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S08056 Summary:

BILL NOS08056A
 
SAME ASNo Same As
 
SPONSORGIANARIS
 
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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S08056 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         8056--A
 
                    IN SENATE
 
                                     March 13, 2020
                                       ___________
 
        Introduced  by Sen. GIANARIS -- read twice and ordered printed, and when
          printed to be committed to the Committee  on  Budget  and  Revenue  --
          committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to said committee
 
        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.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15815-03-0

        S. 8056--A                          2
 
     1    5. (a) The term "person" means an individual, receiver, trustee, guar-
     2  dian,  personal representative, fiduciary, or representative of any kind
     3  and any partnership, firm, association, corporation, or other entity.
     4    (b)  The  term "person", unless expressly provided otherwise, does not
     5  include a governmental entity or a unit or instrumentality of a  govern-
     6  mental entity.
     7    6.  The  term  "user"  means  an  individual  or  any other person who
     8  accesses a digital interface with a device.
     9    § 331. Imposition of tax. 1. There is hereby imposed and shall be paid
    10  a tax on the annual gross  revenues  any  person  derives  from  digital
    11  advertising services in the state.
    12    2. The tax imposed shall be apportioned to the state by the apportion-
    13  ment  factor  determined  pursuant  to  this  section. The apportionment
    14  factor is a fraction, determined by including only those  receipts,  net
    15  income,  net  gains,  and other items described in this section that are
    16  included in the computation of the taxpayer's business  income  for  the
    17  taxable year. The numerator of the apportionment fraction shall be equal
    18  to  the  sum of all the amounts required to be included in the numerator
    19  pursuant to the provisions of this section and the  denominator  of  the
    20  apportionment  fraction  shall  be  equal  to the sum of all the amounts
    21  required to be included in the denominator pursuant to the provisions of
    22  this section.
    23    3. (a) The annual gross revenues of  a  person  derived  from  digital
    24  advertising  in  the  state  shall  be  included in the numerator of the
    25  apportionment fraction. The annual gross revenues of  a  person  derived
    26  from  digital  advertising in the United States shall be included in the
    27  denominator of the apportionment fraction.
    28    (b) The commissioner shall adopt regulations to determine  the  amount
    29  of revenue derived from each state in which digital advertising services
    30  are provided.
    31    4. The digital advertising gross revenues tax rate is:
    32    (a)  two and one-half percent of the assessable base for a person with
    33  global annual gross revenues of one hundred million dollars through  one
    34  billion dollars;
    35    (b) five percent of the assessable base for a person with global annu-
    36  al  gross  revenues  of  one  billion  one  dollars through five billion
    37  dollars;
    38    (c) seven and one-half percent of the assessable  base  for  a  person
    39  with  global  annual  gross revenues of five billion one dollars through
    40  fifteen billion dollars; and
    41    (d) ten percent of the assessable base for a person with global annual
    42  gross revenues exceeding fifteen billion dollars.
    43    § 332. Returns. 1. Each person that, in a calendar  year,  has  annual
    44  gross revenues derived from digital advertising services in the state of
    45  at  least  one million dollars shall complete, under oath, and file with
    46  the commissioner a return, on or before April fifteenth the year follow-
    47  ing the effective date of this article.
    48    2. (a) Each person that reasonably expects the person's  annual  gross
    49  revenues  derived  from  digital  advertising  services  in the state to
    50  exceed one million dollars shall complete, under oath, and file with the
    51  commissioner  a  declaration  of  estimated  tax,  on  or  before  April
    52  fifteenth of that year.
    53    (b)  Any  person required to file a declaration of estimated tax for a
    54  taxable year pursuant  to  paragraph  (a)  of  this  subdivision,  shall
    55  complete and file with the commissioner a quarterly estimated tax return

        S. 8056--A                          3
 
     1  on or before June fifteenth, September fifteenth, and December fifteenth
     2  of such year.
     3    3. Any person required to file a return pursuant to this section shall
     4  file  with the return an attachment that states any information that the
     5  commissioner requires to determine annual gross  revenues  derived  from
     6  digital advertising services in the state.
     7    4.  Any person required to file a return under subdivision two of this
     8  section shall maintain records of digital advertising services  provided
     9  in  the state and the basis for the calculation of the digital advertis-
    10  ing gross revenues tax owed.
    11    § 333. Tax payment. 1. Except as provided in subdivision two  of  this
    12  section,  each  person  required  to  file  a return under section three
    13  hundred thirty-two of this article shall  pay  the  digital  advertising
    14  gross  revenues tax with the return that covers the period for which the
    15  tax is due.
    16    2. Any person required to file  estimated  digital  advertising  gross
    17  revenues  tax  returns under paragraph (b) of subdivision two of section
    18  three hundred thirty-two of this article shall pay:
    19    (a) at least twenty-five percent of the estimated digital  advertising
    20  gross revenues tax shown on the declaration or amended declaration for a
    21  taxable year:
    22    i.  With  the declaration or amended declaration that covers the year;
    23  and
    24    ii. With each quarterly return for that year; and
    25    (b) any unpaid digital advertising gross revenues  tax  for  the  year
    26  shown on the person's return that covers that year with the return.
    27    §  3.  The  tax law is amended by adding a new section 1816 to read as
    28  follows:
    29    § 1816. Digital ad tax. Any willful act  or  omission  by  any  person
    30  which  constitutes  a  violation  of any provision of article fifteen of
    31  this chapter shall constitute a misdemeanor.
    32    § 4. This act shall take effect immediately and shall apply to taxable
    33  years beginning on and after January 1, 2021.
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