Increases from 3/4% to 1%, the rate of additional sales and compensating use taxes the county of Essex is authorized to impose and extends expiration thereof

BILL NUMBER:S4531

Title of bill

An act to amend the tax law, in relation to authorizing the county of Essex to impose an additional one percent of sales and compensating use tax

Purpose

Increases from three-quarters of a percent to one percent, the rate of additional sales and compensating use taxes the county of Essex is authorized to impose and extends the expiration thereof.

Summary of provisions

Section one of the bill would amend clause 36 of subparagraph (i) of the opening paragraph of section 1210 of the tax law, to authorize the county of Essex to impose an additional one percent of sales and compensating use taxes for the period commencing December 1, 2013 and ending November 30, 2015.

Section two of the bill would amend subparagraph (iii) of the opening paragraph of section 1210 of the tax law, regarding the calculation of the maximum tax rate for preemption purposes under section 1224 of the tax law, to provide that Essex Counties additional one percent rate would be excluded from that calculation.

Section three of the bill would amend subdivision (cc) of section 1224 of the tax law to provide that Essex County has the sole right to impose the additional one percent rate of tax.

Section four of the bill contains the effective date.

Existing law

Essex County currently imposes the general three percent rate of sales and use taxes pursuant to section 1210(a)(1)(i) of the tax law. In addition to its underlying three percent rate, Essex County currently imposes an additional three-quarters of one percent rate for the period beginning on December 1, 2011 and ending November 30, 2013. Pursuant to section 1224(cc) of the tax law, Essex County has the sole right to impose its additional tax rate.

Justification

The Essex County Board of Supervisors has requested introduction of this legislation to allow the county to impose and additional one quarter of one percent rate of sales tax. Due to the estimated loss of nearly $4 million in revenue from all sources including state and federal funds, the county is trying to seek additional sources of revenue to balance their budget. Essex County's current three and three-quarters percent is not sufficiently adequate to offset their increased costs. Essex County intends to direct all additional income to be derived from the additional one quarter of one percent to go directly to reduce the real property tax levy.

Legislative history

2011: S. 344-B Referred to Investigations and Government Operations; A. 150-B Third Calendar 2010: S. 8214-A Referred to Rules; A. 11466-A Passed Assembly

Fiscal implications

None to the State

Local fiscal implications

The county estimates that this will generate approximately $1.6 million in revenue.

Effective date

This act shall take effect December 1, 2013; provided that on and after the date this act shall have become a law, Essex county shall be authorized to adopt and amend local laws, ordinances, or resolutions to impose the additional rate of tax authorized by this act to take effect as provided for in this act.