NY State Senate Bill 2011-S5637

Senate Bill S5637

Signed By Governor

2011-2012 Legislative Session

Defines and exempts electronic news sources and periodicals from sales and compensating use taxes

download bill text pdf

Archive: Last Bill Status - Signed by Governor

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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Sep 23, 2011	signed chap.583
Sep 12, 2011	delivered to governor
Jun 23, 2011	returned to senate passed assembly ordered to third reading rules cal.618 substituted for a8223a
Jun 16, 2011	referred to ways and means delivered to assembly passed senate ordered to third reading cal.1326 committee discharged and committed to rules
Jun 08, 2011	referred to investigations and government operations

Votes

- Jun 16, 2011 - Floor Vote
  S5637
  
  62
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 16, 2011
      
      aye (62)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Avella
      
      Ball
      
      Bonacic
      
      Breslin
      
      Carlucci
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Espaillat
      
      Farley
      
      Flanagan
      
      Fuschillo
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Grisanti
      
      Hannon
      
      Hassell-Thompson
      
      Huntley
      
      Johnson
      
      Kennedy
      
      Klein
      
      Krueger
      
      Kruger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Libous
      
      Little
      
      Marcellino
      
      Martins
      
      Maziarz
      
      McDonald
      
      Montgomery
      
      Nozzolio
      
      O'Mara
      
      Oppenheimer
      
      Parker
      
      Peralta
      
      Perkins
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stavisky
      
      Stewart-Cousins
      
      Valesky
      
      Young
      
      Zeldin
  Jun 16, 2011 - Rules Committee Vote
  S5637
  
  17
  
  Aye
  
  3
  
  Nay
  
  4
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 16, 2011
      
      aye (17)
      
      Alesi
      
      Breslin
      
      Farley
      
      Hannon
      
      Hassell-Thompson
      
      Johnson
      
      LaValle
      
      Larkin
      
      Libous
      
      Marcellino
      
      Maziarz
      
      Nozzolio
      
      Saland
      
      Sampson
      
      Seward
      
      Skelos
      
      Smith
      
      nay (3)
      
      Krueger
      
      Montgomery
      
      Parker
      
      aye wr (4)
      
      Dilan
      
      Duane
      
      Perkins
      
      Stewart-Cousins

2011-S5637 (ACTIVE) - Details

See Assembly Version of this Bill:: A8223
Law Section:: Tax Law
Laws Affected:: Amd §§1101, 1105 & 1115, Tax L

2011-S5637 (ACTIVE) - Summary

Defines and exempts electronic news sources and periodicals from sales and compensating use taxes.

2011-S5637 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5637

TITLE OF BILL:
An act
to amend the tax law, in relation to exempting electronic news services
and electronic periodicals from sales and compensating use taxes

PURPOSE:
The purpose of this legislation is to exempt from sales and use taxes
electronic news services and electronic periodicals.

SUMMARY OF PROVISIONS:
Section 5 of the bill exempts an "electronic news service" that meets
a subscription price cap and an "electronic periodical." Section 1 of
the bill defines "electronic news service" as a service that is
delivered or accessed electronically, which meets specified criteria.
The key to the definition of an electronic news service is that the
service's predominant purpose must be the presentation of news
content, which it must prominently feature. "News content" is defined
as "the articles, photographs, video and audio material concerning
general news or specialized news that are accessed through the
service and does not include listings, advertisements, catalogs,
compilations, databases, or the like," while "non-news content" is
defined to mean "any information, other than news content." In line
with the idea that delivery of news content is the key feature of an
exempt electronic news service, the non-news content available

through the service can only be updated within a twenty-four hour
period if the news content is also newly-published or updated at
least once in that period. If the service features a search function
at no extra charge that allows access to content other than the
service's past or present news content, the service
will only qualify as an electronic news service if the provider,
can prove that the search function is only incidental part of the
service.
To qualify as an electronic news service, the service must not in
whole or in substantial part constitute a listing, catalog, database,
or compilation. As defined in the bill, for a publication to be an
electronic periodical, its predominant purpose must be the
presentation of news content, which it must prominently feature. An
electronic periodical may not be published more frequently than
weekly and
cannot be updated between issues, although the incidental addition of
content between issues would not prevent a publication from being an
electronic periodical. Because of the lesser
flexibility of the exemption for electronic periodicals, those
publications need not meet any subscription price cap to qualify for
exemption. Many of the terms in the respective definitions of
electronic news services and electronic periodicals derive from the
definition of newspaper and periodical in the Tax Department's
current sales tax regulations, in which case they are intended to
have the same meaning.

