Bill > A07805

This bill establishes a new tax on digital advertising services in New York state, targeting large digital platforms that derive significant annual revenue from digital ads. The tax applies to companies with annual gross revenues exceeding $100 million from digital advertising, imposing a 7% tax rate on the assessable base (digital advertising revenues in 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 revenues must file annual tax returns and quarterly estimated tax payments, maintaining detailed records of their digital advertising services. The legislation is motivated by the observation that digital platforms often avoid traditional sales taxes by bartering access to services in exchange for personal user data, which is then used for targeted advertising. The tax is designed to capture the value of these digital transactions while exempting smaller platforms to minimize compliance burdens. Any willful violation of the digital ad tax provisions would be considered a misdemeanor, and the tax will take effect for taxable years beginning on or after January 1, 2026.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/A7805