Makes permanent Clinton county's authorization to impose an additional rate of sales and compensating use tax

Summary of provisions

Section 1 would amend clause 36 of subparagraph (i) of the opening paragraph of section 1210 of the Tax Law, which authorizes counties and cities to impose sales and use taxes at specified rates, to authorize Clinton County to impose an additional 1% rate of such taxes for the period commencing December 1, 2011, and ending November 30, 2013. Currently the county imposes an additional rate of 1% through November 30,2013.

Section 2 would amend Tax Law section 1224(cc), which provides that Clinton County has the sole right to impose the additional 1% rate of tax, and that such additional rate is not subject to preemption, to provide that net collections from the additional 1% rate of tax shall be used by the county solely for county purposes and shall not be subject to any revenue distribution agreement under Tax Law section 1262(c).

Section 3 provides that the bill would take effect immediately.

Existing law

Section 1210 of the Tax Law authorizes counties and cities to impose sales and compensating use taxes generally at a rate not to exceed 3%. Pursuant to section 1210(a), a county or city can impose the "general" sales and use taxes, consisting of the six subdivisions of section 1105 of the Tax Law, which imposes the State's sales taxes, and of the related compensating and use taxes in section 1110 of the Tax Law, which imposes the State's use taxes. Or, pursuant to section 1210(b), a county or a city can impose one or more of the taxes described in section 1105(b), (d), (e), or (f), which are known as the "segmented taxes," plus any related use taxes. If a locality imposes the general sales and use taxes at the maximum rate of 3%, the State Legislature may authorize the locality to impose such taxes at an additional rate. Clinton County currently imposes the "general" sales and use taxes at the rate of 3%, and an additional 1% rate, for a total rate of 4%.

The amendment of section 1224(cc) merely codifies an unconsolidated provision in section 4 of Chapter 179 of the Laws of 2007. This provision ensures that revenues from Clinton County's additional one percent rate may be retained by the county, to be used for county purposes. Otherwise, revenues from the additional rate might be subject to a revenue sharing agreement the county has with the city of Plattsburgh under Tax Law section 1262(c).

Section 1210(d) of the Tax Law requires a county or city to enact or amend its local law, ordinance or resolution imposing an additional rate of tax and to give notice of such enactment to the Commissioner of Taxation and Finance at least 90 days before the effective date, although the Commissioner can waive and reduce such 90 day period to not less than 30 days if the Commissioner finds it to be consistent with the Commissioner's duties to do so. Section 1210(e) of the Tax Law requires a county or city also to file a certified copy of its local enactment with the State Comptroller, Secretary of State and county or city clerk, within five days of enactment.

Justification

Clinton County has requested an authorization from the legislature to impose an additional one percent sales and compensating use tax above the standard three percent rate for the period beginning December 1, 2011, and ending November 30, 2013. Revenues from the additional tax will assist Clinton County in providing essential services, while maintaining a balanced budget.

Legislative history

New Bill.

Fiscal implications

None to the State.

Local fiscal implications

Approximately $12 million to Clinton County.

Effective date

This act shall take effect immediately.