Extends the authority of the county of Nassau to impose additional sales and compensating use taxes; extends local government assistance programs in Nassau county

BILL NUMBER:S5146

Title of bill

An act to amend the tax law, in relation to extending the authority of the county of Nassau to impose additional sales and compensating use taxes, and extending local government assistance programs in Nassau county

Description

This bill amends section 1210 the Tax Law to extend until November 30, 2015 the authorization for Nassau County to impose sales and compensating use taxes at the current levels and amends section 1262-e of the Tax Law to extend through 2015, the authorization for Nassau County to use sales tax revenues to assist towns, cities and villages.

Summary of provisions

Section 1 of the bill amends clause 2 of subparagraph (i) of the opening paragraph of section 1210 of the tax law to extend until November 30, 2015 the authorization for Nassau County to impose sales and compensating use taxes at the current levels.

Section 2 of the bill amends section 1262-e of the tax law to extend the authorization for Nassau County to establish local government assistance programs through 2015.

Effective Date. The bill would become effective immediately.

Reasons for support

The authorization for Nassau County to impose sales and compensating use taxes at the current levels presently expires on November 30, 2013. Although Nassau County has significantly improved its financial management in recent years, it continues to face serious financial challenges. The County is continuing to address its financial difficulties on many fronts: cost-cutting, streamlining government agencies, restructuring debt and other measures of fiscal discipline. At this point, however, loss of monies flowing from the currently authorized level of sales and compensating use taxes, would have severe consequences for the County's financial status. By extending the authorization until November 30, 2015, this bill would assure that the County will be able to count on the same level of taxation in its attempts to regain financial health while continuing to supply acceptable levels of services to its citizens.

Section 1262-e of the Tax Law requires the County Legislature to fund a local assistance program for its town and cities with one-third of the revenues received by the County from the 3/4% sales and compensating use tax additional to the regular 3% rate authorized by Tax Law § 1210, Section 1262-e also authorizes the County to enact local legislation establishing such a program for its villages, funded from not in excess of 1/6th of the revenues received from the imposition of the 3/4% sales and compensating use tax remaining after the towns and cities have received their assistance. Towns, cities and villages receiving such funding are precluded from claiming any further funds from sales tax revenues. These jurisdictions depend on the local government assistance program to, among other things, help

defray the costs of solid waste collection and disposal, maintain conservation and environmental control programs and minimize real property taxes.

Fiscal implications

None to the State. The continuation of the current sales and compensating use tax, which is authorized by this bill, generates an estimated $343 million in 2014 and $355 million in 2015 in essential revenue for the County. Failure to do so could lead to a loss of over 3,000 jobs, or 40% of the County's workforce, and threaten basic health and safety services that the County provides to Nassau residents.

Effective date

Immediately