Bill S2927-2011

Provides for pollution tax credits for the purchase of certain machinery or equipment for the reduction of pollution made by dry cleaning businesses

Provides for pollution tax credits for the purchase of certain machinery or equipment for the reduction of pollution made by dry cleaning businesses.

Details

Actions

  • Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Feb 3, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S2927

TITLE OF BILL: An act to amend the tax law, in relation to pollution tax credits for the purchase of certain equipment made by dry cleaning businesses

PURPOSE: To reduce costs for small dry cleaning businesses faced with disproportionately expensive environmental compliance costs by giving these businesses a sales tax exemption for the purchase of pollution prevention or control equipment.

SUMMARY OF PROVISIONS: Amends various sections of the tax law to provide a sales tax exemption to dry cleaners for the purchase of equipment or machinery certified by the Department of Environmental Conservation that is used primarily to control, prevent or abate pollution or contaminants from their operations.

JUSTIFICATION: A State sales tax exemption for the purchase of pollution prevention or control equipment for dry cleaners is appropriate because the public directly benefits for an avoidance of damages to human health by reduced or avoided pollution.

LEGISLATIVE HISTORY: 2009-10: S.4420 - Referred to Investigations and Government Operations

FISCAL IMPLICATIONS: There will be limited financial impacts from the bill due to the reduced income from sales tax on pollution prevention/reduction equipment. However, this is offset significantly by the avoided costs of adverse human health impacts.

EFFECTIVE DATE: This act shall take effect three years after it shall have become law and applies to taxable years ending on or after such date, except that section one of this act shall take effect on the first day of the sales tax quarterly period, as designated in subdivision (b) of section 1136 of the tax law, next commencing on or after the effective date of this act and shall apply to sales made on or after the effective date of section one of this act and shall apply to all equipment or machinery purchased on or after such date although purchased under a prior contract.