Section 5 of the bill also provides a set of rules to deal with
situations in which an electronic news service or an electronic
periodical is sold for one price with other things.
Under these rules, for example, if an electronic news service is sold


together with a subscription to a newspaper for one price, each is
available separately for sale, and the separate price of the
electronic news service is below the cap amount, the entire price
would be exempt because the amount of the selling price attributable
to the electronic news service would be exempt by reason of the
exemption added by this bill and the remainder of the selling price
would be exempt under the existing exemption for newspapers in Tax
Law 1115(a)(5).

JUSTIFICATION:
The Tax Law has long taxed information services while exempting
newspapers and periodicals, probably on the theory that newspapers
and magazines play an important role in our democracy by keeping the
public informed and sharpening public debate about the issues of the
day. In the digital age, the written news content that the public
used to get exclusively from newspapers and periodicals is now
available electronically, through internet websites, smart phone
applications, or via downloads on portable readers. While these
information sources sometimes differ from traditional newspapers and
periodicals in respect to their interactivity, they serve the same
important function of keeping the public informed. Yet the current
exemption in the Tax Law for digital news services is limited to
newspapers or periodicals delivered electronically that contain the
exact same content of the paper edition of the newspaper or
periodical (except for advertisements). This bill would update the
Tax Law to meet this change in the marketplace by creating an
exemption for electronic news services and electronic periodicals
while distinguishing them from taxable information services. To limit
the revenue impact of the exemption, the exemption for electronic
news services, the more flexible of the two exemptions, is subject
to a price cap. The definitions of electronic newspaper and
electronic periodical contain a number of provisions designed to
deter providers of taxable information services from attempting to
qualify as exempt electronic news services, including that the
service has to advertise itself as a news service or a similar term.
Also, consistent with the revenue goal, the bill provides that if any
provision of it is invalidated by a court, the exemption is removed,
and the prior law is reinstated. Thus, this bill will foster the
newspaper industry in New York, helping to keep the State at the
forefront of that business, without jeopardizing the information
service tax base.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
Minimal.

EFFECTIVE DATE:
This act shall take effect on the first day of a sales tax quarterly
period, as described in subdivision (b) of section 1136 of the tax
law, next commencing at least 90 days after this act shall have
become a law and shall apply in accordance with the applicable
transitional provisions in sections 1106, and 1217 of the tax law
provided, however, that the commissioner shall compute the cap amount
under subparagraph (B) of paragraph 37 of subdivision (b) of section
1101 of the tax law, as added by section one of this act, based on


prices in effect during the first seven days of the first calendar
month next commencing after this act shall have become a law, which
cap amount shall be published at least one month prior to the date
this act takes effect shall apply to sales made, services rendered,
or occurring from the date this act takes effect through the next
succeeding May 31.

2011-S5637 (ACTIVE) - Bill Text download pdf

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

                                  5637

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              June 8, 2011
                               ___________

Introduced  by  Sen.  DeFRANCISCO -- 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 exempting electronic news
  services and electronic periodicals from sales  and  compensating  use
  taxes

