Marketplace Tax

We’re writing to update you on a dangerous pending proposal for a new NYS Marketplace Provider Tax and to ask for your help in fighting it.

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Dear Tech:NYC Members,

We’re writing to update you on a dangerous pending proposal for a new NYS Marketplace Provider Tax and to ask for your help in fighting it. In short, this proposal would require internet marketplaces that generate more than $100m annually in sales to collect sales taxes on behalf of their out-of-state sellers who sell to New York buyers.

More details on the tax can be found in our latest Policy Debrief here.

We have three primary concerns with the proposed tax:

• It will negatively impact New York's appeal as a home for tech companies. Because it would only apply to marketplace providers with a nexus to New York, those providers will have an incentive to open offices outside of New York in order to avoid the tax.

• The tax will create significant operational challenges for the companies who must comply with it.

• Finally, this tax sends the wrong message to all tech companies, regardless of their business, about New York’s desire to establish a welcoming environment for our community.

We are reaching out now because we are in the homestretch of this process—the governor proposed this tax as part of the 2018 budget, which must be finalized by March 31 and just yesterday, both the Assembly and Senate issued their response budgets—the Assembly included the tax in its budget, while the Senate removed it. Now, both houses will be negotiating a final budget with the governor, which means we need to keep pressure on all three to ensure that this tax is not in the final budget.

Please let us know by replying to this email if 1) your company or any of your portfolio companies are particularly interested in this issue; and/or 2) if you’d be interested in helping our efforts to fight it, either by making a phone call or sending an email to an elected official.

Only two other states—South Dakota and Alabama—have passed similar taxes; they are currently stayed in both states pending litigation. This is not a place where we want New York to be a leader.

Thanks,Julie