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
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.
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
This act will raise revenue for the state.
This act shall take effect immediately and shall apply to taxable years
beginning on and after January 1, 2021.
STATE OF NEW YORK
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
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
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
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.
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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
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
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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;
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
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.