NY State Senate Bill 2023-S8355

Current 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 22, 2024	referred to budget and revenue

2023-S8355 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §1134, Tax L

2023-S8355 (ACTIVE) - Summary

Makes technical changes relating to the rescindment of certificates of authority clarifying that a failure to file a report or return relates only to the person's obligation to pay taxes.

2023-S8355 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8355

SPONSOR: SEPULVEDA
 
TITLE OF BILL:

An act to amend the tax law, in relation to making technical changes
relating to the rescindment of certificates of authority

 
PURPOSE:

Makes technical changes relating to the rescindment of certificates of
authority.

 
SUMMARY OF PROVISIONS:

Section one: Amends subparagraph A of paragraph 4 of subdivision a of
section 1134 of the tax law with respect to only the person's obligation
to pay taxes.

Section two: Amends subparagraph A of paragraph 4 of subdivision a of
section 1134 with respect to only the person's obligation to pay taxes.

Section three: Provides for an effective date.

 
EXISTING LAW:

Section 1134 of the tax law.

 
JUSTIFICATION:

NY State Sales Tax Collection and Regulating the Certificate of Authori-
ty

Sellers of products in New York State are subject to sales tax and must
obtain a Certificate of Authority and register with the New York State
Tax Department. The Certificate of Authority gives the seller the right
to collect tax on their taxable sales and to issue and accept most New
York State sales tax exemption certificates. Generally, the seller
collects the tax from the purchaser and remits it to New York State.

Wholesale sellers collecting sales taxes from customers must ensure that
they are accurately collecting these taxes, and that their customers are
fully compliant with accurately reporting those taxes that they are
paying.

Wholesale sellers who do not collect sales taxes from their customers
must nevertheless report their sales to the New York State Tax Depart-
ment in the form of "information returns" so that the Department know
what taxes must be paid by the wholesale sellers' customers. Proper
reporting is often complicated given the diverse and complex retail
environment in New York City where there are tens of thousands of small
and immigrant-owned businesses who are not English speakers, and who
often lack a full understanding of their tax obligations. This can, and
often does, make it difficult for the wholesale sellers to report accu-
rate information to the Department.

Given this challenge, the Department's recent determination to penalize
wholesale sellers for inaccurate or incomplete information returns has
gone overboard. In addition to fines for such non-compliance, which the
proposed bill does not change, the Department is attempting to rescind
the wholesale seller's Certificate of Authority - with the obvious
effect of putting them out of business. This overreaching penalty can
put hundreds of community workers out of work, as well as deprive New
York State with significant tax dollars from the wholesale seller.

In order to ensure that the process is both efficient and fair to both
retailers and wholesalers, the legislation proposed here limits the
taxing authority's ability to remove a wholesaler's Certificate of
Authority to willful acts and/or adjudicated crimes by the wholesale
seller that cause a failure to properly collect and remit sales tax
revenues from customers to the Department. The bill thus only removes
the Department's ability to rescind a Certificate of Authority for prob-
lems associated with a seller's filing of information returns.

Proper oversight that includes the drastically punitive response of
rescission of a seller's Certificate of Authority should be implemented
only for those who fail to pay their own taxes.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to any and all
notices for rescindment issued on and after January 1, 2015

2023-S8355 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8355
 
                             I N  S E N A T E
 
                             January 22, 2024
                                ___________
 
 Introduced by Sen. SEPULVEDA -- 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 making technical changes
   relating to the rescindment of certificates of authority
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  Subparagraph  (A)  of  paragraph  4 of subdivision (a) of
 section 1134 of the tax law, as amended by section 2 of part P of  chap-
 ter 59 of the laws of 2021, is amended to read as follows:
   (A)  Where  a  person  who  holds a certificate of authority, AND WITH
 RESPECT TO ONLY THE PERSON'S OBLIGATION  TO  PAY  TAXES,  (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,  (iv)  willfully fails to prepay, collect, truthfully
 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 fails to comply with a
 notice issued by the commissioner pursuant to paragraph  three  of  such
 subdivision,  (vi)  has  been  convicted of a crime provided for in this
 chapter, (vii) where such person, or any  person  affiliated  with  such
 person as such term is defined in subdivision 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 paragraph (a) of subdivision  four  of
 such  section  four hundred eighty-a, or (viii) has not obtained a valid
 retail dealer registration under section four hundred eighty-a  of  this
 chapter  and  such  person  possesses  or  sells unstamped or unlawfully
 stamped packages of cigarettes three or more times within  a  period  of
 five  years,  the commissioner may revoke or suspend such certificate of
 authority and all duplicates  thereof.    Provided,  however,  that  the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD13962-03-4
 S. 8355                             2
 
 commissioner  may  revoke or suspend a certificate of authority based on
 (a) 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, or (b) the grounds set forth in clause (viii)
 of this subparagraph, such suspension or revocation shall be for a peri-
 od of five years.
   § 2. Subparagraph (A) of paragraph 4 of  subdivision  (a)  of  section
 1134  of  the tax law, as amended by section 2-a of part P of chapter 59
 of the laws of 2021, is amended to read as follows:
   (A) Where a person who holds a  certificate  of  authority,  AND  WITH
 RESPECT  TO  ONLY  THE  PERSON'S  OBLIGATION TO PAY TAXES, (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, (iv) willfully fails  to  prepay,  collect,  truthfully
 account  for  or pay over any tax imposed under this article or pursuant
 to the authority of article twenty-nine of this chapter,  (v)  has  been
 convicted  of  a  crime  provided  for  in this chapter, (vi) where such
 person, or any person affiliated  with  such  person  as  such  term  is
 defined  in  subdivision  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, or (vii) has not obtained a valid
 retail dealer registration under section four hundred eighty-a  of  this
 chapter  and  such  person  possesses  or  sells unstamped or unlawfully
 stamped packages of cigarettes three or more times within  a  period  of
 five  years,  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
 (a) the grounds set forth in clause (v) 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) 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, or (b) the grounds set forth in clause (vii)
 of this subparagraph, such suspension or revocation shall be for a peri-
 od of five years.
   § 3. This act shall take effect immediately and shall apply to any and
 all notices for  rescindment  issued  on  and  after  January  1,  2015;
 provided  that  the  amendments  to  subparagraph  (A) of paragraph 4 of
 subdivision (a) of section 1134 of the tax law made by  section  one  of
 this  act  shall  be subject to the   expiration   and reversion of such
 subparagraph pursuant to subdivision (e) of section  23  of  part  U  of
 chapter  61  of  the laws of 2011,   as amended, when upon such date the
 provisions of section two of this act shall take effect.

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Senate Bill S8355

Sponsored By

Current Bill Status - In Senate Committee Budget And Revenue Committee

2023-S8355 (ACTIVE) - Details

2023-S8355 (ACTIVE) - Summary

2023-S8355 (ACTIVE) - Sponsor Memo

2023-S8355 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8355

Share this bill

Sponsored By

Luis R. Sepúlveda

Current Bill Status - In Senate Committee Budget And Revenue Committee

2023-S8355 (ACTIVE) - Details

2023-S8355 (ACTIVE) - Summary

2023-S8355 (ACTIVE) - Sponsor Memo

2023-S8355 (ACTIVE) - Bill Text download pdf

Comments