This bill has been amended

Bill S273A-2013

Provides for an exemption from sales and use taxes on the sale of general aviation aircraft and for a report on the economic impact thereof

Provides for an exemption from sales and use taxes on the sale of general aviation aircraft.

Details

Actions

  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 8, 2014: returned to senate
  • Jan 8, 2014: died in assembly
  • Jun 21, 2013: referred to ways and means
  • Jun 20, 2013: DELIVERED TO ASSEMBLY
  • Jun 20, 2013: PASSED SENATE
  • May 6, 2013: ADVANCED TO THIRD READING
  • May 1, 2013: 2ND REPORT CAL.
  • Apr 30, 2013: 1ST REPORT CAL.516
  • Apr 22, 2013: PRINT NUMBER 273A
  • Apr 22, 2013: AMEND (T) AND RECOMMIT TO FINANCE
  • Apr 16, 2013: REPORTED AND COMMITTED TO FINANCE
  • Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Votes

Memo

BILL NUMBER:S273A

TITLE OF BILL: An act to amend the tax law, in relation to exempting from sales and compensating use taxes the purchase of general aviation aircraft; and providing for the repeal of certain provisions upon expiration thereof

PURPOSE:

This bill would establish a 5-year pilot program to exempt from sales and use taxes the purchase of general aviation aircraft for a limited time and require a study be conducted by the commissioner of taxation and finance as to the economic and revenue impacts of the exemption.

SUMMARY OF PROVISIONS:

§ 1- Titles the act the "New York Aviation Jobs Act."

§ 2- Amends Tax Law § 1115 (dd) by amending paragraph 1 to exempt from sales and use taxation the purchase of general aviation aircraft similar to the current exemption granted to commercial service aircraft.

§ 3- Requires a study be conducted by the commissioner of taxation and finance as to the economic and revenue impacts of the exemption to be submitted on or after November 1, 2018, to the Governor, temporary president of the senate and the speaker of the assembly.

§ 4- Effective date is April 1, 2014 and shall apply to all sales of general aviation aircraft on or after that date and until March 31, 2019.

JUSTIFICATION:

Airports are among the economic engines that fuel growth in the economy of the state and in the communities which they serve. The economic benefits of airports in this state are quite impressive. Annual economic activity attributable to aviation is $50 billion. The aviation sector employs more than 394,500 state residents and generates $18 billion in payroll and $4.5 billion in State and local tax revenue annually.

This bill will make New York competitive with other states that already exempt sales taxes related to the purchase of general aviation aircraft. Connecticut, Massachusetts, New Jersey, Maine and New Hampshire are a few of the regional states that exempt these aviation purchases from sales and use taxes or provide more favorable tax treatment. NY has lost 700 such aircraft since 2002.

Therefore, this bill establishes a 5-year tax exemption pilot program, similar to what was successfully enacted to exempt maintenance and repair of general aviation aircraft from the sales and use tax a few years ago. A Tax Department report-A Review of the Sales and Use Tax Exemption for Private Aircraft Parts and Service-on that exemption found that, since its enactment in 2004, New York has attracted significant investment in aviation services, resulting in an expansion of aviation maintenance and repair businesses, the creation of jobs

here in New York and an increase in state tax revenue. (FAA data indicates the establishment of 23 such major aviation maintenance and repair businesses and 686 new jobs since 2004).

By adopting a 5 year exemption pilot program for the purchase of general aviation aircraft, New York will encourage the location of such aircraft and business jets to locate here. Like the maintenance and repair exemption, an exemption for the purchase of aircraft is expected to increase state revenues and leverage significant economic returns for local communities and the state.

LEGISLATIVE HISTORY:

2005-2006: S.3655 - Passed Senate 2007-2008: S.425-B - Passed Senate 2009-2010: S.4551-A - Referred to Investigations & Government Operations 2011-2012: S.2678 - Passed Senate

FISCAL IMPLICATIONS:

Estimated reduction of $13.4 million annually will be more than offset by increases in economic activity, jobs and state and local tax revenue (the impact of each business aircraft on average is 5 on airport jobs and $1 million of economic activity according to DOT). The economic development benefits at airports will generate payroll taxes, property taxes, and sales taxes in other ancillary services and increased fuel tax collections from the expected increase of in-state basing of general aviation aircraft and the resulting increase in aviation activity.

EFFECTIVE DATE:

This act shall take effect April 1, 2014, and shall apply to sales of general aviation aircraft made and uses occurring on or after that date in accordance with the applicable transitional provisions of section 1106 and 1107 of the tax law, but shall not apply to sales occurring after March 31, 2019, and section one of this act shall expire and be deemed repealed April 1, 2019. Provided, however, that aircraft subject to exemption pursuant to paragraph 1 of subdivision (dd) of section 1115 of the tax law, as amended by section two of this act, shall remain so exempt after the expiration and repeal of section two of this act, including instances where the aircraft is subsequently sold or the ownership is transferred or assigned, for the useful life of the aircraft.


Text

STATE OF NEW YORK ________________________________________________________________________ 273--A 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sens. LARKIN, BONACIC, BOYLE, DeFRANCISCO, FLANAGAN, FUSCHILLO, GRIFFO, GRISANTI, KENNEDY, LITTLE, MAZIARZ, NOZZOLIO, O'MARA, RANZENHOFER, RITCHIE, ZELDIN -- read twice and ordered print- ed, and when printed to be committed to the Committee on Investi- gations and Government Operations -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to exempting from sales and compensating use taxes the purchase of general aviation aircraft; and providing for the repeal of certain provisions upon expiration thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Short title. This act shall be known and may be cited as the "New York aviation jobs act". S 2. Paragraph 1 of subdivision (dd) of section 1115 of the tax law, as added by section 1 of part L of chapter 60 of the laws of 2004, is amended to read as follows: (1) Services otherwise taxable under paragraph three of subdivision (c) of section eleven hundred five or under section eleven hundred ten of this article, SALES OF GENERAL AVIATION AIRCRAFT, and tangible personal property purchased and used by the person who sells such services in performing such services, where such property becomes a physical component part of the property upon which the services are performed or where such property is a lubricant applied to aircraft, shall be exempt from tax under this article where such services are performed on aircraft. S 3. The commissioner of taxation and finance, in conjunction with the commissioner of transportation, shall review and analyze all statistical data available for the purpose of determining the economic and revenue
impact of the sales and compensating use tax exemption for the sale of general aviation aircraft enacted by section two of this act. Such review and analysis shall include, but not be limited to, any increases in aviation-related employment, aircraft basing, aircraft maintenance and aircraft hangering within the state. The commissioner shall compile his or her findings into a report, which shall be submitted, on or before November 1, 2018, to the governor, the temporary president of the senate and the speaker of the assembly. S 4. This act shall take effect April 1, 2014, and shall apply to sales of general aviation aircraft made and uses occurring on or after such effective date in accordance with the applicable transitional provisions of sections 1106 and 1107 of the tax law, but shall not apply to sales occurring after March 31, 2019, and section two of this act shall expire and be deemed repealed April 1, 2019. Provided, however, that aircraft subject to exemption pursuant to paragraph 1 of subdivi- sion (dd) of section 1115 of the tax law, as amended by section two of this act, shall remain so exempt after the expiration and repeal of section two of this act, including instances where the aircraft is subsequently sold or the ownership is transferred or assigned, for the useful life of the aircraft. Provided, further, that the commissioner of taxation and finance shall be immediately authorized to adopt and amend any rules or regulations and to issue any procedure, forms or instructions necessary to implement section two of this act on its effective date.

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