Text

STATE OF NEW YORK ________________________________________________________________________ 2927 2011-2012 Regular Sessions IN SENATE February 3, 2011 ___________
Introduced by Sens. JOHNSON, BONACIC, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Investi- gations and Government Operations AN ACT to amend the tax law, in relation to pollution tax credits for the purchase of certain equipment made by dry cleaning businesses THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision (a) of section 1115 of the tax law is amended by adding a new paragraph 44 to read as follows: (44) EQUIPMENT OR MACHINERY CERTIFIED BY THE DEPARTMENT OF ENVIRON- MENTAL CONSERVATION, PURSUANT TO REGULATIONS PROMULGATED BY SUCH DEPART- MENT, FOR POLLUTION PREVENTION OR CONTROL WHICH, FOR PURPOSES OF THIS PARAGRAPH, SHALL MEAN ANY PROCESS, FACILITY, DEVICE, FIXTURE, EQUIPMENT OR MACHINERY USED PRIMARILY FOR THE CONTROL, PREVENTION OR ABATEMENT OF POLLUTION OR CONTAMINANTS FROM THE OPERATION OF A DRY CLEANING PLANT, INCLUDING ANY STRUCTURE, MACHINERY OR EQUIPMENT INSTALLED IN THE RECON- STRUCTION OR REPLACEMENT OF SUCH PROCESS, FACILITY, DEVICE, FIXTURE, EQUIPMENT OR MACHINERY. S 2. Subparagraph (A) of paragraph 2 of subsection (a) of section 606 of the tax law, as amended by chapter 637 of the laws of 2008, is amended to read as follows: (A) A credit shall be allowed under this subsection with respect to tangible personal property and other tangible property, including build- ings and structural components of buildings, which are: depreciable pursuant to section one hundred sixty-seven of the internal revenue code, have a useful life of four years or more, are acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code, have a situs in this state and are (i) principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horti- culture, floriculture, viticulture or commercial fishing, (ii) indus-
trial waste treatment facilities or air pollution control facilities, used in the taxpayer's trade or business OR BUSINESS INVESTMENTS MADE BY DRY CLEANING BUSINESSES TO ACHIEVE POLLUTION PREVENTION INCLUDING INVESTMENTS INTO CHANGES IN FACILITY PROCESSES OR OPERATIONS METHODS, (iii) research and development property, (iv) principally used in the ordinary course of the taxpayer's trade or business as a broker or deal- er in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assign- ment, termination, or transfer) of stocks, bonds or other securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, or of commodities as defined in section 475(e) of the Internal Revenue Code, (v) principally used in the ordinary course of the taxpayer's trade or business of providing investment advisory services for a regulated investment company as defined in section eight hundred fifty-one of the Internal Revenue Code, or lending, loan arrangement or loan origination services to customers in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, or (vi) principally used as a qual- ified film production facility including qualified film production facilities having a situs in an empire zone designated as such pursuant to article eighteen-B of the general municipal law, where the taxpayer is providing three or more services to any qualified film production company using the facility, including such services as a studio lighting grid, lighting and grip equipment, multi-line phone service, broadband information technology access, industrial scale electrical capacity, food services, security services, and heating, ventilation and air conditioning. For purposes of clauses (iv) and (v) of this subparagraph, property purchased by a taxpayer affiliated with a regulated broker, dealer, or registered investment adviser is allowed a credit under this subsection if the property is used by its affiliated regulated broker, dealer or registered investment adviser in accordance with this subsection. For purposes of determining if the property is principally used in qualifying uses, the uses by the taxpayer described in clauses (iv) and (v) of this subparagraph may be aggregated. In addition, the uses by the taxpayer, its affiliated regulated broker, dealer and regis- tered investment adviser under either or both of those clauses may be aggregated. Provided, however, a taxpayer shall not be allowed the cred- it provided by clauses (iv) and (v) of this subparagraph unless (I) eighty percent or more of the employees performing the administrative and support functions resulting from or related to the qualifying uses of such equipment are located in this state, or (II) the average number of employees that perform the administrative and support functions resulting from or related to the qualifying uses of such equipment and are located in this state during the taxable year for which the credit is claimed is equal to or greater than ninety-five percent of the aver- age number of employees that perform these functions and are located in this state during the thirty-six months immediately preceding the year for which the credit is claimed, or (III) the number of employees located in this state during the taxable year for which the credit is claimed is equal to or greater than ninety percent of the number of employees located in this state on December thirty-first, nineteen hundred ninety-eight or, if the taxpayer was not a calendar year taxpay- er in nineteen hundred ninety-eight, the last day of its first taxable year ending after December thirty-first, nineteen hundred ninety-eight.
