June 23, 2021
Assembly Passes Legislation to Hold Out of State Businesses Engaged in Improper Conduct Financially and Legally Accountable in New York
Speaker Carl Heastie and Ways and Means Committee Chair Helene E. Weinstein today announced that the Assembly passed legislation that would help New York businesses by holding out of state business to the same standards as those headquartered in New York. The bills would strengthen the law that allows businesses that operate in New York to be sued here in New York, and would also close a loophole that allows some businesses and wealthy individuals to avoid paying taxes in New York State.
“Businesses based in New York honor their obligations here in New York,” Speaker Heastie said. “These bills will ensure that out of state businesses that operate in our state are held responsible both financially and legally, and that wealthy individuals pay their fair share.”
“The Assembly Majority is committed to ensuring that out of state businesses and wealthy individuals pay their fair share and contribute to our state and communities,” Assemblymember Weinstein said. “It is past time we closed this loophole to make it easier to identify and force tax cheats to pay up. Additionally, we will ensure that New Yorkers can hold out of state businesses accountable here in New York instead of having to travel.”
In 2013, the New York False Claims Act expanded liability to individuals who defraud state or local governments by knowingly concealing or improperly avoiding financial obligations to state or local government. Legislation passed by the Assembly would strengthen the False Claims Act by assuring that wealthy individuals and businesses that do not file tax returns are covered by the act. Under this legislation, individuals and corporations with a net income or sales over $1 million that knowingly and unlawfully fail to file a tax return, resulting in lost revenue to state or local government of at least $350,000, could be sued under the False Claims Act (A.2543, Weinstein).
The Assembly also passed legislation that would ensure that businesses operating here may be held legally responsible in New York State. The bill would amend the Business Corporation Law to reinforce the continuing viability of consent as a basis for general personal jurisdiction over foreign corporations authorized to do business in New York State. This would allow New York residents to sue corporations licensed in New York, which will save consumers the expense of traveling in order to seek enforcement of corporate obligations (A.7769, Weinstein).