Directs the department to issue the tax-exemption coupons contemplated by section 284-e of the tax law no later than 60 days after enactment

BILL NUMBER:A10177

Title of bill

An act to amend the tax law, in relation to issuing coupons for tax exempt fuel sales on Indian reservations

Purpose or general idea of bill

Directs the department to issue the tax-exemption coupons contemplated by section 284-e of the tax law no later than 60 days after enactment.

Summary of specific provisions

Section 1: Amends paragraph (b) of subdivision 1 and paragraph (d) of subdivision 3 of section 284-e of the tax law, as added by section 4 of part k of chapter 61 of the laws of 2005, are amended and a new subdivision 6 is added to provide that a distributor shall sell only motor fuel or Diesel motor fuel upon which the motor fuel tax or Diesel motor fuel tax has been previously paid or assumed by such distributor to Indian nations or tribes or to reservation motor fuel sellers and other purchasers, but that the tax shall not be collected on any purchase for which the purchaser presents a valid Indian tax-exemption coupon.

Section 2: Provides that this bill shall take effect on the sixtieth day after it shall have become a law.

Justification

Tax Law Section 284-e took effect in 2006 in order to establish a mechanism for the State to collect excise tax from distributors on motor fuel and Diesel motor fuel sold through Native American outlets to non-tribal members, while also providing a means for qualified Indians to purchase tax-exempt motor fuel and Diesel motor fuel for tribal use and/or consumption. That legislation did not specify a deadline for the Department of Taxation and Finance (the Department) to issue tax-exemption coupons. Since Section 284-e's enactment, the Department has not issued the requisite tax-exemption coupons and has not enforced other aspects of the Tax Law that would otherwise require distributors to sell motor fuel and Diesel motor fuel on which the tax has been previously paid or assumed by such distributors to tribal outlets for resale to non-tribal members.

This legislation would direct the Department to issue the tax-exemption coupons contemplated by Section 284-e no later than 60 days after enactment, which would allow more than sufficient time for the Department to issue the requisite coupons. If enacted, this bill would remove the Department's discretion with regard to whether to issue tax-exemption coupons, and would mandate the issuance of such coupons within sixty days. The bill makes clear that the Department's failure to issue such coupons would not relieve the distributors' obligation to sell only motor fuel or Diesel motor fuel on which the tax has been previously paid or assumed by such distributors as of the 60 day deadline. However, the bill also specifies that in the event the Department fails to issue the requisite coupons, the Department would be subject to an action for injunctive relief directing that the coupons be issued as contemplated, as well as for refunds to qualified Indians for tax-exempt sales that occur after the 60 day deadline.

Prior legislative history

New bill.

Fiscal implication

Revenue generating.

Effective date

This act shall take effect on the sixtieth day after it shall have become a law.