NY State Senate Bill 2011-S5732

Senate Bill S5732

2011-2012 Legislative Session

Relates to facilitating the compliance of room remarketers with their obligation to collect sales tax on their sales of occupancy

download bill text pdf

Archive: Last Bill Status - Stricken

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

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 25, 2012	recommit, enacting clause stricken
Jan 05, 2012	print number 5732a
Jan 05, 2012	amend (t) and recommit to investigations and government operations
Jan 04, 2012	referred to investigations and government operations returned to senate died in assembly
Jun 17, 2011	referred to ways and means delivered to assembly passed senate ordered to third reading cal.1359
Jun 14, 2011	referred to rules

Votes

- Jun 17, 2011 - Floor Vote
  S5732
  
  62
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 17, 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

Bill Amendments

Original

A (Active)

2011-S5732 - Details

Law Section:: Tax Law
Laws Affected:: Amd §§1105, 1111 & 1119, Tax L; amd §11-2502, NYC Ad Cd

2011-S5732 - Summary

Relates to facilitating the compliance of room remarketers with their obligation to collect sales tax on their sales of occupancy.

2011-S5732 - Sponsor Memo

                                BILL NUMBER:S5732

TITLE OF BILL:
An act
to amend the tax law, in relation to facilitating the
compliance of room remarketers
with their obligation to collect sales tax on their sales of occupancy

PURPOSE:
The purpose of this legislation is to facilitate the compliance of
room remarketers with the duty to collect sales tax and New York City
hotel room occupancy tax on hotel occupancies.

SUMMARY OF PROVISIONS:
Sections 1 and 2 of this bill adds new subdivision (r) to section
1111 of the Tax Law and the accompanying reference change, which would
provide the following relief to room remarketers. First, with regard
to transactions in which a customer obtains occupancy together with
other items, for one price, this bill provides room remarketers with
a way of computing the portion of the bill taxable as rent; the room
remarketers may compute such amount based on the consideration
payable to the hotel for the occupancy relative to the consideration
payable for the other items, or may use any other method authorized
by the commissioner Second, the bill would permit room remarketers to
not specify the amount of the sales tax due on occupancy at the time
the customer makes the reservation and instead to provide the

information on any invoice given to the customer prior to the
completion of the occupancy. Third, room remarketers would report
occupancy transactions in the sales tax filing period in which the
occupancy ended, rather than in the sales tax period during which
they collected the consideration for the occupancy. Fourth, section 3
of this bill amends Tax Law section 1119(e) to relieve a room
remarketer of the burden of obtaining the
certificate of authority number of the hotel that sold the occupancy
in order to qualify for a credit or refund of the sales tax the room
remarketer paid to the hotel for the occupancy.

Section 3 allows room remarketers to supply certain identifying
information about the hotel, including its address and telephone
number, instead of the certificate of authority number when the hotel
refuses to supply the latter number.

Sections 4-6 of the bill amends the New York City Administrative Code
to make some similar changes to provisions regarding room
remarketers' obligation to collect the City's hotel room occupancy
tax and to change some internal cross-references to other sections of
the Administrative Code.

EXISTING LAW:
Sales tax must generally be reported in the filing period in which the
seller collected the receipts from the sale (Tax Law § 1137[a)).
The seller must separately state the sales tax on any bill, invoice
or other memorandum of sale given to the customer (Tax Law §1132
[a][1]). Finally, if a room remarketer transaction involves a sale
of occupancy together with other items that are not taxable, the
charge for the whole bundle is taxable as rent unless the room


remarketer separately states on any invoice given to the customer a
charge for rent that is reasonable in relation to the value of the
other components of the bundle (Tax Law § 1105[e][2)).

JUSTIFICATION:
Last year's budget bill (section 4 of part AA of Chapter 57 of the
Laws of 2010) required room remarketers to collect sales tax on
sales of occupancy, and required room remarketers to collect New York
City hotel room occupancy taxes, while granting them a credit for
sales tax they paid to the hotels where the occupancy took place.
This bill makes a number of changes in the Tax Law and to the New
York City Administrative Code to better conform procedures to the
manner in which room remarketers have traditionally done business,
thereby lessening the compliance burden on them.

First, this bill revises the rule in last year's legislation regarding
sales in which a room remarketer bundles occupancy with nontaxable
items, such as airfare. Under last year's bill, the room remarketer
had to separately state the occupancy portion of the price of the
bundle ("bundled price") or treat the full amount of the bundled
price as rent and collect tax on that amount. The traditional
practice in the industry, however, is not to separately state the
price of the occupancy portion of the bundle on the invoice given the
customer. This bill conforms the sales tax and New York occupancy tax
to this industry practice by allowing a room remarketer to calculate
the portion of the bill taxable as rent based on the consideration
payable to the hotel for the occupancy relative to the consideration
payable for the other items.

The bill also allows the room remarketers to calculate the portion of
the bill taxable as rent based on any other method authorized by the
commissioner. With respect to New York City hotel occupancy tax, the
bill provides that the room remarketer may calculate the portion of
the bill taxable as rent based on the formula outlined above or,
alternatively, use any other reasonable method pursuant to which the
rent portion of the consideration would be no less than the
computation of rent under the formula.

Under last year's legislation, room remarketers are subject to the
usual sales tax rule that requires sales tax to be separately stated
on any invoice given the customer. The websites of most room
remarketers, however, are not set up to separate the state and local
sales tax from other taxes due on the occupancy. This bill would
relieve room remarketers of the need to undertake the wholesale
reprogramming of their sites to perform this task and allowing them
to meet the separate statement requirement for both New York sales
tax and New York City hotel occupancy tax with an invoice showing
such tax provided to the customer any time up to the end of the
occupancy.

