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A proposal by New York’s governor to require online marketplaces to collect sales tax when they facilitate a sale to New York residents is dead for now.
Gov. Andrew M. Cuomo’s (D) proposal didn’t make it into a tentative agreement with legislative leaders on an omnibus revenue bill for fiscal year 2017-18, sources familiar with the agreement who requested anonymity told Bloomberg BNA April 6.
While the bill hasn’t been drafted, and several issues remain unresolved, the online marketplace provisions aren’t expected to be included in the final measure.
The governor and legislative leaders did reach tentative agreement on extension of the state’s millionaire’s tax for two years. The tax, which is set to expire Dec. 31, establishes a rate of 8.82 percent for single filers earning more than $1 million and married couples earning more than $2.1 million.
It’s unclear when a final revenue bill be drafted, as the Legislature is scheduled to take a two-week recess. Negotiations between the governor and legislative leaders have been particularly opaque and topsy-turvy this year, even by the standards of Albany, which has had a historically dysfunctional budget process.
“What is happening right now is ridiculous,” Sen. Andrea Stewart-Cousins (D), the Democratic minority leader, said in an April 5 statement. “Dysfunction and chaos has descended on Albany. This situation has spiraled out of control, and New Yorkers deserve better.”
Cuomo proposed a measure for the second consecutive year that would require online marketplaces like those operated by Amazon.com Inc. and eBay Inc. to collect sales tax when they facilitate sales to New Yorkers from sellers in and outside of the state. Current law requires collection of sales tax only from in-state sellers.
The measure was supported by Democrats who control the state Assembly, but opposed by Republicans who control the Senate.
“We’re disappointed that they capitulated to the histrionics of the dot-coms worth billions rather than listen to the brick-and-mortar stores in their own districts,” said Ted Potrikus, president and CEO of the Retail Council of New York State.
“They’d rather have cardboard boxes from out-of-state merchants on their doorsteps than level the sales tax playing field for the stores that—today, anyway—employ so many New Yorkers,” he told Bloomberg BNA in an email.
The tentative budget agreement also would keep in place a scheduled reduction in personal income tax (PIT) rates for taxpayers with incomes between $40,000 and $300,000. In 2018, PIT rates for taxpayers with incomes between $40,000 and $150,000 will drop to 6.45 percent from 6.85 percent. The rate for those earning between $150,000 and $300,000 will drop to 6.65 percent from 6.85 percent.
To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y., at GSilverman@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
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