If the taxpayer becomes subject to tax in this state after the taxable year beginning in nineteen hundred ninety-eight, then the taxpayer is not required to satisfy the employment test provided in the preceding sentence of this subparagraph for its first taxable year. For the purposes of clause (III) of this subparagraph the employment test will be based on the number of employees located in this state on the last day of the first taxable year the taxpayer is subject to tax in this state. If the uses of the property must be aggregated to determine whether the property is principally used in qualifying uses, then either each affiliate using the property must satisfy this employment test or this employment test must be satisfied through the aggregation of the employees of the taxpayer, its affiliated regulated broker, dealer, and registered investment adviser using the property. For purposes of this subsection, the term "goods" shall not include electricity. S 3. Subparagraph (B) of paragraph 2 of subsection (a) of section 606 of the tax law is amended by adding three new clauses (vi), (vii) and (viii) to read as follows: (VI) POLLUTION PREVENTION SHALL MEAN CHANGES IN PRODUCTION METHODS OR RAW MATERIALS THAT REDUCE, AVOID OR ELIMINATE THE USE OF TOXIC OR HAZARDOUS SUBSTANCES OR THE GENERATION OF SUCH SUBSTANCES OR POLLUTANTS PER UNIT OF PRODUCT, SO AS TO REDUCE RISKS TO THE HEALTH OF WORKERS, CONSUMERS OR THE ENVIRONMENT, WITHOUT SHIFTING RISKS BETWEEN WORKERS, CONSUMERS OR ENVIRONMENTAL MEDIA. POLLUTION PREVENTION INCLUDES THE REDESIGN, MODIFICATION, UPGRADE OR REPLACEMENT OF PRODUCTION PROCESSES, EQUIPMENT OR TECHNOLOGY; REFORMULATION OR REDESIGN OF PRODUCTS, SUBSTI- TUTION OF INPUTS OR RAW MATERIALS; IMPROVEMENTS IN HOUSEKEEPING, MAINTE- NANCE, TRAINING OR INVENTORY CONTROL; AND EXTENDED USE OR REUSE OF MATE- RIALS THROUGH METHODS INTEGRAL TO THE PRODUCTION PROCESS, SUCH AS IN-PROCESS, CLOSED-LOOP RECYCLING. SUCH TERM DOES NOT INCLUDE INCINERA- TION, TRANSFER FROM ONE MEDIUM OF RELEASE OR DISCHARGE TO ANOTHER MEDIA, OFF-SITE OR OUT-OF-PRODUCTION RECYCLING, END-OF-PIPE TREATMENT OR POLLUTION CONTROL. (VII) POLLUTANT SHALL MEAN ANY SUBSTANCE, CONTAMINANT, WASTE OR EMIS- SION WHICH CONTRIBUTES TO POLLUTION AS DEFINED IN ARTICLE ONE OF THE ENVIRONMENTAL CONSERVATION LAW. (VIII) TOXIC OR HAZARDOUS SUBSTANCE SHALL MEAN ANY SUBSTANCE LISTED AS A SUBSTANCE HAZARDOUS TO PUBLIC HEALTH, SAFETY OR THE ENVIRONMENT IN REGULATIONS PROMULGATED PURSUANT TO ARTICLE THIRTY-SEVEN OF THE ENVIRON- MENTAL CONSERVATION LAW. S 4. Subparagraph (i) of paragraph (b) of subdivision 12 of section 210 of the tax law, as amended by chapter 637 of the laws of 2008, is amended to read as follows: (i) A credit shall be allowed under this subdivision with respect to tangible personal property and other tangible property, including build- ings and structural components of buildings, which are: depreciable pursuant to section one hundred sixty-seven of the internal revenue code, have a useful life of four years or more, are acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code, have a situs in this state and are (A) principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horti- culture, floriculture, viticulture or commercial fishing, (B) industrial waste treatment facilities or air pollution control facilities, used in the taxpayer's trade or business, (C) research and development property OR BUSINESS INVESTMENTS MADE BY DRY CLEANING BUSINESSES TO ACHIEVE POLLUTION PREVENTION INCLUDING INVESTMENTS INTO CHANGES IN FACILITY
PROCESSES OR OPERATIONS OR PRODUCTION METHODS, (D) principally used in the ordinary course of the taxpayer's trade or business as a broker or dealer in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of stocks, bonds or other securi- ties as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, or of commodities as defined in section four hundred seventy-five (e) of the Internal Revenue Code, (E) principally used in the ordinary course of the taxpayer's trade or business of providing investment advisory services for a regulated investment compa- ny as defined in section eight hundred fifty-one of the Internal Revenue Code, or lending, loan arrangement or loan origination services to customers in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, (F) principally used in the ordinary course of the taxpayer's business as an exchange registered as a national securities exchange within the meaning of sections 3(a)(1) and 6(a) of the Securities Exchange Act of 1934 or a board of trade as defined in section 1410(a)(1) of the New York Not-for-Profit Corporation Law or as an entity that is wholly owned by one or more such national securities exchanges or boards of trade and that provides automation or technical services thereto, or (G) princi- pally used as a qualified film production facility including qualified film production facilities having a situs in an empire zone designated as such pursuant to article eighteen-B of the general municipal law, where the taxpayer is providing three or more services to any qualified film production company using the facility, including such services as a studio lighting grid, lighting and grip equipment, multi-line phone service, broadband