Grants sales and use tax exemption for certain tangible personal property and services used in the operation of recreational skiing facilities

Summary of provisions

Section 1 - Amends subdivision (a) of section 1115 of the tax law by adding paragraph (44) to exempt the production of snow, uphill transpor- tation of skiers, and/or the grooming and maintenance of snow from sales and compensating use tax.

Section 2 - Amends section 1115 of the tax law by adding a new subdivi- sion (hh) to exempt the production of snow as well as the equipment to transport skiers uphill and to groom snow by any recreational ski area from sales and compensating use tax.

Section 3 - Contains the effective date.

Justification

New York State ranks fifth in the nation in skier visits per year despite the fact that the state is the second highest when compared to the percentage of their population that skis. New York State currently exports a number of skiers and their families to the New England states. In order to remain competitive with our neighbors to the east which aggressively campaigns for our skiers and those whom visit New York, this state needs to upgrade equipment and maintain state of the art snowmaking systems, and this legislation will greatly assist them in the purchase of new equipment and upgrading of snowmaking systems.

The ski industry employs over 10,000 New York State residents serving on average 4 million skier visits per year with an economic impact of over $1 billion. With over 40 ski areas, New York State has more ski areas than any other state with over $4.8 million in sales tax paid each year. Local property taxes paid amount to over $3.5 million. Snow making is critical to the ski industry and this legislation will provide energy tax relief, which is one of the highest expenses faced each winter season.

The three state owned ski areas in New York State are exempt from the state sales tax while privately owned ski areas are not. This has created an unfair business environment for these privately owned ski areas, many of which are located in upstate New York. This bill would

provide that all ski areas that purchase energy efficient snow making equipment and make snow shall be exempt from this tax. The fuel, gas, electricity, and refrigeration, and gas, electric, and refrigeration services used directly for the production of snow would now be exempt from the state sales tax as will the energy efficient equipment. The manufacture of snow is not eligible for a tax exemption under the defi- nition of manufacturing because snow is not sold as a product. The climate and business environment has changed such that ski areas must make snow to remain viable in this industry.

This legislation would eliminate the sales tax on the purchase of quali- fying energy efficient lift and grooming equipment. New safer equipment to transport skiers has become available that will move more people with less energy and manpower required. Grooming equipment is powered by diesel fuel, and advancements in such technology has made the newer machines much more energy efficient with less emissions and more horse- power. Wisconsin, Minnesota, Utah and Colorado have enacted similar laws that apply not only to the purchase of new energy efficient equipment but also for the use and compensating tax on snowmaking energy.

Legislative history

2009-10: S.836 Referred to Energy & Telecommunications; A.519 Referred to Ways & Means 2008: S.2343A; A.5392A Ways & Means 2007: S.2343 Passed Senate; A.5392 Ways & Means 2005-06: S.720 Passed Senate; A.7995 Ways & Means

Fiscal implications

To be determined.

Effective date

This act shall take effect on the first of July next succeeding the date on which it shall have become a law.