S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1453
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 11, 2021
                                ___________
 
 Introduced  by M. of A. PERRY -- read once and referred to the Committee
   on Ways and Means
 
 AN ACT to amend the tax law, in relation to requiring vendors to  estab-
   lish  mandatory  escrow  accounts for sales taxes collected, establish
   the mechanism for those  accounts  and  provide  the  state  with  the
   authority  to  have  immediate access to their collected taxes; and to
   repeal certain provisions of such law relating thereto
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph 1 of subdivision (a) of section 1132 of the tax
 law, as amended by section 1 of part DDD of chapter 59 of  the  laws  of
 2019, is amended to read as follows:
   (1)  (I)  Except  as otherwise permitted in subdivision (d) of section
 eleven hundred thirty-three of  this  part,  every  person  required  to
 collect  the tax shall collect the tax from the customer when collecting
 the price, amusement charge or rent to which it applies. If the customer
 is given any sales slip, invoice, receipt or other statement or memoran-
 dum of the price, amusement charge or rent  paid  or  payable,  the  tax
 shall be stated, charged and shown separately on the first of such docu-
 ments  given  to  him.  The  tax shall be paid to the person required to
 collect it as trustee for and on account of the state.
   (II) EVERY PERSON REQUIRED TO COLLECT THE TAX SHALL DEPOSIT  SUCH  TAX
 UPON COLLECTION INTO A SEPARATE ACCOUNT, IN TRUST FOR AND PAYABLE TO THE
 COMMISSIONER,  AS PROVIDED BY SUBPARAGRAPHS (III) AND (IV) OF THIS PARA-
 GRAPH AT A TIME AND IN A MANNER AS DETERMINED BY THE COMMISSIONER.   ALL
 AMOUNTS  DEPOSITED  IN  SUCH ACCOUNT SHALL BE KEPT IN SUCH ACCOUNT UNTIL
 PAID OVER TO THE COMMISSIONER.
   (III) IF THE PERSON REQUIRED  TO  COLLECT  THE  TAX  DOES  NOT  ACCEPT
 PAYMENTS  FROM  CUSTOMERS  THROUGH  CREDIT  OR DEBIT CARD BANKING TRANS-
 ACTIONS, THE PERSON REQUIRED TO  COLLECT  THE  TAX  SHALL  ESTABLISH  AN
 ACCOUNT  IN  ANY  BANKING  INSTITUTION  APPROVED BY THE COMMISSIONER AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05490-01-1

