New York Association
of Convenience Stores
130 Washington Avenue, Suite 300, Albany NY
12210
TELEPHONE: (800) 33-NYACS or (518) 432-1400 FAX:
(518) 432-7400
MEMORANDUM IN SUPPORT
S.5715 by
Senator Wright
A.8987 by
Committee on Rules (Abbate)
AN ACT to amend the tax law, in relation to lottery agent compensation and to
repeal paragraph 9 of subdivision a of section 1604 of such law relating thereto
The New York Association of Convenience Stores
represents more than 4,000 neighborhood mini marts and convenience stores
licensed by the Division of the Lottery to sell New York Lottery tickets.
Seven days a
week, 52 weeks a year, including holidays, our stores have provided adult New
Yorkers with quick, convenient access to state lottery tickets for the past 38
years.
As a result of
their hard work, dedication to serving the needs of lottery customers,
commitment of prime counter and window display space, and acceptance of new
games and procedures, New York Lottery sales have skyrocketed from $53.6 million
in 1967 to $5.8 billion in 2004.
If a business
enterprise had experienced a 100-fold increase in sales during that time, the
sales force that produced such phenomenal growth would be rewarded in the form
of increased commissions. However, the retailer’s commission on lottery sales
has remained at 6% through the presidencies of Lyndon Johnson, Richard Nixon,
Gerald Ford, Jimmy Carter, Ronald Reagan, George H.W. Bush, Bill Clinton, and
George W. Bush.
During that time, retail wage levels have been driven higher as the Legislature increased New York's minimum wage from $1.40/hr to $6.00/hr. Upward pressure on payroll costs will intensify as the minimum climbs to $6.75 on 1/1/06 and $7.15 on 1/1/07. Insurance, energy, property taxes, payroll taxes, licenses, regulatory compliance, waste disposal and other operating expenses all have increased exponentially as well.
Meanwhile, more
customers are buying lottery tickets with credit cards, and the processing fees
charged by Visa and MasterCard eat up half the retailer’s commission. Stores’
risk of loss from theft of instant tickets has grown with the introduction of
$5 and $10 tickets (soon to be joined by $20 tickets). And their lottery
licenses are now unfairly at risk of suspension under the state's tobacco enforcement
program.
As the sponsors point out, the 1999 hike in the
sales tax vendor allowance offers a precedent for adjusting the rate of
compensation for retailers who generate revenues for the State.
On behalf of New York Lottery’s sales force, NYACS respectfully
urges the Legislature to acknowledge outstanding sales performance and sharply
higher costs of doing business by passing S.5715/A.8987.
James S. Calvin
President, NYACS
June 22, 2005