imposed on a retail merchant not based on the merchant's records it will
be more equitable since the merchant's local area will be the basis of
comparison. These business owners are the backbone of the state's econo-
my and deserve to have their taxes determined in a fair manner. This
bill will restore fairness to the tax assessment process and help retail
merchants in New York live up to their legitimate tax assessments.

 
LEGISLATIVE HISTORY:

2018: S.561/A.3924 Committed to Rules
2017: S.561/A.3924 Passed Senate
2015,2016: S.3013/A.4569 Passed Senate
2014: S.2710/A.5936 Committed to Rules
2013: S.2710/A.5936 Passed Senate
2011,2012: S.4943/A.8129 Passed the Senate

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

S971 (ACTIVE) - Bill Text download pdf


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

                                   971

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                             January 9, 2019
                               ___________

Introduced  by Sens. YOUNG, RANZENHOFER -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Finance

AN ACT to amend the tax law, in relation to the determination  of  sales
  and compensating use taxes due

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

  Section 1. Subdivision (a) of section 1138 of the tax law  is  amended
by adding a new paragraph 5 to read as follows:
  (5)  WHENEVER  A RETURN REQUIRED BY THIS ARTICLE IS NOT FILED, OR IF A
RETURN WHEN FILED IS INCORRECT OR INSUFFICIENT, AND THE  AMOUNT  OF  TAX
DUE  IS  DETERMINED  BY THE COMMISSIONER FROM SUCH INFORMATION AS MAY BE
AVAILABLE PURSUANT TO PARAGRAPH ONE OF THIS SUBDIVISION, ANY    EXTERNAL
INDICES  USED  TO  ESTIMATE THE TAX DUE SHALL REFLECT THE LOCAL ECONOMIC
CONDITIONS.
  § 2. This act shall take effect immediately.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03735-01-9

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