Relates to the imposition of sales tax on the purchase of certain aircraft and vessels.
TITLE OF BILL: An act to amend the tax law, in relation to sales and compensating use taxes imposed with respect to certain aircraft and vessels by article 28 and pursuant to the authority of article 29 of such law; and to repeal certain provisions of such law relating thereto
To repeal Part SS and Part TT of the 2015 New York State Revenue Budget Bill; S.2009/A.3009; which provided certain aircrafts and vessels a tax exemption after the first $230,000 of sale price.
SUMMARY OF PROVISIONS:
Amends the sections of tax law that were changed by Part SS and TT of the 2015 New York State Revenue Budget. Bill, which provided a tax exemption on the receipt of sales in excess of $230,000 on vessels and certain aircrafts.
Section 1 Adds noncommercial aircraft having a seating capacity of less than twenty passengers and maximum payload capacity of less than six thousand pounds back into Paragraph (A) of subdivision (i)of section 1111 of the tax law.
Section 2 Adds `aircraft' back into section 1111 of the tax law
Section 3 Repeals paragraph 21-a of Section 1115 of tax law, which was created by Chapter 59 of the laws of 2015
Section 4 Repeals subdivision (jj) of section 1115 of the tax law, which was created by Chapter 59 of the laws of 2015
Section 5 Repeals subdivision 13 of section 1118 of tax law, which was created by Chapter 59 of the laws of 2015
Section 6 Provides for the effective date
Buried in the Revenue portion of the 2015-2016 State Budget was a bill aimed at exempting yachts and private aircraft from sales and compensating use taxes for costs of $230,000 and above. Sales Tax exemptions can be good public policy when they seek to encourage important public policy prerogatives or incentivize the sale of particular technologies or products which create jobs. One such example in this year's State budget was a sales tax exemption for power purchase agreements for solar energy. This exemption contributes to a laudable goal-producing clean energy and reducing greenhouse gas
emissions-while also helping to create production and installation jobs in the solar industry. Sales tax exemptions should not be used however, to provide benefits to a very few New Yorkers who can afford a particular product, while producing no discernible job creation benefit. The sales tax exemption for certain yachts and planes is bad public policy. Tax reductions should be broad based and above-all they should provide benefits to average hard working New Yorkers. For example, in Monroe and Ontario counties that comprise my Senate District-the median average family income is $52,700 and $56,749 respectively. Families in the Finger Lakes region are working hard every day to pay the bills and send their kids to school. These families need tax relief, in order to better meet their basic needs. As such-the recently adopted sales tax exemption for yachts and private planes of over $230,000 should be immediately repealed and any money that may become available should be used for broader based tax relief of targeted job creation programs that help hardworking taxpayers.
Recovery of revenue to the state.
Immediately-allowing the repeal of this sales tax exemption due to take effect on September 1, 2015.
STATE OF NEW YORK ________________________________________________________________________ 4816 2015-2016 Regular Sessions IN SENATE April 20, 2015 ___________Introduced by Sens. FUNKE, RITCHIE -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to sales and compensating use taxes imposed with respect to certain aircraft and vessels by article 28 and pursuant to the authority of article 29 of such law; and to repeal certain provisions of such law relating thereto THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (A) of subdivision (i) of section 1111 of the tax law, as amended by section 1 of part TT of chapter 59 of the laws of 2015, is amended to read as follows: (A) Notwithstanding any contrary provisions of this article or other law, with respect to any lease for a term of one year or more of (1) a motor vehicle, as defined in section one hundred twenty-five of the vehicle and traffic law, with a gross vehicle weight of ten thousand pounds or less,
[or](2) a vessel, as defined in section twenty-two hundred fifty of such law (including any inboard or outboard motor and any trailer, as defined in section one hundred fifty-six of such law, leased in conjunction with such a vessel) AND (3) NONCOMMERCIAL AIRCRAFT HAVING A SEATING CAPACITY OF LESS THAN TWENTY PASSENGERS AND A MAXIMUM PAYLOAD CAPACITY OF LESS THAN SIX THOUSAND POUNDS, or an option to renew such a lease or a similar contractual provision, all receipts due or consideration given or contracted to be given for such property under and for the entire period of such lease, option to renew or similar provision, or combination of them, shall be deemed to have been paid or given and shall be subject to tax, and any such tax due shall be collected, as of the date of first payment under such lease, option to renew or similar provision, or combination of them, or as of the date of registration of such property with the commissioner of motor vehicles, whichever is earlier. Notwithstanding any inconsistent provisions ofEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10484-02-5 S. 4816 2