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision (b) of section 1101 of the tax law  is  amended
by adding a new paragraph 37 to read as follows:
  (37)  ELECTRONIC  NEWS  SERVICE. (I) A SERVICE DELIVERED, FURNISHED OR
PROVIDED TO OR ACCESSED BY THE  PURCHASER  ELECTRONICALLY  OR  DIGITALLY
THAT MEETS ALL OF THE FOLLOWING CONDITIONS:
  (A)  THE  SERVICE'S  PREDOMINANT  PURPOSE  IS THE PRESENTATION OF NEWS
CONTENT, WHICH IT PROMINENTLY FEATURES;
  (B) THE SERVICE'S NEWS CONTENT  (I)  INCLUDES  GENERAL  NEWS  THAT  IS
ACCESSIBLE  WITHOUT USE OF A SEARCH FUNCTION; (II) IS NEWLY PUBLISHED OR
UPDATED AT LEAST DAILY UNLESS THE SERVICE SPECIFIES SOME OTHER INTERVAL,
PROVIDED, HOWEVER, THAT THE  NEWS  CONTENT  MUST  BE  NEWLY  UPDATED  OR
PUBLISHED  WITHIN A TWENTY-FOUR HOUR PERIOD THAT PRECEDES OR IMMEDIATELY
FOLLOWS A TIME WHEN THE NON-NEWS CONTENT IS NEWLY PUBLISHED OR  UPDATED;
AND  (III)  IS  PREDOMINANTLY PURCHASED FROM CONTRACTED WIRE SERVICES OR
WRITTEN OR PRODUCED BY THE EMPLOYEES OR ENGAGED INDEPENDENT  CONTRACTORS
OF  THE  PERSON  PROVIDING  THE  SERVICE, INCLUDING, BUT NOT LIMITED TO,
EMPLOYEES OR ENGAGED INDEPENDENT CONTRACTORS OF ANY  AFFILIATE  OF  SUCH
PERSON;
  (C) THE SERVICE IS AVAILABLE TO THE PUBLIC;
  (D)  THE  SERVICE  HOLDS  ITSELF OUT AS A "NEWS SERVICE," "NEWSPAPER,"
"MAGAZINE," "PERIODICAL," "JOURNAL," "POST," OR WORDS OF SIMILAR  IMPORT
AND  DOES  NOT HOLD ITSELF OUT AS SOMETHING OTHER THAN ONE OF SUCH TERMS
OR A TERM OF SIMILAR IMPORT.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13033-01-1

