NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6199
SPONSOR: Braunstein TITLE OF BILL:
An act to amend the tax law, in relation to creating an excise tax on
the collection of consumer data by commercial data collectors
PURPOSE OR GENERAL IDEA OF BILL:
To raise revenue to fund state services by imposing a tax on the
collection of New Yorkers' consumer data by businesses for commercial
purposes.
SUMMARY OF SPECIFIC PROVISIONS:
Amends Tax Law by adding new Section 186-h
Section 1. The bill imposes an excise tax on the collection of New York-
ers' consumer data based on the number of New York individuals on whom a
commercial data collector collects data within a month. The tax applies
regardless of the format in which the data is collected.
The tax is imposed on for-profit businesses that collect data, excluding
basic contact information, on over 1 million New York individuals in a
given month.
There is a graduated rate schedule that begins at 5 cents per individual
per month for commercial data collectors collecting data on over a
million New Yorkers in a month. The rate gradually increases, with the
highest rate 50 cents per individual per month paid on the number of
individual New Yorkers over 10 million on whom data is collected in a
month.
Other provisions impose filing and recordkeeping requirements, provide
that a taxpayer and the Tax Department may agree on a methodology for
determining the tax that simplifies compliance, and adopt certain admin-
istrative provisions that apply to existing taxes under Article 9 of the
tax law.
Section 2. The bill would be effective immediately with the imposition
of the tax beginning on the first day of the month that begins more than
six months after the law becomes effective.
JUSTIFICATION:
In the current marketplace, data about individual consumer interests and
preferences are an extraordinarily valuable asset. Some of the largest,
most successful data collectors are social media companies that amass
huge amounts of data on individual New Yorkers that is analyzed using
sophisticated technology to enhance the value of the advertising oppor-
tunities they offer. Much of this data comes from the consumers them-
selves, often without any awareness on the part of the individual whose
data is being collected. The description above is only one manner in
which data about New Yorkers is collected and used. Big box retailers,
internet retail platforms, credit card companies, multi-media enter-
tainment providers and most other large companies maintain databases
that they analyze for a range of purposes, from selling advertising to
evaluating the effectiveness of their websites.
Only a small fraction of all businesses will collect data on over a
million New York consumers monthly, the threshold for being subject to
the tax.
The tax paid per consumer is extremely modest. The tax paid by a busi-
ness collecting data on 2 million New York consumers would be 30 cents a
year per consumer. The tax paid by a business collecting data on 10
million New York consumers would be $2.70 per consumer per year.
PRIOR LEGISLATIVE HISTORY:
New Bill
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Increased revenues to the State in an amount to be determined
EFFECTIVE DATE:
Immediately and shall apply to all tax years commencing on or after the
first day of the first month that begins more than six months after the
law takes effect.
STATE OF NEW YORK
________________________________________________________________________
6199
2021-2022 Regular Sessions
IN ASSEMBLY
March 10, 2021
___________
Introduced by M. of A. BRAUNSTEIN -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to creating an excise tax on
the collection of consumer data by commercial data collectors
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new section 186-h to
2 read as follows:
3 § 186-h. Excise tax on the collection of consumer data by commercial
4 data collectors. 1. Imposition of tax. There is hereby imposed a monthly
5 excise tax on the collection of the consumer data of individual New York
6 consumers by commercial data collectors. The tax shall apply regardless
7 of the format, electronic or otherwise, in which the consumer data is
8 collected by the commercial data collector.
9 2. Definitions. As used in this section:
10 (a) The words "commercial data collector" mean a for-profit entity
11 that:
12 (i) collects, maintains, uses, processes, sells or shares consumer
13 data in support of its business activities; and
14 (ii) collects consumer data, other than consumer contact information,
15 on more than one million individual New York consumers in a month within
16 the calendar year.
17 (b) The word "consumer" means an individual who purchases goods or
18 services from a commercial data collector or uses the services of a
19 commercial data collector, whether charged for those services or not.
20 (c) The words "consumer contact information" mean (i) a consumer's
21 email address, telephone number, telefax number, home address, mailing
22 address; and (ii) credit card information necessary to engage in a sales
23 transaction.
