What's happening
This bill restructures and updates New York State's laws on how counties and cities can impose and distribute local sales and use taxes, including authorizing new rates and changing revenue-sharing rules.
Why it matters
Expands local flexibility and control. By specifying which counties and cities can adopt higher local sales tax rates and how they can incrementally increase them, this bill gives local governments more tailored options to address their unique fiscal needs—potentially leading to new or higher local taxes in certain areas.
Clarifies revenue preemption and sharing. The legislation carefully details which jurisdictions have “prior right” to impose and collect certain sales taxes, and introduces new rules for how cities and counties interact over overlapping tax authority. This could affect how much revenue cities versus counties can generate and retain, impacting local budgets and services.
Alters distribution of new sales tax revenue. In several cases (e.g., Oneida, Ontario, Clinton, Herkimer counties), the bill specifies that additional sales tax revenues must be used solely for county purposes or designated projects, and are excluded from prior revenue-sharing agreements. This means cities within those counties may not benefit from the new revenue, affecting local funding dynamics.
Standardizes and modernizes legal references. The bill repeals outdated provisions and replaces them with a clearer, more streamlined legal structure for imposing, collecting, and distributing sales and use taxes. This reduces legal ambiguity and could make local tax administration more efficient, but may also change long-standing revenue arrangements for some municipalities.
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Let Counties Set Sales Tax
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History
- Referred to investigations and government operations
- Returned to senate
- Died in assembly
- Referred to ways and means
- Delivered to assembly
- Passed senateVote 50–12
- Ordered to third reading cal.2219
- Referred to rules
Full text
6 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6566
2017-2018 Regular Sessions
IN SENATE
June 4, 2017
Introduced by COMMITTEE ON RULES -- (at request of the Governor) -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the tax law, in relation to the authority of counties and cities to impose sales and compensating use taxes pursuant to the authority of article 29 of such law; and to repeal certain provisions of section 1210, section 1210-E and section 1224 of such law relating thereto
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (i) of the opening paragraph of section 1210 of the tax law is REPEALED and a new subparagraph (i) is added to read as follows:
(i) with respect to a city of one million or more and the following counties: (1) any such city having a population of one million or more is hereby authorized and empowered to adopt and amend local laws, ordinances or resolutions imposing such taxes in any such city, at the rate of four and one-half percent;
(2) the following counties that impose taxes described in subdivision (a) of this section at the rate of three percent as authorized above in this paragraph are hereby further authorized and empowered to adopt and amend local laws, ordinances, or resolutions imposing such taxes at additional rates, in quarter percent increments, not to exceed the following rates, which rates are additional to the three percent rate authorized above in this paragraph, and, in the case of a county authorized to impose more than one additional rate, also in addition to each other:
(A) One-quarter of one percent - None;
(B) One-half of one percent - Ontario, Schenectady;
(C) Three-quarters of one percent - Dutchess, Orange;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13049-01-7
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(D) One percent - Albany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia, Cortland, Delaware, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Jefferson, Lewis, Livingston, Madison, Monroe, Montgomery, Niagara, Onondaga, Orleans, Oswego, Otsego, Putnam, Rensselaer, Rockland, St. Lawrence, Schoharie, Schuyler, Seneca, Steuben, Suffolk, Sullivan, Tioga, Tompkins, Ulster, Wayne, Wyoming, Yates;
(E) One and one-quarter percent - Herkimer, Nassau;
(F) One and one-half percent - Allegany;
(G) One and three-quarters percent - Erie, Oneida.
Provided, however, that (I) the county of Rockland may impose additional rates of five-eighths percent and three-eighths percent, in lieu of imposing such additional rate in quarter percent increments; (II) the county of Ontario may impose additional rates of one-eighth percent and three-eighths percent, in lieu of imposing such additional rate in quarter percent increments; (III) three-quarters percent of the additional rate authorized to be imposed by the county of Nassau shall be subject to the limitation set forth in section twelve hundred sixty-two-e of this article.