S. 5637                             2

  (E) THE SERVICE HAS CONTINUITY AS TO ITS TITLE AND THE GENERAL  NATURE
OF ITS CONTENT OVER TIME;
  (F)  THE  SERVICE  IS NOT, IN WHOLE OR IN SUBSTANTIAL PART, A LISTING,
CATALOG, DATABASE, OR COMPILATION;
  (G) THE ONLY SEARCH FUNCTION THE SERVICE OFFERS WITHOUT A  SEPARATELY-
STATED,  REASONABLE CHARGE IS A SEARCH OF THE SERVICE'S OR OF ANY OF ITS
AFFILIATES' PRESENT OR PAST  NEWS  CONTENT.  PROVIDED,  A  SERVICE  THAT
SATISFIES  ALL  THE  CLAUSES OF THIS SUBPARAGRAPH EXCEPT THIS CLAUSE MAY
STILL QUALIFY AS AN ELECTRONIC NEWS SERVICE FOR PURPOSES OF  THIS  PARA-
GRAPH  IF THE PROVIDER OF THE SERVICE CAN SHOW THAT THE NON-NEWS CONTENT
AVAILABLE THROUGH THE SEARCH FUNCTION IS MERELY AN  INCIDENTAL  PART  OF
THE  SERVICE,  INCLUDING,  FOR  EXAMPLE, BY SHOWING THAT THE COST TO THE
PERSON PROVIDING THE SERVICE OF ANY NON-NEWS CONTENT  AVAILABLE  THROUGH
THE  SEARCH  FUNCTION  IS LESS THAN THE COST TO THAT PERSON OF PROVIDING
THE NEWS CONTENT AVAILABLE THROUGH THE SERVICE. PROVIDED, FURTHER,  THAT
A PURCHASER'S ACCESS TO THE SERVICE'S SEARCH FUNCTION FOR WHICH THERE IS
A SEPARATELY-STATED, REASONABLE CHARGE TO THE PURCHASER SHALL BE TREATED
SEPARATELY AND IS NOT RELEVANT AS TO WHETHER THIS CLAUSE IS SATISFIED.
  (II) THE FOLLOWING DEFINITIONS APPLY TO SUBPARAGRAPH (I) OF THIS PARA-
GRAPH  AND  SUBDIVISION  (GG)  OF SECTION ELEVEN HUNDRED FIFTEEN OF THIS
ARTICLE:
  (A) "NEWS CONTENT" MEANS THE  ARTICLES,  PHOTOGRAPHS,  AND  VIDEO  AND
AUDIO  MATERIAL CONCERNING GENERAL NEWS OR SPECIALIZED NEWS AND DOES NOT
INCLUDE LISTINGS, ADVERTISEMENTS, CATALOGS, COMPILATIONS, DATABASES,  OR
THE LIKE.
  (B) "NON-NEWS CONTENT" MEANS ANY INFORMATION OTHER THAN NEWS CONTENT.
  (C)  "ARTICLE"  MEANS  A  PROSE  COMPOSITION,  INCLUDING COMMENTARIES,
REVIEWS, EDITORIALS, OP-EDS, LETTERS TO THE EDITOR, AND READER  COMMENTS