 A. 1453                             2
 
 LOCATED IN THIS STATE THE DEPOSITS IN WHICH ARE INSURED BY AN AGENCY  OF
 THE FEDERAL GOVERNMENT. THE ACCOUNT SHALL BE HELD IN TRUST FOR AND PAYA-
 BLE  TO  THE  COMMISSIONER AND THE AMOUNT OF SUCH TAX COLLECTED SHALL BE
 KEPT  IN SUCH ACCOUNT UNTIL PAYMENT OVER TO THE COMMISSIONER. THE PERSON
 REQUIRED TO COLLECT THE TAX SHALL AUTHORIZE THE  COMMISSIONER  TO  DEBIT
 SUCH ACCOUNT IN A MANNER DETERMINED BY THE COMMISSIONER.
   (IV)  IF  THE PERSON REQUIRED TO COLLECT THE TAX ACCEPTS PAYMENTS FROM
 CUSTOMERS USING CREDIT OR DEBIT CARDS, THE PERSON  REQUIRED  TO  COLLECT
 THE  TAX  SHALL  ESTABLISH A SEPARATE ESCROW ACCOUNT THROUGH AN APPROVED
 CREDIT CARD PROCESSING COMPANY (ACCPC) AND NOT THROUGH AN ESCROW ACCOUNT
 OF THE TYPE DESCRIBED IN  SUBPARAGRAPH  (III)  OF  THIS  PARAGRAPH.  THE
 COMMISSIONER SHALL BY REGULATION ESTABLISH STANDARDS FOR APPROVING CRED-
 IT  CARD  PROCESSING COMPANIES FOR OPENING AND ESTABLISHING ACCPC ESCROW
 ACCOUNTS FOR PERSONS REQUIRED TO PAY THE TAX. PERSONS COLLECTING THE TAX
 AND REQUIRED TO USE ACCPC ESCROW ACCOUNTS UNDER THIS SUBPARAGRAPH  SHALL
 MAKE DAILY DEPOSITS INTO THEIR ACCPC ESCROW ACCOUNT THAT ARE AN ESTIMATE
 OF  THE AMOUNT OF TAXES THEY COLLECTED THAT DAY FOR ALL OF THEIR TAXABLE
 SALES, BOTH THOSE PAID IN CASH AND THOSE PAID BY CREDIT OR  DEBIT  CARD.
 TO  EFFECTUATE  THE  DEPOSIT, THE ACCPC SHALL DEDUCT THE ESTIMATED SALES
 TAXES OWED FROM THE DAY'S CREDIT  AND  DEBIT  CARD  TRANSACTIONS  BEFORE
 PAYING  OVER  THE RECEIPTS FROM SUCH TRANSACTIONS TO THE PERSON REQUIRED
 TO COLLECT THE TAX. THE AMOUNT DEDUCTED SHALL BE DETERMINED BY MULTIPLY-
 ING THE DAY'S CREDIT AND DEBIT CARD SALES BY AN ALGORITHMIC  RATE  WHICH
 SHALL  BE DETERMINED WHEN THE ACCPC ESCROW ACCOUNT IS ESTABLISHED AND AT
 LEAST ONCE A YEAR THEREAFTER.  THE ALGORITHMIC RATE SHALL  REPRESENT  AN
 ESTIMATED CALCULATION OF THE AMOUNT OF TAXES COLLECTED AND OWED EACH DAY
 FOR  BOTH  CASH  AND CREDIT AND DEBIT CARD SALES. THE CALCULATION OF THE
 PERSON'S ALGORITHMIC RATE SHALL  BE  CERTIFIED  BY  A  CERTIFIED  PUBLIC
