Provides for temporary suspension of sales and compensating use tax on certain services engaged for clean-up activities associated with a disaster

Title of bill

An act to amend the tax law, in relation to suspending the state sales and compensating use tax on certain disaster clean-up items during a state of emergency and authorizing localities to waive such tax during the same period

Purpose of the bill

To assist property owners during times of emergency cleanup by waiving sales tax on cleanup activities.

Summary of specific provisions

Section 1 amends section 1115 of the Tax Law by adding a new subsection (gg) to allow the Governor to temporarily suspend, by executive order, during a state disaster emergency, and for up to sixty days after the end of such state of emergency, sales and compensating taxes associated with property clean up activities taxable under subdivision (c) of Tax law section 1105 and Tax law 1110.

Section 2 amends Tax Law subparagraph 1210(a)(1) to add the exemption provided under new section 1115 (gg).

Section 3 amends Tax Law subdivision 1210(d) to permit local governments the option to suspend their local sales and use taxes on clean up activities as described in Tax Law 1115(g) for the same period that state taxes are suspended.

Section 4 amends Tax Law 1210 by adding a new subdivision (p) permitting a city with a population of over one million, by resolution, to suspend sales and use taxes during the same periods of clean up activities described in Tax Law section 1115.

Section 5 permits any county or city imposing sales and compensating use taxes pursuant to Article 29 of the Tax Law, or any city with a population of over one million imposing sales and compensating use taxes pursuant to Tax Law section 1107 to suspend sales and use taxes for clean up activities during the same periods of clean up activities described in Tax Law section 1115.

Section 6 provides that the act shall take effect immediately and shall apply to any sales made and uses occurring during exemption periods on or after the date of enactment.

Justification

Sales and compensating taxes are imposed on lawn maintenance activities pursuant to Tax Law 1105(c). During times of storm, flood, hurricane or other disaster, such clean up costs can be enormous and overwhelming for property owners. During recent snow storms in Western New York, trees and branches covered lawns and driveways, and the costs for cleaning up this disaster for homeowners was often thousands of dollars. These costs provided an unexpected and unwarranted windfall to the state and local governments in the form of sales taxes generated by this emergency. Clearly, any part of the state could suffer a similar disaster, whether it be caused by a hurricane, heavy rains, snow or wind. This bill gives the Governor greater flexibility to assist and protect our residents with the option to suspend sales taxes on clean up activities for the duration of the state of emergency and up to sixty days thereafter, and also allows cities and counties to similarly suspend their sales taxes on these activities as well. When residents in our state face such an emergency, it is not proper for the state to prosper from their misfortune.

Prior legislative history

2007/08: S.2837/A.7311--INVESTIGATIONS/Ways & Means

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.