S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1124
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              January 7, 2021
                                ___________
 
 Introduced  by Sen. GIANARIS -- 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  establishing  a  tax  on
   digital ads
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. This act shall be known and may be cited as the "digital ad
 tax act (DATA)".
   § 2. The tax law is amended by adding a new  article  15  to  read  as
 follows:
                                ARTICLE 15
                            TAX ON DIGITAL ADS
 SECTION 330. DEFINITIONS.
         331. IMPOSITION OF TAX.
         332. RETURNS.
         333. TAX PAYMENT.
   § 330. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
 HAVE THE FOLLOWING MEANINGS:
   1.  THE  TERM "ANNUAL GROSS REVENUES" MEANS INCOME OR REVENUE FROM ALL
 SOURCES IN NEW YORK  STATE,  BEFORE  ANY  EXPENSES  OR  TAXES,  COMPUTED
 ACCORDING TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
   2.  THE TERM "ASSESSABLE BASE" MEANS THE ANNUAL GROSS REVENUES DERIVED
 FROM DIGITAL ADVERTISING SERVICES IN THE STATE.
   3. THE TERM  "DIGITAL  ADVERTISING  SERVICES"  INCLUDES  ADVERTISEMENT
 SERVICES ON A DIGITAL INTERFACE, INCLUDING ADVERTISEMENTS IN THE FORM OF
 BANNER ADVERTISING, SEARCH ENGINE ADVERTISING, INTERSTITIAL ADVERTISING,
 AND OTHER COMPARABLE ADVERTISING SERVICES, THAT USE PERSONAL INFORMATION
 ABOUT THE PEOPLE THE ADS ARE BEING SERVED TO.
   4.  THE TERM "DIGITAL INTERFACE" MEANS ANY TYPE OF SOFTWARE, INCLUDING
 A WEBSITE, PART OF A WEBSITE, OR APPLICATION, THAT A  USER  IS  ABLE  TO
 ACCESS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03351-01-1

 S. 1124                             2
 
   5. (A) THE TERM "PERSON" MEANS AN INDIVIDUAL, RECEIVER, TRUSTEE, GUAR-
 DIAN,  PERSONAL REPRESENTATIVE, FIDUCIARY, OR REPRESENTATIVE OF ANY KIND
 AND ANY PARTNERSHIP, FIRM, ASSOCIATION, CORPORATION, OR OTHER ENTITY.
   (B)  THE  TERM "PERSON", UNLESS EXPRESSLY PROVIDED OTHERWISE, DOES NOT
 INCLUDE A GOVERNMENTAL ENTITY OR A UNIT OR INSTRUMENTALITY OF A  GOVERN-
 MENTAL ENTITY.
   6.  THE  TERM  "USER"  MEANS  AN  INDIVIDUAL  OR  ANY OTHER PERSON WHO
 ACCESSES A DIGITAL INTERFACE WITH A DEVICE.
   § 331. IMPOSITION OF TAX. 1. THERE IS HEREBY IMPOSED AND SHALL BE PAID
 A TAX ON THE ANNUAL GROSS  REVENUES  ANY  PERSON  DERIVES  FROM  DIGITAL
 ADVERTISING SERVICES IN THE STATE.
   2. THE TAX IMPOSED SHALL BE APPORTIONED TO THE STATE BY THE APPORTION-
 MENT  FACTOR  DETERMINED  PURSUANT  TO  THIS  SECTION. THE APPORTIONMENT
 FACTOR IS A FRACTION, DETERMINED BY INCLUDING ONLY THOSE  RECEIPTS,  NET
 INCOME,  NET  GAINS,  AND OTHER ITEMS DESCRIBED IN THIS SECTION THAT ARE
 INCLUDED IN THE COMPUTATION OF THE TAXPAYER'S BUSINESS  INCOME  FOR  THE
 TAXABLE YEAR. THE NUMERATOR OF THE APPORTIONMENT FRACTION SHALL BE EQUAL
 TO  THE  SUM OF ALL THE AMOUNTS REQUIRED TO BE INCLUDED IN THE NUMERATOR
 PURSUANT TO THE PROVISIONS OF THIS SECTION AND THE  DENOMINATOR  OF  THE
 APPORTIONMENT  FRACTION  SHALL  BE  EQUAL  TO THE SUM OF ALL THE AMOUNTS
 REQUIRED TO BE INCLUDED IN THE DENOMINATOR PURSUANT TO THE PROVISIONS OF
 THIS SECTION.
   3. (A) THE ANNUAL GROSS REVENUES OF  A  PERSON  DERIVED  FROM  DIGITAL
 ADVERTISING  IN  THE  STATE  SHALL  BE  INCLUDED IN THE NUMERATOR OF THE
 APPORTIONMENT FRACTION. THE ANNUAL GROSS REVENUES OF  A  PERSON  DERIVED
 FROM  DIGITAL  ADVERTISING IN THE UNITED STATES SHALL BE INCLUDED IN THE
 DENOMINATOR OF THE APPORTIONMENT FRACTION.
   (B) THE COMMISSIONER SHALL ADOPT REGULATIONS TO DETERMINE  THE  AMOUNT
 OF REVENUE DERIVED FROM EACH STATE IN WHICH DIGITAL ADVERTISING SERVICES
 ARE PROVIDED.
   4. THE DIGITAL ADVERTISING GROSS REVENUES TAX RATE IS:
   (A)  TWO AND ONE-HALF PERCENT OF THE ASSESSABLE BASE FOR A PERSON WITH
 GLOBAL ANNUAL GROSS REVENUES OF ONE HUNDRED MILLION DOLLARS THROUGH  ONE
 BILLION DOLLARS;
   (B) FIVE PERCENT OF THE ASSESSABLE BASE FOR A PERSON WITH GLOBAL ANNU-
 AL  GROSS  REVENUES  OF  ONE  BILLION  ONE  DOLLARS THROUGH FIVE BILLION
 DOLLARS;
   (C) SEVEN AND ONE-HALF PERCENT OF THE ASSESSABLE  BASE  FOR  A  PERSON
 WITH  GLOBAL  ANNUAL  GROSS REVENUES OF FIVE BILLION ONE DOLLARS THROUGH
 FIFTEEN BILLION DOLLARS; AND
   (D) TEN PERCENT OF THE ASSESSABLE BASE FOR A PERSON WITH GLOBAL ANNUAL
 GROSS REVENUES EXCEEDING FIFTEEN BILLION DOLLARS.
   § 332. RETURNS. 1. EACH PERSON THAT, IN A CALENDAR  YEAR,  HAS  ANNUAL
 GROSS REVENUES DERIVED FROM DIGITAL ADVERTISING SERVICES IN THE STATE OF
 AT  LEAST  ONE MILLION DOLLARS SHALL COMPLETE, UNDER OATH, AND FILE WITH
 THE COMMISSIONER A RETURN, ON OR BEFORE APRIL FIFTEENTH THE YEAR FOLLOW-
 ING THE EFFECTIVE DATE OF THIS ARTICLE.
   2. (A) EACH PERSON THAT REASONABLY EXPECTS THE PERSON'S  ANNUAL  GROSS
 REVENUES  DERIVED  FROM  DIGITAL  ADVERTISING  SERVICES  IN THE STATE TO
 EXCEED ONE MILLION DOLLARS SHALL COMPLETE, UNDER OATH, AND FILE WITH THE
 COMMISSIONER  A  DECLARATION  OF  ESTIMATED  TAX,  ON  OR  BEFORE  APRIL
 FIFTEENTH OF THAT YEAR.
   (B)  ANY  PERSON REQUIRED TO FILE A DECLARATION OF ESTIMATED TAX FOR A
 TAXABLE YEAR PURSUANT  TO  PARAGRAPH  (A)  OF  THIS  SUBDIVISION,  SHALL
 COMPLETE AND FILE WITH THE COMMISSIONER A QUARTERLY ESTIMATED TAX RETURN

