Sales Tax on Printed Materials

Date: 2010

 

April 14, 2010
 
Sales Tax on Printed Materials
Part R of A. 9710B (Assembly Majority Budget Proposal)
 
MEMORANDUM IN OPPOSITION
 
Unshackle Upstate, a bipartisan coalition of over 70+ business and trade organizations representing a 
growing group of over 70,000 employers and employing upwards of 1.5 million people opposes Part R of 
A.9710-B Budget Article VII  – which would impose a new sales tax (on average 8% statewide) on 
promotional and marketing materials sent by New York businesses to both out-of-state and in-state 
customers.  
 
The proposal would repeal a sales tax exemption (Subdivision [n] of section 1115 of the State Tax Law) 
that was originally enacted in 1989 and updated in 1997 to protect New York State-based companies. 
Specifically, this proposed change would impose the state’s sales and use taxes on promotional materials 
mailed, shipped or otherwise distributed from a point within the state, by or on behalf of in-state 
businesses, when sent to customers or prospective customers located outside the state.  It would also 
apply to mailing lists in conjunction with promotional materials.
 
Prior to the enactment of this important sales tax exemption, New York companies were charged sales tax 
on materials sent to customers when other states exempted such activities.  As a result, this printing and 
marketing work was often sent to non-New York State companies, costing the State valuable jobs and tax 
revenue.  
 
New York State is home to about 3,000 printing companies that represent an $11 billion industry and 
some 75,000 jobs.  These companies print items ranging from mailed brochures that local car dealers send 
out, to offers for rebates on home repairs, to packaging on free samples of razor blades or skin cream.  
These examples are just some of the examples of the currently exempted items. 
 
If this proposal is enacted, we will see a mass migration of these activities out of New York State, as the 
printing and marketing industry is very cost-sensitive to even the smallest of increases.  This is simply a 
cost increase that many businesses will be unable to absorb, forcing them to either relocate outside the 
State or close their doors completely.  Moreover, it would make it more costly to do promotional work in 
New York State, thereby affecting the firms that produce and distribute this material.
 
For these reasons, Unshackle Upstate strongly encourages the Governor and the Senate to reject this 
onerous burden in the Enacted State Budget.