ON  ARTICLES.  THE TERM DOES NOT INCLUDE LISTINGS, ADVERTISEMENTS, CATA-
LOGS, COMPILATIONS, DATABASES, OR THE LIKE.
  (D) "GENERAL NEWS" MEANS MATTERS OF GENERAL INTEREST  AND  REPORTS  OF
CURRENT EVENTS.
  (E)  "SPECIALIZED  NEWS" MEANS MATTERS OF A SPECIALIZED INTEREST, SUCH
AS LEGAL, MERCANTILE, FINANCIAL, THEATRICAL, ENTERTAINMENT  NEWS,  POLI-
TICAL, RELIGIOUS, OR SPORTING MATTERS.
  (F) "CAP AMOUNT" MEANS THREE HUNDRED PERCENT OF THE ANNUALIZED AVERAGE
DAILY  NEWSSTAND  PRICE  OF  THE THREE NEWSPAPERS WITH THE LARGEST TOTAL
PAID NATIONAL DAILY CIRCULATION. THE COMMISSIONER  SHALL  DETERMINE  THE
CAP  AMOUNT  ANNUALLY  AND SHALL CAUSE IT TO BE PUBLISHED ON THE DEPART-
MENT'S WEBSITE AND GIVE OTHER APPROPRIATE GENERAL NOTICE THEREOF.    THE
COMMISSIONER  SHALL  DETERMINE  AND  PUBLISH  THE CAP AMOUNT ANNUALLY BY
APRIL FIRST BASED ON PRICES CHARGED DURING THE FIRST WEEK OF JANUARY  OF
THAT  YEAR, WHICH CAP AMOUNT SHALL APPLY FOR THE SUCCEEDING TWELVE-MONTH
PERIOD COMMENCING JUNE FIRST AND ENDING MAY THIRTY-FIRST.    THE  CALCU-
LATION  AND PUBLICATION OF THE CAP AMOUNT UNDER THIS CLAUSE SHALL NOT BE
INCLUDED WITHIN PARAGRAPH (A) OF SUBDIVISION TWO OF SECTION ONE  HUNDRED
TWO OF THE STATE ADMINISTRATIVE PROCEDURE ACT RELATING TO THE DEFINITION
OF A RULE.
  (G)  "AFFILIATE"  MEANS,  WITH RESPECT TO ANY PERSON, ANY OTHER PERSON
THAT,  DIRECTLY  OR  INDIRECTLY  THROUGH  ONE  OR  MORE  INTERMEDIARIES,
CONTROLS,  OR  IS  CONTROLLED  BY, OR IS UNDER COMMON CONTROL WITH, SUCH
PERSON, AND THE TERM "CONTROL" (INCLUDING THE TERMS "CONTROLLED BY"  AND
"UNDER COMMON CONTROL WITH") MEANS THE POSSESSION, DIRECTLY OR INDIRECT-
LY,  OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND
POLICIES OF SUCH PERSON, WHETHER THROUGH OWNERSHIP OF VOTING SECURITIES,
BY CONTRACT OR OTHERWISE.

