Provides that issuers of debit and credit cards shall pay sales and use taxes directly to the state tax commission.
Ayes (28): Adams, Addabbo, Aubertine, Breslin, Diaz, Dilan, Duane, Espada, Hassell-Thomps, Johnson C, Klein, Krueger, Monserrate, Montgomery, Onorato, Oppenheimer, Parker, Perkins, Sampson, Savino, Schneiderman, Serrano, Smith, Squadron, Stachowski, Stavisky, Stewart-Cousins, Valesky
Nays (27): Alesi, DeFrancisco, Farley, Flanagan, Fuschillo, Golden, Griffo, Johnson O, Lanza, Larkin, Leibell, Libous, Little, Marcellino, Maziarz, McDonald, Morahan, Nozzolio, Padavan, Ranzenhofer, Robach, Saland, Seward, Skelos, Volker, Winner, Young
Absent (2): Hannon, LaValle
Excused (5): Bonacic, Foley, Huntley, Kruger, Thompson
Ayes (13): Smith, Espada, Montgomery, Duane, Krueger, Parker, Serrano, Stewart-Cousins, Dilan, Klein, Valesky, Monserrate, Saland
Ayes W/R (1): Stachowski
Nays (10): Hassell-Thompson, Skelos, Johnson O, Padavan, Volker, Farley, LaValle, Seward, Hannon, Larkin
BILL NUMBER: S2550A
TITLE OF BILL : 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
PURPOSE : To enhance the administration and enforcement of sales tax by including credit card processors as the prime entity with the fiduciary duty to remit the New York State sales tax. Processors are those entities who for a fee remit credit card and debit card receipts from vendors to the issuers of such credit/debit cards then remit collection of such payments on behalf of the vendors.
SUMMARY OF PROVISIONS : Section 1 of the Bill includes processors of credit/debit cards payments to vendors as the Entity primarily responsible for the duty to collect and remit to the State, all sales taxes due on items purchased with credit/debit cards. Vendors who sell to the public shall remain responsible to correctly report and maintain true records of the value of goods sold.
Section 2 of the Bill provides for a refund or credit in the event that such is due and owing when goods which are returned to the vendor.
JUSTIFICATION : A major source of failure to comply with New York State sales taxes Being remitted to the State from vendors who collect such taxes from their customer's is the current system which relies solely upon the thousands of vendors to voluntarily do so. The State cannot possibly audit every vendor. They know this. But the processors which are paid by vendors to deal with the issuers of credit/debit cards, and who actually get the monies from the credit card issuers, are far less numerous. They know the true sales and actually get money from the credit card companies which includes the sales taxes. It is more efficient to have these processors remit the sales taxes directly to the State instead of sending the taxes back to the vendors and then relying upon the vendors to timely and accurately do so.
LEGISLATIVE HISTORY : S.774 of 2008 Referred to Investigations and Governmental Operations
EFFECTIVE DATE : This law shall take effect on the first of October next proceeding the date on which it shall have become a law.
STATE OF NEW YORK ________________________________________________________________________ 2550--A 2009-2010 Regular Sessions IN SENATE February 23, 2009 ___________Introduced by Sens. DIAZ, ADAMS, BRESLIN, DILAN, HASSELL-THOMPSON, HUNT- LEY, C. JOHNSON, KRUEGER, ONORATO, PARKER, SAMPSON, SCHNEIDERMAN, STACHOWSKI, STAVISKY, STEWART-COUSINS, THOMPSON -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee 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: Section 1. The tax law is amended by adding a new section 1168 to read as follows: S 1168. COLLECTION AND PAYMENT OF TAXES BY PROCESSORS OF CREDIT CARDS AND DEBIT CARDS. (A) NOTWITHSTANDING ANY LAW, RULE OR REGULATION TO THE CONTRARY, AN ISSUER OF CREDIT CARDS OR DEBIT CARDS, AS DEFINED IN SECTION FIVE HUNDRED ELEVEN OF THE GENERAL BUSINESS LAW, SHALL COLLECT AND PAY TAXES IMPOSED BY ARTICLES TWENTY-EIGHT AND TWENTY-NINE OF THIS CHAPTER, AND SHALL BE SUBJECT TO ALL PROVISIONS OF SUCH ARTICLES AS A PERSON REQUIRED TO COLLECT TAX, AS DEFINED IN SUBDIVISION ONE OF SECTION ELEVEN HUNDRED THIRTY-ONE OF THIS CHAPTER ON ALL TRANSACTIONS CONDUCTED WITH A CREDIT OR DEBIT CARD OF THE ISSUER, PROVIDED, HOWEVER, NOTWITH- STANDING ANY LAW, RULE OR REGULATION TO THE CONTRARY, SUCH TAXES SHALL BE PAID DIRECTLY TO THE COMMISSIONER BY THE ISSUER. (B) NOTWITHSTANDING ANY LAW, RULE OR REGULATION TO THE CONTRARY, ON ANY TRANSACTION CONDUCTED WITH A DEBIT OR CREDIT CARD OF THE ISSUER, WHEREIN THE ISSUER IS REQUIRED TO COLLECT AND PAY TAXES PURSUANT TO SUBDIVISION (A) OF THIS SECTION, THE VENDOR OF TANGIBLE PERSONAL PROPER- TY OR SERVICES INVOLVED IN SAID TRANSACTION SHALL NOT BE REQUIRED TO PAYEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04695-02-9 S. 2550--A 2
AND COLLECT TAXES PURSUANT TO ARTICLES TWENTY-EIGHT AND TWENTY-NINE OF THIS CHAPTER, RATHER THIS DUTY SHALL BE IMPOSED UPON PROCESSORS. (C) FOR PURPOSES OF THIS SECTION, PROCESSOR SHALL MEAN ANY ENTITY WHICH CONTRACTS WITH VENDORS TO PROCESS THEIR CREDIT CARD RECEIPTS AND WHO FOR A FEE, OBTAIN FUNDS FOR VENDORS FROM SUCH ISSUERS OF CREDIT OR DEBIT CARDS. S 2. This act shall take effect on the first of October next succeed- ing the date on which it shall have become a law, except that any rules and regulations necessary for the timely implementation of this act on its effective date shall be promulgated on or before such date.