Authorizes the city of New Rochelle to impose certain taxes on utilities

BILL NUMBER:S5361

Title of bill

An act to amend the general city law, in relation to authorizing the city of New Rochelle to impose certain taxes on utilities

Purpose or general idea of bill

Currently, any city of this state is authorized to impose a gross receipts tax on utilities at a rate not exceeding one percent of gross income or of gross operating income, as the case may be, except that Rochester, Buffalo and Yonkers have the authority to impose a gross receipts tax on utilities at a rate not exceeding three percent of gross income or gross operating income. This bill increases to three percent the maximum authorized gross receipts tax that the city of New Rochelle may impose on utilities, making the maximum level for New Rochelle commensurate with the authorizations already in effect for Rochester, Buffalo and Yonkers.

Summary of specific provisions

Section 1 amends the opening paragraph of section 20-b of the general city law, as amended by chapter 287 of the laws of 1979, to increase the maximum gross receipts tax that New Rochelle may impose on utilities to three percent of gross income or gross operating income, adding New Rochelle to Rochester, Buffalo and Yonkers, all of which are authorized to impose a gross receipts tax at a rate not exceeding three percent. Subject to those exceptions, Section 1 provides that any city of this state, acting through its local legislative body, is authorized to impose a gross receipts tax on utilities at a rate not exceeding one percent of gross income or gross operating income. Section 1 further provides that it does not prevent any city from adopting laws to exempt from the gross receipts tax omnibus corporations subject to the supervision of the state department of public service. Section 1 also amends the opening paragraph of section 20-b by deleting a reference to article 3-a of the public service law, which has been repealed.

Section 2 provides the effective date, which is immediate.

Justification

This legislation will allow a new tax imposition within territorial limits of the city of New Rochelle. The city has requested this authorization from the state legislature to impose additional taxes on utilities not to exceed three percent of gross income or gross operating income.

Section 20-b of the General City Law authorizes cities to impose a gross receipts tax on the sale of utilities, not, exceeding one percent of gross income, for transactions within their territorial limits. Subsequent legislation authorized the cities of Yonkers,

Rochester and Buffalo to impose the gross receipts tax at a rate not to exceed three percent.

New Rochelle's local government is working to maintain critical services in a difficult economy, without further burdening hard-pressed property taxpayers. The option to increase the local utility gross receipts tax rate will provide the city of New Rochelle with much-needed fiscal flexibility as it confronts budget challenges.

The gross receipts tax on utilities is, in certain respects, more fair and less onerous than the property tax. It distributes the burden of taxation more broadly, rather than concentrating the tax burden only on property taxpayers. Further, because it is based on the consumer's level of utility usage, it allows ratepayers some control over their own costs through efficiency and waste reduction. This has the added environmental benefit of providing an incentive for energy and resource conservation.

Legislative history

New Bill.

Fiscal implications

None to the state. Additional revenues to the city of New Rochelle.

Effective date

Immediately.