Provides that issuers of debit and credit cards shall pay sales and use taxes directly to the commissioner of taxation and finance

1 Co-sponsor

• Daniel L. Squadron

BILL NUMBER:S347

Title of bill

REVISED 12/30/11 An act to amend the tax law, in relation to requiring issuers of credit cards and debit cards to pay and collect sales and use taxes and pay such taxes to the commissioner of taxation and finance

Purpose

To enhance the administration and enforcement of sales tax by including credit card processors as the prime entity with the fiduciary duty to remit the New York State sales tax. Processors are those entities who for a fee remit credit card and debit card receipts from vendors to the issuers of such credit/debit cards then remit collection of such payments on behalf of the vendors.

Summary of provisions

Section 1 of the bill includes processors of credit and or debit card payments to vendors as the entity primarily responsible for the duty to collect and remit to the state, all sales taxes due on items purchased with credit and or debit cards. Vendors who sell to the public shall remain responsible to correctly report and maintain true records of the value of goods sold.

Section 2 of the bill provides for a refund or credit in the event that such is due and owing when goods which are returned to the vendor.

Justification

A major source of failure to comply with New York State sales taxes being remitted to the state from vendors who collect such taxes from their customers, is the current system which relies solely upon the thousands of vendors to voluntarily remit such sales taxes. New York State cannot possibly audit every vendor and the vendors know this. But the processors which are paid by vendors to deal with the issuers of credit and or debit cards, and who actually get the monies from the credit card issuers, are far less numerous. They know the true sales and actually get money from the credit card companies which includes the sales taxes. It is more efficient to have these processors remit the sales taxes directly to New York state instead of sending the taxes back to the vendors and then relying upon the vendors to timely and accurately submit the sales taxes.

Legislative history

2011: S.347 - Defeated in Investigations and Government Operations 2010: S.2550A/A.7674 Referred to Investigations and Government Operations/Referred to Ways and Means 2009: S.2550A/A.7674 Tabled/Referred to Ways and Means 2008: S.774/A.9991 Referred to Investigations and Government Operations/Referred to Ways and Means 2007: S.774 Referred to Investigations and Government Operations 2005-06: S.827 Referred to Investigations and Government Operations 2003-04: S.4362 Referred to Investigations and Government Operations

Effective date

This law shall take effect on the first of October next succeeding the date on which it shall have become a law, with provisions.