Last year's bill required room remarketers to report tax in the period
in which the room remarketer debited the customer's credit card for
the occupancy. While this is the usual sales tax rule, it is not well
suited to the room remarketer industry. Because of the ease with
which reservations can be made or changed, customers of room
remarketers often cancel reservations or change the dates of the
reservations. If the reservation is made in one reporting period, and


cancelled in another, however, sales tax refund claims would be
generated, because the room remarketer would have already had to
remit to the State the sales tax due on the occupancy. This bill
would obviate the need for such refund claims by allowing room
remarketers to report the tax due on occupancy and remit the tax to
the State in the filing period in which the occupancy actually
occurs, as is current practice with respect to the New York City
hotel room occupancy tax. This bill also facilitates the process by
which room remarketers obtain credit or refund of the sales tax they
paid to the hotels that provide the occupancy that is part of the
room remarketers' transactions. Last year's bill required a room
remarketer to obtain the certificate of authority number of
the hotel that sold it the occupancy in order to qualify for a credit
or refund of the sales tax the remarketer paid the hotel for the
occupancy. Because hotels sometimes refuse to supply that number,
this bill allows room remarketers, in the event of such a refusal, to
substitute certain identifying information about the hotel, including
its address and telephone number.

LEGISLATIVE HISTORY:
New legislation.

FISCAL IMPLICATIONS:
None.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This bill would become effective on September 1, 2011, and would
apply to occupancies commencing on or after that date.

2011-S5732 - Bill Text download pdf

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

                                  5732

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              June 14, 2011
                               ___________

Introduced  by  Sen.  DeFRANCISCO -- read twice and ordered printed, and
  when printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in relation to facilitating the  compliance
  of  room  remarketers  with  their  obligation to collect sales tax on
  their sales of occupancy

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

  Section  1. Subdivision (e) of section 1105 of the tax law, as amended
by section 4 of part AA of chapter 57 of the laws of 2010, is amended to
read as follows:
  (e) (1) The rent for every occupancy of a room or rooms in a hotel  in
this  state,  except that the tax shall not be imposed upon (i) a perma-
nent resident, or (ii) where the rent is not more than at  the  rate  of
two dollars per day.
  (2)  [When]  EXCEPT  AS  PROVIDED IN SUBDIVISION (R) OF SECTION ELEVEN
HUNDRED ELEVEN OF THIS PART, WHEN occupancy is provided,  for  a  single
consideration,  with property, services, amusement charges, or any other
items, the separate sale of which is not subject to tax under this arti-
cle, the entire consideration shall be treated as rent  subject  to  tax
under  paragraph  one of this subdivision; provided, however, that where
the amount of the rent for occupancy is stated separately from the price
of such property, services, amusement charges, or other  items,  on  any
sales slip, invoice, receipt, or other statement given the occupant, and
such  rent  is  reasonable  in  relation  to the value of such property,
services, amusement charges or other items, only such separately  stated
rent will be subject to tax under paragraph one of this subdivision.
  S  2.  Section 1111 of the tax law is amended by adding a new subdivi-
sion (r) to read as follows:
  (R) (1) IN REGARD TO THE COLLECTION OF SALES  TAX  ON  OCCUPANCIES  BY
ROOM  REMARKETERS, WHEN OCCUPANCY IS PROVIDED FOR A SINGLE CONSIDERATION
WITH PROPERTY, SERVICES, AMUSEMENT CHARGES, OR ANY OTHER ITEMS,  WHETHER