S. 5637                             3

  S 2. Subdivision (b) of section 1101 of the  tax  law  is  amended  by
adding a new paragraph 38 to read as follows:
  (38)  ELECTRONIC PERIODICAL. (I) A PUBLICATION DELIVERED, FURNISHED OR
PROVIDED TO OR ACCESSED BY THE  PURCHASER  ELECTRONICALLY  OR  DIGITALLY
THAT MEETS ALL OF THE FOLLOWING CONDITIONS:
  (A)  THE PUBLICATION'S PREDOMINANT PURPOSE IS THE PRESENTATION OF NEWS
CONTENT, WHICH IT PROMINENTLY FEATURES;
  (B) THE PUBLICATION IS PUBLISHED AT  STATED  INTERVALS,  AT  LEAST  AS
FREQUENTLY  AS FOUR TIMES A YEAR BUT NO MORE FREQUENTLY THAN WEEKLY, AND
IS NOT UPDATED BETWEEN ISSUES.  HOWEVER,  THE  INCIDENTAL  PROVISION  OF
ADDITIONAL  NEWS CONTENT BETWEEN ISSUES WILL NOT PREVENT THE REQUIREMENT
IN THIS CLAUSE FROM BEING SATISFIED. IN  DETERMINING  WHETHER  THE  NEWS
CONTENT  ADDED  BETWEEN  ISSUES  IS  INCIDENTAL,  AMONG  THE FACTORS THE
COMMISSIONER IS TO CONSIDER IS THE AMOUNT  OF  THE  NEWS  CONTENT  ADDED
BETWEEN  ISSUES RELATIVE TO THE NEWS CONTENT IN PRECEDING ISSUES AND THE
FREQUENCY OF THE PROVISION OF ADDITIONAL NEWS  CONTENT  BETWEEN  ISSUES.
PROVIDED  THAT  THE  DISPLAY OF READER COMMENTS OR LETTERS TO THE EDITOR
BETWEEN ISSUES DOES NOT AFFECT WHETHER THIS CLAUSE IS SATISFIED.
  (C) THE PUBLICATION'S NEWS CONTENT IS PURCHASED FROM  CONTRACTED  WIRE
SERVICES  OR  WRITTEN OR PRODUCED BY MULTIPLE EMPLOYEES OR ENGAGED INDE-
PENDENT CONTRACTORS OF THE PERSON PROVIDING THE PUBLICATION,  INCLUDING,
BUT  NOT LIMITED TO, EMPLOYEES OR ENGAGED INDEPENDENT CONTRACTORS OF ANY
AFFILIATE OF SUCH PERSON;
  (D) THE PUBLICATION IS AVAILABLE TO THE PUBLIC;
  (E) THE PUBLICATION HOLDS ITSELF OUT AS A "MAGAZINE," "PERIODICAL"  OR
WORDS  OF SIMILAR IMPORT AND DOES NOT HOLD ITSELF OUT AS SOMETHING OTHER
THAN A "MAGAZINE," "PERIODICAL," OR WORDS OF SIMILAR IMPORT;
  (F) THE PUBLICATION HAS CONTINUITY AS TO ITS  TITLE  AND  THE  GENERAL
NATURE OF ITS CONTENT OVER TIME;
  (G)  THE  PUBLICATION IS NOT, IN WHOLE OR IN SUBSTANTIAL PART, A LIST-
ING, CATALOG, DATABASE, OR COMPILATION; AND
  (H) THE ONLY SEARCH FUNCTION THE PUBLICATION OFFERS  WITHOUT  A  SEPA-
RATELY-STATED,  REASONABLE CHARGE IS A SEARCH OF THE PUBLICATION'S OR OF
AN AFFILIATE'S PRESENT OR PAST NEWS CONTENT. HOWEVER: (I)  THE  PUBLICA-
TION'S  PROVISION OF ACCESS, AT NO ADDITIONAL CHARGE, TO A SEARCH ENGINE
THAT, APART FROM THE SERVICE, IS OTHERWISE AVAILABLE TO THE  PUBLIC  FOR
FREE  IS  NOT  RELEVANT AS TO WHETHER THIS CLAUSE IS SATISFIED; AND (II)
THE PUBLICATION'S PROVISION OF ACCESS TO A  SEARCH  FUNCTION  FOR  WHICH
THERE  IS  A SEPARATELY-STATED, REASONABLE CHARGE TO THE PURCHASER SHALL
BE TREATED SEPARATELY AND IS NOT RELEVANT AS TO WHETHER THIS  CLAUSE  IS
SATISFIED.
  (II)  FOR  PURPOSES  OF  SUBPARAGRAPH  (I)  OF  THIS PARAGRAPH AND THE
EXEMPTION PROVIDED FOR ELECTRONIC PERIODICALS  IN  SUBDIVISION  (GG)  OF
SECTION  ELEVEN HUNDRED FIFTEEN OF THIS ARTICLE, "ARTICLES" HAS THE SAME
MEANING AS IN SUBPARAGRAPH (II) OF PARAGRAPH THIRTY-SEVEN OF SUBDIVISION
(B) OF THIS SECTION AND "NEWS CONTENT" MEANS ARTICLES, PHOTOGRAPHS,  AND
VIDEO  AND AUDIO MATERIAL DEVOTED TO LITERATURE, THE SCIENCES, THE ARTS,
NEWS, AN INDUSTRY, PROFESSION, SPORT OR OTHER  FIELD  OF  ENDEAVOR,  AND
DOES NOT INCLUDE LISTINGS, ADVERTISEMENTS, CATALOGS, COMPILATIONS, DATA-
BASES, OR THE LIKE.
  S 3. Paragraph 1 of subdivision (c) of section 1105 of the tax law, as
amended  by  chapter  373  of  the  laws  of 1995, 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

