NY State Senate Bill 2011-S4942

Senate Bill S4942

2011-2012 Legislative Session

Establishes a retail merchants voluntary compliance program relating to past due sales tax liability

download bill text pdf

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

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
Jan 04, 2012	referred to investigations and government operations
May 02, 2011	referred to investigations and government operations

2011-S4942 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Add §1700-a, Tax L

2011-S4942 (ACTIVE) - Summary

Establishes a retail merchants voluntary compliance program relating to past due sales tax liability.

2011-S4942 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S4942

TITLE OF BILL:
An act
to amend the tax law, in relation to establishing a retail merchants
voluntary compliance program for purposes of sales tax liability

PURPOSE:
This bill will direct the Commissioner of Taxation and Finance to
develop a retail merchants voluntary compliance program for eligible
taxpayers.

SUMMARY OF PROVISIONS:

A new Section 1700-a is added to the Tax Law to provide that a
taxpayer who has not been subject to an outstanding sales tax
assessment from the New York State Department of Taxation and Finance
in the previous five years shall be deemed eligible to enter into a
compliance agreement with the Commissioner to encourage timely and
accurate future payments. The Commissioner is granted authority to
develop the terms of the compliance agreement which may include the
requirement of a segregated bank account for sales tax collections,
more frequent tax deposit requirements or the use of a segregated
point of sale system.

Taxpayers who enter into the voluntary compliance agreement shall be

granted a waiver from applicable interest and penalties for their
assessment and shall be protected from criminal actions relating to
the failure to pay the appropriate amount of sales tax.

The Commissioner, if satisfied that the taxpayer is unable to make
full payment of the disclosed tax liability, may enter into an
installment payment program subject to terms and conditions imposed
by the Commissioner. The compliance agreement shall provide that the
taxpayer is exempt from criminal liability and shall be exempt from
any criminal tax prosecution if they comply with the terms of the
installment payment agreement.

Any taxpayer who intentionally provides misleading or false
information in submitting information to the Commissioner or attempts
to evade tax due under the agreement shall be subject to rescission
of the agreement.
The Commissioner is granted authority to promulgate rules,
regulations, and take any and all actions necessary to implement the
voluntary compliance program.

JUSTIFICATION:
New York state sales tax laws are complex placing retail merchants in
jeopardy of assessments from the Department of Tax and Finance for
unpaid sales tax. In addition to any taxes due, the merchants are also
liable for interest and penalties. While collecting unpaid taxes is
important, little if anything is done by the Department to
incentivize future tax compliance. This bill establishes a program
under which retail merchants that have been determined to owe sales
tax and have not had a sales tax assessment within the previous five
years will be eligible for a waiver of any interest or penalties due


if they agree to undertake certain actions designed to ensure future
sales tax compliance. Under new provisions of the Tax Law enacted as
part of the 2011-12 budget the Tax Department is authorized to
impose such conditions on recalcitrant retail merchants. While that
may be appropriate under certain circumstances, the provisions of
this bill will provide an incentive for retail merchants to use an
assessment from the Department as an opportunity to fine tune their
sales tax collection and remittance process and gain future
compliance with the law. These business owners deserve the support
and assistance of the Department rather than being treated as
criminals. They are the backbone of the state's economy and the
public interest is well served by the government giving
them a helping hand transitioning to a more compliant business
operation.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
Undetermined at this time. Likely to result in additional state
revenue due to taxpayers becoming compliant.

EFFECTIVE DATE:
This act shall take effect immediately.