subdivision (b) of this section or of section eleven hundred seventeen of this article or of other law, for purposes of such a lease, option to renew or similar provision originally entered into outside this state, by a lessee (1) who was a resident of this state, and leased such prop- erty for use outside the state and who subsequently brings such property into this state for use here or (2) who was a nonresident and subse- quently becomes a resident and brings the property into this state for use here, any remaining receipts due or consideration to be given after such lessee brings such property into this state shall be subject to tax as if the lessee had entered into or exercised such lease, option to renew or similar provision, or combination thereof, for the first time in this state and the relevant provisions of sections eleven hundred ten concerning imposition and computation of tax, eleven hundred eighteen concerning exemption from use tax for tax paid to another jurisdiction, eleven hundred thirty-two concerning presumption of taxability and conditions for registration and eleven hundred thirty-nine concerning refunds, of this article, shall be applicable to any sales or compensat- ing use tax paid by the lessee before the lessee brought the property into this state, except to the extent that any such provision is incon- sistent with a provision of this subdivision. For purposes of this subdivision, (1) a lease for a term of one year or more shall include any lease for a shorter term which includes an option to renew or other like provision (or more than one of such option or other provision) where the cumulative period that the lease, with or without such option or provision, may be in effect upon exercise of such option or provision is one year or more and (2) receipts due and consideration given or contracted to be given under any such lease or other provision for excess mileage charges shall be subject to tax as and when paid or due. S 2. Subdivision (q) of section 1111 of the tax law, as added by section 2 of part TT of chapter 59 of the laws of 2015, is amended to read as follows: (q) (1) The exclusions from the definition of retail sale in subpara- graph (iv) of paragraph four of subdivision (b) of section eleven hundred one of this article shall not apply to transfers, distributions, or contributions of
[a]AN AIRCRAFT OR vessel, except where, in the case of the exclusion in subclause (I) of clause (A) of such subparagraph (iv), the two corporations to be merged or consolidated are not affil- iated persons with respect to each other. For purposes of this subdivi- sion, corporations are affiliated persons with respect to each other where (i) more than five percent of their combined shares are owned by members of the same family, as defined by paragraph four of subsection (c) of section two hundred sixty-seven of the internal revenue code of nineteen hundred eighty-six; (ii) one of the corporations has an owner- ship interest of more than five percent, whether direct or indirect, in the other; or (iii) another person or a group of other persons that are affiliated persons with respect to each other hold an ownership interest of more than five percent, whether direct or indirect, in each of the corporations. (2) Notwithstanding any contrary provision of law, in relation to any transfer, distribution, or contribution of [a]AN AIRCRAFT OR vessel that qualifies as a retail sale as a result of paragraph one of this subdivision, the sales tax imposed by subdivision (a) of section eleven hundred five of this part shall be computed based on the price at which the seller purchased the tangible personal property, provided that where the seller or purchaser affirmatively shows that the seller owned the property for six months prior to making the transfer, distribution orS. 4816 3
contribution covered by paragraph one of this subdivision, such AIRCRAFT OR vessel shall be taxed on the basis of the current market value of the AIRCRAFT OR vessel at the time of that transfer, distribution, or contribution. For the purposes of the prior sentence, "current market value" shall not exceed the cost of the AIRCRAFT OR vessel. See subdivi- sion (b) of this section for a similar rule on the computation of any compensating use tax due under section eleven hundred ten of this part on such transfers, distributions, or contributions. (3) A purchaser of
[a]AN AIRCRAFT OR vessel covered by paragraph one of this subdivision will be entitled to a refund or credit against the sales or compensating use tax due as a result of a transfer, distrib- ution, or contribution of such AIRCRAFT OR vessel in the amount of any sales or use tax paid to this state or any other state on the seller's purchase or use of the AIRCRAFT OR vessel so transferred, distributed or contributed, but not to exceed the tax due on the transfer, distrib- ution, or contribution of the AIRCRAFT OR vessel or on the purchaser's use in the state of the AIRCRAFT OR vessel so transferred, distributed or contributed. An application for a refund or credit under this subdi- vision must be filed and shall be in such form as the commissioner may prescribe. Where an application for credit has been filed, the applicant may immediately take such credit on the return which is due coincident with or immediately subsequent to the time the application for credit is filed. However, the taking of the credit on the return shall be deemed to be part of the application for credit. Provided that the commission- er may, in his or her discretion and notwithstanding any other law, waive the application requirement for any or all classes of persons where the amount of the credit or refund is equal to the amount of the tax due from the purchaser. The provisions of subdivisions (a), (b), and (c) of section eleven hundred thirty-nine of this article shall apply to applications for refund or credit under this subdivision. No interest shall be allowed or paid on any refund made or credit allowed under this subdivision. If a refund is granted or a credit allowed under this para- graph, the seller or purchaser shall not be eligible for a refund or credit pursuant to subdivision seven of section eleven hundred eighteen of this article with regard to the same purchase or use. S 3. Paragraph 21-a of subdivision (a) of section 1115 of the tax law is REPEALED. S 4. Subdivision (jj) of section 1115 of the tax law is REPEALED. S 5. Subdivision 13 of section 1118 of the tax law is REPEALED. S 6. This act shall take effect immediately; provided that sections one, two and three of this act shall take effect on the same date and in the same manner as part TT of chapter 59 of the laws of 2015 takes effect; and sections four and five of this act shall take effect on the same date and in the same manner as part SS of chapter 59 of the laws of 2015 takes effect.