Bill Text: NY A05900 | 2023-2024 | General Assembly | Amended


Bill Title: Establishes a tax on direct broadcast satellite services and video streaming services; establishes the community media reinvestment fund; imposes an excise tax on direct broadcast satellite services or video streaming services; provides monies from the community media reinvestment fund shall be distributed to the state general fund, municipalities and infrastructure or services overseen by the ConnectALL office or organizations identified by ConnectALL.

Spectrum: Strong Partisan Bill (Democrat 42-4)

Status: (Introduced) 2024-04-08 - print number 5900b [A05900 Detail]

Download: New_York-2023-A05900-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5900--B

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                     March 24, 2023
                                       ___________

        Introduced  by  M.  of  A.  BENEDETTO,  CARROLL, REYES, BURGOS, SEPTIMO,
          ZACCARO, TAPIA, ZINERMAN, ALVAREZ, RAGA, FORREST, OTIS, CRUZ, JACKSON,
          SILLITTI, DE LOS SANTOS, CUNNINGHAM, RIVERA, ARDILA, ROZIC,  GONZALEZ-
          ROJAS,  WEPRIN,  WALKER,  KIM,  THIELE,  BICHOTTE HERMELYN,  DINOWITZ,
          SEAWRIGHT, MEEKS, LUCAS, KELLES, SIMON,  EPSTEIN,  JEAN-PIERRE,  CHAN-
          DLER-WATERMAN,  CHANG,  SHIMSKY,  DARLING,  GALLAGHER -- read once and
          referred to the Committee on Ways and Means --  committee  discharged,
          bill  amended,  ordered  reprinted  as amended and recommitted to said
          committee -- recommitted to the Committee on Ways and Means in accord-
          ance with Assembly Rule  3,  sec.  2  --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee

        AN ACT to amend the tax law, in relation to establishing a tax on direct
          broadcast satellite services and  video  streaming  services;  and  to
          amend the state finance law, in relation to establishing the community
          media reinvestment fund

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "community media reinvestment act".
     3    §  2.  The  tax  law  is amended by adding a new article 15 to read as
     4  follows:
     5                                  ARTICLE 15
     6                      COMMUNITY MEDIA REINVESTMENT ACT
     7  Section 330. Definitions.
     8          331. Imposition and collection of an assessment on direct broad-
     9                 cast satellite services and video streaming services.
    10    § 330. Definitions. For the purposes of this  article,  the  following
    11  terms shall have the following meanings:
    12    1.  "municipality" means any village, town, city, or county not wholly
    13  contained within a city in the state of New York;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06297-04-4