 ACCOUNTANT LICENSED IN THIS STATE, AN ATTORNEY LICENSED IN THIS STATE OR
 AN ENROLLED AGENT OR REGISTERED TAX RETURN PREPARER WHO HAS BEEN AUTHOR-
 IZED  BY  THE DEPARTMENT TO CERTIFY THE ALGORITHMIC RATE, AS AN ACCURATE
 ESTIMATE OF THE RATIO OF THE PERSON'S CASH TO  CREDIT  TRANSACTIONS  AND
 TAXABLE  TO  NON-TAXABLE  SALES. THE COMMISSIONER SHALL PROMULGATE REGU-
 LATIONS DEFINING HOW THE ALGORITHMIC RATE SHALL BE  CALCULATED,  SETTING
 STANDARDS  FOR  THAT  CALCULATION,  AND IDENTIFYING THE PROCESS BY WHICH
 LICENSED OR REGISTERED PROFESSIONALS MAY BE APPROVED OR  DISAPPROVED  BY
 THE  DEPARTMENT TO CERTIFY THE ACCURACY OF THE ALGORITHMIC RATE. AMOUNTS
 DEPOSITED IN AN ACCPC ESCROW ACCOUNT SHALL BE  HELD  IN  TRUST  FOR  AND
 PAYABLE  TO  THE  COMMISSIONER  AND SHALL BE KEPT IN SUCH ACCOUNTS UNTIL
 PAYMENT OVER  TO  THE  COMMISSIONER.  PERSONS  COLLECTING  THE  TAX  AND
 REQUIRED  TO  USE AN ACCPC ESCROW ACCOUNT UNDER THIS SUBPARAGRAPH SHALL,
 UPON ESTABLISHING THE ACCOUNT, AUTHORIZE THE COMMISSIONER TO DEBIT  SUCH
 ACCOUNT IN A MANNER AND FREQUENCY TO BE DETERMINED BY THE COMMISSIONER.
   § 2. Paragraph 1 of subdivision (a) of section 1134 of the tax law, as
 amended  by  section  160  of part A of chapter 389 of the laws of 1997,
 subparagraph (iii) as amended by section 44 of part K of chapter  61  of
 the laws of 2011, is amended to read as follows:
   (1) (i) Every person required to collect any tax imposed by this arti-
 cle, other than a person who is a vendor solely by reason of clause (D),
 (E)  or (F) of subparagraph (i) of paragraph eight of subdivision (b) of
 section eleven hundred one of this article, commencing business or open-
 ing a new place of business, (ii) every  person  purchasing  or  selling
 tangible  personal  property for resale commencing business or opening a
 new place of business, (iii) every  person  selling  petroleum  products
 including  persons  who or which are not distributors, (iv) every person
 described in this subdivision who takes possession of or pays for  busi-