§ 2. Subparagraph (ii) of the opening paragraph of section 1210 of the tax law is REPEALED and a new subparagraph (ii) is added to read as follows:
(ii) the following cities that impose taxes described in subdivision (a) of this section at the rate of one and one-half percent or higher as authorized above in this paragraph for such cities are hereby further authorized and empowered to adopt and amend local laws, ordinances, or resolutions imposing such taxes at additional rates, in quarter percent increments, not to exceed the following rates, which rates are additional to the one and one-half percent or higher rates authorized above in this paragraph and, in the case of a city authorized to impose more than one additional rate, also in addition to each other:
(1) One-quarter of one percent - None;
(2) One-half of one percent - None;
(3) Three-quarters of one percent - None;
(4) One percent - Mount Vernon; New Rochelle for the period beginning January first, two thousand fifteen and ending December thirty-first, two thousand seventeen; Oswego for the period beginning December first, two thousand fifteen and ending November thirtieth, two thousand seventeen; White Plains for the period beginning September first, two thousand seventeen and ending August thirty-first, two thousand nineteen;
(5) One and one-quarter percent - None;
(6) One and one-half percent - Yonkers for the period beginning December first, two thousand fifteen and ending November thirtieth, two thousand seventeen;
(7) One and three-quarters percent - None;
§ 3. Subparagraphs (iii) and (iv) of the opening paragraph of section 1210 of the tax law are REPEALED and a new subparagraph (iii) is added to read as follows:
(iii) the maximum rate referred to in section twelve hundred twentyfour of this article shall be calculated without reference to the additional rates authorized for counties, other than the counties of Cayuga, Cortland, Fulton, Madison, and Otsego in subparagraph (i) and the cities in subparagraph (ii) of this paragraph.
§ 4. Section 1210 of the tax law is amended by adding a new subdivision (p) to read as follows:
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(p) Notwithstanding any provision of this section or other law to the contrary, a county authorized to impose an additional rate or rates of sales and compensating use taxes by clause two of subparagraph (i) of the opening paragraph of this section may adopt a local law, ordinance or resolution by a majority vote of its governing body imposing such rate or rates for a period not to exceed two years. Any such local law, ordinance, or resolution shall also be subject to the provisions of subdivisions (d) and (e) of this section.
§ 5. Section 1210-E of the tax law is REPEALED.
§ 6. Subdivisions (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (z-1), (aa), (bb), (cc), (dd), (ee), (ff), (gg), and (ii) of section 1224 of the tax law are REPEALED.
§ 7. Section 1224 of the tax law is amended by adding three new subdivisions (d), (e), and (f) to read as follows:
(d) For purposes of this section, the term "prior right" shall mean the preferential right to impose any tax described in sections twelve hundred two and twelve hundred three, or twelve hundred ten and twelve hundred eleven, of this article and thereby to preempt such tax and to preclude another municipal corporation from imposing or continuing the imposition of such tax to the extent that such right is exercised. However, the right of preemption shall only apply within the territorial limits of the taxing jurisdiction having the right of preemption.
(e) Each of the following counties and cities shall have the sole right to impose the following additional rate of sales and compensating use taxes in excess of three percent that such county or city is authorized to impose pursuant to subparagraph (i) or (ii) of the opening paragraph of section twelve hundred ten of this article. Such additional rates of tax shall not be subject to preemption.
(1) Counties:
(A) One-quarter of one percent - None;
(B) One-half of one percent - Ontario, Schenectady;
(C) Three-quarters of one percent - Dutchess, Lewis, Orange;
(D) One percent - Albany, Broome, Chautauqua, Cattaraugus, Chemung, Chenango, Clinton, Columbia, Delaware, Essex, Franklin, Genesee, Greene, Hamilton, Jefferson, Livingston, Monroe, Montgomery, Niagara, Onondaga, Orleans, Oswego, Otsego, Putnam, Rensselaer, Rockland, St. Lawrence, Schoharie, Schuyler, Seneca, Steuben, Suffolk, Sullivan, Tioga, Tompkins, Ulster, Wayne, Wyoming, Yates;
(E) One and one-quarter percent - Herkimer, Nassau;
(F) One and one-half percent - Allegany;
(G) One and three-quarter percent - Erie, Oneida.