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13095-03-1

S. 5732                             2

OR  NOT  SUCH OTHER ITEMS ARE TAXABLE, THE RENT PORTION OF THE CONSIDER-
ATION FOR SUCH TRANSACTION SHALL BE  COMPUTED  AS  FOLLOWS:  EITHER  THE
TOTAL  CONSIDERATION  RECEIVED  BY  THE  ROOM REMARKETER MULTIPLIED BY A
FRACTION,  THE NUMERATOR OF WHICH SHALL BE THE CONSIDERATION PAYABLE FOR
THE OCCUPANCY BY THE ROOM REMARKETER AND THE DENOMINATOR OF WHICH  SHALL
BE  SUCH  CONSIDERATION PAYABLE FOR THE OCCUPANCY PLUS THE CONSIDERATION
PAYABLE BY THE REMARKETER FOR THE OTHER ITEMS  BEING  SOLD,  OR  BY  ANY
OTHER  METHOD  AS  MAY  BE  AUTHORIZED  BY THE COMMISSIONER. IF THE ROOM
REMARKETER FAILS TO SEPARATELY STATE THE TAX ON THE RENT SO COMPUTED  ON
A SALES SLIP, INVOICE, RECEIPT, OR OTHER STATEMENT GIVEN TO THE OCCUPANT
IN  THE  MANNER PRESCRIBED BY PARAGRAPH TWO OF THIS SUBDIVISION OR FAILS
TO MAINTAIN RECORDS OF THE PRICES OF ALL  COMPONENTS  OF  A  TRANSACTION
COVERED  BY THIS PARAGRAPH, THE ENTIRE CONSIDERATION SHALL BE TREATED AS
RENT SUBJECT TO TAX UNDER PARAGRAPH ONE OF SUBDIVISION  (E)  OF  SECTION
ELEVEN  HUNDRED  FIVE OF THIS PART. NOTHING HEREIN SHALL BE CONSTRUED TO
SUBJECT TO TAX OR EXEMPT FROM TAX ANY SERVICE OR PROPERTY  OR  AMUSEMENT
CHARGE  OR OTHER ITEMS OTHERWISE SUBJECT TO TAX OR EXEMPT FROM TAX UNDER
THIS ARTICLE OR PURSUANT TO THE AUTHORITY OF ARTICLE TWENTY-NINE OF THIS
CHAPTER. A ROOM REMARKETER'S RECORDS OF THE  CONSIDERATION  PAYABLE  FOR
ALL  COMPONENTS  OF  A TRANSACTION COVERED BY THIS PARAGRAPH ARE RECORDS
REQUIRED TO BE MAINTAINED FOR PURPOSES OF  SUBDIVISION  (A)  OF  SECTION
ELEVEN HUNDRED THIRTY-FIVE OF THIS ARTICLE.
  (2)  IN  REGARD  TO THE COLLECTION OF SALES TAX ON OCCUPANCIES BY ROOM
REMARKETERS, INCLUDING A TRANSACTION DESCRIBED IN PARAGRAPH ONE OF  THIS
SUBDIVISION, THE REQUIREMENTS OF THE SECOND SENTENCE OF PARAGRAPH ONE OF
SUBDIVISION  (A)  OF  SECTION  ELEVEN HUNDRED THIRTY-TWO OF THIS ARTICLE
SHALL BE DEEMED SATISFIED IF THE REMARKETER GIVES THE CUSTOMER  A  SALES
SLIP,  INVOICE,  RECEIPT,  OR  OTHER  STATEMENT OF THE PRICE ("INVOICE")
PRIOR TO THE CUSTOMER'S COMPLETION OF HIS OR HER OCCUPANCY, ON WHICH THE
AMOUNT OF TAX DUE UNDER THIS ARTICLE AND PURSUANT TO  THE  AUTHORITY  OF
ARTICLE  TWENTY-NINE OF THIS CHAPTER IS STATED. THE ROOM REMARKETER MUST
KEEP EITHER A COPY OF THE INVOICE AS  REQUIRED  BY  SUBDIVISION  (A)  OF
SECTION  ELEVEN  HUNDRED  THIRTY-FIVE  OF  THIS  ARTICLE,  OR ELECTRONIC
RECORDS THAT ACCURATELY REFLECT THE INFORMATION THAT IS ON  THE  INVOICE
PROVIDED TO THE CUSTOMER.
  (3)  IN REGARD TO THE REPORTING AND THE PAYMENT TO THE COMMISSIONER BY
ROOM REMARKETERS OF SALES TAX DUE ON  OCCUPANCIES,  SUBDIVISION  (A)  OF
SECTION  ELEVEN  HUNDRED  THIRTY-SEVEN  OF THIS ARTICLE SHALL BE READ TO
REQUIRE A ROOM REMARKETER TO REPORT SUCH SALES  TAX  DUE,  INCLUDING  IN
REGARD  TO A TRANSACTION DESCRIBED IN PARAGRAPH ONE OF THIS SUBDIVISION,
ON THE RETURN DUE FOR THE FILING PERIOD IN WHICH THE OCCUPANCY ENDS AND,
AT THE TIME OF FILING SUCH RETURN, TO PAY TO THE COMMISSIONER THE  TOTAL
AMOUNT DESCRIBED BY SUCH SUBDIVISION (A).
  S  3.  Subdivision  (e)  of  section  1119 of the tax law, as added by
section 5 of part AA of chapter 57 of the laws of 2010,  is  amended  to
read as follows:
  (e)  Subject  to  conditions and limitations provided in this subdivi-
sion, a room remarketer shall be allowed a refund or credit against  the
amount of tax collected and required to be remitted under section eleven
hundred thirty-seven of this article in the amount of the tax it paid to
an  operator  of a hotel under section eleven hundred four of this arti-
cle, where applicable, and subdivision (e)  of  section  eleven  hundred
five of this article. Provided, however, that, in order to qualify for a
refund  or  credit  under  this  subdivision for any sales tax quarterly
period, the room remarketer must, for that quarter,  (1)  be  registered
for  sales tax purposes under section eleven hundred thirty-four of this

