What's happening
This bill updates the rules for suspending driver's licenses due to tax debt, raising thresholds for inflation and adding new hardship exemptions.
Why it matters
Reduces the risk of losing a driver’s license for low-income individuals. By exempting people whose income is at or below 250% of the federal poverty level, or who receive public assistance or SSI, the bill protects vulnerable New Yorkers from losing their primary means of transportation for work, school, or family obligations due to tax debt.
Makes the tax debt threshold fairer over time. Tying the minimum tax debt amount that can trigger license suspension to inflation means fewer people will be penalized simply because the threshold failed to keep up with the cost of living, ensuring the policy targets only those with significant, not trivial, debts.
Adds new avenues for relief from suspension. The bill expands hardship exemptions by allowing taxpayers to avoid suspension if paying their tax debt would prevent them from meeting necessary living expenses, and gives the commissioner explicit authority to waive suspension based on case-specific equities, increasing fairness and flexibility.
Narrows the scope to focus on true avoidance. The updated rules maintain consequences for those actively evading tax collection (e.g., hiding assets), while shielding those making good faith efforts to pay or facing genuine hardship, promoting a more just and targeted approach to tax enforcement.
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Who cares
Headline styles
Raise Tax Suspension Threshold
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to ways and means
- Delivered to assembly
- Passed senateVote 51–9
- Ordered to third reading cal.770
- Reported and committed to rules
- Reported and committed to finance
- Print number 3836a
- Amend and recommit to investigations and government operations
- Referred to investigations and government operations
- Returned to senate
- Died in assembly
- Referred to ways and means
Show 5 earlier actions
- Delivered to assembly
- Passed senateVote 47–14
- Ordered to third reading cal.1245
- Committee discharged and committed to rules
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Raise License Suspension Threshold
In Assembly Committee · Ways And Means · Sponsor Helene Weinstein
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3836--A
2019-2020 Regular Sessions
IN SENATE
February 19, 2019
Introduced by Sens. KRUEGER, BAILEY, CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to the enforcement of delinquent tax liabilities by means of the suspension of licenses to operate a motor vehicle
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivisions 1, 3 and 5 of section 171-v of the tax law, subdivision 1 as added by section 1 of part P of chapter 59 of the laws of 2013, and subdivisions 3 and 5 as amended by section 1 of part EEE of chapter 59 of the laws of 2019, are amended to read as follows:
(1) The commissioner shall enter into a written agreement with the commissioner of motor vehicles, which shall set forth the procedures for the two departments to cooperate in a program to improve tax collection through the suspension of drivers' licenses of taxpayers with past-due tax liabilities equal to or in excess of ten thousand dollars multiplied by the applicable inflation adjustment. For the purposes of this section, the term "tax liabilities" shall mean any tax, surcharge, or fee administered by the commissioner, or any penalty or interest due on these amounts owed by an individual with a New York driver's license, the term "driver's license" means any license issued by the department of motor vehicles, except for a commercial driver's license as defined in section five hundred one-a of the vehicle and traffic law, and the term "past-due tax liabilities" means any tax liability or liabilities which have become fixed and final such that the taxpayer no longer has any right to administrative or judicial review, and the "applicable inflation adjustment" for a calendar year shall be determined under the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00879-05-9
S. 3836--A 2
principles of section 7345(f) of the Internal Revenue Code of 1986, using the calendar year of the effective date of the chapter of the laws of two thousand twenty which amended this subdivision as the base period. The ten thousand dollar limitation in this subdivision shall not apply to a taxpayer that the commissioner determines has taken affirmative steps to evade or avoid the collection of tax, such as by hiding assets.