 A. 1453                             3
 
 ness assets under circumstances requiring notification by such person to
 the  commissioner  pursuant to subdivision (c) of section eleven hundred
 forty-one of this [chapter] PART, (v) every  person  selling  cigarettes
 including  persons  who  or  which are not agents, and (vi) every person
 described in subparagraph (i), (ii), (iii), (iv) or (v)  of  this  para-
 graph  or  every  person who is a vendor solely by reason of clause (D),
 (E) or (F) of subparagraph (i) of paragraph eight of subdivision (b)  of
 section  eleven  hundred  one  of  this article who or which has had its
 certificate of authority revoked under paragraph four of  this  subdivi-
 sion, shall file with the commissioner a certificate of registration, in
 a  form  prescribed  by  the commissioner, at least twenty days prior to
 commencing business or opening a new place of business or such  purchas-
 ing,  selling or taking of possession or payment, whichever comes first.
 Every person who is a vendor solely by reason of clause (D) of  subpara-
 graph  (i)  of  paragraph  eight  of  subdivision  (b) of section eleven
 hundred one of this article shall file with the commissioner  a  certif-
 icate of registration, in a form prescribed by such commissioner, within
 thirty  days after the day on which the cumulative total number of occa-
 sions that such person came  into  the  state  to  deliver  property  or
 services, for the immediately preceding four quarterly periods ending on
 the  last  day  of  February,  May, August and November, exceeds twelve.
 Every person who is a vendor solely by reason of clause (E) of  subpara-
 graph  (i)  of  paragraph  eight  of  subdivision  (b) of section eleven
 hundred one of this article shall file with the commissioner  a  certif-
 icate of registration, in a form prescribed by such commissioner, within
 thirty  days  after the day on which the cumulative total, for the imme-
 diately preceding four quarterly periods  ending  on  the  last  day  of
 February, May, August and November, of such person's gross receipts from
 sales of property delivered in this state exceeds three hundred thousand
 dollars  and  number of such sales exceeds one hundred. Every person who
 is a vendor solely by reason of clause (F) of subparagraph (i) of  para-
 graph  eight  of  subdivision  (b) of section eleven hundred one of this
 article shall file with the commissioner a certificate of  registration,
 in  a form prescribed by such commissioner, within thirty days after the
 day on which tangible personal property in which such person retains  an
 ownership interest is brought into this state by the person to whom such
 property is sold, where the person to whom such property is sold becomes
 or  is  a resident or uses such property in any manner in carrying on in
 this state any employment, trade, business  or  profession.    A  PERSON
 REQUIRED  TO  FILE  A CERTIFICATE OF REGISTRATION AND WHO IS REQUIRED TO
 COLLECT THE TAX AS REQUIRED BY SUBPARAGRAPH  (I)  OF  PARAGRAPH  ONE  OF
 SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-TWO OF THIS PART SHALL,
 AT  THE  TIME  SUCH CERTIFICATE IS FILED, ESTABLISH AN ESCROW ACCOUNT AS
 REQUIRED BY SUBPARAGRAPHS (II), (III)  AND  (IV)  OF  PARAGRAPH  ONE  OF
 SUBDIVISION  (A)  OF  SECTION  ELEVEN  HUNDRED  THIRTY-TWO OF THIS PART.
 PERSONS REQUIRED TO ESTABLISH AN  ESCROW  ACCOUNT  THROUGH  AN  APPROVED
 CREDIT  CARD  PROCESSING  COMPANY PURSUANT TO SUBPARAGRAPH (IV) OF PARA-
 GRAPH ONE OF SUBDIVISION (A) OF SECTION  ELEVEN  HUNDRED  THIRTY-TWO  OF
 THIS  PART  SHALL  ESTABLISH  AN  ALGORITHMIC FORMULA FOR PAYMENT OF THE
 ESTIMATED COLLECTED SALES TAX AND SHALL FILE,  WITHIN  THREE  MONTHS  OF
 FILING   THEIR  CERTIFICATE  OF  REGISTRATION  A  CERTIFICATION  FROM  A
 LICENSED, REGISTERED OR APPROVED PROFESSIONAL OF THE TYPE  SPECIFIED  IN
 SUBPARAGRAPH  (IV) OF PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN
 HUNDRED THIRTY-TWO OF THIS PART CERTIFYING  TO  THE  ACCURACY  OF  THEIR
 METHOD  OF  ESTIMATING THEIR DAILY COLLECTION OF SALES TAXES AS PROVIDED
 IN SUBPARAGRAPH (IV) OF PARAGRAPH ONE  OF  SUBDIVISION  (A)  OF  SECTION