2011-S4942 (ACTIVE) - Bill Text download pdf

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

                                  4942

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 2, 2011
                               ___________

Introduced  by  Sen.  YOUNG  -- 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  establishing  a  retail
  merchants  voluntary  compliance  program  for  purposes  of sales tax
  liability

  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 1700-a to
read as follows:
  S 1700-A.  RETAIL MERCHANTS VOLUNTARY COMPLIANCE PROGRAM. 1.  NOTWITH-
STANDING  ANY  OTHER  PROVISION  OF  LAW TO THE CONTRARY, THERE SHALL BE
ESTABLISHED A RETAIL MERCHANTS VOLUNTARY COMPLIANCE PROGRAM TO BE ADMIN-
ISTERED BY THE COMMISSIONER, FOR ALL ELIGIBLE TAXPAYERS.
  2. FOR PURPOSES OF THIS SECTION, AN "ELIGIBLE TAXPAYER" IS AN INDIVID-
UAL, PARTNERSHIP, ESTATE, TRUST, CORPORATION, LIMITED LIABILITY COMPANY,
JOINT STOCK COMPANY, OR ANY OTHER COMPANY, TRUSTEE, RECEIVER,  ASSIGNEE,
REFEREE,  SOCIETY,  ASSOCIATION, BUSINESS OR ANY OTHER PERSON SUBJECT TO
SALES TAX IMPOSED BY OR PURSUANT TO THE AUTHORITY OF THIS CHAPTER,  THAT
IS SUBJECT TO AN ASSESSMENT FOR OUTSTANDING SALES TAX AND HAS NOT HAD AN
ASSESSMENT FOR SALES TAX WITHIN THE PREVIOUS FIVE YEARS.
  3.  UNDER  THE  RETAIL  MERCHANTS  VOLUNTARY  COMPLIANCE PROGRAM, UPON
EXECUTION OF A VOLUNTARY COMPLIANCE AGREEMENT BY THE  ELIGIBLE  TAXPAYER
AND THE COMMISSIONER, THE COMMISSIONER SHALL WAIVE ANY APPLICABLE INTER-
EST  AND  PENALTIES. IN ADDITION, NO CRIMINAL ACTION OR PROCEEDING SHALL
BE BROUGHT AGAINST AN ELIGIBLE TAXPAYER RELATING TO  THE  TAX  LIABILITY
COVERED BY THE AGREEMENT.
  4.  IF  A TAXPAYER AND ITS TAX LIABILITY ARE ELIGIBLE UNDER THE RETAIL
MERCHANTS VOLUNTARY COMPLIANCE PROGRAM, THE COMMISSIONER  IS  AUTHORIZED
TO  ENTER  INTO  A  VOLUNTARY  COMPLIANCE AGREEMENT WITH THE TAXPAYER. A
VOLUNTARY COMPLIANCE AGREEMENT SHALL BE IN A FORM TO BE  ESTABLISHED  BY