S. 5637                             4

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.
  S 4. Paragraph (i) of subdivision (b) of section 1115 of the tax  law,
as  amended  by  chapter  575 of the laws of 1965, is amended to read as
follows:
  (i) Telephony and telegraphy and telephone and telegraph service  used
by  newspapers,  ELECTRONIC  NEWS SERVICES, radio broadcasters and tele-
vision broadcasters in the collection or dissemination of news shall  be
exempt  from  the  tax  imposed  under subdivision (b) of section eleven
hundred five OF THIS ARTICLE if the charge for such services is  a  toll
charge  or  a  charge  for  mileage  services,  including the associated
station terminal equipment.
  S 5. Section 1115 of the tax law is amended by adding a  new  subdivi-
sion (gg) to read as follows:
  (GG)  (1)  RECEIPTS  FROM  THE  SALE OF AN ELECTRONIC NEWS SERVICE AND
CONSIDERATION GIVEN OR CONTRACTED TO BE GIVEN FOR, OR FOR THE USE OF, AN
ELECTRONIC NEWS SERVICE SHALL BE EXEMPT FROM THE TAXES IMPOSED BY  PARA-
GRAPH  ONE  OR NINE OF SUBDIVISION (C) OF SECTION ELEVEN HUNDRED FIVE OF
THIS ARTICLE AND CLAUSE (C) OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED
TEN OF THIS ARTICLE IF THE RECEIPTS FROM THE SALE OF, OR  THE  CONSIDER-
ATION GIVEN FOR, OR FOR THE USE OF, THE ELECTRONIC NEWS SERVICE DOES NOT
EXCEED THE CAP AMOUNT AS DEFINED IN SUBPARAGRAPH (II) OF PARAGRAPH THIR-
TY-SEVEN  OF SUBDIVISION (B) OF SECTION ELEVEN HUNDRED ONE OF THIS ARTI-
CLE. IF THE SUBSCRIPTION PERIOD OF THE ELECTRONIC NEWS SERVICE IS  OTHER
THAN  A YEAR, THE CAP AMOUNT SHALL BE ADJUSTED PROPORTIONATELY IN DETER-
MINING WHETHER THE SUBSCRIPTION PRICE EXCEEDS THE  CAP  AMOUNT.  IF  THE
CONTRACT  FOR  THE  SALE OF THE ELECTRONIC NEWS SERVICE GRANTS MORE THAN
ONE PERSON THE RIGHT TO VIEW THE ELECTRONIC NEWS SERVICE,  THE  RECEIPTS
FROM THE SALE OF, OR THE CONSIDERATION GIVEN FOR, OR FOR THE USE OF, THE
SERVICE  WILL  BE DEEMED NOT TO EXCEED THE CAP AMOUNT ONLY IF THE LISTED
SELLING PRICE FOR AN INDIVIDUAL SUBSCRIPTION ON  THE  DAY  THE  CONTRACT
COMMENCES DOES NOT EXCEED THE CAP AMOUNT.
  (2)  RECEIPTS FROM THE SALE OF AN  ELECTRONIC PERIODICAL AND CONSIDER-
ATION GIVEN, OR CONTRACTED TO BE GIVEN FOR, OR FOR THE USE OF, AN  ELEC-
TRONIC  PERIODICAL  SHALL  BE EXEMPT FROM THE TAXES IMPOSED BY PARAGRAPH
ONE OR NINE OF SUBDIVISION (C) OF SECTION ELEVEN HUNDRED FIVE AND CLAUSE
(C) OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED TEN OF THIS ARTICLE.
  (3) IF AN ELECTRONIC PERIODICAL IS SOLD TOGETHER WITH ANY OTHER COMPO-
NENTS THAT ARE TAXABLE UNDER THIS ARTICLE (OTHER THAN AN ELECTRONIC NEWS
SERVICE) FOR A SINGLE PRICE, THE EXEMPTION  IN  PARAGRAPH  TWO  OF  THIS
SUBDIVISION SHALL NOT APPLY TO THE RECEIPTS FROM THE SALE OF, OR CONSID-
ERATION  GIVEN,  OR  CONTRACTED  TO  BE GIVE FOR, OR FOR THE USE OF, THE
ELECTRONIC PERIODICAL AND SUCH OTHER COMPONENTS UNLESS THE VENDOR  SELLS
SUCH  ELECTRONIC  PERIODICAL AND SUCH OTHER COMPONENTS SEPARATELY IN THE
REGULAR COURSE OF BUSINESS. IF THE REQUIREMENT IN THE PRECEDING SENTENCE
IS SATISFIED, THEN THE EXEMPTION WILL APPLY TO AN AMOUNT  EQUAL  TO  THE
BUNDLED  PRICE  MULTIPLIED  BY A FRACTION, THE NUMERATOR OF WHICH IS THE
PRICE OF THE ELECTRONIC PERIODICAL WHEN SOLD SEPARATELY AND THE  DENOMI-
NATOR OF WHICH IS THE SUM OF THE PRICE OF THE ELECTRONIC PERIODICAL WHEN

