Authorizes certain counties, cities and school districts to impose up to a three percent rate of sales and compensating use taxes; repealer

Summary of provisions

Section 1 repeals the opening paragraph of section 1210 of the Tax Law and replaces it with a new opening paragraph. Currently, the opening paragraph of section 1210 authorizes all counties and cities to impose a sales and compensating use tax not in excess of 3%. Additionally, the current opening paragraph authorizes certain cities and counties to impose an additional rate of sales and use tax for the term and rates specified for each of these jurisdictions in the current opening paragraph. The new opening paragraph would authorize all counties and cities to impose a sales and compensating use tax not in excess of 3%. Additionally, the new opening paragraph would authorize the counties and cities listed in new subdivision (k) of section 1210 to permanently impose an additional rate of sales and compensating use tax.

Section 2 makes technical amendments to paragraph 1 of subdivision (a) of section 1210 of the Tax Law to conform the paragraph to section 1210.

Section 3 repeals subparagraph (iii) of paragraph 3 of subdivision (a) of section 1210 of the Tax Law and renumbers subparagraph (iv) of paragraph 3 of subdivision (a) of section 1210 to subparagraph (iii).

Section 4 repeals subparagraph (iii) of paragraph 3 of subdivision (a) of section 1210 of the Tax Law because other provisions of section 1210 render this subparagraph obsolete.

Section 5 adds new subdivision (k) to section 1210 of the Tax Law. New subdivision (k) provides the authority for the counties and cities specified in the subdivision to permanently impose a sales and compensating use tax at a rate that does not exceed the rate specified in new subdivision (k) for such county or city.

Sections 6 through 35 makes technical corrections that ensure that the amended sections conform to the provisions of this bill. Sections 1210-D and 1210-E of the Tax Law are repealed because the additional rates authorized by such sections have been included in new subparagraph (k) of section 1210.

Section 36 adds 12 new sections to Part 4 of Article 29 of the Tax Law, which prescribes the rules for the disposition of revenue. These new sections codify current unconsolidated law.

Section 37 effective date.

Justification

As more and more localities have been authorized over the years to impose additional rates of sales and use taxes, the requirement to have their authority renewed every other year has placed an extraordinary administrative burden on them incurring additional time and expense by staff.

This bill would provide local mandate relief by easing or eliminating this burden. The biennial renewal bills also burden the State Legislature every other year in the same way. Drafting and renewing the State enabling legislation for this ever-expanding population of counties and cities, and then preparing model enactments for them to extend the additional rates, have also tied up the Tax Department's resources. Often, a county or city seeks to rush a bill through the Legislature to meet a local fiscal emergency. These bills often get passed without sufficient time for the Tax Department to notify vendors and other persons required to collect taxes. Those businesses then do not have sufficient time to adjust their cash registers and take other steps necessary to collect the correct amount of tax on the effective date of the new rate, putting them at risk and threatening the locality's revenues until the businesses can come into compliance.

By authorizing counties and cities each to continue by local enactment their existing rate of tax permanently, this will alleviate the workload for those laboring in the counties, cities and the New York State Tax Department. It will furthermore allow counties and cities to reduce rates when conditions allow, while still providing the opportunity for an increase if necessary.

This legislation benefits all stakeholders and streamlines and optimizes state and local government operations. It also helps to minimize compliance problems for businesses required to collect sales and use taxes because the rate currently existing will be permanently authorized. Moreover, businesses required to collect taxes will have notification of rate change in a timely fashion, improving operations.

Legislative history

New bill.

Fiscal implications

LOCAL FISCAL IMPLICATIONS: Provides certainty for local budget planning.

Effective date

September 1, 2011.