A. 6635 2
THE FEDERAL GOVERNMENT. THE ACCOUNT SHALL BE HELD IN TRUST FOR AND PAYA-
BLE TO THE COMMISSIONER AND THE AMOUNT OF SUCH TAX COLLECTED SHALL BE
KEPT IN SUCH ACCOUNT UNTIL PAYMENT OVER TO THE COMMISSIONER. THE PERSON
REQUIRED TO COLLECT THE TAX SHALL AUTHORIZE THE COMMISSIONER TO DEBIT
SUCH ACCOUNT IN A MANNER DETERMINED BY THE COMMISSIONER.
(IV) IF THE PERSON REQUIRED TO COLLECT THE TAX ACCEPTS PAYMENTS FROM
CUSTOMERS USING CREDIT OR DEBIT CARDS, THE PERSON REQUIRED TO COLLECT
THE TAX SHALL ESTABLISH A SEPARATE ESCROW ACCOUNT THROUGH AN APPROVED
CREDIT CARD PROCESSING COMPANY (ACCPC) AND NOT THROUGH AN ESCROW ACCOUNT
OF THE TYPE DESCRIBED IN SUBPARAGRAPH (III) OF THIS PARAGRAPH. THE
COMMISSIONER SHALL BY REGULATION ESTABLISH STANDARDS FOR APPROVING CRED-
IT CARD PROCESSING COMPANIES FOR OPENING AND ESTABLISHING ACCPC ESCROW
ACCOUNTS FOR PERSONS REQUIRED TO PAY THE TAX. PERSONS COLLECTING THE TAX
AND REQUIRED TO USE ACCPC ESCROW ACCOUNTS UNDER THIS SUBPARAGRAPH SHALL
MAKE DAILY DEPOSITS INTO THEIR ACCPC ESCROW ACCOUNT THAT ARE AN ESTIMATE
OF THE AMOUNT OF TAXES THEY COLLECTED THAT DAY FOR ALL OF THEIR TAXABLE
SALES, BOTH THOSE PAID IN CASH AND THOSE PAID BY CREDIT OR DEBIT CARD.
TO EFFECTUATE THE DEPOSIT, THE ACCPC SHALL DEDUCT THE ESTIMATED SALES
TAXES OWED FROM THE DAY'S CREDIT AND DEBIT CARD TRANSACTIONS BEFORE
PAYING OVER THE RECEIPTS FROM SUCH TRANSACTIONS TO THE PERSON REQUIRED
TO COLLECT THE TAX. THE AMOUNT DEDUCTED SHALL BE DETERMINED BY MULTIPLY-
ING THE DAY'S CREDIT AND DEBIT CARD SALES BY AN ALGORITHMIC RATE WHICH
SHALL BE DETERMINED WHEN THE ACCPC ESCROW ACCOUNT IS ESTABLISHED AND AT
LEAST ONCE A YEAR THEREAFTER. THE ALGORITHMIC RATE SHALL REPRESENT AN
ESTIMATED CALCULATION OF THE AMOUNT OF TAXES COLLECTED AND OWED EACH DAY
FOR BOTH CASH AND CREDIT AND DEBIT CARD SALES. THE CALCULATION OF THE
PERSON'S ALGORITHMIC RATE SHALL BE CERTIFIED BY A CERTIFIED PUBLIC
ACCOUNTANT LICENSED IN THIS STATE, AN ATTORNEY LICENSED IN THIS STATE OR
AN ENROLLED AGENT OR REGISTERED TAX RETURN PREPARER WHO HAS BEEN AUTHOR-
IZED BY THE DEPARTMENT TO CERTIFY THE ALGORITHMIC RATE, AS AN ACCURATE
ESTIMATE OF THE RATIO OF THE PERSON'S CASH TO CREDIT TRANSACTIONS AND
TAXABLE TO NON-TAXABLE SALES. THE COMMISSIONER SHALL PROMULGATE REGU-
LATIONS DEFINING HOW THE ALGORITHMIC RATE SHALL BE CALCULATED, SETTING
STANDARDS FOR THAT CALCULATION, AND IDENTIFYING THE PROCESS BY WHICH
LICENSED OR REGISTERED PROFESSIONALS MAY BE APPROVED OR DISAPPROVED BY
THE DEPARTMENT TO CERTIFY THE ACCURACY OF THE ALGORITHMIC RATE. AMOUNTS
DEPOSITED IN AN ACCPC ESCROW ACCOUNT SHALL BE HELD IN TRUST FOR AND
PAYABLE TO THE COMMISSIONER AND SHALL BE KEPT IN SUCH ACCOUNTS UNTIL
PAYMENT OVER TO THE COMMISSIONER. PERSONS COLLECTING THE TAX AND
REQUIRED TO USE AN ACCPC ESCROW ACCOUNT UNDER THIS SUBPARAGRAPH SHALL,
UPON ESTABLISHING THE ACCOUNT, AUTHORIZE THE COMMISSIONER TO DEBIT SUCH
ACCOUNT IN A MANNER AND FREQUENCY TO BE DETERMINED BY THE COMMISSIONER.