S. 5637                             5

SOLD SEPARATELY AND THE PRICE OF THE OTHER COMPONENTS OF THE TRANSACTION
WHEN SOLD SEPARATELY.
  (4)  IF  AN ELECTRONIC NEWS SERVICE IS SOLD TOGETHER WITH OTHER COMPO-
NENTS FOR A SINGLE PRICE, THE EXEMPTION IN PARAGRAPH ONE OF THIS  SUBDI-
VISION  SHALL  NOT  APPLY TO THE RECEIPTS FROM THE SALE OF, OR CONSIDER-
ATION GIVEN, OR CONTRACTED TO BE GIVEN, FOR, OR  FOR  THE  USE  OF,  THE
ELECTRONIC  NEWS  SERVICE  AND  THE  OTHER COMPONENTS IN THE TRANSACTION
UNLESS ONE OF THE FOLLOWING EXCEPTIONS APPLIES AND ONLY  TO  THE  EXTENT
INDICATED:
  (I)  THE  PROVIDER  OF THE ELECTRONIC NEWS SERVICE DOES NOT SEPARATELY
SELL THE ELECTRONIC NEWS SERVICE IN THE REGULAR COURSE OF BUSINESS,  THE
OTHER  COMPONENTS  ARE  NOT  TAXABLE UNDER THIS ARTICLE, AND THE BUNDLED
PRICE IS LESS THAN THE CAP AMOUNT, IN WHICH CASE THE  EXEMPTION  APPLIES
TO THE FULL BUNDLED PRICE; OR
  (II)  THE PROVIDER OF THE ELECTRONIC NEWS SERVICE SELLS THE ELECTRONIC
NEWS SERVICE AND EACH OF THE OTHER COMPONENTS OF THE  TRANSACTION  SEPA-
RATELY  IN THE REGULAR COURSE OF BUSINESS, WHETHER OR NOT THE COMPONENTS
ARE TAXABLE UNDER THIS ARTICLE, AND THE SEPARATE PRICE OF THE ELECTRONIC
NEWS SERVICE DOES NOT EXCEED THE CAP AMOUNT. IF THE CONDITIONS  IN  THIS
SUBPARAGRAPH  ARE  MET,  THE EXEMPTION PROVIDED BY PARAGRAPH ONE OF THIS
SUBDIVISION WILL APPLY ONLY TO AN AMOUNT  EQUAL  TO  THE  BUNDLED  PRICE
MULTIPLIED  BY  A  FRACTION,  THE NUMERATOR OF WHICH IS THE PRICE OF THE
ELECTRONIC NEWS SERVICE WHEN SOLD SEPARATELY IN THE  REGULAR  COURSE  OF
BUSINESS,  AND  THE  DENOMINATOR OF WHICH IS THE SUM OF THE PRICE OF THE
ELECTRONIC NEWS SERVICE WHEN SOLD SEPARATELY IN THE  REGULAR  COURSE  OF
BUSINESS  AND THE PRICES OF THE OTHER COMPONENTS WHEN SOLD SEPARATELY IN
THE REGULAR COURSE OF BUSINESS; PROVIDED, HOWEVER, THAT IN NO CASE SHALL
THE EXEMPT AMOUNT BE GREATER THAN THE AMOUNT OF THE CHARGE FOR THE ELEC-
TRONIC NEWS SERVICE WHEN SOLD SEPARATELY IN THE REGULAR COURSE OF  BUSI-
NESS.
  (5)  FOR  THE  PURPOSES  OF THIS SUBDIVISION "BUNDLED PRICE" MEANS THE
PRICE AT WHICH AN ELECTRONIC NEWS SERVICE OR AN ELECTRONIC PERIODICAL IS
SOLD TOGETHER WITH ANY OTHER COMPONENTS FOR ONE PRICE;  AND  "COMPONENT"
MEANS  ANY  PROPERTY,  SERVICE, OR OTHER ITEM OF WHATEVER NATURE THAT IS
SOLD TOGETHER WITH AN ELECTRONIC NEWS SERVICE OR  ELECTRONIC  PERIODICAL
FOR ONE PRICE.
  (6)  NOTHING  IN  THIS  SUBDIVISION  SHALL  EXEMPT, OR BE CONSTRUED TO
EXEMPT, ANY SEPARATE CHARGE BY THE VENDOR OF AN ELECTRONIC NEWS  SERVICE
OR  ELECTRONIC  PERIODICAL  FOR OTHER INFORMATION SERVICES, OR ANY OTHER
PROPERTY OR SERVICE SUBJECT TO TAX UNDER THIS  ARTICLE,  THAT  DOES  NOT
CONSTITUTE AN ELECTRONIC NEWS SERVICE OR ELECTRONIC PERIODICAL.
  S 6. Severability clause. If any clause, sentence, paragraph, subdivi-
sion,  section  or  part  of  this act shall be adjudged by any court of
competent jurisdiction to be invalid, this act shall be null, void,  and
without  effect  in its entirety and thus prior law shall be reinstated.
It is hereby declared to be the intent of the legislature that this  act
would  not  have  been  enacted  if such invalid provisions had not been
included herein.
  S 7. This act shall take effect on the first day of a sales tax  quar-
terly period, as described in subdivision (b) of section 1136 of the tax
law, next commencing at least 90 days after this act shall have become a
law  and  shall  apply  in  accordance  with the applicable transitional
provisions in sections 1106 and 1217 of the tax law; provided,  however,
that  the  commissioner  of  taxation  and finance shall compute the cap
amount under subparagraph (ii) of paragraph 37  of  subdivision  (b)  of
section  1101 of the tax law, as added by section one of this act, based

S. 5637                             6

on prices in effect during the first seven days of  the  first  calendar
month  next  commencing  after this act shall have become a law, and the
commissioner of taxation and finance shall publish that  cap  amount  at
least  one  month  prior  to the date this act takes effect and such cap
amount shall apply to sales made, services rendered, or  uses  occurring
from  the  date  this  act  takes effect through the next succeeding May
thirty-first.

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