Bill S663-2013

Relates to computing sales and compensating use tax retail sales of motor fuel and diesel motor fuel at a rate of cents per gallon in New York city

Relates to computing sales and compensating use tax in regard to retail sales of motor fuel and diesel motor fuel at a rate of cents per gallon in cities of one million or more.

Details

Actions

  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S663

TITLE OF BILL:

An act to amend the tax law, in relation to computing sales and compensating use tax retail sales of motor fuel and diesel motor fuel at a rate of cents per gallon in cities of one million or more

PURPOSE OR GENERAL IDEA OF THE BILL:

The purpose of this legislation is to require the city of New York to compute its sales and compensating use tax for gasoline and diesel fuels at a flat, cents per gallon, rate rather than the current percentage per gallon rate.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends paragraphs 3, 4 and 6 of subdivision (m) of section 1111 of the tax law, as amended by section 1 of part M-1 of chapter 109 of the laws of 2006, to remove prior discretion afforded to the legislative body of the city of New York to choose to compute its sales and compensating use taxes at a flat cents per gallon rate. This will result in the city of New York being required to compute its sales and compensating use tax for gasoline and diesel fuels at flat, cents per gallon, rate rather than the current percentage per gallon rate.

Section 2 of the bill states that a municipality shall set the rate of tax as provided in paragraph (3) of subdivision (m) of section 1111 of the tax law, beginning June 1, 2013, by local law, ordinance or resolution, and such municipality shall mail, by certified or registered mail, a certified copy of such local law, ordinance or resolution to the commission of taxation and finance at his or her office in Albany on or before May 21, 2013.

Section 3 sets forth an immediate effective date.

JUSTIFICATION:

Pursuant to New York State tax law § 1111(m) (1), consumers pay a sales and compensating use tax of 8 cents per gallon for retail sales of motor fuel and diesel motor fuel. This flat rate remains constant regardless of the fluctuations in the base price of a gallon of motor or diesel motor fuel.

However, in the city of New York, in addition to the state sales and compensating use tax on gas, consumers are also forced to pay a city sales and compensating use tax based on a percentage of the sale price of a gallon rather than a flat/fixed cents per gallon tax. The current city sales and compensating use tax on the sale of motor and diesel motor fuel is 4.00% per gallon. The city has continued this policy despite being given authority by the state to go to a flat rate policy in 2006.

Given the rapid and tremendous increase in the cost of oil in the past few months, the application of a percentage based city sales and compensating use tax has resulted in the city of New York benefitting from an undeserved windfall in tax revenue on the backs of consumers who must purchase gas within city lines. Not only are consumers being gouged by the base price of oil but they are also being gouged by the city of New York in its percentage rate collection of sales and compensating use tax.

This legislation will amend the New York Tax Law and require the city of New York to impose flat cents per gallon sales and compensating use tax on the sale of motor and diesel motor fuel.

LEGISLATIVE HISTORY:

2011-12: S.6852

FISCAL IMPLICATIONS:

Yet to be determined.

EFFECTIVE DATE:

This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 663 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sens. AVELLA, ADAMS, DILAN, PARKER, SAVINO -- 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 computing sales and compen- sating use tax retail sales of motor fuel and diesel motor fuel at a rate of cents per gallon in cities of one million or more THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraphs 3, 4 and 6 of subdivision (m) of section 1111 of the tax law, as amended by section 1 of part M-1 of chapter 109 of the laws of 2006, are amended to read as follows: (3) [Paragraph one of this subdivision shall not apply to the] THE sales and compensating use taxes imposed by subdivision (a) of section eleven hundred seven of this article in regard to retail sales of motor fuel and diesel motor fuel[. However, the legislative body of a city in which the taxes imposed by such section eleven hundred seven are in effect, by local law, ordinance, or resolution in exactly the form prepared by the commissioner, may elect that such taxes, in regard to retail sales of motor fuel and diesel motor fuel,] shall be computed, as determined by the commissioner, at a rate of cents per gallon, rounded to the nearest cent, equal to two or three dollars, as determined by the [municipality] CITY IN WHICH SUCH TAX IS IMPOSED, multiplied by the percentage rate of such taxes within the municipality. (4) [Paragraph] EXCEPT AS PROVIDED IN PARAGRAPH THREE OF THIS SUBDIVI- SION, PARAGRAPH one of this subdivision shall not apply to the sales and compensating use taxes imposed by a local law, ordinance or resolution of a municipality pursuant to the authority of subpart B of part one of article twenty-nine of this chapter, in regard to retail sales of motor fuel and diesel motor fuel. The legislative body of such a municipality, by local law, ordinance or resolution in exactly the form prepared by
the commissioner, may elect that its sales and compensating use taxes, in regard to the retail sale of motor fuel and diesel motor fuel, shall be computed, as determined by the commissioner, at a rate of cents per gallon, rounded to the nearest cent, equal to two or three dollars, as determined by the municipality, multiplied by the percentage rate of such taxes within the municipality. (6) A local law, ordinance or resolution SETTING THE RATE OF TAX PURSUANT TO PARAGRAPH THREE OF THIS SUBDIVISION OR making or revoking the election made pursuant to paragraph [three or] four of this subdivi- sion must go into effect in accordance with the provisions of subdivi- sions (d) and (e) of section twelve hundred ten of this chapter. S 2. A municipality shall set the rate of tax as provided by paragraph (3) of subdivision (m) of section 1111 of the tax law, beginning June 1, 2013, by local law, ordinance or resolution, and such municipality shall mail, by certified or registered mail, a certified copy of such local law, ordinance or resolution to the commissioner of taxation and finance at his or her office in Albany on or before May 21, 2013. S 3. This act shall take effect immediately.

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