January 23, 2008
Fees would rise, 'loopholes' close to raise revenue
(January 23, 2008) — ALBANY — Small cigars and some malt beverages would cost more and a container deposit would be required on some noncarbonated drinks under the budget proposed Tuesday by Gov. Eliot Spitzer.
The $124 billion plan, which now goes to the Legislature, contains no generalized tax increase, although it would raise an additional $434 million by closing purported tax loopholes and $305 million by increasing or implementing 46 fines and fees. Among other changes, Spitzer's budget would:
- Close a loophole that lets online retailers such as Amazon.com, which sell in New York but do not have offices here, avoid collecting sales and use taxes. The state would require tax collections by certain sellers that use New York residents to solicit sales, generating $47 million for the state in 2008-09.
- Tax certain flavored malt-beverage products at the low-liquor rate rather than the beer rate. It would generate $15 million in 2008-09.
- Classify little cigars as cigarettes for tax purposes, raising $3.6 million in 2008-09.
- Add certain noncarbonated beverages such as water and iced tea to the list of products for which a 5-cent container deposit is required; current law requires a deposit only for beer and soda. The change would generate an additional $25 million in 2008-09. Beverage companies would have to forward unclaimed deposits to the state's Environmental Protection Fund beginning Jan. 1, 2009.
- A similar proposal by Spitzer passed the Assembly last year but not the Senate.
- Raise the motor-vehicle law enforcement fee on auto-insurance purchases from $5 to $20. Half of the $145.2 million raised by that increase would go for transportation purposes such as State Police highway patrols and auto-theft prevention, and the rest would help to pay for bridge repairs.
- Increase the state sales fee for closings on real estate costing more than $175,000, which would generate $21.5 million more in 2008-09.
- Combine the petroleum business tax, motor fuel tax and the state sales tax on motor fuel and diesel fuel into one petroleum business tax to simplify tax forms and make the taxes easier to administer. The state would get $13 million more in 2008-09 and $56 million annually when the change is fully effective.
- Require all 600,000 active sales tax vendors to re-register and pay a $50 fee to allow the state to update its records and collect back-tax liabilities. This would produce an additional $12 million in 2008-09.