What's happening
This bill allows school bus operators to receive sales tax refunds or credits on buses, equipment, and fuel used for student transportation.
Why it matters
Reduces operating costs for school bus companies. By allowing refunds or credits for sales tax paid on buses, equipment, and fuel, the bill directly lowers expenses for operators, potentially making student transportation more affordable and sustainable.
Applies only to operators under school contracts. To qualify, at least 70% of a bus’s use must be for transporting students under a formal school contract, ensuring the benefit is targeted to those genuinely providing school transportation services.
Phased implementation incentivizes early adoption. The refund/credit starts at 50% for the first year (Sept 2018–Aug 2019), then increases to 100% in subsequent years, encouraging operators to update fleets and claim benefits sooner.
Strict eligibility and record-keeping requirements. Operators must meet all criteria for at least 12 months after purchase and keep detailed records to demonstrate compliance, ensuring accountability and preventing misuse of the tax benefit.
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Who cares
School bus operators
Qualifying operators would receive sales and use tax refunds or credits on buses, installed parts, equipment, lubricants, covered services and qualifying fuel, phased from 50 percent to 100 percent.
Operators serving preschools and nursery schools
Transportation under Education Law contracts for these schools would count toward eligibility, alongside transportation for pre-kindergarten through secondary schools.
School bus operators with mixed-use fleets
Buses would need at least 70 percent qualifying school transportation use, measured by mileage or hours, while fuel would need to be used exclusively for that transportation.
New York State Department of Taxation and Finance
The department would administer applications and require operators to maintain records demonstrating compliance with the refund or credit requirements.
Headline styles
End Bus Sales Tax
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
No Sales Tax for Buses
In Assembly Committee · Ways And Means · Sponsor David Gantt
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1653
2017-2018 Regular Sessions
IN SENATE
January 10, 2017
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law, in relation to providing certain school bus operators with a refund or credit of sales and compensating use taxes on the purchase of school buses and equipment and fuel used in the operation of a school bus
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1119 of the tax law is amended by adding a new subdivision (g) to read as follows:
(g) Subject to the conditions and limitations provided in this subdivision, a refund or credit shall be allowed for tax paid pursuant to subdivision (a) of section eleven hundred five, paragraph three of subdivision (c) of section eleven hundred five, or section eleven hundred ten of this article and any tax imposed pursuant to the authority of article twenty-nine of this chapter, on the sale to or purchase by a school bus operator of (i) a school bus, as defined in section one hundred forty-two of the vehicle and traffic law, at least seventy percent of the use of which is for the transportation, by such operator, of school students to or from school or school related events, pursuant to a contract made under the provisions of the education law, (ii) parts, equipment and lubricants when such parts, equipment and lubricants are installed in or on such a school bus, at least seventy percent of the use of which is for such transportation, by such operator, pursuant to such contract, (iii) the services described in paragraph three of subdivision (c) of section eleven hundred five of this article when rendered with respect to such a school bus so used or with respect to parts, equipment and lubricants installed in or on such a school bus so used, and (iv) motor fuel or diesel motor fuel used exclusively by such operator in such a school bus for such transportation pursuant to such
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01079-01-7
S. 1653 2
contract. No refund or credit shall be allowed under this subdivision unless all of the requirements for such refund or credit have been met for at least a twelve month period after the school bus operator's purchase of such school bus; however, such refund or credit shall be allowed for a school bus that is painted "national school bus chrome" pursuant to subdivision twenty-one of section three hundred seventy-five of the vehicle and traffic law and labeled as a "SCHOOL BUS" pursuant to subparagraph one of paragraph (b) of subdivision twenty of such section three hundred seventy-five if all of the requirements for such refund or credit have been met in the previous quarterly reporting period as described in subdivision (b) of section eleven hundred thirty-six of this article. An application for a refund or credit pursuant to this subdivision must be filed with the commissioner within the time provided by subdivision (a) of section eleven hundred thirty-nine of this article and no more frequently than quarterly. Such application shall be in such form as the commissioner may prescribe. Where an application for credit has been filed, the school bus operator may take such credit on the return which is due coincident with or immediately subsequent to the time the school bus operator files such application for credit. However, the taking of the credit on the return shall be deemed to be part of the application for credit and shall be subject to the provisions in respect to applications for credit in such section eleven hundred thirty-nine as provided in subdivision (e) of such section. The allowance of the credit or refund shall also be subject to the school bus operator maintaining records satisfactory to the commissioner demonstrating compliance with all the requirements of this subdivision. The percentage of such school bus use may be computed either on the basis of mileage or hours of use, at the discretion of the purchaser or user. For the purposes of this subdivision, the term "school" shall mean a pre-kindergarten or kindergarten program, a preschool, nursery school or elementary, intermediate or secondary school. The refund or credit shall be fifty percent for the period commencing September first, two thousand eighteen to August thirty-first, two thousand nineteen. The refund or credit shall be one hundred percent commencing September first, two thousand nineteen.
§ 2. This act shall take effect on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing September 1, 2018 and shall apply in accordance with the applicable transitional provisions in sections 1106 and 1217 of the tax law; provided, further, that the commissioner of taxation and finance shall be authorized on and after the date this act shall have become a law to adopt and amend any rules or regulations and issue any procedure, forms or instructions necessary to implement this act on its effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to providing certain school bus operators with a refund or credit of sales and compensating use taxes on the purchase of school buses and equipment and fuel used in the operation of a school bus
Purpose
To create an incentive for the private school bus operators to quickly phase-in the use of new clean-fuel school buses with near zero harmful emissions and ease the escalating financial burden on school bus operators and property tax payers attributed to various state and federal mandates, out-of-control insurance premiums and skyrocketing fuel prices.
Summary of provisions
Section 1. Adds a new subdivision (g) to section 1119 of the tax law to phase in a refund or credit from state sales and use tax on the sale or use by a school bus operator of any school bus (used for the transportation of students to and from school or school related events) and of parts, equipment, lubricants, motor fuel, maintenance, servicing and repairs.
Section 2. Effective date.
Justification
In recent years, school bus contractors have been hit with enormous increases in costs associated with new clean-fuel school bus regulations, rising insurance premiums, various state and federal mandates and skyrocketing fuel prices yet they have received very small increases in compensation for their long term contracts because the Consumer price Index, which those increases are based, has not risen at a rate commensurate with those costs. The financial pinch has forced many contractors to decide not to extend existing pupil transportation contracts. Those districts that have had to go out to RFP or bid in the last few years have found that their costs have gone up significantly. Exemption from sales tax would ease the financial strain on contractors, help them conform to new federal clean-fuel regulations, remain competitive and help them extend existing contracts.
Legislative history
2015-16: S2167/A175 - Investigations & Government Operations/Ways & Means
2013-14: S1999-A - Investigations & Government Operations
2011-12: S1647/A799 - Investigations & Government Operations/Ways & Means
Fiscal implications
To be determined.
Effective date
This act shall take effect on the first day of the sales tax quarterly period next commencing September 1, 2017.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.