S 2. Paragraph 1 of subdivision (a) of section 1134 of the tax law, as
amended by section 160 of part A of chapter 389 of the laws of 1997,
subparagraph (iii) as amended by section 44 of part K of chapter 61 of
the laws of 2011, is amended to read as follows:
(1) (i) Every person required to collect any tax imposed by this arti-
cle, other than a person who is a vendor solely by reason of clause (D),
(E) or (F) of subparagraph (i) of paragraph eight of subdivision (b) of
section eleven hundred one of this article, commencing business or open-
ing a new place of business, (ii) every person purchasing or selling
tangible personal property for resale commencing business or opening a
new place of business, (iii) every person selling petroleum products
including persons who or which are not distributors, (iv) every person
described in this subdivision who takes possession of or pays for busi-
ness assets under circumstances requiring notification by such person to
A. 6635 3
the commissioner pursuant to subdivision (c) of section eleven hundred
forty-one of this [chapter] PART, (v) every person selling cigarettes
including persons who or which are not agents, and (vi) every person
described in subparagraph (i), (ii), (iii), (iv) or (v) of this para-
graph or every person who is a vendor solely by reason of clause (D),
(E) or (F) of subparagraph (i) of paragraph eight of subdivision (b) of
section eleven hundred one of this article who or which has had its
certificate of authority revoked under paragraph four of this subdivi-
sion, shall file with the commissioner a certificate of registration, in
a form prescribed by the commissioner, at least twenty days prior to
commencing business or opening a new place of business or such purchas-
ing, selling or taking of possession or payment, whichever comes first.
Every person who is a vendor solely by reason of clause (D) of subpara-
graph (i) of paragraph eight of subdivision (b) of section eleven
hundred one of this article shall file with the commissioner a certif-
icate of registration, in a form prescribed by such commissioner, within
thirty days after the day on which the cumulative total number of occa-
sions that such person came into the state to deliver property or
services, for the immediately preceding four quarterly periods ending on
the last day of February, May, August and November, exceeds twelve.
Every person who is a vendor solely by reason of clause (E) of subpara-
graph (i) of paragraph eight of subdivision (b) of section eleven
hundred one of this article shall file with the commissioner a certif-
icate of registration, in a form prescribed by such commissioner, within
thirty days after the day on which the cumulative total, for the imme-
diately preceding four quarterly periods ending on the last day of
February, May, August and November, of such person's gross receipts from
sales of property delivered in this state exceeds three hundred thousand
dollars and number of such sales exceeds one hundred. Every person who
is a vendor solely by reason of clause (F) of subparagraph (i) of para-
graph eight of subdivision (b) of section eleven hundred one of this
article shall file with the commissioner a certificate of registration,
in a form prescribed by such commissioner, within thirty days after the
day on which tangible personal property in which such person retains an
ownership interest is brought into this state by the person to whom such
property is sold, where the person to whom such property is sold becomes
or is a resident or uses such property in any manner in carrying on in
this state any employment, trade, business or profession. A PERSON
REQUIRED TO FILE A CERTIFICATE OF REGISTRATION AND WHO IS REQUIRED TO
COLLECT THE TAX AS REQUIRED BY SUBPARAGRAPH (I) OF PARAGRAPH ONE OF
SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-TWO OF THIS PART SHALL,
AT THE TIME SUCH CERTIFICATE IS FILED, ESTABLISH AN ESCROW ACCOUNT AS
REQUIRED BY SUBPARAGRAPHS (II), (III) AND (IV) OF PARAGRAPH ONE OF
SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-TWO OF THIS PART.
