Senator Diaz Calls On Governor Paterson To Support Legislation To Require Credit Card Companies To Pay All Sales Taxes Collected Directly To The State

Ruben Diaz

September 24, 2008

NYS Senator Rev. Ruben Diaz is calling upon Governor Paterson to support Senate Bill 774: an act to amend the tax law, in relation to requiring issuers of credit cards and debit cards to pay and collect sales and use taxes and pay such taxes directly to the commissioner of the NYS Department of Taxation and Finance.

“While the Governor is now pressuring small business owners to properly remit their business taxes in an effort to balance the state’s fiscal needs, Governor Paterson has had an opportunity to do this all session by supporting my legislation, Senate Bill 774, which will ensure that New York State will receive over 500 million dollars in uncollected sales taxes”, said State Senator Diaz.

“Consider the case of the Cipriani Restaurants.  They cheated the State out of millions of dollars in sales taxes on meals and drinks.  If my bill was in place they could not have done this since the patrons who pay with credit cards (80%) would have their sales tax remitted by credit card companies directly to the State rather than have it returned to the vendor.  The Cipriani’s own have a dozen restaurants, and there are hundred’s of thousands of pizza joints in New York City.  Doesn’t it make sense to focus on the retailer’s who run their businesses with credit cards, rather than auditing  the pizza shops?  My  legislation would correct the problem of sales tax scofflaws and allow the 125 auditors in the new Special Investigation Unit of the New York State Department of Taxation and Finance, to focus more efficiently on businesses which do not operate primarily on credit cards for their business.

The only one’s who are opposed to this legislation are the credit card companies who are very powerful. They are not going to like this, because it will tell the State how much money they are making in New York. There is no additional cost to the retailer’s or consumers, just an end to sales tax scofflaws.

For more information, please contact Senator Diaz at (718) 991-3161.




Add S1168, Tax L
Provides that issuers of debit and credit cards shall pay sales and use taxes directly to the state tax commission.



                STATE OF NEW YORK





                               2007-2008 Regular Sessions


                    IN SENATE


                                     January 9, 2007



        Introduced  by  Sens. DIAZ, CONNOR, HASSELL-THOMPSON, SABINI, SAMPSON --

          read twice and ordered printed, and when printed to  be  committed  to

          the Committee on Investigations and Government Operations


        AN  ACT to amend the tax law, in relation to requiring issuers of credit

          cards and debit cards to pay and collect sales and use taxes  and  pay

          such taxes to the commissioner of taxation and finance


          The  People of the State of New York, represented in Senate and Assem-

        bly, do enact as follows:


     1    Section 1. The tax law is amended by adding a new section 1168 to read

     2  as follows:

     3    § 1168. Collection and payment of taxes by issuers of credit cards and

     4  debit cards. (a) Notwithstanding any law,  rule  or  regulation  to  the

     5  contrary,  an  issuer  of  credit  cards  or  debit cards, as defined in

     6  section five hundred eleven of the general business law,  shall  collect

     7  and  pay  taxes imposed by articles twenty-eight and twenty-nine of this

     8  chapter, and shall be subject to all provisions of such  articles  as  a

     9  person required to collect tax, as defined in subdivision one of section

    10  eleven  hundred thirty-one of this chapter on all transactions conducted

    11  with a credit or debit card of the issuer, provided,  however,  notwith-

    12  standing  any  law, rule or regulation to the contrary, such taxes shall

    13  be paid directly to the commissioner by the issuer.

    14    (b) Notwithstanding any law, rule or regulation to  the  contrary,  on

    15  any  transaction  conducted  with  a debit or credit card of the issuer,

    16  wherein the issuer is required to collect  and  pay  taxes  pursuant  to

    17  subdivision (a) of this section, the vendor of tangible personal proper-

    18  ty or services involved in said transaction shall not be required to pay

    19  and  collect  taxes pursuant to articles twenty-eight and twenty-nine of

    20  this chapter.

    21    § 2. This act shall take effect on the first of October next  succeed-

    22  ing  the date on which it shall have become a law, except that any rules

    23  and regulations necessary for the timely implementation of this  act  on

    24  its effective date shall be promulgated on or before such date.


         EXPLANATION--Matter in italics (underscored) is new; matter in brackets