        A. 5900--B                          2

     1    2. "person" means an individual, partnership, limited liability compa-
     2  ny, trust or association, with or without  transferable  shares,  joint-
     3  stock  company,  corporation,  society, club, organization, institution,
     4  estate, receiver, trustee, assignee or  referee  and  any  other  person
     5  acting in a fiduciary or representative capacity, whether appointed by a
     6  court or otherwise, and any combination of individuals acting as a unit.
     7  The  term  "person",  unless  expressly  provided  otherwise,  does  not
     8  include:
     9    (a) a governmental entity or a unit or instrumentality  of  a  govern-
    10  mental entity; or
    11    (b)  any  entity exempt from sales and compensating use taxes pursuant
    12  to paragraph four of subdivision (a) of section eleven  hundred  sixteen
    13  of this chapter;
    14    3.  "community media organization" means an entity that is responsible
    15  for:
    16    (a) operating and administering a public access channel, as defined in
    17  16 NYCRR 895.4; and/or
    18    (b) operating and administering educational and/or governmental access
    19  channels, as defined in 16 NYCRR 895.4;
    20    4. "subscriber" or "customer" means any person or member of the gener-
    21  al public who receives  direct  broadcast  satellite  service  or  video
    22  streaming  service from a direct broadcast satellite service provider or
    23  video streaming service provider and does not  further  distribute  such
    24  service in the ordinary course of business;
    25    5.  "direct  broadcast  satellite  service"  means the distribution or
    26  broadcasting by satellite of video programming or services  directly  to
    27  receiving  equipment  located at an end user subscriber's or an end user
    28  customer's premises, including, but not limited  to,  the  provision  of
    29  premium  channels,  the  provision  of  music or other audio services or
    30  channels,  and  any  other  service  received  in  connection  with  the
    31  provision of direct broadcast satellite service;
    32    6.  "direct  broadcast  satellite service provider" means a person who
    33  transmits, broadcasts or otherwise provides direct  broadcast  satellite
    34  service to subscribers or customers in the state;
    35    7. "video streaming service" means the distribution or broadcasting of
    36  video  programming  displayed  by the viewer for a fee on a subscription
    37  basis. The term  video  streaming  service,  unless  expressly  provided
    38  otherwise,  does  not  include  cable  service as defined by 47 U.S.C. §
    39  522(6);
    40    8. "video streaming service provider" means a  person  who  transmits,
    41  broadcasts  or otherwise provides video streaming service to subscribers
    42  or customers in the state;
    43    9. "video programming" means programming provided by, or comparable to
    44  programming provided by, a television broadcast station  including,  but
    45  not  limited  to, video programming provided by local networks, national
    46  broadcast networks, cable television networks and all forms of  pay-per-
    47  view or on-demand video entertainment; and
    48    10.  "gross  receipts"  means  all consideration of any kind or nature
    49  received by a direct  broadcast  satellite  service  provider  or  video
    50  streaming   service  provider,  or  an  affiliate  of  such  person,  in
    51  connection with the provision, delivery, or furnishing of direct  broad-
    52  cast  satellite  service  or  video  streaming service to subscribers or
    53  customers within  the  state,  determined  according  to  the  hierarchy
    54  described  in  section three hundred thirty-one of this article.  "Gross
    55  receipts" shall not include:

        A. 5900--B                          3

     1    (a) revenue not actually received, regardless of whether it is billed,
     2  including, but not limited to, bad debts;
     3    (b)  revenue  received by an affiliate or other person in exchange for
     4  supplying goods and services to an affiliated direct broadcast satellite
     5  service provider or affiliated video streaming service provider;
     6    (c) refunds, rebates or discounts made to subscribers or customers, to
     7  advertisers or to other persons;
     8    (d) revenue from telecommunications service as defined in 47 U.S.C.  §
     9  153(53). Under no circumstances shall direct broadcast satellite provid-
    10  ers  or  video  streaming  service  providers subject to the tax imposed
    11  pursuant to this article include the amount of such tax on  bills  as  a
    12  pass-through to customers. It shall be the responsibility of each direct
    13  broadcast  satellite  service  provider and each video streaming service
    14  provider subject to the tax imposed pursuant to this article to pay  its
    15  required taxes to the state and providers shall not mislead the customer
    16  to think otherwise;
    17    (e)  revenue  from  any  service  that is subject to tax under article
    18  twenty-eight of this chapter;
    19    (f) revenue from the sale of capital assets or surplus  equipment  not
    20  used  by  the purchaser to receive direct broadcast satellite service or
    21  video streaming service from  the  direct  broadcast  satellite  service
    22  provider or video streaming service provider;
    23    (g)  reimbursements made by programmers to the direct broadcast satel-
    24  lite service provider or video streaming service provider for  marketing
    25  costs  incurred  by  such  service  provider for the introduction of new
    26  programming;
    27    (h) late payment fees collected from subscribers or customers; or
    28    (i)  charges,  other  than  charges  for  direct  broadcast  satellite
    29  services  or  video  streaming  services, that are aggregated or bundled
    30  with direct broadcast satellite services or video streaming services  on
    31  a  subscriber's  or  customer's  bill, if the direct broadcast satellite
    32  service provider or video streaming service provider can reasonably  and
    33  separately  identify  the  charges  in its books and records kept in the
    34  regular course of business.
    35    § 331. Imposition and collection of an assessment on direct  broadcast
    36  satellite  services  and  video  streaming  services. 1. There is hereby
    37  imposed an excise tax on  the  provision,  delivery,  or  furnishing  of
    38  direct  broadcast  satellite  services  or  video  streaming services by
    39  direct broadcast satellite service providers or video streaming  service
    40  providers to subscribers or customers in the state.
    41    2.(a) Direct broadcast satellite service providers and video streaming
    42  service  providers shall pay an assessment equal to five percent of such
    43  provider's gross receipts derived in or from the provision, delivery, or
    44  furnishing of direct broadcast  satellite  service  or  video  streaming
    45  service to subscribers or customers in the state.
    46    (b)  Gross  receipts  derived  in  or from the provision, delivery, or
    47  furnishing of direct broadcast  satellite  service  or  video  streaming
    48  service by direct broadcast satellite service providers or video stream-
    49  ing  service providers to subscribers or customers in the state shall be
    50  determined by the hierarchy of sourcing methods set forth  in  paragraph
    51  (c) of this subdivision. The direct broadcast satellite service provider
    52  or  video  streaming service provider shall exercise due diligence under
    53  each method described  in  paragraph  (c)  of  this  subdivision  before
    54  rejecting  it  and  proceeding  to the next method in the hierarchy, and
    55  shall base its determination on information known to it  or  information
    56  that would be known to it upon reasonable inquiry.

