Relates to exemptions from sales and use taxes for certain fuel, gas, electricity, refrigeration and steam and gas.
Ayes (22): DeFrancisco, Bonacic, Farley, Flanagan, Fuschillo, Golden, Griffo, Grisanti, Hannon, Lanza, LaValle, Little, Marcellino, O'Mara, Ranzenhofer, Robach, Savino, Seward, Diaz, Peralta, Stavisky, Kennedy
Ayes W/R (10): Nozzolio, Krueger, Dilan, Rivera, Gianaris, Breslin, Parker, Perkins, Squadron, Espaillat
Absent (1): Sampson
Excused (3): Larkin, Young, Montgomery
TITLE OF BILL: An act to amend the tax law, in relation to certain exemptions from sales and use taxes
PURPOSE: To incentivize manufacturing in New York while allowing businesses to make efficient use of their resources.
SUMMARY OF PROVISIONS:
Section one amends paragraph 1 of subdivision (c) of section 1115 of the tax law, as amended by section 7 of part B of chapter 63 of the laws of 2000 by removing the words "directly and exclusively."
Section two provides for an immediate effective date.
EXISTING LAW: Energy must be used exclusively and directly for manufacturing in order to be excluded from sales and use taxation.
JUSTIFICATION: Currently, only energy that is used exclusively and directly for manufacturing is excluded from sales and use taxation. The purpose of this exclusion is to encourage manufacturers to locate in and produce goods in New York. However, the existing, law's strict limitations run counter to this goal. For example, lighting that is required for workers to see the machines they work on is not excluded from taxation.
The limitation also leads businesses to organize their operations in less than efficient ways. For example, the air conditioning costs to keep computer servers from overheating would no longer be excluded from taxation if a business were to also add a technician's desk into that room. Even though predominantly a manufacturing cost, the addition of one desk causes the air conditioning not to be an exclusively manufacturing expense. This leads to absurd workplace designs and an inefficient use of resources. By removing the exclusive and direct requirements, this bill incentivizes manufacturing in New York while still requiring that tax free energy actively contributes to the manufacturing of goods.
LEGISLATIVE HISTORY: New bill
FISCAL IMPLICATIONS: None
LOCAL FISCAL IMPLICATIONS: None
EFFECTIVE DATE: Immediate
STATE OF NEW YORK ________________________________________________________________________ 1441 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommuni- cations AN ACT to amend the tax law, in relation to certain exemptions from sales and use taxes THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subdivision (c) of section 1115 of the tax law, as amended by section 7 of part B of chapter 63 of the laws of 2000, is amended to read as follows: (1) Fuel, gas, electricity, refrigeration and steam, and gas, elec- tric, refrigeration and steam service of whatever nature for use or consumption
[directly and exclusively]in the production of tangible personal property, gas, electricity, refrigeration or steam, for sale, by manufacturing, processing, assembling, generating, refining, mining or extracting shall be exempt from the taxes imposed under subdivisions (a) and (b) of section eleven hundred five and the compensating use tax imposed under section eleven hundred ten of this article. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05004-01-3