S. 5732                             3

article; (2) collect the taxes imposed by section eleven hundred four of
this article, where applicable, and subdivision (e)  of  section  eleven
hundred five of this article; and (3) furnish the certificate of author-
ity  number  of  the  operator to whom the applicant paid the tax in its
application for refund or credit  if  required  on  that  form  or  upon
request.    PROVIDED THAT IF THE ROOM REMARKETER REQUESTS THE OPERATOR'S
CERTIFICATE OF AUTHORITY NUMBER AND IS NOT PROVIDED  WITH  THAT  NUMBER,
THE ROOM REMARKETER MAY SATISFY THIS REQUIREMENT BY PROVIDING THE OPERA-
TOR'S  NAME,  BUSINESS ADDRESS, TELEPHONE NUMBER, AND THE ADDRESS OF THE
HOTEL WHERE THE OCCUPANCY TOOK PLACE. An application for refund or cred-
it under this subdivision must be filed with the commissioner within the
time provided by subdivision (a) of section eleven  hundred  thirty-nine
of  this  article. The application must be in the form prescribed by the
commissioner. Where an application for credit has been filed, the appli-
cant may immediately take the credit on the return that is  due  coinci-
dent with or immediately subsequent to the time that the applicant files
the  application  for  credit.  However, the taking of the credit on the
return is deemed to be part of the application for credit. The procedure
for granting or denying the applications for refund or credit and review
of those determinations shall be  as  provided  in  subdivision  (e)  of
section eleven hundred thirty-nine of this article. An operator, includ-
ing  a  room  remarketer, who is paid tax by a room remarketer must upon
request provide the remarketer with its certificate of authority number,
provided that the operator's failure  to  do  so  does  not  change  the
requirement set forth in paragraph three of this subdivision.
  S  4.  Paragraph 4 of subdivision a of section 11-2502 of the adminis-
trative code of the city of New York, as amended by section 8 of part AA
of chapter 57 of the laws of 2010, is amended to read as follows:
  (4) (I) When occupancy is provided, for a single  consideration,  with
property,  services, amusement charges, or any other items, the separate
sale of which is not subject to  tax  under  this  chapter,  the  entire
consideration  shall  be  treated as rent subject to tax under paragraph
one of this subdivision; provided, however, that where the amount of the
rent for occupancy is stated separately from the price of such property,
services, amusement charges or other items on any sales  slip,  invoice,
receipt,  or other statement given the occupant and such rent is reason-
able in relation to the value  of  such  property,  services,  amusement
charges,  or  other  items,  only  such  separately  stated rent will be
subject to tax under [paragraph one of] this subdivision.
  (II) IN REGARD TO THE COLLECTION OF TAX ON OCCUPANCIES BY REMARKETERS,
WHEN OCCUPANCY IS PROVIDED, FOR A SINGLE CONSIDERATION,  WITH  PROPERTY,
SERVICES,  AMUSEMENT  CHARGES,  OR  ANY OTHER ITEMS, WHETHER OR NOT SUCH
OTHER ITEMS ARE TAXABLE, THE RENT PORTION OF THE CONSIDERATION FOR  SUCH
SALE  SHALL BE COMPUTED AS FOLLOWS: THE TOTAL CONSIDERATION FOR THE SALE
MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH SHALL BE THE  CONSIDER-
ATION  PAID  TO THE HOTEL FOR THE OCCUPANCY AND THE DENOMINATOR OF WHICH
SHALL BE THE CONSIDERATION PAID TO THE HOTEL FOR THE OCCUPANCY PLUS  THE
CONSIDERATION PAID TO THE PROVIDERS OF THE OTHER ITEMS BEING SOLD, OR BY
ANY  OTHER  REASONABLE  METHOD  PURSUANT  TO  WHICH  THE RENT PORTION OF
CONSIDERATION WOULD BE NO LESS THAN THE COMPUTATION OF RENT  PORTION  OF
CONSIDERATION  UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH.  NOTHING HEREIN
SHALL BE CONSTRUED TO SUBJECT TO TAX OR EXEMPT FROM TAX ANY  SERVICE  OR
PROPERTY  OR AMUSEMENT CHARGE OR OTHER ITEMS OTHERWISE SUBJECT TO TAX OR
EXEMPT FROM TAX UNDER THIS CHAPTER.

S. 5732                             4

  S 5. Paragraph 5 of subdivision a of section 11-2502 of  the  adminis-
trative code of the city of New York, as amended by section 8 of part AA
of chapter 57 of the laws of 2010, is amended to read as follows:
  (5)  A room remarketer shall be allowed a refund or credit against the
taxes collected and required to be remitted pursuant to section  11-2505
of  this chapter in the amount of the tax it paid to the operator of the
hotel or another room remarketer under [paragraph three of] this  subdi-
vision.  Provided,  however,  that  in  order to qualify for a refund or
credit under this paragraph with respect to  any  quarterly  period,  as
described  in subdivision a of section 11-2504 of this chapter, the room
remarketer must, with respect to such quarter,  (i)  be  registered  for
hotel room occupancy tax purposes under section 11-2514 of this chapter,
and  (ii)  collect the taxes imposed by paragraphs two and three of this
subdivision. Subject to the conditions and  limitations  of  this  para-
graph,  the provisions of section 11-2507 of this chapter shall apply to
refunds or credits under this paragraph.
  S 6. Subdivision f of section 11-2502 of the  administrative  code  of
the  city  of New York, as amended by local law number 43 of the city of
New York for the year 2009 and paragraph 2 as renumbered by section 9 of
part AA of chapter 57 of the  laws  of  2010,  is  amended  to  read  as
follows:
  f.  The  tax  to be collected shall be stated [and charged] separately
from the rent [and shown separately on any record thereof, at  the  time
when  the  occupancy  is  arranged or contracted for and charged for and
upon every evidence of occupancy or any bill or statement or charge made
for said occupancy issued or delivered by the operator or room remarket-
er] ON A SALES SLIP, INVOICE, RECEIPT, OR OTHER STATEMENT OF  THE  PRICE
("INVOICE")  GIVEN TO THE OCCUPANT PRIOR TO THE OCCUPANT'S COMPLETION OF
HIS OR HER OCCUPANCY AND BE VERIFIABLE FROM THE BOOKS AND RECORDS OF  AN
OPERATOR OR ROOM REMARKETER RESPONSIBLE FOR COLLECTING AND REMITTING THE
TAX.
  (1)  Where an occupant rents a room directly from an operator, the tax
shall be paid by the occupant to the operator  as  trustee  for  and  on
account of the city, and the operator shall be liable for the collection
of the tax on the rent and for the payment of the tax on the rent.
  (2)  The  operator or room remarketer and any officer of any corporate
operator or room remarketer shall be personally liable for  the  portion
of the tax collected or required to be collected under this chapter, and
the  operator shall have the same right in respect to collecting the tax
from the occupant, or in respect to nonpayment of the tax by  the  occu-
pant  as if the tax were a part of the rent for the occupancy payable at
the time such tax shall become due and owing, including  all  rights  of
eviction, dispossession, repossession and enforcement of any innkeeper's
lien  that  he or she may have in the event of nonpayment of rent by the
occupant; provided however, that the commissioner of  finance  shall  be
joined as a party in any action or proceeding brought by the operator to
collect or enforce collection of the tax.
  S  7.  This act shall take effect September 1, 2011 and shall apply to
occupancies that commence on or after such date.

