Legislative Memo

Ken Pokalsky
Vice President of Government Affairs
T 518.465.7517 x205


A.9710-B Budget Article VII – Part R



Sales Tax Increase on Promotional Materials



March 31, 2010


The Business Council of New York State opposes the above referenced legislation that would repeal Subdivision (n) of Section 1115 of the Tax Law.  Part R of the Assembly Budget Article VII bill (A.9710-B) is a job-killing proposal that would raise taxes by an estimated $25 million on New York State companies that produce and distribute promotional materials outside of New York State. 

Specifically, this proposed change would impose the state's sales and use taxes on promotional materials mailed, shipped or otherwise distributed from a point within the state, by or on behalf of in-state businesses, when sent to customers or prospective customers located outside the state.  It would also apply to mailing lists in conjunction with promotional materials.  This proposal would adversely affect a wide range of businesses in New York, including retailers, financial services, utilities and others.

Moreover, it would make it more costly to do promotional work in New York State, thereby affecting the firms that produce and distribute this material.

New York is already a high cost state, and has been given low marks for its overall business climate.  Legislation like this is just one more example of unique state-imposed costs that erode our competitiveness. If enacted, the repeal of Subdivision (n) of Section 1115 of the Tax Law would cause the publishing, printing and related support industries to outsource their business elsewhere.     

Many legislators have expressed their opposition to tax increases in the Fiscal 2011 state budget.  We strongly agree that the legislature needs to avoid imposing new job-killing business taxes.  This “no new tax” pledge should be applied to A.9710-B, Part R, because the repeal of Subdivision (n) of Section 1115 of the Tax Law is clearly a tax hike. 

For these reasons, The Business Council urges the Assembly to reject this proposal.