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.

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S663-2013 Actions

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

S663-2013 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.

S663-2013 Text

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

                                     663

                         2013-2014 Regular Sessions

                              I N  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

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD03396-01-3

 S. 663                              2

  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.