What's happening
This bill excludes dealer-offered motor vehicle rebates from the taxable price when calculating state and local sales tax.
Why it matters
Reduces the overall sales tax burden for car buyers. by ensuring that any dealer-offered rebates are subtracted from the vehicle’s price before calculating state and local sales tax, potentially leading to significant savings for consumers.
Aligns tax treatment with the actual out-of-pocket cost. paid by the buyer, rather than taxing the pre-rebate price, which some argue is a fairer approach and could make advertised rebates more meaningful.
May incentivize more consumers to take advantage of dealer rebates. and promotions, possibly boosting car sales and benefiting both dealers and buyers, especially in competitive markets.
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Who cares
Headline styles
Remove Rebates From Car Taxes
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2774
2017-2018 Regular Sessions
IN SENATE
January 17, 2017
Introduced by Sen. RITCHIE -- 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 the taxable price for the sale of a motor vehicle
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1105 of the tax law is amended by adding a new subdivision (g) to read as follows:
(g) Any rebate offered by a retail dealer of a motor vehicle to a consumer at the time of sale shall be excluded for the purposes of calculating the taxable price under this section of such motor vehicle sale. Such rebate shall further be excluded for the purposes of calculating any local sales and compensating use tax that may be applicable.
§ 2. This act shall take effect on the thirtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08280-01-7
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 the taxable price for the sale of a motor vehicle
Purpose
To provide for the calculation of sales tax for the purchase of a motor vehicle after a manufacturer's rebate is applied to the purchase price.
Summary of provisions
Section 1 amends § 1105 of the Tax Law by adding a new subdivision providing that any rebate offered by a retail dealer of a motor vehicle to a consumer at the time of sale shall be excluded for the purposes of calculating the taxable price of such motor vehicle sale. The rebate must also be excluded for the purposes of calculating any local sales and compensating use tax that may be applicable.
Section 2 provides the effective date.
Existing law
Section 1105 of the Tax Law provides for the imposition of sales tax of four percent upon the receipts from every retail sale of tangible personal property, except as otherwise provided in this article.
Section 1210 of the Tax Law relates to the taxes of cities and counties administered by the state tax commission and provides, notwithstanding any other provision f law to the contrary, but subject to the limitations and exemptions as set forth part II of this article, any city or county in this state, acting though its local legislative body, is authorized and empowered to adopt and amend local laws, ordinances or resolutions imposing in any such city or county sales and compensating use taxes.
This bill provides that the state sales tax and local sales and compensating use tax shall be imposed after the rebate is deducted from the price of the vehicle.
Justification
New York State requires that sales tax be paid on the purchase of a motor vehicle prior to the deduction of a manufacturer's rebate. However, claiming that rebates are a form of payment from the manufacturer and therefore do not affect the purchase price of the car fails to acknowledge the fact that the purchaser, on whom the sales tax is imposed, is paying a sales price after the rebate is applied. The "manufacturer's payment" is not subject to any tax. Thus the purchaser bears the cost for the tax on a payment not actually paid by them. For example, a consumer who purchases a vehicle and receives a $2500 manufacturer's rebate that is applied toward the purchase price will pay an additional sales tax of $200 or more, depending on their county of residence. This is unwarranted and unfair to the purchaser.
To remedy this unfairness, this legislation provides that all state and local sales taxes imposed on the purchase of a motor vehicle shall reflect the post rebate price of the vehicle. This measure ensures that the purchaser pays sales tax only on what he or she actually pays as the purchase price.
Legislative history
S.7019 Referred to Investigations and government operations.
Fiscal implications
To be determined.
Effective date
This act shall take effect 30 days after enactment.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.