PERSONS REQUIRED TO ESTABLISH AN ESCROW ACCOUNT THROUGH AN APPROVED
CREDIT CARD PROCESSING COMPANY PURSUANT TO SUBPARAGRAPH (IV) OF PARA-
GRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-TWO OF
THIS PART SHALL ESTABLISH AN ALGORITHMIC FORMULA FOR PAYMENT OF THE
ESTIMATED COLLECTED SALES TAX AND SHALL FILE, WITHIN THREE MONTHS OF
FILING THEIR CERTIFICATE OF REGISTRATION A CERTIFICATION FROM A
LICENSED, REGISTERED OR APPROVED PROFESSIONAL OF THE TYPE SPECIFIED IN
SUBPARAGRAPH (IV) OF PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN
HUNDRED THIRTY-TWO OF THIS PART CERTIFYING TO THE ACCURACY OF THEIR
METHOD OF ESTIMATING THEIR DAILY COLLECTION OF SALES TAXES AS PROVIDED
IN SUBPARAGRAPH (IV) OF PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION
ELEVEN HUNDRED THIRTY-TWO OF THIS PART. Information with respect to the
A. 6635 4
notice requirements of a purchaser, transferee or assignee and such
person's liability pursuant to the provisions of subdivision (c) of
section eleven hundred forty-one of this [chapter] PART shall be
included in or accompany the certificate of registration form furnished
the applicant. The commissioner shall also include with such information
furnished to each applicant general information about the tax imposed
under this article including information on records to be kept, returns
and payments, notification requirements and forms. Such certificate of
registration may be amended in accordance with rules promulgated by the
commissioner.
S 3. Subparagraph (A) of paragraph 4 of subdivision (a) of section
1134 of the tax law, as amended by section 21-a of part U of chapter 61
of the laws of 2011, is amended to read as follows:
(A) Where a person who holds a certificate of authority (i) willfully
fails to file a report or return required by this article, (ii) willful-
ly files, causes to be filed, gives or causes to be given a report,
return, certificate or affidavit required under this article which is
false, (iii) willfully fails to comply with the provisions of paragraph
two or three of subdivision (e) of section eleven hundred thirty-seven
of this [article] PART, (iv) willfully fails to prepay, collect, truth-
fully account for or pay over any tax imposed under this article or
pursuant to the authority of article twenty-nine of this chapter, (v)
fails to obtain a bond pursuant to paragraph two of subdivision (e) of
section eleven hundred thirty-seven of this part, or WILLFULLY fails to
[comply with a notice issued by the commissioner pursuant to paragraph
three of such subdivision] ESTABLISH OR PROPERLY FUND AN ESCROW ACCOUNT
AS REQUIRED BY PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN
HUNDRED THIRTY-TWO OF THIS PART OR OTHERWISE WILLFULLY FAILS TO COMPLY
WITH THE REQUIREMENTS OF THAT SECTION, or (vi) has been convicted of a
crime provided for in this chapter, the commissioner may revoke or
suspend such certificate of authority and all duplicates thereof.
Provided, however, that the commissioner may revoke or suspend a certif-
icate of authority based on the grounds set forth in clause (vi) of this
subparagraph only where the conviction referred to occurred not more
than one year prior to the date of revocation or suspension.