 A. 1453                             4
 
 ELEVEN  HUNDRED THIRTY-TWO OF THIS PART. Information with respect to the
 notice requirements of a purchaser,  transferee  or  assignee  and  such
 person's  liability  pursuant  to  the  provisions of subdivision (c) of
 section  eleven  hundred  forty-one  of  this  [chapter]  PART  shall be
 included in or accompany the certificate of registration form  furnished
 the applicant. The commissioner shall also include with such information
 furnished  to  each  applicant general information about the tax imposed
 under this article including information on records to be kept,  returns
 and  payments,  notification requirements and forms. Such certificate of
 registration may be amended in accordance with rules promulgated by  the
 commissioner.
   §  3.  Subparagraph  (A)  of paragraph 4 of subdivision (a) of section
 1134 of the tax law, as amended by section 5 of part I of chapter 59  of
 the laws of 2020, is amended to read as follows:
   (A)  Where a person who holds a certificate of authority (i) willfully
 fails to file a report or return required by this article, (ii) willful-
 ly files, causes to be filed, gives or causes  to  be  given  a  report,
 return,  certificate  or  affidavit required under this article which is
 false, (iii) willfully fails to comply with the provisions of  paragraph
 two  or  three of subdivision (e) of section eleven hundred thirty-seven
 of this [article] PART, (iv) willfully fails to prepay, collect,  truth-
 fully  account  for  or  pay  over any tax imposed under this article or
 pursuant to the authority of article twenty-nine of  this  chapter,  (v)
 fails  to  obtain a bond pursuant to paragraph two of subdivision (e) of
 section eleven hundred thirty-seven of this part, or WILLFULLY fails  to
 [comply  with  a notice issued by the commissioner pursuant to paragraph
 three of such subdivision] ESTABLISH OR PROPERLY FUND AN ESCROW  ACCOUNT
 AS  REQUIRED  BY  PARAGRAPH  ONE  OF  SUBDIVISION  (A) OF SECTION ELEVEN
 HUNDRED THIRTY-TWO OF THIS OF THIS PART OR OTHERWISE WILLFULLY FAILS  TO
 COMPLY WITH THE REQUIREMENTS OF THAT SECTION, (vi) has been convicted of
 a crime provided for in this chapter, or (vii) where such person, or any
 person  affiliated  with such person as such term is defined in subdivi-
 sion twenty-one of section four hundred seventy of this chapter, has had
 a retail dealer registration issued pursuant  to  section  four  hundred
 eighty-a of this chapter revoked pursuant to subparagraph (iii) of para-
 graph (a) of subdivision four of such section four hundred eighty-a, the
 commissioner may revoke or suspend such certificate of authority and all
 duplicates  thereof. Provided, however, that the commissioner may revoke
 or suspend a certificate of authority based on the grounds set forth  in
 clause  (vi)  of this subparagraph only where the conviction referred to
 occurred not more than one year prior  to  the  date  of  revocation  or
 suspension;  and provided further that where the commissioner revokes or
 suspends a certificate of authority based on the grounds  set  forth  in
 clause  (vii)  of this subparagraph, such suspension or revocation shall
 continue for as long as the revocation of the retail dealer registration
 pursuant to section four hundred eighty-a of  this  chapter  remains  in
 effect.
   §  4.  Subparagraph  (A)  of paragraph 4 of subdivision (a) of section
 1134 of the tax law, as amended by section 6 of part I of chapter 59  of
 the laws of 2020, is amended to read as follows:
   (A)  Where a person who holds a certificate of authority (i) willfully
 fails to file a report or return required by this article, (ii) willful-
 ly files, causes to be filed, gives or causes  to  be  given  a  report,
 return,  certificate  or  affidavit required under this article which is
 false, (iii) willfully fails to comply with the provisions of  paragraph
 two  or  three of subdivision (e) of section eleven hundred thirty-seven