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11112-01-1

S. 4942                             2

THE  COMMISSIONER AND INCLUDE SUCH TERMS AS THE COMMISSIONER MAY REASON-
ABLY REQUIRE TO REQUIRE THE ELIGIBLE TAXPAYER TO COMPLY WITH THIS  CHAP-
TER  IN  THE FUTURE INCLUDING, BUT NOT LIMITED TO THE ESTABLISHMENT OF A
SEGREGATED  BANK  ACCOUNT  FOR  SALES TAX COLLECTIONS, MORE FREQUENT TAX
DEPOSIT REQUIREMENTS OR USE OF CERTIFIED POINT  OF  SALES  SYSTEMS.  THE
ELIGIBLE TAXPAYER SHALL PAY THE TAX THAT IS THE SUBJECT OF THE VOLUNTARY
COMPLIANCE  AGREEMENT  WHEN THE AGREEMENT IS EXECUTED OR WITHIN THE TIME
STATED ON A BILL ISSUED TO THE ELIGIBLE TAXPAYER BY THE COMMISSIONER. IN
THE EVENT THE COMMISSIONER IS SATISFIED THAT THE  ELIGIBLE  TAXPAYER  IS
UNABLE  TO  MAKE  IMMEDIATE FULL PAYMENT OF THE DISCLOSED TAX LIABILITY,
THE COMMISSIONER MAY ENTER INTO AN INSTALLMENT PAYMENT PROGRAM WITH  THE
ELIGIBLE  TAXPAYER  FOR THE PAYMENT OF THE TAX DUE. THE COMMISSIONER MAY
REQUIRE A  FINANCIAL  DISCLOSURE  STATEMENT  SETTING  FORTH  INFORMATION
CONCERNING  THE  ELIGIBLE  TAXPAYER'S CURRENT ASSETS, LIABILITIES, EARN-
INGS, AND OTHER FINANCIAL INFORMATION BEFORE ENTERING INTO  AN  INSTALL-
MENT  PAYMENT  PLAN WITH THE ELIGIBLE TAXPAYER. IN ADDITION TO ANY OTHER
INFORMATION AND TERMS THAT THE COMMISSIONER DETERMINES ARE  APPROPRIATE,
THE  VOLUNTARY  COMPLIANCE AGREEMENT SHALL PROVIDE THAT, IF THE ELIGIBLE
TAXPAYER COMPLIES WITH THE TERMS OF THE COMPLIANCE AGREEMENT, THE ELIGI-
BLE TAXPAYER WILL NOT BE SUBJECT TO ANY CRIMINAL TAX PROSECUTION IN THIS
STATE FOR THE CONDUCT DISCLOSED BY THE ELIGIBLE TAXPAYER.
  5. IF THE ELIGIBLE  TAXPAYER  INTENTIONALLY  PROVIDES  FALSE  MATERIAL
INFORMATION  OR  OMITS MATERIAL INFORMATION IN HIS OR HER SUBMISSIONS TO
THE COMMISSIONER, OR ATTEMPTS TO INTENTIONALLY DEFEAT OR EVADE A TAX DUE
PURSUANT TO THE AGREEMENT EXECUTED PURSUANT TO THIS SECTION,  OR  INTEN-
TIONALLY  FAILS  TO  COMPLY  WITH THE TERMS OF THE COMPLIANCE AGREEMENT,
SUCH AGREEMENT SHALL BE DEEMED RESCINDED.
  6. UNLESS THE COMMISSIONER ON HIS OR HER OWN MOTION  REDETERMINES  THE
AMOUNT  OF  TAX  DUE,  NO REFUND SHALL BE GRANTED OR CREDIT ALLOWED WITH
RESPECT TO ANY TAXES, INCLUDING APPLICABLE  INTEREST,  PAID  UNDER  THIS
PROGRAM.
  7.  THE  COMMISSIONER  MAY  PROMULGATE  REGULATIONS,  ISSUE  FORMS AND
INSTRUCTIONS, AND TAKE ANY AND ALL OTHER ACTIONS NECESSARY TO  IMPLEMENT
THE  PROVISIONS OF THE PROGRAM ESTABLISHED PURSUANT TO THIS SECTION. THE
COMMISSIONER SHALL PUBLICIZE THE PROGRAM PROVIDED FOR IN THIS SECTION SO
AS TO MAXIMIZE PUBLIC AWARENESS OF AND PARTICIPATION IN SUCH PROGRAM.
  8. THE VOLUNTARY COMPLIANCE AGREEMENT, AND OTHER DOCUMENTS FILED BY AN
ELIGIBLE TAXPAYER PURSUANT TO THE PROGRAM ESTABLISHED  BY  THIS  SECTION
SHALL BE DEEMED TO BE REPORTS AND RETURNS:
  (A)  SUBJECT  TO  THE  SECRECY  PROVISIONS OF THIS CHAPTER IN THE SAME
MANNER AND TO THE SAME EXTENT AS IF SUCH DOCUMENTS WERE REFERRED  TO  IN
ANY OF THE SECRECY PROVISIONS OF THIS CHAPTER; AND
  (B) FOR PURPOSES OF THE CRIMINAL PROVISIONS OF ARTICLE THIRTY-SEVEN OF
THIS CHAPTER.
  S 2. This act shall take effect immediately.

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