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

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S347-2011 Actions

• Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Mar 22, 2011: DEFEATED IN INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Feb 22, 2011: NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
• Jan 5, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S347-2011 Meetings

Investigations and Government Operations: Mar 22, 2011

S347-2011 Votes

S347-2011 Memo

BILL NUMBER:S347

TITLE OF BILL:              REVISED 12/30/11
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 and or debit card
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 and or 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 customers, is the current system which relies solely upon the
thousands of vendors to voluntarily remit such sales taxes. New York
State cannot possibly audit every vendor and the vendors know this.
But the processors which are paid by vendors to deal with the issuers
of credit and or 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 New York state instead
of sending the
taxes back to the vendors and then relying upon the vendors to timely
and accurately submit the sales taxes.

LEGISLATIVE HISTORY:
2011:    S.347 - Defeated in Investigations and Government
         Operations
2010:    S.2550A/A.7674 Referred to Investigations and Government
         Operations/Referred to Ways and Means
2009:    S.2550A/A.7674 Tabled/Referred to Ways and Means
2008:    S.774/A.9991 Referred to Investigations and Government
         Operations/Referred to Ways and Means
2007:    S.774 Referred to Investigations and Government Operations
2005-06: S.827 Referred to Investigations and Government Operations
2003-04: S.4362 Referred to Investigations and Government Operations

EFFECTIVE DATE:


This law shall take effect on the first of October next succeeding
the date on which it shall have become a law, with provisions.

S347-2011 Text

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

      S. 347                                                    A. 156

                         2011-2012 Regular Sessions

                        SENATE - ASSEMBLY

                                 (PREFILED)

                               January 5, 2011
                                 ___________

  IN  SENATE -- Introduced by Sen. DIAZ -- read twice and ordered printed,
    and when printed to be committed to the  Committee  on  Investigations
    and Government Operations

  IN ASSEMBLY -- Introduced by M. of A. KAVANAGH -- read once and referred
    to the Committee on Ways and Means

  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 PAY

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD00836-01-1

 S. 347                              2                             A. 156

  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. Effective immediately,
  any  rules  and  regulations  necessary for the timely implementation of
  this act on its effective date may be  promulgated  on  or  before  such
  date.