Extends the authority of the county of Ulster to impose an additional 1 percent sales and compensating use tax

BILL NUMBER:S6296

Title of bill

An act to amend the tax law and chapter 200 of the laws of 2002 amending the tax law relating to certain tax rates imposed by the county of Ulster, in relation to extending the authority of the county of Ulster to impose an additional 1 percent sales and compensating use tax

Purpose

This bill would permit Ulster County to begin imposing an additional 1percent rate of sales and compensating use tax beginning February 1, 2014 until December 31, 2014. It would also allow Ulster County to begin imposing an additional 1 percent rate of sales and compensating use tax beginning January 1, 2015 until November 30, 2015 if the Ulster County Legislature certifies to the Commissioner of the Department of Taxation and Finance that the County of Ulster will be responsible for the full local share of the Safety Net Assistance Program.

Summary of provisions

Section one of the bill permits Ulster County to collect sales taxes for the periods of February 1, 2014 to December 31, 2014 and January 1, 2015 to November 30, 2015.

Section three requires Ulster County to honor its existing sales tax collection and disbursement agreement with the City of Kingston within this new agreement.

Section three also requires the Ulster County Legislature to pass a local ordinance in order to impose a one percent additional rate of sales and compensating use tax authorized by this act for the period beginning February 1, 2014 and ending December 31, 2014 and send that ordinance to the commissioner of Taxation and Finance shall be received on or prior to January 23, 2014.

Section four requires the Ulster County Legislature to pass a local ordinance in order to impose a one percent additional rate of sales and compensating use tax authorized by this act for the period beginning January 1, 2015 and ending November 30, 2015. This ordinance also must include language which certifies that the County will take over all Safety Net costs from municipalities by January 1, 2015.

Justification

Ulster County is the only county in New York State that passes on the cost of the Safety Net Program to local municipalities. While Ulster County will assume two thirds of the local share annually beginning in 2014 as part of a phased takeover, municipalities had been assuming a 50 percent share of the cost of the program until a 2011 increase left localities to cover a 71%. share. This has caused a significant fiscal burden on Ulster County's local governments. The estimated revenue from the extension of a 1 percent sales and compensating use tax is more than enough funding to cover these costs and provide much needed relief to municipalities. It is also germane that State and Federal funding of the cost of separate public assistance programs was assumed completely at the same time the towns of Ulster County and the City of Kingston were required to pay an increased share of Safety Net costs. Where in other counties, the increased burden of Safety Net was more than offset by increased

Public Assistance support, in Ulster County uniquely the county government was enriched at the expense of the towns and City of Kingston. This legislation corrects that inequity.

Fiscal implications

None to the State.

Effective date

This act shall take effect immediately.