 S. 1124                             3
 
 ON OR BEFORE JUNE FIFTEENTH, SEPTEMBER FIFTEENTH, AND DECEMBER FIFTEENTH
 OF SUCH YEAR.
   3. ANY PERSON REQUIRED TO FILE A RETURN PURSUANT TO THIS SECTION SHALL
 FILE  WITH THE RETURN AN ATTACHMENT THAT STATES ANY INFORMATION THAT THE
 COMMISSIONER REQUIRES TO DETERMINE ANNUAL GROSS  REVENUES  DERIVED  FROM
 DIGITAL ADVERTISING SERVICES IN THE STATE.
   4.  ANY PERSON REQUIRED TO FILE A RETURN UNDER SUBDIVISION TWO OF THIS
 SECTION SHALL MAINTAIN RECORDS OF DIGITAL ADVERTISING SERVICES  PROVIDED
 IN  THE STATE AND THE BASIS FOR THE CALCULATION OF THE DIGITAL ADVERTIS-
 ING GROSS REVENUES TAX OWED.
   § 333. TAX PAYMENT. 1. EXCEPT AS PROVIDED IN SUBDIVISION TWO  OF  THIS
 SECTION,  EACH  PERSON  REQUIRED  TO  FILE  A RETURN UNDER SECTION THREE
 HUNDRED THIRTY-TWO OF THIS ARTICLE SHALL  PAY  THE  DIGITAL  ADVERTISING
 GROSS  REVENUES TAX WITH THE RETURN THAT COVERS THE PERIOD FOR WHICH THE
 TAX IS DUE.
   2. ANY PERSON REQUIRED TO FILE  ESTIMATED  DIGITAL  ADVERTISING  GROSS
 REVENUES  TAX  RETURNS UNDER PARAGRAPH (B) OF SUBDIVISION TWO OF SECTION
 THREE HUNDRED THIRTY-TWO OF THIS ARTICLE SHALL PAY:
   (A) AT LEAST TWENTY-FIVE PERCENT OF THE ESTIMATED DIGITAL  ADVERTISING
 GROSS REVENUES TAX SHOWN ON THE DECLARATION OR AMENDED DECLARATION FOR A
 TAXABLE YEAR:
   I.  WITH  THE DECLARATION OR AMENDED DECLARATION THAT COVERS THE YEAR;
 AND
   II. WITH EACH QUARTERLY RETURN FOR THAT YEAR; AND
   (B) ANY UNPAID DIGITAL ADVERTISING GROSS REVENUES  TAX  FOR  THE  YEAR
 SHOWN ON THE PERSON'S RETURN THAT COVERS THAT YEAR WITH THE RETURN.
   §  3.  The  tax law is amended by adding a new section 1816 to read as
 follows:
   § 1816. DIGITAL AD TAX. ANY WILLFUL ACT  OR  OMISSION  BY  ANY  PERSON
 WHICH  CONSTITUTES  A  VIOLATION  OF ANY PROVISION OF ARTICLE FIFTEEN OF
 THIS CHAPTER SHALL CONSTITUTE A MISDEMEANOR.
   § 4. This act shall take effect immediately and shall apply to taxable
 years beginning on and after January 1, 2022.