•  Summary 
  •  
  •  Actions 
  •  
  •  Committee Votes 
  •  
  •  Floor Votes 
  •  
  •  Memo 
  •  
  •  Text 
  •  
  •  LFIN 
  •  
  •  Chamber Video/Transcript 

A05430 Summary:

BILL NOA05430
 
SAME ASNo Same As
 
SPONSORTapia
 
COSPNSR
 
MLTSPNSR
 
Amd §1134, Tax L
 
Makes technical changes relating to the rescindment of certificates of authority clarifying that a failure to file a report or return relates only to the person's obligation to pay taxes.
Go to top    

A05430 Actions:

BILL NOA05430
 
02/14/2025referred to ways and means
Go to top

A05430 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5430
 
SPONSOR: Tapia
  TITLE OF BILL: An act to amend the tax law, in relation to making technical changes relating to the rescindment of certificates of authority   PURPOSE: Makes technical changes relating to the rescindment of certificates of authority.   SUMMARY OF PROVISIONS: Section one: Amends subparagraph A of paragraph 4 of subdivision a of section 1134 of the tax law with respect to only the person's obligation to pay taxes. Section two: Amends subparagraph A of paragraph 4 of subdivision a of section 1134 with respect to only the person's obligation to pay taxes. Section three: Provides for an effective date.   EXISTING LAW: Section 1134 of the tax law.   JUSTIFICATION: NY State Sales Tax Collection and Regulating the Certificate of Authori- ty Sellers of products in New York State are subject to sales tax and must obtain a Certificate of Authority and register with the New York State Tax Department. The Certificate of Authority gives the seller the right to collect tax on their taxable sale's and to issue and accept most New York State sales tax exemption certificates. Generally, the seller collects the tax from the purchaser and remits it to New York State. Wholesale sellers collecting sales taxes from customers must ensure that they are accurately collecting these taxes, and that their customers are fully compliant with accurately reporting those taxes that they are paying. Wholesale sellers who do not collect sales taxes from their customers must nevertheless report their sales to the New York State Tax Depart- ment in the form of "information returns" so that the Department knows what taxes must be paid by the wholesale sellers' customers. Proper reporting is often complicated given the diverse and complex retail environment in New York City, where there are tens of thousands of small and immigrant-owned businesses who are not English speakers, and who often lack a full understanding of their tax obligations. This can, and often does, make it difficult for the wholesale sellers to report accu- rate information to the Department. Given this challenge, the Department's recent determination to penalize wholesale sellers for inaccurate or incomplete Information returns has gone overboard. In addition to fines for such non-compliance, which the proposed bill does not change, the Department is attempting to rescind the wholesale seller's Certificate of Authority - with the obvious effect of putting them out of business. This overreaching penalty can put hundreds of community workers out of work, as well as deprive New York State of significant tax dollars from the wholesale seller. In order to ensure that the process is both efficient and fair to both retailers and wholesalers, the legislation proposed here limits the taxing authority's ability to remove a wholesaler's Certificate of Authority to willful acts and/or adjudicated crimes by the wholesale seller that cause a failure to properly collect and remit sales tax revenues from customers to the Department. The bill thus only removes the Department's ability to rescind a Certificate of Authority for prob- lems associated with a seller's filing of information returns. Proper oversight that includes the drastically punitive response of rescission of a seller's Certificate of Authority should be implemented only for those who fail to pay their own taxes.   LEGISLATIVE HISTORY: New Bill   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: This act shall take effect immediately and shall apply to any and all notices for rescindment issued on and after January 1, 2015
Go to top

A05430 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5430
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 14, 2025
                                       ___________
 
        Introduced  by M. of A. TAPIA -- read once and referred to the Committee
          on Ways and Means
 
        AN ACT to amend the tax law, in relation  to  making  technical  changes
          relating to the rescindment of certificates of authority
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subparagraph (A) of  paragraph  4  of  subdivision  (a)  of
     2  section  1134 of the tax law, as amended by section 2 of part P of chap-
     3  ter 59 of the laws of 2021, is amended to read as follows:
     4    (A) Where a person who holds a  certificate  of  authority,  and  with
     5  respect  to  only  the  person's  obligation to pay taxes, (i) willfully
     6  fails to file a report or return required by this article, (ii) willful-
     7  ly files, causes to be filed, gives or causes  to  be  given  a  report,
     8  return,  certificate  or  affidavit required under this article which is
     9  false, (iii) willfully fails to comply with the provisions of  paragraph
    10  two  or  three of subdivision (e) of section eleven hundred thirty-seven
    11  of this [article] part, (iv) willfully fails to prepay, collect,  truth-
    12  fully  account  for  or  pay  over any tax imposed under this article or
    13  pursuant to the authority of article twenty-nine of  this  chapter,  (v)
    14  fails  to  obtain a bond pursuant to paragraph two of subdivision (e) of
    15  section eleven hundred thirty-seven of this part,  or  fails  to  comply
    16  with  a notice issued by the commissioner pursuant to paragraph three of
    17  such subdivision, (vi) has been convicted of a  crime  provided  for  in
    18  this  chapter,  (vii)  where  such person, or any person affiliated with
    19  such person as such term is defined in subdivision twenty-one of section
    20  four hundred seventy of this chapter, has had a retail dealer  registra-
    21  tion  issued  pursuant  to section four hundred eighty-a of this chapter
    22  revoked pursuant to subparagraph (iii) of paragraph (a)  of  subdivision
    23  four of such section four hundred eighty-a, or (viii) has not obtained a
    24  valid  retail dealer registration under section four hundred eighty-a of
    25  this chapter and such person possesses or sells unstamped or  unlawfully
    26  stamped  packages  of  cigarettes three or more times within a period of
    27  five years, the commissioner may revoke or suspend such  certificate  of
    28  authority  and  all  duplicates  thereof.    Provided, however, that the
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08163-01-5

