What's happening
This bill exempts gift certificates, electronic gift cards, and magnetic gift cards from New York sales and use taxes.
Why it matters
Shifts the timing of sales tax collection. By exempting gift certificates and gift cards from sales tax at the time of purchase, the bill ensures that sales tax is only collected when the card is actually used to buy goods or services, better aligning tax collection with real economic activity.
Clarifies broad definitions. The bill provides detailed definitions for "gift certificate," "electronic gift card," and "magnetic gift card," ensuring a wide range of modern prepaid instruments are covered and reducing ambiguity for both consumers and businesses.
Potentially impacts consumers and retailers. Consumers may benefit from more straightforward transactions when buying gift cards, while retailers could see reduced administrative hassles from not needing to calculate or remit sales tax at the point of gift card sale.
Distinguishes prepaid calling cards. By specifically excluding prepaid calling arrangements from the definition, the bill ensures such products remain taxable as before, avoiding loopholes or unintended exemptions in telecommunications.
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Who cares
Gift certificate and gift card buyers
The bill would exempt gift certificates, electronic gift cards and magnetic gift cards from sales and use taxes.
Retailers and other gift card issuers
The exemption would cover banked-value cards, merchandise credits and other qualifying instruments redeemable for goods or services.
Prepaid phone card sellers
The bill explicitly excludes prepaid calling arrangements from its definition of gift certificates.
Department of Taxation and Finance
The commissioner would be required to take steps necessary to implement the exemption on time.
Headline styles
No Tax on Gift Cards
Plain English, a few words. Used as the page title.
Sponsors
History
- Held for consideration in ways and means
- Referred to ways and means
- Referred to ways and means
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4801
2019-2020 Regular Sessions
IN ASSEMBLY
February 5, 2019
Introduced by M. of A. GARBARINO -- Multi-Sponsored by -- M. of A. BARCLAY, BRABENEC, DiPIETRO, FINCH, FRIEND, HAWLEY, LALOR, McDONOUGH, MONTESANO, PALMESANO, PALUMBO, RAIA, STECK, THIELE -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to exemptions from sales and use taxes for gift certificates, electronic gift cards and magnetic gift cards
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision (a) of section 1115 of the tax law is amended by adding a new paragraph 45 to read as follows:
(45)(A) Gift certificates, electronic gift cards and magnetic gift cards.
(B) For the purpose of this paragraph: (i) the term "gift certificate" means a writing identified as a gift certificate by an issuer for use by a customer, whether or not redeemable for cash, and usable for its face amount in lieu of cash for the exchange of goods or services supplied by the seller. Gift certificates shall include electronic or magnetic cards with a banked dollar value, a merchandise credit, a certificate where the issuer has received payment for the full face value for the future purchase or delivery of goods or services, and any other medium that evidences the giving of consideration in exchange for the right to redeem it for goods or services of at least an equal value. Pre-paid calling arrangements, such as pre-paid phone cards, are not considered gift certificates; (ii) the term "electronic gift card" or "magnetic gift card" means a card with a banked dollar value that may be redeemed for goods or services whereby the dollar amount of the card is reduced accordingly.
§ 2. This act shall take effect on the first day of a quarterly sales tax period, as set forth in subdivision (b) of section 1136 of the tax law, next succeeding the thirtieth day after it shall have become a law. Provided, however that the commissioner of taxation and finance shall take any action necessary for the timely implementation of this act on or before the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08355-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.