Bill > S04778

This bill establishes a new tax on digital advertising services in New York State, targeting large digital platforms that derive significant revenue from online advertising. The tax would apply to companies with annual gross revenues from digital advertising exceeding $100 million, with a 7% tax rate calculated based on revenues specifically from digital advertising services within the state. The bill defines digital advertising services as advertisements on digital interfaces that use personal user information, including banner, search engine, and interstitial ads. Companies with at least $1 million in annual digital advertising revenue in New York would be required to file annual and quarterly tax returns, providing detailed information about their digital advertising income. The legislation aims to address the challenge of taxing digital transactions where users often "pay" with personal data instead of money, using advertising revenue as a proxy for taxation. The bill includes provisions for how revenues will be apportioned, defines key terms like "digital interface" and "user," and establishes that willful violations of the tax law would constitute a misdemeanor. The tax would take effect for taxable years beginning on or after January 1, 2026, giving companies time to prepare for the new requirement.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S4778