        A. 5430                             2
 
     1  commissioner may revoke or suspend a certificate of authority  based  on
     2  (a) the grounds set forth in clause (vi) of this subparagraph only where
     3  the  conviction referred to occurred not more than one year prior to the
     4  date  of  revocation  or suspension; and provided further that where the
     5  commissioner revokes or suspends a certificate of authority based on the
     6  grounds set forth in clause (vii) of this subparagraph, such  suspension
     7  or revocation shall continue for as long as the revocation of the retail
     8  dealer  registration  pursuant  to section four hundred eighty-a of this
     9  chapter remains in effect, or (b) the grounds set forth in clause (viii)
    10  of this subparagraph, such suspension or revocation shall be for a peri-
    11  od of five years.
    12    § 2. Subparagraph (A) of paragraph 4 of  subdivision  (a)  of  section
    13  1134  of  the tax law, as amended by section 2-a of part P of chapter 59
    14  of the laws of 2021, is amended to read as follows:
    15    (A) Where a person who holds a  certificate  of  authority,  and  with
    16  respect  to  only  the  person's  obligation to pay taxes, (i) willfully
    17  fails to file a report or return required by this article, (ii) willful-
    18  ly files, causes to be filed, gives or causes  to  be  given  a  report,
    19  return,  certificate  or  affidavit required under this article which is
    20  false, (iii) willfully fails to comply with the provisions of  paragraph
    21  two  or  three of subdivision (e) of section eleven hundred thirty-seven
    22  of this [article] part, (iv) willfully fails to prepay, collect,  truth-
    23  fully  account  for  or  pay  over any tax imposed under this article or
    24  pursuant to the authority of article twenty-nine of  this  chapter,  (v)
    25  has  been  convicted of a crime provided for in this chapter, (vi) where
    26  such person, or any person affiliated with such person as such  term  is
    27  defined  in  subdivision  twenty-one  of section four hundred seventy of
    28  this chapter, has had a retail dealer registration  issued  pursuant  to
    29  section  four  hundred  eighty-a  of  this  chapter suspended or revoked
    30  pursuant to subparagraph (iii) of paragraph (a) of subdivision  four  of
    31  such  section  four  hundred eighty-a, or (vii) has not obtained a valid
    32  retail dealer registration under section four hundred eighty-a  of  this
    33  chapter  and  such  person  possesses  or  sells unstamped or unlawfully
    34  stamped packages of cigarettes three or more times within  a  period  of
    35  five  years,  the commissioner may revoke or suspend such certificate of
    36  authority and  all  duplicates  thereof.  Provided,  however,  that  the
    37  commissioner  may  revoke or suspend a certificate of authority based on
    38  (a) the grounds set forth in clause (v) of this subparagraph only  where
    39  the  conviction referred to occurred not more than one year prior to the
    40  date of revocation or suspension; and provided further  that  where  the
    41  commissioner revokes or suspends a certificate of authority based on the
    42  grounds  set  forth in clause (vi) of this subparagraph, such suspension
    43  or revocation shall continue for as long as the revocation of the retail
    44  dealer registration pursuant to section four hundred  eighty-a  of  this
    45  chapter  remains in effect, or (b) the grounds set forth in clause (vii)
    46  of this subparagraph, such suspension or revocation shall be for a peri-
    47  od of five years.
    48    § 3. This act shall take effect immediately and shall apply to any and
    49  all notices for  rescindment  issued  on  and  after  January  1,  2016;
    50  provided  that  the  amendments  to  subparagraph  (A) of paragraph 4 of
    51  subdivision (a) of section 1134 of the tax law made by  section  one  of
    52  this  act  shall  be subject to the   expiration   and reversion of such
    53  subparagraph pursuant to subdivision (e) of section  23  of  part  U  of
    54  chapter  61  of  the laws of 2011,   as amended, when upon such date the
    55  provisions of section two of this act shall take effect.
Go to top