2011-S5732A (ACTIVE) - Details

Law Section:: Tax Law
Laws Affected:: Amd §§1105, 1111 & 1119, Tax L; amd §11-2502, NYC Ad Cd

2011-S5732A (ACTIVE) - Summary

Relates to facilitating the compliance of room remarketers with their obligation to collect sales tax on their sales of occupancy.

2011-S5732A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5732A

TITLE OF BILL:

An act
to amend the tax law and the administrative code of the city of New
York, in relation to facilitating the
compliance of room remarketers
with their obligation to collect sales tax on their sales of occupancy

PURPOSE:

The purpose of this legislation is to facilitate the compliance of
room remarketers with the duty to collect sales tax and New York City
hotel room occupancy tax on hotel occupancies.

SUMMARY OF PROVISIONS:

Sections 1 and 2 of this bill adds new subdivision (r) to section 1111
of the Tax Law and the accompanying reference change, which would
provide the following relief to room remarketers. First, with regard
to transactions in which a customer obtains occupancy together with
other items, for one price, this bill provides room remarketers with
a way of computing the portion of the bill taxable as rent; the room
remarketers may compute such amount based on the consideration
payable to the hotel for the occupancy relative to the consideration

payable for the other items, or may use any other method authorized
by the commissioner Second, the bill would permit room remarketers to
not specify the amount of the sales tax due on occupancy at the time
the customer makes the reservation and instead to provide the
information on any invoice given to the customer prior to the
completion of the occupancy. Third, room remarketers would report
occupancy transactions in the sales tax filing period in which the
occupancy ended, rather than in the sales tax period during which
they collected the consideration for the occupancy. Fourth, section 3
of this bill amends Tax Law section 1119(e) to relieve a room
remarketer of the burden of obtaining the certificate
of authority number of the hotel that sold the occupancy in
order to qualify for a credit or refund of the sales tax the room
remarketer paid to the hotel for the occupancy.

Section 3 allows room remarketers to supply certain identifying
information about the hotel, including its address and telephone
number, instead of the certificate of authority number when the hotel
refuses to supply the latter number.

Sections 4-6 of the bill amends the New York City Administrative Code
to make some similar changes to provisions regarding room
remarketers' obligation to collect the City's hotel room occupancy
tax and to change some internal cross-references to other sections of
the Administrative Code.

EXISTING LAW:

Sales tax must generally be reported in the filing period in which
the seller collected the receipts from the sale (Tax
Law §1137 a)). The seller must separately state the sales
tax on any bill, invoice or other memorandum of sale given to the
customer (Tax Law § 1132 a 1).  Finally, if a room remarketer
transaction involves a sale of occupancy together with the
other items that are not taxable, the charge for the whole
bundle is taxable as rent unless the room remarketer separately
states on any invoice given to the customer a charge for rent that
is reasonable in relation to the value of the other components of
the bundle (Tax Law § 1105e 2))

JUSTIFICATION:

Last year's budget bill (section 4 of part AA of Chapter 57 of the
Laws of 2010) required room remarketers to collect sales tax on sales
of occupancy, and required room remarketers to collect New York City
hotel room occupancy taxes, while granting them a credit for sales
tax they paid to the hotels where the occupancy took place. This bill
makes a number of changes in the Tax Law and to the New York City
Administrative Code to better conform procedures to the manner in
which room remarketers have traditionally done business, thereby
lessening the compliance burden on them. First, this bill revises the
rule in last year's legislation regarding sales in which a room
remarketer bundles occupancy with nontaxable items, such as airfare.
Under last year's bill, the room remarketer had to separately state
the occupancy portion of the price of the bundle ("bundled price") or
treat the full amount of the bundled price as rent and collect tax on
that amount. The traditional practice in the industry, however, is
not to separately state the price of the occupancy portion of the
bundle on the invoice given the customer. This bill conforms the
sales tax and New York occupancy tax to this industry practice by
allowing a room remarketer to calculate
the portion of the bill taxable as rent based on the
consideration payable to the hotel for the occupancy relative to the
consideration payable for the other items. The bill also allows the
room remarketers to calculate the portion of the bill taxable as rent
based on any other method authorized by the commissioner. With
respect to New York City hotel occupancy tax, the bill provides that
the room remarketer may calculate the portion of the bill taxable as
rent based on the formula outlined above or, alternatively, use any
other reasonable method pursuant to which the rent portion of the
consideration would be no less than the computation of rent under the
formula. Under last year's legislation, room remarketers are subject
to the usual sales tax rule that requires sales tax to be separately
stated on any invoice given the customer. The websites of most room
remarketers, however, are not set up to separate the state and local
sales tax from other taxes due on the occupancy. This bill would
relieve room remarketers of the need to undertake the wholesale
reprogramming of their sites to perform this task and allowing them

to meet the separate statement requirement for both New York sales
tax and New York City hotel occupancy t
ax with an invoice showing such tax provided to the customer any time
up to the end of the occupancy. Last year's bill required room
remarketers to report tax in the period in which the room remarketer
debited the customer's credit card for the occupancy. While this is
the usual sales tax rule, it is not well suited to the room
remarketer industry. Because of the ease with which reservations can
be made or changed, customers of room remarketers often cancel
reservations or change the dates of the reservations. If the
reservation is made in one reporting period, and cancelled in
another, however, sales tax refund claims would be generated, because
the room remarketer would have already had to remit to the State the
sales tax due on the occupancy. This bill would obviate the need for
such refund claims by allowing room remarketers to report the tax due
on occupancy and remit the tax to the State in the filing period in
which the occupancy actually occurs, as is current practice with
respect to the New York City hotel room occupancy tax. This bill also
facilitates the process by which room remarketers obtain credit or
refund of the sales tax they paid to the hotels that provide the
occupancy that is part of the room remarketers' transactions. Last
year's bill required a room remarketer to obtain the certificate of
authority number of the hotel that sold it the occupancy in order to
qualify for a credit or refund of the sales tax the remarketer paid
the hotel for the occupancy. Because hotels sometimes refuse to
supply that number, this bill allows room remarketers, in the event
of such a refusal, to substitute certain identifying information
about the hotel, including its address and telephone number.

