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Legislative Memo

Ken Pokalsky
Vice President of Government Affairs
T 518.465.7517 x205
www.bcnys.org

BILL:

S.2710 (Young)

  Support

SUBJECT:

Sales Tax Standards

 

S.2710 (Young)

DATE:

April 30, 2013

 

The Business Council supports this legislation that would require that any external economic indices used by the Department of Taxation and Finance in estimating sales tax payments due from a vendor reflect local economic factors.

This issue applies where the Department of Taxation and Finance determines that a sales tax vendor has incomplete records from which to determine the accurate level of sales tax to be remitted to the state. In such instances, the Department uses various methods to estimate the vendor's sales levels, from which tax calculations would be made.

Business Council members have raised concerns regarding the Tax Department's use of external indices to determine sales and use tax due, where such indices result in unrealistically high estimates of total revenues and sales tax liability. This happens when the Department employs economic indices based on either a small sample of businesses, or businesses from vastly different regional economies.

To address this, we support this legislation that requires any such indices to reflect local economic conditions, to prevent the Department from using unrealistic assumptions in estimating taxable receipts.

This bill will improve the accuracy and fairness of the Department's tax assessment process. For these reasons, The Business Council supports approval of S.2710.