What's happening
This bill reduces the sales tax rate to 2% for goods or services purchased from small, independently owned New York businesses.
Why it matters
Directly incentivizes consumers to shop at small, local businesses. by making their goods and services cheaper compared to large or chain stores, potentially shifting spending patterns in local economies.
Defines clear criteria. for which businesses qualify (twenty or fewer employees, resident in NY, independently owned, not dominant in their field), which may encourage businesses to stay small or resist consolidation to benefit from the lower tax rate.
Could have a meaningful impact on small business viability and job retention. in New York, as reduced tax rates may increase sales volume and help these businesses better compete with larger companies or online retailers.
May result in reduced sales tax revenue. for the state from qualifying businesses, which could affect funding for public services unless offset by increased overall economic activity or spending.
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Who cares
Headline styles
Cut Sales Tax for Small Businesses
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to budget and revenue
- Print number 4557a
- Amend (t) and recommit to budget and revenue
- Referred to budget and revenue
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.
Cut Sales Tax for Small Business
In Assembly Committee · Ways And Means · Sponsor Jo Anne Simon
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4557--A
2019-2020 Regular Sessions
IN SENATE
March 14, 2019
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to the imposition of sales taxes on goods or services purchased from certain businesses
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of section 1105 of the tax law, as amended by chapter 72 of the laws of 1971, is amended to read as follows:
On and after June first, nineteen hundred seventy-one, there is hereby imposed and there shall be paid a tax of four percent; provided, however, that when the goods or services are purchased from a business which employs twenty or less persons, is resident in this state, is independently owned and operated and is not dominant in its field, the amount of tax paid on such sale shall be two percent, upon:
§ 2. This act shall take effect on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing at least 90 days after this act shall have become a law and shall apply in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09206-04-9
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 impo- sition of sales taxes on goods or services purchased from certain busi- nesses
Purpose or general idea of bill
This legislation will help small businesses by lowering the sales tax rate for goods and services purchased.
Summary of provisions
Section one of this bill amends the opening paragraph of Tax Law section 1105 to provide that the State sales tax for purchases from a small business with twenty or fewer employees shall be 2 percent.
Section two of this bill provides that this act shall take effect on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing at least 90 days after this act shall have become a law and shall apply in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law.
Current law
Currently, unless an exemption applies, the State sales tax on goods and services purchased within New York is 4%.
Justification
According to the statistics released by the United States Small Business Commission, in 2018, 50.2% of New York employees were employed by one of the 2,143,667 New York small businesses. Additionally, in 2015, the top industries with the greatest percentage of small business employees were Agriculture, Forestry, and Fishing and Hunting (92.1%), Construction (90.7%), and Other Services (except Public Administration) (86.2%).
Further, New York's small businesses accounted for over half of the State's exports in 2015.
While these statistics are impressive, for New York ranked 36th in busi- ness employment growth at 0.4%. We need to help increase the growth of jobs in New York. Small businesses, which represent over half of the New York employers, are poised to expand and increase employment. This bill will help them expand in New York's second largest employment sector, retail trade.
Prior legislative history
New bill.
Fiscal implications
To be determined.
Effective date
This act shall take effect on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing at least 90 days after this act shall have become a law and shall apply in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.