AB10706 Summary:

BILL NOA10706
 
SAME ASSAME AS S08056-A
 
SPONSORRules (Walker)
 
COSPNSR
 
MLTSPNSR
 
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.
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AB10706 Actions:

BILL NOA10706
 
07/01/2020referred to ways and means
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AB10706 Committee Votes:

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AB10706 Floor Votes:

There are no votes for this bill in this legislative session.
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AB10706 Memo:

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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AB10706 Text:



 
                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.
                                                                   LBD15815-04-0

        A. 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 the

        A. 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.
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