What's happening
This bill requires credit and debit card issuers to collect and pay sales and use taxes directly to the state, instead of vendors.
Why it matters
Shifts Tax Collection Burden. By making credit and debit card issuers responsible for collecting and remitting sales and use tax, this bill would relieve vendors (businesses) of the administrative and financial responsibility for tax collection on card-based transactions.
Centralizes Tax Remittance. The state would receive sales tax payments directly from a smaller number of large financial institutions (card issuers and processors), which could potentially improve tax compliance, reduce errors, and streamline oversight.
Impacts Payment Processing Industry. Payment processors and card issuers would need to update their systems to track, calculate, and remit taxes for every transaction, representing a significant operational shift that could increase costs or require new technology.
Potential for Changes in Consumer and Vendor Behavior. Vendors might be incentivized to encourage cash transactions or alternative payment methods to avoid complexities or fees, while consumers could see changes in how taxes are displayed or processed at the point of sale.
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Who cares
Headline styles
Card Companies Pay Sales Tax
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4860
2017-2018 Regular Sessions
IN SENATE
March 3, 2017
Introduced by Sens. DIAZ, SQUADRON -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
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
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 1168 to read as follows:
§ 1168. Collection and payment of taxes by processors of credit cards and debit cards. (a) Notwithstanding any law, rule or regulation to the contrary, an issuer of credit cards or debit cards, as defined in section five hundred eleven of the general business law, shall collect and pay taxes imposed by articles twenty-eight and twenty-nine of this chapter, and shall be subject to all provisions of such articles as a person required to collect tax, as defined in subdivision one of section eleven hundred thirty-one of this chapter on all transactions conducted with a credit or debit card of the issuer, provided, however, notwithstanding any law, rule or regulation to the contrary, such taxes shall be paid directly to the commissioner by the issuer.
(b) Notwithstanding any law, rule or regulation to the contrary, on any transaction conducted with a debit or credit card of the issuer, wherein the issuer is required to collect and pay taxes pursuant to subdivision (a) of this section, the vendor of tangible personal property or services involved in said transaction shall not be required to pay and collect taxes pursuant to articles twenty-eight and twenty-nine of this chapter, rather this duty shall be imposed upon processors.
(c) For purposes of this section, processor shall mean any entity which contracts with vendors to process their credit card receipts and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07302-01-7
S. 4860 2
who for a fee, obtain funds for vendors from such issuers of credit or debit cards.
§ 2. This act shall take effect on the first of October next succeeding the date on which it shall have become a law. Effective immediately, any rules and regulations necessary for the timely implementation of this act on its effective date may be promulgated on or before such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
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
Provides that issuers of debit and credit cards shall pay sales and use taxes directly to the Commissioner of Taxation and Finance
Summary of provisions
Section 1. Amends the Tax Law by adding a new section 1168. Requires processors of credit and or debit card to collect and pay taxes directly to the Commissioner of Taxation and Finance.
Section 2. Effective Date.
Existing law
None.
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 include 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 submit the sales taxes in a timely and accurately manner.
Legislative history
2016: S.472- REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS/A.5908referred to ways and means 2015: S.472- REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS/ A.5908-referred to ways and means 2014: S.785 - Referred to Investigations and Government Operations/A.157 -Referred to Ways and Means 2013: S.785 - Referred to Investigations and Government Operations/A.157 -Referred to Ways and Means 2012: S.347 - Referred to Investigations and Government Operations/A.156- Referred to Ways and Means 2011: S.347 - Defeated in Investigations and Government Operations/A.156- Referred to Ways and Means 2010: S.2550A - Notice of Committee Consideration Requested/A.7674-A Referred to Ways and Means 2009: S.2550A - Tabled/A.7674-A - Amend and recommit to Ways and Means 2008: S.774/Referred to Investigations and Government Operations/A.9991 -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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.