 A. 1453                             5

 of this [article] PART, (iv) willfully fails to prepay, collect,  truth-
 fully  account  for  or  pay  over any tax imposed under this article or
 pursuant to the authority of article twenty-nine of  this  chapter,  (v)
 WILLFULLY  FAILS  TO  ESTABLISH  OR  PROPERLY  FUND AN ESCROW ACCOUNT AS
 REQUIRED BY PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION  ELEVEN  HUNDRED
 THIRTY-TWO  OF THIS PART OR OTHERWISE WILLFULLY FAILS TO COMPLY WITH THE
 REQUIREMENTS OF THAT SECTION, OR (VI) has  been  convicted  of  a  crime
 provided  for in this chapter, or [(vi)] (VII) where such person, or any
 person affiliated with such person as such term is defined  in  subdivi-
 sion twenty-one of section four hundred seventy of this chapter, has had
 a  retail  dealer  registration  issued pursuant to section four hundred
 eighty-a of this chapter suspended or revoked pursuant  to  subparagraph
 (iii)  of paragraph (a) of subdivision four of such section four hundred
 eighty-a, the commissioner may revoke or  suspend  such  certificate  of
 authority  and  all  duplicates  thereof.    Provided, however, that the
 commissioner may revoke or suspend a certificate of authority  based  on
 the  grounds  set  forth  in clause [(v)] (VI) of this subparagraph only
 where the conviction referred to occurred not more than one  year  prior
 to the date of revocation or suspension; and provided further that where
 the commissioner revokes or suspends a certificate of authority based on
 the  grounds set forth in clause [(vi)] (VII) of this subparagraph, such
 suspension or revocation shall continue for as long as the revocation of
 the retail dealer registration pursuant to section four hundred eighty-a
 of this chapter remains in effect.
   § 5. Paragraph 1 of subdivision (a) of section 1136 of the tax law  is
 REPEALED.
   § 6. Subdivision (c) of section 1136 of the tax law, as added by chap-
 ter 93 of the laws of 1965, is amended to read as follows:
   (c) The [tax commission] COMMISSIONER may permit or require returns to
 be made covering other periods and upon such dates as it may specify. If
 the  tax commission deems it necessary in order to insure the payment of
 the taxes imposed by this article, it may require returns to be made for
 shorter periods than those prescribed pursuant to the foregoing subdivi-
 sions of this section, and upon such dates as it may specify.    IF  THE
 COMMISSIONER  DETERMINES THAT THE PERSON REQUIRED TO COLLECT AND PAY THE
 TAX HAS ESTABLISHED AN ESCROW ACCOUNT AS PROVIDED BY SUBPARAGRAPHS (II),
 (III) AND (IV) OF PARAGRAPH ONE OF SUBDIVISION  (A)  OF  SECTION  ELEVEN
 HUNDRED  THIRTY-TWO  OF  THIS PART AND THAT THE AMOUNT DEPOSITED IN THAT
 ESCROW ACCOUNT HAS EQUALED OR EXCEEDED NINETY-FIVE PERCENT OF THE  TAXES
 OWED  FOR  FOUR  CONSECUTIVE QUARTERS, THE COMMISSIONER SHALL PERMIT THE
 PERSON TO FILE AN ANNUAL RETURN IN  LIEU  OF  THE  RETURNS  REQUIRED  BY
 SUBDIVISION  (A)  OF THIS SECTION. THE ANNUAL RETURN SHALL RECONCILE THE
 AMOUNTS WITHHELD AND PAID THROUGH THE ESCROW ACCOUNT WITH  THE  PERSON'S
 ANNUAL  TAXABLE SALES AND THE RETURN SHALL BE CERTIFIED AS ACCURATE BY A
 LICENSED, REGISTERED OR APPROVED PROFESSIONAL OF THE TYPE IDENTIFIED  IN
 SUBPARAGRAPH  (IV) OF PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN
 HUNDRED THIRTY-TWO OF THIS PART AND SHALL  INCLUDE  A  CERTIFICATION  AS
 PRESCRIBED  BY  THE COMMISSIONER. THE FORM OF THE ANNUAL RETURN SHALL BE
 PRESCRIBED BY THE COMMISSIONER AND SHALL CONTAIN SUCH INFORMATION AS THE
 COMMISSIONER MAY DEEM NECESSARY FOR THE PROPER  ADMINISTRATION  OF  THIS
 ARTICLE.  THE  ANNUAL RETURN SHALL BE FILED ON OR BEFORE JANUARY THIRTY-
 FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR COVERED BY THE RETURN.
   § 7. The opening paragraphs of subdivisions (a) and (b)  and  subdivi-
 sion  (c)  of  section  1137  of  the tax law, the opening paragraphs of
 subdivisions (a) and (b) as amended by section 2-f of part M-1 of  chap-