        A. 5900--B                          4

     1    (c) Hierarchy of sourcing methods:
     2    (i) the customer's primary use location of the direct broadcast satel-
     3  lite service or video streaming service; and
     4    (ii) the customer's billing address.
     5    3.  The tax authorized in this section shall be for each year, or part
     6  of each year, that such direct broadcast satellite service  provider  or
     7  video streaming service provider is engaged in the sale of direct broad-
     8  cast  satellite  or video streaming services to subscribers or customers
     9  in the state.
    10    4. (a) Every direct broadcast satellite service provider and/or  video
    11  streaming  service  provider subject to tax under this section shall (i)
    12  file, on or before April fifteenth  of  each  year,  for  taxable  years
    13  beginning  on or after January first, two thousand twenty-five, a return
    14  for the year ended on the preceding December thirty-first, and (ii)  pay
    15  the  tax due, which return shall state the gross receipts for the period
    16  covered by each such return.
    17    (b) Returns shall be filed with the  commissioner  on  a  form  to  be
    18  furnished  by  the  commissioner for such purpose and shall contain such
    19  other data, information or matter as the commissioner may require to  be
    20  included therein.
    21    (c)  Notwithstanding  paragraphs  (a) and (b) of this subdivision, the
    22  commissioner may require any direct broadcast satellite service provider
    23  and/or video streaming service provider to file an annual return,  which
    24  shall  contain  any  data  specified  by the commissioner, regardless of
    25  whether such provider is subject to tax under this section.
    26    5. (a) A direct broadcast satellite service provider or video  stream-
    27  ing service provider who fails to file a return or to pay any tax within
    28  thirty  days  of  the time required pursuant to this article (determined
    29  with regard to any extension of time for  filing  or  paying)  shall  be
    30  subject  to a penalty of ten percent of the amount of the tax determined
    31  to be due, plus five percent of such amount for each subsequent month or
    32  fraction thereof during which such  failure  continues,  not  to  exceed
    33  thirty percent in the aggregate.
    34    (b)  In the event of an underpayment of the tax owed, the commissioner
    35  shall set the underpayment rate of interest to be paid, but  the  under-
    36  payment  rate  shall  not  be  less  than seven and one-half percent per
    37  annum, compounded daily. If no such rate of interest is set, such under-
    38  payment rate shall be deemed to be set at seven and one-half percent per
    39  annum, compounded daily. Any such rate set  by  the  commissioner  shall
    40  apply  to  taxes,  or any portion thereof, which remain or become due or
    41  underpaid on or after the date on which such rates become effective  and
    42  shall  apply  only  with  respect to interest computed or computable for
    43  periods or portions of periods occurring in the period during which such
    44  rates are in effect.
    45    6. Every direct broadcast  satellite  service  provider  and/or  video
    46  streaming  service provider subject to tax under this section shall keep
    47  such records of its business and in such form as  the  commissioner  may
    48  require,  and  such  records  shall  be  preserved for a period of three
    49  years, except that the commissioner may  consent  to  their  destruction
    50  within that period or may require that they be kept longer.
    51    §  3. The state finance law is amended by adding a new section 99-m to
    52  read as follows:
    53    § 99-m. Community media reinvestment fund. 1. There is  hereby  estab-
    54  lished  in  the joint custody of the comptroller and the commissioner of
    55  taxation and finance a special fund to be known as the "community  media
    56  reinvestment fund".