LEGISLATIVE HISTORY:

New Legislation.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This bill would become effective on September 1, 2012, and would apply
to occupancies commencing on or after that date.

2011-S5732A (ACTIVE) - Bill Text download pdf

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

                                 5732--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              June 14, 2011
                               ___________

Introduced  by  Sen.  DeFRANCISCO -- read twice and ordered printed, and
  when printed to be committed to the Committee on Rules --  recommitted
  to  the  Committee  on  Investigations  and  Government  Operations in
  accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the tax law and the administrative code of the  city  of
  New York, in relation to facilitating the compliance of room remarket-
  ers with their obligation to collect sales tax on their sales of occu-
  pancy

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

  Section 1. Subdivision (e) of section 1105 of the tax law, as  amended
by section 4 of part AA of chapter 57 of the laws of 2010, is amended to
read as follows:
  (e)  (1) The rent for every occupancy of a room or rooms in a hotel in
this state, except that the tax shall not be imposed upon (i)  a  perma-
nent  resident,  or  (ii) where the rent is not more than at the rate of
two dollars per day.
  (2) [When] EXCEPT AS PROVIDED IN SUBDIVISION  (R)  OF  SECTION  ELEVEN
HUNDRED  ELEVEN  OF  THIS PART, WHEN occupancy is provided, for a single
consideration, with property, services, amusement charges, or any  other
items, the separate sale of which is not subject to tax under this arti-
cle,  the  entire  consideration shall be treated as rent subject to tax
under paragraph one of this subdivision; provided, however,  that  where
the amount of the rent for occupancy is stated separately from the price
of  such  property,  services, amusement charges, or other items, on any
sales slip, invoice, receipt, or other statement given the occupant, and
such rent is reasonable in relation  to  the  value  of  such  property,
services,  amusement charges or other items, only such separately stated
rent will be subject to tax under paragraph one of this subdivision.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13095-05-1

