S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4816

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             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 of

 EXPLANATION--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 or

S. 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.