Imposes a penalty on persons failing to collect or remit sales tax

BILL NUMBER:S2660

Title of bill

An act to amend the tax law, in relation to imposing a penalty on persons failing to collect or remit sales tax

Purpose

This bill would require the imposition of a fine for noncompliance with current sales tax laws. It will apply to both an individual who does not collect a sales tax, and to the individual who fails to take the second step, which is remittance of the tax.

Summary of provisions

Amends section 1132(a) and section 1145(a) (1) (i) of the New York State Tax Law.

Justification

According to recent figures, New York State could lose upwards of 600 million dollars as a result of sales tax evasion each year. Merchants who fail to collect and remit the appropriate amount of sales tax are cheating not only the government but their competitors as well. The merchant who is responsible and who pays his/her sales tax may be forced to charge a higher price for the product than the dishonest vendor who cheats. In addition, a merchant who does collect the tax, but does not remit it to the state, is also cheating the consumer by charging the tax and keeping the money. This measure would impose a fine of $5,000 on a merchant if a customer's sales tax receipt, invoice or other statement or memorandum of the price does not clearly state the sales tax. In addition, the same fine shall apply to an individual who does not collect or does not remit the sales tax in compliance to current laws.

Fiscal implications

The increased fines will result in expanded revenues for local and state governments.

Effective date

This act shall take effect on the one hundred eightieth day after which it shall have become a law.