 A. 1453                             6
 
 ter  109  of  the laws of 2006 and subdivision (c) as amended by chapter
 155 of the laws of 1982, are amended to read as follows:
   Every  person  required  to  file a return under the preceding section
 whose total taxable receipts (as "taxable  receipts"  are  described  in
 subdivision  (a)  of  such  section),  amusement  charges  and rents are
 subject to the tax imposed pursuant to subdivisions (a), (c),  (d),  (e)
 and  (f)  of  section  eleven hundred five of this article shall, at the
 time of filing such return, pay to the commissioner  the  total  of  the
 following,  LESS  ANY AMOUNTS ALREADY DEPOSITED INTO THE PERSON'S ESCROW
 ACCOUNT  AND  COLLECTED  BY  OR  AVAILABLE   FOR   COLLECTION   BY   THE
 COMMISSIONER:
   Every person required to file a return under the preceding section and
 not  subject to the provisions of subdivision (a) of this section shall,
 at the time of filing such return, pay to  the  commissioner  the  taxes
 imposed  by  this  article  and  pursuant to article twenty-nine of this
 chapter as well as all other moneys collected by such person  acting  or
 purporting  to  act under the provisions of this article or of any local
 law, ordinance or resolution adopted pursuant to  such  article  twenty-
 nine;  provided,  however,  that if the commissioner shall have fixed an
 effective rate of tax applicable to any or all of his or  her  receipts,
 amusement  charges  and  rents  as  provided  in subdivision (d) of this
 section, any such person may elect, with  reference  to  such  receipts,
 amusement  charges and rents and subject to approval by the commissioner
 and to such regulations as the commissioner may promulgate,  to  pay  to
 the  commissioner  at  the time of filing his or her return the total of
 the following, LESS ANY AMOUNTS  ALREADY  DEPOSITED  INTO  THE  PERSON'S
 ESCROW  ACCOUNT  AND  COLLECTED  BY  OR  AVAILABLE FOR COLLECTION BY THE
 COMMISSIONER:
   (c) [(1)] The provisions of subdivisions (a) and (b) of  this  section
 shall  not  be  applicable to[: (i)] a person filing a short-form, part-
 quarterly return as defined in paragraph [(ii)] TWO of  subdivision  (a)
 of  section  eleven hundred thirty-six [hereof] OF THIS PART who, at the
 time of such filing shall pay to the tax  commission  one-third  of  the
 total  state  and  local sales and compensating use taxes payable by the
 person to the tax commission in the comparable quarter of the immediate-
 ly preceding year under this article and as taxes  imposed  pursuant  to
 the  authority  of  article  twenty-nine  with  respect to all receipts,
 amusement charges and rents[, or (ii) a person filing a March  estimated
 return  as  described  in  paragraph  (ii) of subdivision (c) of section
 eleven hundred thirty-seven-A hereof who, at the  time  of  such  filing
 shall  pay to the tax commission one-third of the sales and compensating
 use taxes payable by such person to the tax commission in the comparable
 quarter of the immediately preceding year under this  article.  Notwith-
 standing  the  preceding sentence, for the purposes of subparagraph (ii)
 of this paragraph, the sales and compensating use taxes payable  in  the
 comparable  quarter  of the immediately preceding year shall not include
 taxes imposed by section eleven hundred seven or eleven hundred eight of
 this article or pursuant to the authority of article twenty-nine of this
 chapter.
   (2) The provisions of subdivisions (a) and (b) of this section, howev-
 er, shall apply to a person filing a March estimated return as described
 in  paragraph  (i)  of  subdivision  (c)  of  section   eleven   hundred
 thirty-seven-A  hereof  who, at the time of such filing shall pay to the
 tax commission the sales and compensating use taxes, that are  estimated
 to  be  payable  by such person for such month of March. Notwithstanding
 the preceding sentence, for the purposes of this  paragraph,  the  sales

