Exempts other states and possessions of the United States and their political subdivisions from state sales taxes.
TITLE OF BILL: An act to amend the tax law, in relation to providing an exemption from sales tax for sales made to other states, other political subdivisions of the United States and their political subdivisions
PURPOSE: To provide an automatic exemption for New York state sales and use tax to other states and political subdivisions of the United States for uses which would otherwise be immune from taxation.
SUMMARY OF PROVISIONS:
Section 1. Amends paragraph 2 of subdivision(a) of section 1116 of the tax law to provide that any state, any political subdivision, agency, or instrumentality which would otherwise be immune from taxation where it is a purchaser, user or consumer, or where it sells services or property of a kind not ordinarily sold by private persons.
Section 2. Provides that this act shall take effect July 1, 2013 or on the first day of a sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing after signature.
JUSTIFICATION: New York currently does not provide an automatic exemption for sales and services performed in New York state for out of state governmental and other municipal entities. This results in a situation where other states and their municipal governments are discouraged from conducting business within New York. The situation is particularly troublesome for business close to the borders of other states and is resulting in the loss of such business for in state business concerns.
Many other states currently provide such a blanket sales tax exemption to other governmental entities, realizing that it is an incentive to encourage out of state revenue for their employers.
LEGISLATIVE HISTORY: 2012: S.6163 Referred to Investigations and Government Operations
FISCAL IMPLICATIONS: Undetermined.
EFFECTIVE DATE: This act shall take affect July 1, 2013 or upon an immediately preceding sales tax quarter.
STATE OF NEW YORK ________________________________________________________________________ 2614 2013-2014 Regular Sessions IN SENATE January 23, 2013 ___________Introduced by Sen. YOUNG -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to providing an exemption from sales tax for sales made to other states, other political subdivisions of the United States and their political subdivisions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 2 of subdivision (a) of section 1116 of the tax law, as amended by chapter 530 of the laws of 1976, is amended to read as follows: (2) The United States of America, ANY STATE, THE DISTRICT OF COLUMBIA, OR ANY POSSESSION OF THE UNITED STATES OR POLITICAL SUBDIVISION THEREOF, and any
[of its agencies and instrumentalities]AGENCY OR INSTRUMENTALI- TY OF ANY OF THE FOREGOING THAT IS NOT DESCRIBED IN PARAGRAPH ONE OF THIS SUBDIVISION, insofar as it is immune from taxation where it is the purchaser, user or consumer, or where it sells services or property of a kind not ordinarily sold by private persons; S 2. This act shall take effect July 1, 2013 or on the first day of a sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing at least ninety days after this act shall have become a law, whichever shall be later.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07119-01-3