S 4. Subparagraph (A) of paragraph 4 of subdivision (a) of section
1134 of the tax law, as amended by chapter 2 of the laws of 1995, is
amended to read as follows:
(A) Where a person who holds a certificate of authority (i) willfully
fails to file a report or return required by this article, (ii) willful-
ly files, causes to be filed, gives or causes to be given a report,
return, certificate or affidavit required under this article which is
false, (iii) willfully fails to comply with the provisions of paragraph
two or three of subdivision (e) of section eleven hundred thirty-seven
of this [article] PART, (iv) willfully fails to prepay, collect, truth-
fully account for or pay over any tax imposed under this article or
pursuant to the authority of article twenty-nine of this chapter, [or]
(v) WILLFULLY FAILS TO ESTABLISH OR PROPERLY FUND AN ESCROW ACCOUNT AS
REQUIRED BY PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED
THIRTY-TWO OF THIS PART OR OTHERWISE WILLFULLY FAILS TO COMPLY WITH THE
REQUIREMENTS OF THAT SECTION, OR (VI) has been convicted of a crime
provided for in this chapter, the commissioner may revoke or suspend
such certificate of authority and all duplicates thereof. Provided,
however, that the commissioner may revoke or suspend a certificate of
authority based on the grounds set forth in clause (v) of this subpara-
A. 6635 5
graph only where the conviction referred to occurred not more than one
year prior to the date of revocation or suspension.
S 5. Paragraph 1 of subdivision (a) of section 1136 of the tax law is
REPEALED.
S 6. Subdivision (c) of section 1136 of the tax law, as added by chap-
ter 93 of the laws of 1965, is amended to read as follows:
(c) The [tax commission] COMMISSIONER may permit or require returns to
be made covering other periods and upon such dates as it may specify. If
the tax commission deems it necessary in order to insure the payment of
the taxes imposed by this article, it may require returns to be made for
shorter periods than those prescribed pursuant to the foregoing subdivi-
sions of this section, and upon such dates as it may specify. IF THE
COMMISSIONER DETERMINES THAT THE PERSON REQUIRED TO COLLECT AND PAY THE
TAX HAS ESTABLISHED AN ESCROW ACCOUNT AS PROVIDED BY SUBPARAGRAPHS (II),
(III) AND (IV) OF PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN
HUNDRED THIRTY-TWO OF THIS PART AND THAT THE AMOUNT DEPOSITED IN THAT
ESCROW ACCOUNT HAS EQUALED OR EXCEEDED NINETY-FIVE PERCENT OF THE TAXES
OWED FOR FOUR CONSECUTIVE QUARTERS, THE COMMISSIONER SHALL PERMIT THE
PERSON TO FILE AN ANNUAL RETURN IN LIEU OF THE RETURNS REQUIRED BY
SUBDIVISION (A) OF THIS SECTION. THE ANNUAL RETURN SHALL RECONCILE THE
AMOUNTS WITHHELD AND PAID THROUGH THE ESCROW ACCOUNT WITH THE PERSON'S
ANNUAL TAXABLE SALES AND THE RETURN SHALL BE CERTIFIED AS ACCURATE BY A
LICENSED, REGISTERED OR APPROVED PROFESSIONAL OF THE TYPE IDENTIFIED IN
SUBPARAGRAPH (IV) OF PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN
HUNDRED THIRTY-TWO OF THIS PART AND SHALL INCLUDE A CERTIFICATION AS
PRESCRIBED BY THE COMMISSIONER. THE FORM OF THE ANNUAL RETURN SHALL BE
PRESCRIBED BY THE COMMISSIONER AND SHALL CONTAIN SUCH INFORMATION AS THE
COMMISSIONER MAY DEEM NECESSARY FOR THE PROPER ADMINISTRATION OF THIS
ARTICLE. THE ANNUAL RETURN SHALL BE FILED ON OR BEFORE JANUARY
THIRTY-FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR COVERED BY THE
RETURN.