(3) The department shall provide notice to the taxpayer of his or her inclusion in the license suspension program no later than sixty days prior to the date the department intends to inform the commissioner of motor vehicles of the taxpayer's inclusion. However, no such notice shall be issued to a taxpayer: (i) whose wages are being garnished by the department for the payment of past-due tax liabilities or past-due child support or combined child and spousal support arrears; (ii) who receives public assistance or supplemental security income; or (iii) whose income does not exceed two hundred fifty percent of the poverty level as reported by the federal Department of Health and Human Services or any successor agency. Notice shall be provided by first class mail to the taxpayer's last known address as such address appears in the electronic systems or records of the department. Such notice shall include:
(a) a clear statement of the past-due tax liabilities along with a statement that the department shall provide to the department of motor vehicles the taxpayer's name, social security number and any other identifying information necessary for the purpose of suspending his or her driver's license pursuant to this section and subdivision four-f of section five hundred ten of the vehicle and traffic law sixty days after the mailing or sending of such notice to the taxpayer;
(b) a statement that the taxpayer may avoid suspension of his or her license by fully satisfying the past-due tax liabilities, by making payment arrangements satisfactory to the commissioner, or by demonstrating any of the grounds for challenge set forth in subdivision five of this section, or by presenting facts to the commissioner resulting in the commissioner waiving suspension of his or her license based on the equities of the case. Such statement shall include information regarding programs through which the taxpayer can pay the past-due tax liabilities to the department, enter into a payment arrangement or request additional information needed to challenge the suspension under subdivision five of this section or demonstrate the equities of the case;
(c) a statement that the taxpayer's right to protest the notice is limited to raising issues set forth in subdivision five of this section;
(d) a statement that the suspension of the taxpayer's driver's license shall continue until the past-due tax liabilities are fully paid or the taxpayer makes payment arrangements satisfactory to the commissioner; and
(e) any other information that the commissioner deems necessary.
(5) Notwithstanding any other provision of law, and except as specifically provided herein, the taxpayer shall have no right to commence a court action or proceeding or to any other legal recourse against the department or the department of motor vehicles regarding a notice issued by the department pursuant to this section and the referral by the department of any taxpayer with past-due tax liabilities to the department of motor vehicles pursuant to this section for the purpose of suspending the taxpayer's driver's license. A taxpayer may only challenge such suspension or referral on the grounds that (i) the individual to whom the notice was provided is not the taxpayer at issue; (ii) the
S. 3836--A 3
past-due tax liabilities were satisfied; (iii) the taxpayer's wages are being garnished by the department for the payment of the past-due tax liabilities at issue or for past-due child support or combined child and spousal support arrears; (iv) the taxpayer's wages are being garnished for the payment of past-due child support or combined child and spousal support arrears pursuant to an income execution issued pursuant to section five thousand two hundred forty-one of the civil practice law and rules; (v) the taxpayer's driver's license is a commercial driver's license as defined in section five hundred one-a of the vehicle and traffic law; (vi) the department incorrectly found that the taxpayer has failed to comply with the terms of a payment arrangement made with the commissioner more than once within a twelve month period for the purposes of subdivision three of this section; (vii) the taxpayer receives public assistance or supplemental security income; [or] (viii) [the taxpayer demonstrates that suspension of the taxpayer's driver's license will cause the taxpayer undue economic hardship] the taxpayer's income does not exceed two hundred fifty percent of the poverty level as reported by the federal Department of Health and Human Services or any successor agency; or (ix) payment of the past due tax liabilities will create a hardship for the taxpayer in meeting necessary living expenses.
However, nothing in this subdivision is intended to limit a taxpayer from seeking relief pursuant to an offer in compromise pursuant to subdivision fifteenth of section one hundred seventy-one of this article or from joint and several liability pursuant to section six hundred fifty-four of this chapter, to the extent that he or she is eligible pursuant to such section, or establishing to the department that the enforcement of the underlying tax liabilities has been stayed by the filing of a petition pursuant to the Bankruptcy Code of 1978 (Title Eleven of the United States Code).
§ 2. The commissioner of taxation and finance is authorized and directed to promulgate any rules and regulations necessary to implement the provisions of this act in accordance with the provisions of the state administrative procedure act.
§ 3. This act shall take effect on the first of April next succeeding the date on which it shall have become a law.
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 the enforcement of delin- quent tax liabilities by means of the suspension of licenses to operate a motor vehicle
Purpose of bill
To amend section 171-v of the tax law to provide for a additional hard- ship exemption from New York's driver's license suspension program as it relates to the non-payment of income taxes.
Summary of specific provisions
Section 1 amends section 171-v of the tax law to add an inflation adjustment to the exclusion from driver's license suspension provisions for tax debts under 10,000; amends notice provisions to exclude those not subject to license suspension and increases information regarding requests for waivers of suspension; and adds an exception to suspension provisions for taxpayers who make less than 250 percent of the poverty level.