S. 5732--A                          2

  S 2. Section 1111 of the tax law is amended by adding a  new  subdivi-
sion (r) to read as follows:
  (R)  (1)  IN  REGARD  TO THE COLLECTION OF SALES TAX ON OCCUPANCIES BY
ROOM REMARKETERS, WHEN OCCUPANCY IS PROVIDED FOR A SINGLE  CONSIDERATION
WITH  PROPERTY, SERVICES, AMUSEMENT CHARGES, OR ANY OTHER ITEMS, WHETHER
OR NOT SUCH OTHER ITEMS ARE TAXABLE, THE RENT PORTION OF  THE  CONSIDER-
ATION  FOR  SUCH  TRANSACTION  SHALL  BE COMPUTED AS FOLLOWS: EITHER THE
TOTAL CONSIDERATION RECEIVED BY THE  ROOM  REMARKETER  MULTIPLIED  BY  A
FRACTION,  THE NUMERATOR OF WHICH SHALL BE THE CONSIDERATION PAYABLE FOR
THE OCCUPANCY BY THE ROOM REMARKETER AND THE DENOMINATOR OF WHICH  SHALL
BE  SUCH  CONSIDERATION PAYABLE FOR THE OCCUPANCY PLUS THE CONSIDERATION
PAYABLE BY THE REMARKETER FOR THE OTHER ITEMS  BEING  SOLD,  OR  BY  ANY
OTHER  METHOD  AS  MAY  BE  AUTHORIZED  BY THE COMMISSIONER. IF THE ROOM
REMARKETER FAILS TO SEPARATELY STATE THE TAX ON THE RENT SO COMPUTED  ON
A SALES SLIP, INVOICE, RECEIPT, OR OTHER STATEMENT GIVEN TO THE OCCUPANT
IN  THE  MANNER PRESCRIBED BY PARAGRAPH TWO OF THIS SUBDIVISION OR FAILS
TO MAINTAIN RECORDS OF THE PRICES OF ALL  COMPONENTS  OF  A  TRANSACTION
COVERED  BY THIS PARAGRAPH, THE ENTIRE CONSIDERATION SHALL BE TREATED AS
RENT SUBJECT TO TAX UNDER PARAGRAPH ONE OF SUBDIVISION  (E)  OF  SECTION
ELEVEN  HUNDRED  FIVE OF THIS PART. NOTHING HEREIN SHALL BE CONSTRUED TO
SUBJECT TO TAX OR EXEMPT FROM TAX ANY SERVICE OR PROPERTY  OR  AMUSEMENT
CHARGE  OR OTHER ITEMS OTHERWISE SUBJECT TO TAX OR EXEMPT FROM TAX UNDER
THIS ARTICLE OR PURSUANT TO THE AUTHORITY OF ARTICLE TWENTY-NINE OF THIS
CHAPTER. A ROOM REMARKETER'S RECORDS OF THE  CONSIDERATION  PAYABLE  FOR
ALL  COMPONENTS  OF  A TRANSACTION COVERED BY THIS PARAGRAPH ARE RECORDS
REQUIRED TO BE MAINTAINED FOR PURPOSES OF  SUBDIVISION  (A)  OF  SECTION
ELEVEN HUNDRED THIRTY-FIVE OF THIS ARTICLE.
  (2)  IN  REGARD  TO THE COLLECTION OF SALES TAX ON OCCUPANCIES BY ROOM
REMARKETERS, INCLUDING A TRANSACTION DESCRIBED IN PARAGRAPH ONE OF  THIS
SUBDIVISION, THE REQUIREMENTS OF THE SECOND SENTENCE OF PARAGRAPH ONE OF
SUBDIVISION  (A)  OF  SECTION  ELEVEN HUNDRED THIRTY-TWO OF THIS ARTICLE
SHALL BE DEEMED SATISFIED IF THE REMARKETER GIVES THE CUSTOMER  A  SALES
SLIP,  INVOICE,  RECEIPT,  OR  OTHER  STATEMENT OF THE PRICE ("INVOICE")
PRIOR TO THE CUSTOMER'S COMPLETION OF HIS OR HER OCCUPANCY, ON WHICH THE
AMOUNT OF TAX DUE UNDER THIS ARTICLE AND PURSUANT TO  THE  AUTHORITY  OF
ARTICLE  TWENTY-NINE OF THIS CHAPTER IS STATED. THE ROOM REMARKETER MUST
KEEP EITHER A COPY OF THE INVOICE AS  REQUIRED  BY  SUBDIVISION  (A)  OF
SECTION  ELEVEN  HUNDRED  THIRTY-FIVE  OF  THIS  ARTICLE,  OR ELECTRONIC
RECORDS THAT ACCURATELY REFLECT THE INFORMATION THAT IS ON  THE  INVOICE
PROVIDED TO THE CUSTOMER.
  (3)  IN REGARD TO THE REPORTING AND THE PAYMENT TO THE COMMISSIONER BY
ROOM REMARKETERS OF SALES TAX DUE ON  OCCUPANCIES,  SUBDIVISION  (A)  OF
SECTION  ELEVEN  HUNDRED  THIRTY-SEVEN  OF THIS ARTICLE SHALL BE READ TO
REQUIRE A ROOM REMARKETER TO REPORT SUCH SALES  TAX  DUE,  INCLUDING  IN
REGARD  TO A TRANSACTION DESCRIBED IN PARAGRAPH ONE OF THIS SUBDIVISION,
ON THE RETURN DUE FOR THE FILING PERIOD IN WHICH THE OCCUPANCY ENDS AND,
AT THE TIME OF FILING SUCH RETURN, TO PAY TO THE COMMISSIONER THE  TOTAL
AMOUNT DESCRIBED BY SUCH SUBDIVISION (A).
  S  3.  Subdivision  (e)  of  section  1119 of the tax law, as added by
section 5 of part AA of chapter 57 of the laws of 2010,  is  amended  to
read as follows:
  (e)  Subject  to  conditions and limitations provided in this subdivi-
sion, a room remarketer shall be allowed a refund or credit against  the
amount of tax collected and required to be remitted under section eleven
hundred thirty-seven of this article in the amount of the tax it paid to
an  operator  of a hotel under section eleven hundred four of this arti-

S. 5732--A                          3

cle, where applicable, and subdivision (e)  of  section  eleven  hundred
five of this article. Provided, however, that, in order to qualify for a
refund  or  credit  under  this  subdivision for any sales tax quarterly
period,  the  room  remarketer must, for that quarter, (1) be registered
for sales tax purposes under section eleven hundred thirty-four of  this
article; (2) collect the taxes imposed by section eleven hundred four of
this  article,  where  applicable, and subdivision (e) of section eleven
hundred five of this article; and (3) furnish the certificate of author-
ity number of the operator to whom the applicant paid  the  tax  in  its
application  for  refund  or  credit  if  required  on that form or upon
request.  PROVIDED THAT IF THE ROOM REMARKETER REQUESTS  THE  OPERATOR'S
CERTIFICATE  OF  AUTHORITY  NUMBER AND IS NOT PROVIDED WITH THAT NUMBER,
THE ROOM REMARKETER MAY SATISFY THIS REQUIREMENT BY PROVIDING THE OPERA-
TOR'S NAME, BUSINESS ADDRESS, TELEPHONE NUMBER, AND THE ADDRESS  OF  THE
HOTEL WHERE THE OCCUPANCY TOOK PLACE. An application for refund or cred-
it under this subdivision must be filed with the commissioner within the
time  provided  by subdivision (a) of section eleven hundred thirty-nine
of this article. The application must be in the form prescribed  by  the
commissioner. Where an application for credit has been filed, the appli-
cant  may  immediately take the credit on the return that is due coinci-
dent with or immediately subsequent to the time that the applicant files
the application for credit. However, the taking of  the  credit  on  the
return is deemed to be part of the application for credit. The procedure
for granting or denying the applications for refund or credit and review
of  those  determinations  shall  be  as  provided in subdivision (e) of
section eleven hundred thirty-nine of this article. An operator, includ-
ing a room remarketer, who is paid tax by a room  remarketer  must  upon
request provide the remarketer with its certificate of authority number,
provided  that  the  operator's  failure  to  do  so does not change the
requirement set forth in paragraph three of this subdivision.
  S 4. Paragraph 4 of subdivision a of section 11-2502 of  the  adminis-
trative code of the city of New York, as amended by section 8 of part AA
of chapter 57 of the laws of 2010, is amended to read as follows:
  (4)  (I)  When occupancy is provided, for a single consideration, with
property, services, amusement charges, or any other items, the  separate
sale  of  which  is  not  subject  to tax under this chapter, the entire
consideration shall be treated as rent subject to  tax  under  paragraph
one of this subdivision; provided, however, that where the amount of the
rent for occupancy is stated separately from the price of such property,
services,  amusement  charges or other items on any sales slip, invoice,
receipt, or other statement given the occupant and such rent is  reason-
able  in  relation  to  the  value of such property, services, amusement
charges, or other items,  only  such  separately  stated  rent  will  be
subject to tax under [paragraph one of] this subdivision.
  (II) IN REGARD TO THE COLLECTION OF TAX ON OCCUPANCIES BY REMARKETERS,
WHEN  OCCUPANCY  IS PROVIDED, FOR A SINGLE CONSIDERATION, WITH PROPERTY,
SERVICES, AMUSEMENT CHARGES, OR ANY OTHER ITEMS,  WHETHER  OR  NOT  SUCH
OTHER  ITEMS ARE TAXABLE, THE RENT PORTION OF THE CONSIDERATION FOR SUCH
SALE SHALL BE COMPUTED AS FOLLOWS: THE TOTAL CONSIDERATION FOR THE  SALE
MULTIPLIED  BY A FRACTION, THE NUMERATOR OF WHICH SHALL BE THE CONSIDER-
ATION PAID TO THE HOTEL FOR THE OCCUPANCY AND THE DENOMINATOR  OF  WHICH
SHALL  BE THE CONSIDERATION PAID TO THE HOTEL FOR THE OCCUPANCY PLUS THE
CONSIDERATION PAID TO THE PROVIDERS OF THE OTHER ITEMS BEING SOLD, OR BY
ANY OTHER REASONABLE METHOD  PURSUANT  TO  WHICH  THE  RENT  PORTION  OF
CONSIDERATION  WOULD  BE NO LESS THAN THE COMPUTATION OF RENT PORTION OF
CONSIDERATION UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH.  NOTHING  HEREIN