S 7. The opening paragraphs of subdivisions (a) and (b) and subdivi-
sion (c) of section 1137 of the tax law, the opening paragraphs of
subdivisions (a) and (b) as amended by section 2-f of part M-1 of chap-
ter 109 of the laws of 2006 and subdivision (c) as amended by chapter
155 of the laws of 1982, are amended to read as follows:
Every person required to file a return under the preceding section
whose total taxable receipts (as "taxable receipts" are described in
subdivision (a) of such section), amusement charges and rents are
subject to the tax imposed pursuant to subdivisions (a), (c), (d), (e)
and (f) of section eleven hundred five of this article shall, at the
time of filing such return, pay to the commissioner the total of the
following, LESS ANY AMOUNTS ALREADY DEPOSITED INTO THE PERSON'S ESCROW
ACCOUNT AND COLLECTED BY OR AVAILABLE FOR COLLECTION BY THE
COMMISSIONER:
Every person required to file a return under the preceding section and
not subject to the provisions of subdivision (a) of this section shall,
at the time of filing such return, pay to the commissioner the taxes
imposed by this article and pursuant to article twenty-nine of this
chapter as well as all other moneys collected by such person acting or
purporting to act under the provisions of this article or of any local
law, ordinance or resolution adopted pursuant to such article twenty-
nine; provided, however, that if the commissioner shall have fixed an
effective rate of tax applicable to any or all of his or her receipts,
amusement charges and rents as provided in subdivision (d) of this
section, any such person may elect, with reference to such receipts,
A. 6635 6
amusement charges and rents and subject to approval by the commissioner
and to such regulations as the commissioner may promulgate, to pay to
the commissioner at the time of filing his or her return the total of
the following, LESS ANY AMOUNTS ALREADY DEPOSITED INTO THE PERSON'S
ESCROW ACCOUNT AND COLLECTED BY OR AVAILABLE FOR COLLECTION BY THE
COMMISSIONER:
(c) [(1)] The provisions of subdivisions (a) and (b) of this section
shall not be applicable to[: (i)] a person filing a short-form, part-
quarterly return as defined in paragraph [(ii)] (2) of subdivision (a)
of section eleven hundred thirty-six [hereof] OF THIS PART who, at the
time of such filing shall pay to the tax commission one-third of the
total state and local sales and compensating use taxes payable by the
person to the tax commission in the comparable quarter of the immediate-
ly preceding year under this article and as taxes imposed pursuant to
the authority of article twenty-nine with respect to all receipts,
amusement charges and rents[, or (ii) a person filing a March estimated
return as described in paragraph (ii) of subdivision (c) of section
eleven hundred thirty-seven-A hereof who, at the time of such filing
shall pay to the tax commission one-third of the sales and compensating
use taxes payable by such person to the tax commission in the comparable
quarter of the immediately preceding year under this article. Notwith-
standing the preceding sentence, for the purposes of subparagraph (ii)
of this paragraph, the sales and compensating use taxes payable in the
comparable quarter of the immediately preceding year shall not include
taxes imposed by section eleven hundred seven or eleven hundred eight of
this article or pursuant to the authority of article twenty-nine of this
chapter.
(2) The provisions of subdivisions (a) and (b) of this section, howev-
er, shall apply to a person filing a March estimated return as described
in paragraph (i) of subdivision (c) of section eleven hundred thirty-
seven-A hereof who, at the time of such filing shall pay to the tax
commission the sales and compensating use taxes, that are estimated to
be payable by such person for such month of March. Notwithstanding the
preceding sentence, for the purposes of this paragraph, the sales and
compensating use taxes that are estimated to be payable by such person
for such month of March shall not include taxes imposed by section elev-
en hundred seven or eleven hundred eight of this article or pursuant to
the authority of article twenty-nine of this chapter].
S 8. Paragraph 3 of subdivision (e) of section 1137 of the tax law is
REPEALED.
