Relates to providing a sales and compensating use tax exemption in certain areas of New York city

BILL NUMBER:S3172A

Title of bill

An act to amend the tax law, in relation to providing a sales and compensating use tax exemption in certain areas of New York city

Purpose or general idea of bill

To provide that there will be no sales tax, on goods or services that are less than $110 for a period of six months from the first day construction has commenced within a certain portion of the Second Avenue Subway construction to assist the "Shop Second Avenue" campaign currently underway in bringing consumers in the doors of these beleaguered businesses that are likely to continue shopping there after the sales tax is reinstated.

Summary of provisions

Section 1 adds a new paragraph 39 to subdivision (b) of section 1101 of the tax law defining a good or service as having a value of less than one hundred ten dollars in the aggregate. Section 2 adds a new paragraph 44 to subdivision (a) of section 1115 of the tax law providing a sale tax exemption for goods and services for a six month period within the business zone area commencing on the first day of a period of authorized construction. This legislation also defines the business zone area as well as empowers the commissioner to determine the period of authorized construction for each business zone area.

Section 3 contains the effective date.

Justification

The East Side of Manhattan is currently undergoing one of the most significant construction projects in decades -- the construction of the long awaited Second Avenue subway. The construction has begun and will eventually run through parts of eight Assembly Districts. While the Second Avenue subway will eventually bring much needed transportation improvements to the East Side, it is currently having a substantially negative effect on local businesses. Some establishments in the heart of the initial construction have lost 20 to 30 percent of business, and others have closed permanently.

This bill would create a Second Avenue Subway Construction Sales Tax Free Zone with the purpose of providing incentive for consumers to shop at businesses currently affected by the construction of the Second Avenue Subway who are likely to continue shopping and supporting these businesses after six months have passed and the sales tax is reinstated.

Prior legislative history

2008: A.10743 Referred to Ways and Means; S.8191 Referred to Investigations and Government Operations.

Fiscal implications for state local governments

Unknown.

Effective date

This act would take effect immediately.