 A. 1453                             7

 and  compensating  use  taxes  that  are estimated to be payable by such
 person for such month of  March  shall  not  include  taxes  imposed  by
 section  eleven hundred seven or eleven hundred eight of this article or
 pursuant to the authority of article twenty-nine of this chapter].
   §  8. Paragraph 3 of subdivision (e) of section 1137 of the tax law is
 REPEALED.
   § 9. Paragraphs 1 and 2 of subdivision (f) of section 1137 of the  tax
 law,  paragraph 1 as amended by section 1 of part X of chapter 57 of the
 laws of 2010 and paragraph 2 as amended by section 1 of part H of  chap-
 ter 62 of the laws of 2006, are amended to read as follows:
   (1)  Except  as  otherwise  provided  in  this  subdivision,  a person
 required to collect tax who files a return required to  be  filed  under
 section eleven hundred thirty-six of this part for a quarterly or longer
 period  shall be allowed a credit against the taxes and fees required to
 be reported on, and paid with, such return, in an amount  as  determined
 in  paragraph  two of this subdivision, but only where such person files
 the return on or before the filing due date and pays or pays  over  with
 such  return  the  total  amount  shown  on such return (determined with
 regard to this subdivision) AND FURTHER ONLY WHERE THE AMOUNTS DEPOSITED
 BY THE PERSON INTO THE PERSON'S ESCROW ACCOUNT DURING THE PERIOD COVERED
 BY THE FILING ARE EQUAL TO AT LEAST NINETY-FIVE PERCENT OF THE TOTAL TAX
 DUE; provided, however, that no  credit  pursuant  to  this  subdivision
 shall  be  allowed  for  any  person  who files or is required to file a
 return pursuant to paragraph two of subdivision (a)  of  section  eleven
 hundred thirty-six of this part or any person who pays or is required to
 pay tax pursuant to section ten of this chapter.
   (2)  The  amount  of  the  credit  authorized by paragraph one of this
 subdivision shall be five percent of the amount of taxes and  fees  (but
 not  including  any penalty or interest thereon) required to be reported
 on, and paid or paid over with, the return but only  if  the  return  is
 filed  on  or  before  the filing due date, but not more than [two] FIVE
 hundred dollars, for each quarterly or longer period[, except that, with
 respect to returns required to be filed for quarterly or longer  periods
 ending  on  or  before the last day of February, two thousand seven, the
 amount of the credit shall be not more  than  one  hundred  seventy-five
 dollars for each such quarterly or longer period].
   § 10. Section 1137-A of the tax law is REPEALED.
   §  11. Section 1145 of the tax law is amended by adding a new subdivi-
 sion (l) to read as follows:
   (L)(1) IN ADDITION TO ANY OTHER PENALTY PROVIDED BY  THIS  ARTICLE  OR
 ANY  OTHER  LAW,  ANY  PERSON  FAILING  TO ESTABLISH OR PROPERLY FUND AN
 ESCROW ACCOUNT REQUIRED BY SUBPARAGRAPH (I),  (II),  (III)  OR  (IV)  OF
 PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-TWO OF
 THIS  PART  SHALL  BE SUBJECT TO AN ADDITIONAL PENALTY OF TEN PERCENT OF
 THE AMOUNT OF TAX DUE IF SUCH FAILURE IS FOR NOT MORE  THAN  ONE  MONTH,
 WITH  AN  ADDITIONAL  ONE  PERCENT FOR EACH ADDITIONAL MONTH OR FRACTION
 THEREOF DURING  WHICH  SUCH  FAILURE  CONTINUES,  NOT  EXCEEDING  THIRTY
 PERCENT IN THE AGGREGATE.
   (2)  IF THE AMOUNT PAID BY THE PERSON REQUIRED TO COLLECT THE TAX INTO
 THEIR ESCROW ACCOUNT IS LESS THAN NINETY  PERCENT  THAN  THE  AMOUNT  OF
 TAXES OWED, AS SHOWN IN THE PERSON'S QUARTERLY, PART-QUARTERLY OR ANNUAL
 RETURN,  THE  PERSON  SHALL  OWE A PENALTY EQUAL TO FIFTY PERCENT OF THE
 DELINQUENCY. IN ADDITION, IF THE ESCROW ACCOUNT MAINTAINED BY THE PERSON
 IS AN ACCPC ESCROW ACCOUNT, THE COMMISSIONER MAY ISSUE A NOTICE  REQUIR-
 ING  THE  PERSON  TO INCREASE THE PERSON'S ALGORITHMIC RATE BY AN AMOUNT
 NOT EXCEEDING TWICE THE AMOUNT OF  THE  DEFICIENCY  AND  THIS  INCREASED

 A. 1453                             8
 
 ALGORITHMIC  RATE  SHALL CONTINUE AS LONG AS THE COMMISSIONER DETERMINES
 THAT SUCH INCREASED RATE IS NECESSARY.
   §  12. This act shall take effect September 1, 2022; provided that the
 amendments to subparagraph (A) of paragraph  4  of  subdivision  (a)  of
 section  1134  of the tax law made by section three of this act shall be
 subject to the expiration and reversion of such subparagraph pursuant to
 section 23 of part U of chapter 61 of the laws of 2011, as amended, when
 upon such date the provisions of section four of  this  act  shall  take
 effect.   Effective immediately the addition, amendment and/or repeal of
 any rule or regulation necessary for the implementation of this  act  on
 its  effective date are authorized to be made and completed on or before
 such date.