Relates to the collection of sales tax on abstracts of title and other public records searches.
TITLE OF BILL: An act to amend the tax law, in relation to the collection of sales tax on abstracts of title and other public records searches
PURPOSE OR GENERAL IDEA OF BILL: To relieve title insurance providers and agents from the expense, burden and complexities associated with collecting sales tax on information services that have been historically exempt from sales tax.
SUMMARY OF SPECIFIC PROVISIONS: Section one amends paragraph one of subdivision c of section 1105 of the tax law by excluding information services such as abstracts of title, tax searches, searches for municipal records for violations, certificates of title and lien searches from sales tax.
Section two sets the effective date.
JUSTIFICATION: Due to the severe downturn in the real estate sector of the economy, the title insurance industry has suffered particularly hard and the slow recovery of the real estate market has forced many agents with depleted reserves to lay off employees or close their doors. The loss of these small businesses further prolongs the overall economic recovery.
Despite having been historically exempt from sales tax for their services, certain portions of title company services became subject to taxation in 2002.
Unfortunately, due to the variety of services and transactions; the identification of the end user of the services (from whom the tax should collected); the location of the closing (which affects tax rate and may not be known or change with little notice); or whether the transaction closes at all (in which case the "end user" is the title agency itself, liable for sales tax on unpaid work product destined for the shredder), and other complexities particular to a transaction, the proper implementation of this law has been exceedingly difficult. And reliable, sound and consistent advice on the matter has been nearly impossible to obtain.
All of this has been further compounded by the additional procedural, bookkeeping and accounting costs and time necessary for implementation of this convoluted system. At a time when New York State has finally undertaken efforts to attract and retain businesses here, this recently enacted tax is inappropriate and should be eliminated.
PRIOR LEGISLATIVE HISTORY: This is a new bill.
FISCAL IMPLICATIONS: None to the state.
EFFECTIVE DATE: This act shall take effect April 1st, 2013.
STATE OF NEW YORK ________________________________________________________________________ 3669 2013-2014 Regular Sessions IN SENATE February 11, 2013 ___________Introduced by Sen. MARTINS -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to the collection of sales tax on abstracts of title and other public records searches THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subdivision (c) of section 1105 of the tax law, as amended by chapter 583 of the laws of 2011, is amended to read as follows: (1) The furnishing of information by printed, mimeographed or multi- graphed matter or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons, but excluding the furnishing of information which is personal or individual in nature and which is not or may not be substan- tially incorporated in reports furnished to other persons, and excluding the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, electronic news services, radio broadcasters and television broadcasters in the collection and dissemination of news, and excluding meteorologi- cal services, AND EXCLUDING ABSTRACTS OF TITLE AND OTHER PUBLIC RECORDS SEARCHES SUCH AS TAX SEARCHES, SEARCHES FOR MUNICIPAL RECORDS FOR VIOLATIONS, CERTIFIED OR NONCERTIFIED COPIES OBTAINED FROM THE PUBLIC RECORD, CERTIFICATES OF TITLE AND LIEN SEARCHES, CERTIFICATES OF GOOD STANDING AND FRANCHISE TAX SEARCHES, COOPERATIVE UNIT SEARCHES AND ZONING LOT PARTIES-IN-INTEREST CERTIFICATIONS. S 2. This act shall take effect April 1, 2013.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08825-01-3