information technology access, industrial scale elec- trical capacity, food services, security services, and heating, venti- lation and air conditioning. For purposes of clauses (D), (E) and (F) of this subparagraph, property purchased by a taxpayer affiliated with a regulated broker, dealer, registered investment adviser, national secu- rities exchange or board of trade, is allowed a credit under this subdi- vision if the property is used by its affiliated regulated broker, deal- er, registered investment adviser, national securities exchange or board of trade in accordance with this subdivision. For purposes of determin- ing if the property is principally used in qualifying uses, the uses by the taxpayer described in clauses (D) and (E) of this subparagraph may be aggregated. In addition, the uses by the taxpayer, its affiliated regulated broker, dealer, and registered investment adviser under either or both of those clauses may be aggregated. Provided, however, a taxpayer shall not be allowed the credit provided by clauses (D), (E) and (F) of this subparagraph unless (I) eighty percent or more of the employees performing the administrative and support functions resulting from or related to the qualifying uses of such equipment are located in this state or (II) the average number of employees that perform the administrative and support functions resulting from or related to the qualifying uses of such equipment and are located in this state during the taxable year for which the credit is claimed is equal to or greater than ninety-five percent of the average number of employees that perform these functions and are located in this state during the thirty-six months immediately preceding the year for which the credit is claimed, or (III) the number of employees located in this state during the taxa- ble year for which the credit is claimed is equal to or greater than
ninety percent of the number of employees located in this state on December thirty-first, nineteen hundred ninety-eight or, if the taxpayer was not a calendar year taxpayer in nineteen hundred ninety-eight, the last day of its first taxable year ending after December thirty-first, nineteen hundred ninety-eight. If the taxpayer becomes subject to tax in this state after the taxable year beginning in nineteen hundred ninety- eight, then the taxpayer is not required to satisfy the employment test provided in the preceding sentence of this subparagraph for its first taxable year. For purposes of clause (III) of this subparagraph the employment test will be based on the number of employees located in this state on the last day of the first taxable year the taxpayer is subject to tax in this state. If the uses of the property must be aggregated to determine whether the property is principally used in qualifying uses, then either each affiliate using the property must satisfy this employ- ment test or this employment test must be satisfied through the aggre- gation of the employees of the taxpayer, its affiliated regulated broker, dealer, and registered investment adviser using the property. For purposes of this subdivision, the term "goods" shall not include electricity. S 5. Subparagraph (ii) of paragraph (b) of subdivision 12 of section 210 of the tax law is amended by adding three new clauses (F), (G) and (H) to read as follows: (F) POLLUTION PREVENTION SHALL MEAN CHANGES IN PRODUCTION METHODS OR RAW MATERIALS THAT REDUCE, AVOID OR ELIMINATE THE USE OF TOXIC OR HAZARDOUS SUBSTANCES OR THE GENERATION OF SUCH SUBSTANCES OR POLLUTANTS PER UNIT OF PRODUCT, SO AS TO REDUCE RISKS TO THE HEALTH OF WORKERS, CONSUMERS OR THE ENVIRONMENT, WITHOUT SHIFTING RISKS BETWEEN WORKERS, CONSUMERS OR ENVIRONMENTAL MEDIA. POLLUTION PREVENTION INCLUDES THE REDESIGN, MODIFICATION, UPGRADE OR REPLACEMENT OF PRODUCTION PROCESSES, EQUIPMENT OR TECHNOLOGY; REFORMULATION OR REDESIGN OF PRODUCTS, SUBSTI- TUTION OF INPUTS OR RAW MATERIALS; IMPROVEMENTS IN HOUSEKEEPING, MAINTE- NANCE, TRAINING OR INVENTORY CONTROL; AND EXTENDED USE OR REUSE OF MATE- RIALS THROUGH METHODS INTEGRAL TO THE PRODUCTION PROCESS, SUCH AS IN-PROCESS, CLOSED-LOOP RECYCLING. SUCH TERM DOES NOT INCLUDE INCINERA- TION, TRANSFER FROM ONE MEDIUM OF RELEASE OR DISCHARGE TO ANOTHER MEDIA, OFF-SITE OR OUT-OF-PRODUCTION RECYCLING, END-OF-PIPE TREATMENT OR POLLUTION CONTROL. (G) POLLUTANT SHALL MEAN ANY SUBSTANCE, CONTAMINANT, WASTE OR EMISSION WHICH CONTRIBUTES TO POLLUTION AS DEFINED IN ARTICLE ONE OF THE ENVIRON- MENTAL CONSERVATION LAW. (H) TOXIC OR HAZARDOUS SUBSTANCE SHALL MEAN ANY SUBSTANCE LISTED AS A SUBSTANCE HAZARDOUS TO PUBLIC HEALTH, SAFETY OR THE ENVIRONMENT IN REGU- LATIONS PROMULGATED PURSUANT TO ARTICLE THIRTY-SEVEN OF THE ENVIRON- MENTAL CONSERVATION LAW. S 6. This act shall take effect three years after it shall have become a law and shall apply to taxable years ending on or after such effective date, except that section one of this act shall take effect on the first day of the sales tax quarterly period, as designated in subdivision (b) of section 1136 of the tax law, next commencing on or after the effec- tive date of this act and shall apply to sales made on or after the effective date of section one of this act and shall apply to all equip- ment or machinery purchased on or after such date although purchased under a prior contract.

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