Exempts from sales tax the sale of an abstract of title to real property to be used for agricultural purposes to either a prospective purchaser of real property or to an attorney representing a prospective purchaser.
TITLE OF BILL: An act to amend the tax law, in relation to providing for a sales tax exemption for farm abstracts
PURPOSE: To clarify that sale of abstracts of title to land used for agricultural purposes are not subject to sales tax.
Section 1 amends Paragraph 1 of Subdivision (c) of Section 1105 of the Tax Law to provide an exclusion from the four percent tax for sale of an abstract of title to real property used for agricultural purposes.
Section 2 states this act shall take effect immediately.
JUSTIFICATION: Agriculture is a land intensive business which makes sales tax on abstract services, property taxes and other land-related tax issues a substantial business expense. The purchase or sale of land requires an abstract of title which provides a condensed history of all deeds, mortgages and other recorded documents pertinent to the land parcel being transferred to new ownership. Before the sale of land can be concluded, the abstract of title is reviewed by an attorney or insurance company to determine if there are any outstanding liens or mortgages that must be satisfied before the buyer can claim ownership.
Securing the abstract of title for a piece of real property to be included in a farm operation is a costly business expense for farmers which was partially defrayed by a state sales tax exemption until last year. Sale of an abstract of title was not considered sale of a taxable information service until the NYS Department of Taxation and Finance rendered an Opinion (TSB-M-10(07)S in 2010 revoking its long standing policy of exempting the sales of abstracts of title from state sales tax in an effort to generate additional revenue for the State. This legislation will protect valuable working landscapes, open green spaces and farm viability by statutorily restoring the tax exemption for sales of abstracts of title to farm land.
LEGISLATIVE HISTORY: 2012: S.4728A - Passed the Senate
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 4200 2013-2014 Regular Sessions IN SENATE March 14, 2013 ___________Introduced by Sen. RITCHIE -- 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 for a sales tax exemption for farm abstracts 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 1105 of the tax law, as amended by chapter 583 of the laws of 2011, is amended to read as follows: (1) The furnishing of information by printed, mimeographed or multi- graphed matter or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons, but excluding the furnishing of information which is personal or individual in nature and which is not or may not be substan- tially incorporated in reports furnished to other persons, and excluding the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, electronic news services, radio broadcasters and television broadcasters in the collection and dissemination of news, and excluding meteorologi- cal services, AND EXCLUDING THE SALE OF AN ABSTRACT OF TITLE TO REAL PROPERTY TO BE USED FOR AGRICULTURAL PURPOSES TO EITHER A PROSPECTIVE PURCHASER OF REAL PROPERTY OR TO AN ATTORNEY REPRESENTING A PROSPECTIVE PURCHASER. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04930-01-3