NY State Senate Bill 2017-S4740

Senate Bill S4740

2017-2018 Legislative Session

Relates to the imposition of sales tax on the purchase of certain aircraft and vessels; repealer

download bill text pdf

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to investigations and government operations
Feb 27, 2017	referred to investigations and government operations

2017-S4740 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §1111, rpld §1115 sub (a) ¶ 21-a, sub (jj), §1118 sub 13, Tax L
Versions Introduced in 2015-2016 Legislative Session:: S4816

2017-S4740 (ACTIVE) - Summary

Relates to the imposition of sales tax on the purchase of certain aircraft and vessels.

2017-S4740 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4740

 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

 PURPOSE :

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

 JUSTIFICATION :

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.
 LEGISLATIVE HISTORY :

2015-26: S.4816-A (Funke)

 FISCAL IMPLICATIONS :

Recovery of revenue to the state.

 EFFECTIVE DATE :
Immediately

2017-S4740 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4740
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 27, 2017
                                ___________
 
 Introduced  by  Sen.  AVELLA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment 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.

                                                            LBD10308-01-7

 S. 4740                             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.
   § 2. Subdivision (q) of section 1111 of the tax  law,  as  amended  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. 4740                             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  subdi-
 vision  (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 commissioner
 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 appli-
 cations  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.
   §  3. Paragraph 21-a of subdivision (a) of section 1115 of the tax law
 is REPEALED.
   § 4. Subdivision (jj) of section 1115 of the  tax  law,  as  added  by
 section 1 of part SS of chapter 59 of the laws of 2015, is REPEALED.
   §  5.  Subdivision  13  of  section  1118  of the tax law, as added by
 section 2 of part SS of chapter 59 of the laws of 2015, is REPEALED.
   § 6. This act shall take effect immediately.

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