        A. 5900--B                          5

     1    2.(a)  All  monies  received by the comptroller or the commissioner of
     2  taxation and finance for the purpose of this  fund  shall  be  deposited
     3  therein.  No  monies  may  be transferred from this account to any other
     4  account except by authority of the commissioner of taxation and finance.
     5    (b) Such fund shall consist of the revenue collected pursuant to arti-
     6  cle fifteen of the tax law and any other revenues collected by or appro-
     7  priated to the fund pursuant to any other law.
     8    3.(a)  The  commissioner  of  taxation  and  finance  is authorized to
     9  utilize the  monies  in  the  community  media  reinvestment  fund,  for
    10  distribution to the state, municipalities, and community media organiza-
    11  tions in proportions as provided in paragraph (b) of this subdivision or
    12  in  accordance with paragraph (c) of this subdivision, provided however,
    13  that the commissioner may retain up to ten percent of the monies in  the
    14  fund annually for operational expenditures.
    15    (b)  The  commissioner of taxation and finance shall annually distrib-
    16  ute, with no remainder left, all monies then held in the community media
    17  reinvestment fund according to the following formula:
    18    (i) one-fifth of the monies in the fund, less the monies  retained  by
    19  the  commissioner  for operational expenditures, shall be distributed to
    20  the state general fund;
    21    (ii) two-fifths of the monies in the fund shall be distributed direct-
    22  ly to municipalities in the state, and further allocated  proportionally
    23  based upon the population of such municipalities;
    24    (iii)  two-fifths  of  the  monies  in  the  fund shall be distributed
    25  directly to identified community media organizations in the  state,  or,
    26  if  no community media organization has been identified in a given muni-
    27  cipality, to infrastructure  or  services  overseen  by  the  ConnectALL
    28  office or to organizations identified by ConnectALL.
    29    (c)  Notwithstanding  paragraph  (b) of this subdivision, in low popu-
    30  lation density areas where cable is not mandated, such funds may be used
    31  by ConnectALL to build out the infrastructure needed for video or  audio
    32  connectivity,  which  may include broadband, cellular, satellite, or any
    33  other means of connectivity appropriate to facilitate the  establishment
    34  of the community media operations desired in each low population density
    35  area.
    36    4.  The  commissioner  of  taxation and finance shall promulgate regu-
    37  lations by December thirty-first, two thousand twenty-four to  establish
    38  procedures  for  identifying,  on  an  annual basis, (a) community media
    39  organizations eligible to receive monies distributed pursuant to subpar-
    40  agraph (iii) of paragraph (b) of subdivision three of this section;  and
    41  (b)  in  the event that no community media organization has been identi-
    42  fied in a given municipality, the  ConnectALL  office  or  organizations
    43  identified  by ConnectALL, eligible to receive monies distributed pursu-
    44  ant to subparagraph (iii) of paragraph (b) of subdivision three of  this
    45  section.  Notwithstanding  any  other  provisions to the contrary in the
    46  state administrative procedure act, such rules and  regulations  may  be
    47  adopted  on  an emergency basis if necessary to meet such December thir-
    48  ty-first, two thousand twenty-four deadline.
    49    5. All payments of monies from the fund shall be made on the audit and
    50  warrant of the comptroller.
    51    § 4. This act shall take effect immediately and apply to taxable years
    52  beginning on and after January 1, 2025.
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