S 9. Paragraphs 1 and 2 of subdivision (f) of section 1137 of the tax
law, paragraph 1 as amended by section 1 of part X of chapter 57 of the
laws of 2010 and paragraph 2 as amended by section 1 of part H of chap-
ter 62 of the laws of 2006, are amended to read as follows:
(1) Except as otherwise provided in this subdivision, a person
required to collect tax who files a return required to be filed under
section eleven hundred thirty-six of this part for a quarterly or longer
period shall be allowed a credit against the taxes and fees required to
be reported on, and paid with, such return, in an amount as determined
in paragraph two of this subdivision, but only where such person files
the return on or before the filing due date and pays or pays over with
such return the total amount shown on such return (determined with
regard to this subdivision) AND FURTHER ONLY WHERE THE AMOUNTS DEPOSITED
BY THE PERSON INTO THE PERSON'S ESCROW ACCOUNT DURING THE PERIOD COVERED
BY THE FILING ARE EQUAL TO AT LEAST NINETY-FIVE PERCENT OF THE TOTAL TAX
DUE; provided, however, that no credit pursuant to this subdivision
A. 6635 7
shall be allowed for any person who files or is required to file a
return pursuant to paragraph two of subdivision (a) of section eleven
hundred thirty-six of this part or any person who pays or is required to
pay tax pursuant to section ten of this chapter.
(2) The amount of the credit authorized by paragraph one of this
subdivision shall be five percent of the amount of taxes and fees (but
not including any penalty or interest thereon) required to be reported
on, and paid or paid over with, the return but only if the return is
filed on or before the filing due date, but not more than [two] FIVE
hundred dollars, for each quarterly or longer period[, except that, with
respect to returns required to be filed for quarterly or longer periods
ending on or before the last day of February, two thousand seven, the
amount of the credit shall be not more than one hundred seventy-five
dollars for each such quarterly or longer period].
S 10. Section 1137-A of the tax law is REPEALED.
S 11. Section 1145 of the tax law is amended by adding a new subdivi-
sion (l) to read as follows:
(L)(1) IN ADDITION TO ANY OTHER PENALTY PROVIDED BY THIS ARTICLE OR
ANY OTHER LAW, ANY PERSON FAILING TO ESTABLISH OR PROPERLY FUND AN
ESCROW ACCOUNT REQUIRED BY SUBPARAGRAPH (I), (II), (III) OR (IV) OF
PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-TWO OF
THIS PART SHALL BE SUBJECT TO AN ADDITIONAL PENALTY OF TEN PERCENT OF
THE AMOUNT OF TAX DUE IF SUCH FAILURE IS FOR NOT MORE THAN ONE MONTH,
WITH AN ADDITIONAL ONE PERCENT FOR EACH ADDITIONAL MONTH OR FRACTION
THEREOF DURING WHICH SUCH FAILURE CONTINUES, NOT EXCEEDING THIRTY
PERCENT IN THE AGGREGATE.
(2) IF THE AMOUNT PAID BY THE PERSON REQUIRED TO COLLECT THE TAX INTO
THEIR ESCROW ACCOUNT IS LESS THAN NINETY PERCENT THAN THE AMOUNT OF
TAXES OWED, AS SHOWN IN THE PERSON'S QUARTERLY, PART-QUARTERLY OR ANNUAL
RETURN, THE PERSON SHALL OWE A PENALTY EQUAL TO FIFTY PERCENT OF THE
DELINQUENCY. IN ADDITION, IF THE ESCROW ACCOUNT MAINTAINED BY THE PERSON
IS AN ACCPC ESCROW ACCOUNT, THE COMMISSIONER MAY ISSUE A NOTICE REQUIR-
ING THE PERSON TO INCREASE THE PERSON'S ALGORITHMIC RATE BY AN AMOUNT
NOT EXCEEDING TWICE THE AMOUNT OF THE DEFICIENCY AND THIS INCREASED
ALGORITHMIC RATE SHALL CONTINUE AS LONG AS THE COMMISSIONER DETERMINES
THAT SUCH INCREASED RATE IS NECESSARY.
S 12. This act shall take effect September 1, 2016; provided that the
amendments to subparagraph (A) of paragraph 4 of subdivision (a) of
section 1134 of the tax law made by section three of this act shall be
subject to the expiration and reversion of such subparagraph pursuant to
section 23 of part U of chapter 61 of the laws of 2011, as amended, when
upon such date the provisions of section four of this act shall take
effect; provided further that the commissioner of taxation and finance
shall promulgate all rules and regulations necessary to implement the
provisions of this act on or before its effective date.