Relates to the meaning of the term "equipment" for purposes of department of taxation and finance audit or enforcement proceedings.
Ayes (58): Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Gallivan, Gianaris, Gipson, Griffo, Grisanti, Hannon, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Squadron, Stavisky, Stewart-Cousins, Tkaczyk, Valesky, Young, Zeldin
Excused (3): Golden, Hassell-Thomps, Smith
TITLE OF BILL: An act in relation to the meaning of the term "equipment" for purposes of department of taxation and finance audit or enforcement proceedings
This legislation would codify a holding of a Division of Tax Appeals decision to ensure fair and consistent tax treatment of certain equipment purchases by Qualified Empire Zone Enterprises (QEZE).
SUMMARY OF SPECIFIC PROVISIONS:
Section one defines personal tangible property subject to this legislation.
Section two defines a term relevant to Empire Zone tax exemption eligibility determinations.
Section three creates a mechanism for businesses to enforce their rights afforded by this bill.
The purpose of the Empire Zone Program was to increase economic activity in high unemployment and high poverty areas. This legislation supports this objective by preserving contractual agreements entered into by a QEZE in reliance upon promises by the state that equipment, purchased and then used at an Empire Zone location, would qualify for the Empire Zone sales tax exemption. Preserving these contracts will protect the value of New York businesses' property and investments, and provide clarity to these businesses in their work to comply with the Tax Law.
This bill follows a Division of Tax Appeals decision that held, for the purpose of Empire Zone tax exemption determinations, that the process of having inventoried, organized, stored and distributed property by a QEZE from its Empire Zone location would qualify a QEZE for a sales tax exemption for purchases. See Eastern Paramedics, Inc., DTA Nos. 822836 and 822837 (N.Y. Div. Tax App. Sept. 10, 2010).
It is not anticipated that there will be any fiscal impact in regard to tax revenues collected from QEZE approved businesses, as such revenues have not been collected as they are subject to ongoing litigation.
This act shall take effect immediately, be deemed to have been in effect as of March 1, 2001, and apply to any Department of Taxation and Finance matter commencing on or after March 1, 2001.
STATE OF NEW YORK ________________________________________________________________________ 7382 IN SENATE May 14, 2014 ___________Introduced by Sen. VALESKY -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT in relation to the meaning of the term "equipment" for purposes of department of taxation and finance audit or enforcement proceedings THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. For the purposes of this act, the term "equipment" shall mean a machine or system, and any part or subassembly thereof. S 2. Equipment shall be considered to be "directly and predominantly" used, as such term is used in clause (i) of paragraph 1 of subdivision (z) of section 1115 of the tax law, as repealed by section 30 of part S-1 of chapter 57 of the laws of 2009 and last amended by section 17 of part CC of chapter 85 of the laws of 2002, for the purposes of any department of taxation and finance audit or enforcement proceeding, or any other administrative matter or proceeding of such department, involving the interpretation, enforcement, or administration of such provision of the tax law, when such equipment was received, inventoried or organized, and then prepared for distribution at an empire zone location by the qualified empire zone enterprise operating at such location, provided that such equipment, upon distribution, is stocked, repaired, cleaned or otherwise handled for the purpose of maintenance or upkeep by employees of such qualified empire zone enterprise whose duties related to such service work originate from, and terminate at, the same empire zone location. S 3. Notwithstanding sections 2006, 2012, 2014, 2016 and 2018 of the tax law, part 3000 of the tax appeals tribunal rules of practice and procedure, or any determination of the division of tax appeals, the division of tax appeals shall accept a petition from any person or enti- ty that contests a determination or decision of the division of tax appeals related to the interpretation of the term "directly and predomi- nantly", as such term is used in the section of the tax law referenced in section two of this act, provided that such original determination or decision of the division of tax appeals was contrary to the definitionEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15187-01-4 S. 7382 2
of such term as established by section two of this act. The division of tax appeals shall process and review, provide for a hearing of, and render a determination and decision in response to any such petition in accordance with the process set forth in part 3000 of the tax appeals tribunal rules of practice and procedure. Any determination or decision issued by the division of tax appeals pursuant to this act shall super- sede any inconsistent determination or decision, be deemed conclusive upon all parties and shall not be subject to review by any other unit in the division of tax appeals, by the tax appeals tribunal or by any court of the state. S 4. This act shall take effect immediately, shall be deemed to have been in full force and effect on and after March 1, 2001, and shall apply to any audit or enforcement proceeding of the department of taxa- tion and finance, or any other administrative matter or proceeding of such department, commencing on or after March 1, 2001.