Read the full memo (1,054 words)
Section 2 provides for rulemaking by the commissioner. Section 3 is the effective date.
Justification
Chapter 59 of the laws of 2013 law gave the New York State Department of Taxation and Finance a new and powerful enforcement tool for collection of delinquent New York State tax liabilities by authorizing the suspen- sion of a tax debtor's driver's license if arrangements are not made by the tax debtor to pay delinquent taxes. Any individual whose tax liability (inclusive of interest and penalties) is $10,000 or greater became subject to revocation of his or her driver's license, regardless of the financial condition of the taxpayer. These sanctions have been effective in getting tax debtors to pay delinquent taxes.
However, these laws also have been widely criticized as being too harsh and punitive.
In 2016, the Tax Section of the New York State Bar Association published Report No. 1344 on "New York State's Driver's License Suspension Program" (the "2016 Report").
That Report concluded that the driver's license suspension law is in conflict with longstanding debtor protection laws when applied to taxpayers who will experience financial hardship if required to enter into a payment agreement with the Department for the payment of their tax debts.
For example, some tax debtors may have so little income or assets that they are not financially able to enter into an installment payment agreement or an Offer in Compromise to pay their tax liabilities without compromising their ability to pay basic living expenses. Nonetheless, the program can be used to force payments of tax debt from an indigent individual under threat of loss of his or her driver's license even though there are, in many cases, federal and state laws in place that would protect that individual from any direct tax levy on income and assets. The limited financial hardship exemptions make the New York law uniquely punitive when applied to this type of tax debtor since, unlike federal tax law, New York lacks many relief programs such as (1) the ability to place a tax debtor in "uncollectible" status if he/she can't afford to begin a payment plan or submit an Offer in Compromise without compromising his/her ability to pay basic living expenses or (2) the ability to enter into what are known as "partial payment" Installment Payment Agreements which set up a monthly payment plan that takes into account an allowance for the tax debtor's reasonable basic living expenses even though the plan may not ultimately fully pay the tax liability.
The 2016 Report recommended that the law be amended (1) to include a financial hardship exemption; (2) to increase the threshold amount of tax debt (plus interest and penalties) that triggers application of the law; (3) to apply the law to any tax debtor, regardless of the amount of tax debt owed, if the tax debtor has engaged in egregious conduct to avoid collection, such as by hiding assets; and (4) to give more discretion to the Department of Taxation and Finance to waive license suspension based on the equities of a particular case. The 2016 report has proved to be a major catalyst for a broad scale effort to amend the law, particularly among groups representing indigent and financially compromised taxpayers.
In 2017, the New York State Bar Association issued a follow-up report (Report No. 1380), to provide greater specificity with respect to the recommendations made in the 2016 Report, as well as to provide the stat- utory language necessary for the recommended amendments to the law.
The 2017 Report made the following recommendations, inter alia:
*An automatic exemption for low-income tax debtors who receive public assistance or supplemental security income or who have income below 135% of the level specified by the Federal Poverty Income Guidelines (currently $16,281 per year for a household of one). This conforms to the driver's license suspension hardship exemption provided under the New York State child support laws. A hardship exemption for any tax debtor who can demonstrate that payment of his or her past due tax liabilities will leave insufficient income to cover necessary basic living expenses.
*A tax debtor's driver's license should be subject to suspension, regardless of the amount of tax debt owed, if the Department determines that the tax debtor has taken affirmative steps to evade or avoid the collection of tax, such as by hiding assets.
*The Department should be granted discretionary authority to waive license suspension based on the equities of the case. This bill contains all of the above-stated recommendations of the Bar's 2017 report, with slight modification, e.g. the exemption for low-income debtors is expanded to persons who have income below %250% of federal guidelines, plus the $10,000 floor is expanded by a cost of living adjustment. Particularly in upstate communities which are not well- served by public transportation, it is hoped that this bill will permit tax debtors to be able to drive to their places of employment and not risk punitive and counterproductive sanctions which leave them unable to remain gainfully employed and unable thus unable to satisfy their tax delinquencies.
Legislative history
2018 A.9596-A (Weinstein)- Referred to Ways and Means
Fiscal implications for state and local governments
To be determined. By allowing citizens to continue to use their vehicles in order to get to and from work, it is hoped that this will result in increased income tax collections to the State.
Effective date
April 1 next succeeding the date on which it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.