NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10196
SPONSOR: Rules (Lupardo) TITLE OF BILL:
An act to amend the tax law, in relation to authorizing distributors of
cannabis products to file annual returns electronically
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to allow the cannabis excise tax to
be paid annually rather than quarterly.
SUMMARY OF PROVISIONS:
Section 1: Subdivision (a) of section 495 of the tax law is amended.
Section 2: Establishes the effective date.
JUSTIFICATION:
Under current law, the cannabis excise tax is paid quarterly by cannabis
cultivators and processors to the NYS Department of Taxation and
Finance. This excise tax payment schedule creates situations where prod-
uct producers and processors often owe taxes before the product is sold
to consumers. This legislation changes the tax collection payment sched-
ule by allowing the payment annually rather than quarterly, similar to
what is now allowed for the alcohol excise tax.
The slow opening of cannabis dispensaries, due to multiple factors, has
created a backlog of products on processors shelves, which have yet to
be sent or sold to retailers, yet the tax is still owed. Another factor
creating stress on the processor's ability to pay the excise tax, is
that some retail dispensaries are delinquent in paying for products they
have received . There is a prompt payment provision in the cannabis law,
but, due to many factors the provision is not being enforced. By allow-
ing the tax to be collected annually it will allow flexibility in the
market as it matures and provides a financial lifeline to currently
struggling producers and processors.
PRIOR LEGISLATIVE HISTORY: This is new legislation.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
STATE OF NEW YORK
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10196
IN ASSEMBLY
May 10, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Lupardo) --
read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to authorizing distributors of
cannabis products to file annual returns electronically
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (a) of section 495 of the tax law, as added by
2 chapter 92 of the laws of 2021, is amended to read as follows:
3 (a) Every person on whom tax is imposed under this article shall, on
4 or before the twentieth day of the month following each quarterly period
5 ending on the last day of February, May, August, and November, respec-
6 tively, file electronically with the commissioner a return on forms to
7 be prescribed by the commissioner, showing the total amount of tax due
8 in such quarterly period, and including such other information as the
9 commissioner may require; provided, however, that a distributor for whom
10 tax is imposed pursuant to this article may elect to file electronically
11 with the commissioner for an annual period instead of a quarterly peri-
12 od. If a distributor elects to file electronically for an annual peri-
13 od, the distributor shall file electronically before the twentieth day
14 of the month following each year ending on the last day of December in a
15 manner prescribed by the commissioner.
16 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15460-01-4