S. 5732--A                          4

SHALL  BE  CONSTRUED TO SUBJECT TO TAX OR EXEMPT FROM TAX ANY SERVICE OR
PROPERTY OR AMUSEMENT CHARGE OR OTHER ITEMS OTHERWISE SUBJECT TO TAX  OR
EXEMPT FROM TAX UNDER THIS CHAPTER.
  S  5.  Paragraph 5 of subdivision a of section 11-2502 of the adminis-
trative code of the city of New York, as amended by section 8 of part AA
of chapter 57 of the laws of 2010, is amended to read as follows:
  (5) A room remarketer shall be allowed a refund or credit against  the
taxes  collected and required to be remitted pursuant to section 11-2505
of this chapter in the amount of the tax it paid to the operator of  the
hotel  or another room remarketer under [paragraph three of] this subdi-
vision. Provided, however, that in order to  qualify  for  a  refund  or
credit  under  this  paragraph  with respect to any quarterly period, as
described in subdivision a of section 11-2504 of this chapter, the  room
remarketer  must,  with  respect  to such quarter, (i) be registered for
hotel room occupancy tax purposes under section 11-2514 of this chapter,
and (ii) collect the taxes imposed by paragraphs two and three  of  this
subdivision.  Subject  to  the  conditions and limitations of this para-
graph, the provisions of section 11-2507 of this chapter shall apply  to
refunds or credits under this paragraph.
  S  6.  Subdivision  f of section 11-2502 of the administrative code of
the city of New York, as amended by local law number 43 of the  city  of
New York for the year 2009 and paragraph 2 as renumbered by section 9 of
part  AA  of  chapter  57  of  the  laws  of 2010, is amended to read as
follows:
  f. The tax to be collected shall be stated  [and  charged]  separately
from  the  rent [and shown separately on any record thereof, at the time
when the occupancy is arranged or contracted for  and  charged  for  and
upon every evidence of occupancy or any bill or statement or charge made
for said occupancy issued or delivered by the operator or room remarket-
er]  ON  A SALES SLIP, INVOICE, RECEIPT, OR OTHER STATEMENT OF THE PRICE
("INVOICE") GIVEN TO THE OCCUPANT PRIOR TO THE OCCUPANT'S COMPLETION  OF
HIS  OR HER OCCUPANCY AND BE VERIFIABLE FROM THE BOOKS AND RECORDS OF AN
OPERATOR OR ROOM REMARKETER RESPONSIBLE FOR COLLECTING AND REMITTING THE
TAX.
  (1) Where an occupant rents a room directly from an operator, the  tax
shall  be  paid  by  the  occupant to the operator as trustee for and on
account of the city, and the operator shall be liable for the collection
of the tax on the rent and for the payment of the tax on the rent.
  (2) The operator or room remarketer and any officer of  any  corporate
operator  or  room remarketer shall be personally liable for the portion
of the tax collected or required to be collected under this chapter, and
the operator shall have the same right in respect to collecting the  tax
from  the  occupant, or in respect to nonpayment of the tax by the occu-
pant as if the tax were a part of the rent for the occupancy payable  at
the  time  such  tax shall become due and owing, including all rights of
eviction, dispossession, repossession and enforcement of any innkeeper's
lien that he or she may have in the event of nonpayment of rent  by  the
occupant;  provided  however,  that the commissioner of finance shall be
joined as a party in any action or proceeding brought by the operator to
collect or enforce collection of the tax.
  S 7. This act shall take effect September 1, 2012 and shall  apply  to
occupancies that commence on or after such date.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.