Relates to the meaning of the term "equipment" for purposes of department of taxation and finance audit or enforcement proceedings

BILL NUMBER:S7382

Title of bill

An act in relation to the meaning of the term "equip- ment" for purposes of department of taxation and finance audit or enforcement proceedings

Purpose

This legislation would codify a holding of a Division of Tax Appeals decision to ensure fair and consistent tax treatment of certain equip- ment purchases by Qualified Empire Zone Enterprises (QEZE).

Summary of specific provisions

Section one defines personal tangible property subject to this legis- lation.

Section two defines a term relevant to Empire Zone tax exemption eligi- bility determinations.

Section three creates a mechanism for businesses to enforce their rights afforded by this bill.

Justification

The purpose of the Empire Zone Program was to increase economic activity in high unemployment and high poverty areas. This legislation supports this objective by preserving contractual agreements entered into by a QEZE in reliance upon promises by the state that equipment, purchased and then used at an Empire Zone location, would qualify for the Empire Zone sales tax exemption. Preserving these contracts will protect the value of New York businesses' property and investments, and provide clarity to these businesses in their work to comply with the Tax Law.

This bill follows a Division of Tax Appeals decision that held, for the purpose of Empire Zone tax exemption determinations, that the process of having inventoried, organized, stored and distributed property by a QEZE from its Empire Zone location would qualify a QEZE for a sales tax exemption for purchases. See Eastern Paramedics, Inc., DTA Nos. 822836 and 822837 (N.Y. Div. Tax App. Sept. 10, 2010).

Legislative history

None

Fiscal implications

It is not anticipated that there will be any fiscal impact in regard to tax revenues collected from QEZE approved businesses, as such revenues have not been collected as they are subject to ongoing litigation.

Effective date

This act shall take effect immediately, be deemed to have been in effect as of March 1, 2001, and apply to any Department of Taxation and Finance matter commencing on or after March 1, 2001.