|SAME AS||SAME AS S08056-A|
|Add Art 15 330 - 333, 1816, Tax L|
|Enacts the digital ad tax act (DATA); establishes a tax on annual gross revenue derived from digital ads.|
|07/01/2020||referred to ways and means|
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AB10706 Floor Votes:
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10706 SPONSOR: Rules (Walker)
TITLE OF BILL: An act to amend the tax law, in relation to establishing a tax on digital ads   PURPOSE: To establish a tax on digital ads for persons with global annual gross revenues of one hundred million dollars or more.   SUMMARY OF PROVISIONS: Section one is the title. Section two amends the tax law by adding a new article 15, which sets for definitions and describes the conditions for imposition of the tax, returns, and tax payment. Section three amends tax law by adding a new section 1816 which sets the penalty for willful acts or omissions in related to the act as consti- tuting a misdemeanor. Section four sets the effective date for taxable years beginning on and after January 1, 2021.   JUSTIFICATION: Large digital platform companies are collecting user information to sell targeted digital ads to users. Taxing companies with massive global annual revenues_ on gross digital advertising revenue will generate new, necessary revenue for New York State. In a state that has incredible wealth as well as incredible poverty, it is fair to ask those who can afford it to contribute more revenue to properly address our state's priorities.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: This act will raise revenue for the state.   EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2021.
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STATE OF NEW YORK ________________________________________________________________________ 10706 IN ASSEMBLY July 1, 2020 ___________ Introduced by COMMITTEE ON RULES -- (at request of M. of A. Walker) -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to establishing a tax on digital ads The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "digital ad 2 tax act (DATA)". 3 § 2. The tax law is amended by adding a new article 15 to read as 4 follows: 5 ARTICLE 15 6 TAX ON DIGITAL ADS 7 Section 330. Definitions. 8 331. Imposition of tax. 9 332. Returns. 10 333. Tax payment. 11 § 330. Definitions. As used in this article, the following terms shall 12 have the following meanings: 13 1. The term "annual gross revenues" means income or revenue from all 14 sources in New York state, before any expenses or taxes, computed 15 according to generally accepted accounting principles. 16 2. The term "assessable base" means the annual gross revenues derived 17 from digital advertising services in the state. 18 3. The term "digital advertising services" includes advertisement 19 services on a digital interface, including advertisements in the form of 20 banner advertising, search engine advertising, interstitial advertising, 21 and other comparable advertising services, that use personal information 22 about the people the ads are being served to. 23 4. The term "digital interface" means any type of software, including 24 a website, part of a website, or application, that a user is able to 25 access. 26 5. (a) The term "person" means an individual, receiver, trustee, guar- 27 dian, personal representative, fiduciary, or representative of any kind 28 and any partnership, firm, association, corporation, or other entity. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15815-04-0A. 10706 2 1 (b) The term "person", unless expressly provided otherwise, does not 2 include a governmental entity or a unit or instrumentality of a govern- 3 mental entity. 4 6. The term "user" means an individual or any other person who 5 accesses a digital interface with a device. 6 § 331. Imposition of tax. 1. There is hereby imposed and shall be paid 7 a tax on the annual gross revenues any person derives from digital 8 advertising services in the state. 9 2. The tax imposed shall be apportioned to the state by the apportion- 10 ment factor determined pursuant to this section. The apportionment 11 factor is a fraction, determined by including only those receipts, net 12 income, net gains, and other items described in this section that are 13 included in the computation of the taxpayer's business income for the 14 taxable year. The numerator of the apportionment fraction shall be equal 15 to the sum of all the amounts required to be included in the numerator 16 pursuant to the provisions of this section and the denominator of the 17 apportionment fraction shall be equal to the sum of all the amounts 18 required to be included in the denominator pursuant to the provisions of 19 this section. 20 3. (a) The annual gross revenues of a person derived from digital 21 advertising in the state shall be included in the numerator of the 22 apportionment fraction. The annual gross revenues of a person derived 23 from digital advertising in the United States shall be included in the 24 denominator of the apportionment fraction. 25 (b) The commissioner shall adopt regulations to determine the amount 26 of revenue derived from each state in which digital advertising services 27 are provided. 28 4. The digital advertising gross revenues tax rate is: 29 (a) two and one-half percent of the assessable base for a person with 30 global annual gross revenues of one hundred million dollars through one 31 billion dollars; 32 (b) five percent of the assessable base for a person with global annu- 33 al gross revenues of one billion one dollars through five billion 34 dollars; 35 (c) seven and one-half percent of the assessable base for a person 36 with global annual gross revenues of five billion one dollars through 37 fifteen billion dollars; and 38 (d) ten percent of the assessable base for a person with global annual 39 gross revenues exceeding fifteen billion dollars. 40 § 332. Returns. 1. Each person that, in a calendar year, has annual 41 gross revenues derived from digital advertising services in the state of 42 at least one million dollars shall complete, under oath, and file with 43 the commissioner a return, on or before April fifteenth the year follow- 44 ing the effective date of this article. 45 2. (a) Each person that reasonably expects the person's annual gross 46 revenues derived from digital advertising services in the state to 47 exceed one million dollars shall complete, under oath, and file with the 48 commissioner a declaration of estimated tax, on or before April 49 fifteenth of that year. 50 (b) Any person required to file a declaration of estimated tax for a 51 taxable year pursuant to paragraph (a) of this subdivision, shall 52 complete and file with the commissioner a quarterly estimated tax return 53 on or before June fifteenth, September fifteenth, and December fifteenth 54 of such year. 55 3. Any person required to file a return pursuant to this section shall 56 file with the return an attachment that states any information that theA. 10706 3 1 commissioner requires to determine annual gross revenues derived from 2 digital advertising services in the state. 3 4. Any person required to file a return under subdivision two of this 4 section shall maintain records of digital advertising services provided 5 in the state and the basis for the calculation of the digital advertis- 6 ing gross revenues tax owed. 7 § 333. Tax payment. 1. Except as provided in subdivision two of this 8 section, each person required to file a return under section three 9 hundred thirty-two of this article shall pay the digital advertising 10 gross revenues tax with the return that covers the period for which the 11 tax is due. 12 2. Any person required to file estimated digital advertising gross 13 revenues tax returns under paragraph (b) of subdivision two of section 14 three hundred thirty-two of this article shall pay: 15 (a) at least twenty-five percent of the estimated digital advertising 16 gross revenues tax shown on the declaration or amended declaration for a 17 taxable year: 18 i. With the declaration or amended declaration that covers the year; 19 and 20 ii. With each quarterly return for that year; and 21 (b) any unpaid digital advertising gross revenues tax for the year 22 shown on the person's return that covers that year with the return. 23 § 3. The tax law is amended by adding a new section 1816 to read as 24 follows: 25 § 1816. Digital ad tax. Any willful act or omission by any person 26 which constitutes a violation of any provision of article fifteen of 27 this chapter shall constitute a misdemeanor. 28 § 4. This act shall take effect immediately and shall apply to taxable 29 years beginning on and after January 1, 2021.