24 (d) The words "consumer data" mean any information that identifies,
25 relates to, describes, is capable of being associated with, or could
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09016-06-1
A. 6199 2
1 reasonably be linked with a consumer, whether directly submitted to the
2 commercial data collector by the consumer or derived from other sources.
3 (e) The words "New York consumer" mean a consumer whose primary resi-
4 dence, as defined in article twenty-two of this chapter, is in New York
5 state.
6 3. Rate of tax. The tax is imposed on commercial data collectors at
7 the following rates based on the number of New York consumers a commer-
8 cial data collector collects data on within the month.
9 New York consumerstax
10 Less than or equal to one million0
11 over one million to two millionfive cents per month on the number
12 of New York consumers over
13 one million but not more
14 than two million
15 over two million to three millionfifty thousand dollars per month plus
16 ten cents per month on the number
17 of New York consumers over
18 two million but not more than
19 three million
20 over three million to four millionone hundred fifty thousand dollars
21 per month plus fifteen cents per
22 month on the number of New York
23 consumers over three million
24 but not more than four million
25 over four million to five millionthree hundred thousand dollars per
26 month plus twenty cents per month
27 on the number of New York
28 consumers over four million but
29 not more than five million
30 over five million to six millionfive hundred thousand dollars per
31 month plus twenty-five cents per
32 month on the number of
33 New York consumers over five
34 million but not more than
35 six million
36 over six million to seven millionseven hundred fifty thousand dollars
37 plus thirty cents per month on the
38 number of New York consumers
39 over six million but not more
40 than seven million
41 over seven million to eight millionone million, fifty thousand dollars
42 per month plus thirty-five cents per
43 month on the number of New York
44 consumers over seven
45 million but not more than eight
46 million
47 over eight million to nine millionone million, four hundred thousand
48 dollars per month plus forty cents
49 per month on the number of New
50 York consumers over eight
51 million but not more than nine
52 million
53 over nine million to ten millionone million, eight hundred thousand
54 dollars per month plus forty-five
55 cents per month on the number
56 of New York consumers over
A. 6199 3
1 nine million but not more than ten
2 million
3 over ten milliontwo million, two hundred fifty
4 thousand dollars per month plus
5 fifty cents per month on the number
6 of New York consumers over
7 ten million.
8 4. Taxpayers. (a) There shall be a rebuttable presumption that a
9 consumer whose information on record with or available to a commercial
10 data collector indicates a New York home address, a New York mailing
11 address, or an internet protocol address connected with a New York
12 location is a New York consumer for purposes of this section. The
13 presumption may be rebutted by evidence that a consumer's primary resi-
14 dence, as defined in article twenty-two of this chapter, is outside New
15 York.
16 (b) A New York consumer shall be counted only once in the calculation
17 of the monthly excise tax imposed on a commercial data collector.
18 (c) Business entities having common ownership as defined in section
19 1563(a) of the internal revenue code shall be treated as a single
20 taxpayer for purposes of meeting the definition of commercial data
21 collector under this section. The entities constituting the single
22 taxpayer are jointly and severally liable for any tax due.
23 (d) The single member of a single member limited liability company
24 shall be treated as a consumer under this section.
25 5. Alternative methods for calculating tax liability. A commercial
26 data collector and the department may agree on a methodology for deter-
27 mining the number of New York consumers for the purpose of calculating
28 the tax.
29 6. Credit against tax paid to another jurisdiction. A commercial data
30 collector that has paid tax under this section may claim a credit
31 against the tax paid with respect to a New York consumer when another
32 state imposes an excise tax identical to the tax imposed under this
33 section with respect to the same consumer.
34 7. Recordkeeping. A commercial data collector shall maintain records
35 as required by the commissioner.
36 8. Returns. (a) A commercial data collector shall file a monthly
37 return as prescribed by the commissioner.
38 (b) A commercial data collector that pays the tax imposed under this
39 section in a given month must file a return in subsequent months until
40 it reports no tax liability for twelve consecutive months.
41 9. Administrative procedures. The administrative procedures set forth
42 in article twenty-seven of this chapter shall apply unless specific
43 provisions to the contrary are set forth in this section.
44 10. The department of taxation and finance may prescribe such rules
45 and regulations as may be necessary to carry out this section.
46 § 2. This act shall take effect immediately and shall apply to all tax
47 years commencing on or after the first day of the first month that
48 begins more than six months after the law takes effect.
