NY State Senate Bill 2019-S7974

Archive: Last Bill Status - In Senate Committee Budget And Revenue 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 05, 2020	referred to budget and revenue

co-Sponsors

2019-S7974 (ACTIVE) - Details

See Assembly Version of this Bill:: A10091
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §1101, Tax L
Versions Introduced in 2021-2022 Legislative Session:: S6301, A1143

2019-S7974 (ACTIVE) - Summary

Codifies existing guidance on the application of sales and use tax and amends the definition of receipt to include consideration received by a vendor from third parties in certain circumstances.

2019-S7974 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7974                 Revised 3/5/2020

SPONSOR: STAVISKY
 
TITLE OF BILL:

An act to amend the tax law, in relation to codifying existing guidance
on the application of sales and use tax

 
PURPOSE OR GENERAL IDEA OF BILL:

To clarify that vendor funding is not subject to sales and use tax.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends paragraph (3) of subsection (b) of section
1101 of the tax law.

Section 2 provides that the act shall take effect immediately and apply
to all tax periods for which the statute of limitations for seeking a
refund or assessing additional tax are still open under the tax law or
for which any claim could be made under the New York false claims act.

 
JUSTIFICATION:

Longstanding guidance from the Department of Tax and Finance states that
vendor funding is not subject to sales and use tax. This legislation
merely codifies this guidance.

The Department of Taxation and Finance has long allowed retailers to
exclude vendor funding from their receipts that are subject to the
collection of sales and use tax, affirmed through continual audit as
well as advisory opinions issued by the Department in 1998 and 1999;
(TSB-A-99(10)S and TSB-A99(10)S, respectively. Relying upon this guid-
ance and long-standing policy, retailers have excluded vendor funding
from taxable receipts.

Vendor purchasing scenarios include transactions between, for example, a
car dealership and its vendor; if a vendor provides a $30,000 vehicle to
a dealer for $25,000 and the vehicle sells at that price, the taxable
value of the vehicle for sales and use tax purposes is $25,000.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To the extent that this legislation simply codifies existing Tax Depart-
ment guidance enforced through audit, this bill has no fiscal impact on
state and local governments.

 
EFFECTIVE DATE:
Immediately.

2019-S7974 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7974
 
                             I N  S E N A T E
 
                               March 5, 2020
                                ___________
 
 Introduced  by Sen. STAVISKY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the tax law, in relation to codifying existing  guidance
   on the application of sales and use tax
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Paragraph 3 of subdivision (b) of section 1101 of  the  tax
 law,  as  amended  by  section 21 of part Y of chapter 63 of the laws of
 2000, is amended to read as follows:
   (3) Receipt. (I) The amount of the sale price of any property and  the
 charge for any service taxable under this article, including gas and gas
 service  and electricity and electric service of whatever nature, valued
 in money, whether received in money or otherwise, including  any  amount
 for  which credit is allowed by the vendor to the purchaser, without any
 deduction for expenses or early payment discounts and also including any
 charges by the vendor to the purchaser for shipping  or  delivery,  and,
 with  respect  to  gas  and  gas  service  and  electricity and electric
 service, any charges by the vendor for transportation,  transmission  or
 distribution,  regardless  of whether such charges are separately stated
 in the written contract, if  any,  or  on  the  bill  rendered  to  such
 purchaser  and regardless of whether such shipping or delivery or trans-
 portation, transmission, or distribution is provided by such vendor or a
 third party, but excluding any credit  for  tangible  personal  property
 accepted  in  part  payment  and  intended for resale. For special rules
 governing computation of receipts, see section eleven hundred eleven  OF
 THIS ARTICLE.
   (II)  RECEIPT  SHALL INCLUDE CONSIDERATION RECEIVED BY THE VENDOR FROM
 THIRD PARTIES IF:
   (A) THE VENDOR RECEIVES CONSIDERATION FROM  A  PARTY  OTHER  THAN  THE
 PURCHASER AND THE CONSIDERATION IS DIRECTLY RELATED TO A PRICE REDUCTION
 OR DISCOUNT ON THE SALE;
   (B)  THE VENDOR HAS AN OBLIGATION TO PASS THROUGH TO THE PURCHASER THE
 PRICE REDUCTION OR DISCOUNT;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15757-01-0

 S. 7974                             2
 
   (C) THE AMOUNT OF THE CONSIDERATION ATTRIBUTABLE TO THE SALE IS  FIXED
 AND  DETERMINABLE  BY  THE VENDOR AT THE TIME OF THE SALE OF THE ITEM TO
 THE PURCHASER; AND
   (D) ONE OF THE FOLLOWING CRITERIA IS MET:
   (I)  THE  PURCHASER PRESENTS A COUPON, CERTIFICATE OR OTHER DOCUMENTA-
 TION TO THE VENDOR TO CLAIM A PRICE  REDUCTION  OR  DISCOUNT  WHERE  THE
 COUPON,  CERTIFICATE  OR  DOCUMENTATION  IS  AUTHORIZED,  DISTRIBUTED OR
 GRANTED BY A THIRD PARTY WITH THE UNDERSTANDING  THAT  THE  THIRD  PARTY
 SHALL REIMBURSE ANY VENDOR TO WHOM THE COUPON, CERTIFICATE OR DOCUMENTA-
 TION IS PRESENTED;
   (II)  THE  PURCHASER PRESENTS IDENTIFICATION AS A MEMBER OF A GROUP OR
 ORGANIZATION ENTITLED TO A PRICE REDUCTION OR DISCOUNT; OR
   (III) THE PRICE REDUCTION OR DISCOUNT IS IDENTIFIED AS A  THIRD  PARTY
 PRICE  REDUCTION OR DISCOUNT ON THE INVOICE RECEIVED BY THE PURCHASER OR
 ON A  COUPON,  CERTIFICATE  OR  OTHER  DOCUMENTATION  PRESENTED  BY  THE
 PURCHASER.
   (III)  SUBCLAUSE (II) OF CLAUSE (D) OF SUBPARAGRAPH (II) OF THIS PARA-
 GRAPH SHALL NOT APPLY TO EMPLOYEE DISCOUNTS THAT  ARE  REIMBURSED  BY  A
 THIRD PARTY ON SALES OF MOTOR VEHICLES.
   (IV)  FOR THE PURPOSES OF SUBCLAUSE (II) OF CLAUSE (D) OF SUBPARAGRAPH
 (II) OF THIS PARAGRAPH, "IDENTIFICATION AS A MEMBER OF A GROUP OR ORGAN-
 IZATION ENTITLED TO A PRICE REDUCTION OR DISCOUNT" SHALL NOT INCLUDE THE
 PRESENTATION OF A CUSTOMER LOYALTY OR RELATED REWARDS PROGRAM CARD.
   § 2. This act shall take effect immediately and shall apply to all tax
 periods for which (a) the statute of limitations for seeking a refund or
 assessing additional tax are still open under the tax  law  or  (b)  for
 which any claim could be made under the New York false claims act.

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Senate Bill S7974

Sponsored By

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

2019-S7974 (ACTIVE) - Details

2019-S7974 (ACTIVE) - Summary

2019-S7974 (ACTIVE) - Sponsor Memo

2019-S7974 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7974

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Sponsored By

Toby Ann Stavisky

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

David Carlucci

2019-S7974 (ACTIVE) - Details

2019-S7974 (ACTIVE) - Summary

2019-S7974 (ACTIVE) - Sponsor Memo

2019-S7974 (ACTIVE) - Bill Text download pdf

Comments