(2) Cities:
(A) One-quarter of one percent - Rome;
(B) One-half of one percent - None;
(C) Three-quarters of one percent - None;
(D) One percent - Mount Vernon, New Rochelle, White Plains, Yonkers.
(f) Each of the following cities is authorized to preempt the taxes imposed by the county in which it is located pursuant to the authority of section twelve hundred ten of this article, to the extent of one-half the maximum aggregate rate authorized under section twelve hundred ten of this article, including the additional rate that the county in which such city is located is authorized to impose: Auburn, in Cayuga county; Cortland, in Cortland county; Gloversville and Johnstown, in Fulton county; Oneida, in Madison county; Oneonta, in Otsego county. As of the date this subdivision takes effect, any such preemption by such a city
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in effect on such date shall continue in full force and effect until the effective date of a local law, ordinance, or resolution adopted or amended by the city to change such preemption. Any preemption by such a city pursuant to this subdivision that takes effect after the date this subdivision takes effect shall be subject to the notice requirements in section twelve hundred twenty-three of this subpart and to the other requirements of this article.
§ 8. Section 1262-g of the tax law, as amended by chapter 185 of the laws of 2015, is amended to read as follows:
§ 1262-g. Oneida county allocation and distribution of net collections from the additional one percent rate of sales and compensating use taxes. Notwithstanding any contrary provision of law, (a) if the county of Oneida imposes sales and compensating use taxes at a rate which is one percent additional to the three percent rate authorized by section twelve hundred ten of this article, as authorized by such section, [(a)] (i) where a city in such county imposes tax pursuant to the authority of subdivision (a) of such section twelve hundred ten, such county shall allocate, distribute and pay in cash quarterly to such city one-half of the net collections attributable to such additional one percent rate of the county's taxes collected in such city's boundaries; [(b)] (ii) where a city in such county does not impose tax pursuant to the authority of such subdivision (a) of such section twelve hundred ten, such county shall allocate, distribute and pay in cash quarterly to such city not so imposing tax a portion of the net collections attributable to one-half of the county's additional one percent rate of tax calculated on the basis of the ratio which such city's population bears to the county's total population, such populations as determined in accordance with the latest decennial federal census or special population census taken pursuant to section twenty of the general municipal law completed and published prior to the end of the quarter for which the allocation is made, which special census must include the entire area of the county; [and (c)] provided, however, that such county shall dedicate the first one million five hundred thousand dollars of net collections attributable to such additional one percent rate of tax received by such county after the county receives in the aggregate eighteen million five hundred thousand dollars of net collections from such additional one percent rate of tax imposed for any of the periods: September first, two thousand twelve through August thirty-first, two thousand thirteen; September first, two thousand thirteen through August thirty-first, two thousand fourteen; and September first, two thousand fourteen through August thirty-first, two thousand fifteen; September first, two thousand fifteen through August thirty-first, two thousand sixteen; and September first, two thousand sixteen through August thirty-first, two thousand seventeen, to an allocation on a per capita basis, utilizing figures from the latest decennial federal census or special population census taken pursuant to section twenty of the general municipal law, completed and published prior to the end of the year for which such allocation is made, which special census must include the entire area of such county, to be allocated and distributed among the towns of Oneida county by appropriation of its board of legislators; provided, further, that nothing herein shall require such board of legislators to make any such appropriation until it has been notified by any town by appropriate resolution and, in any case where there is a village wholly or partly located within a town, a resolution of every such village, embodying the agreement of such town and village or villages upon the amount of such
S. 6566 5
appropriation to be distributed to such village or villages out of the allocation to the town or towns in which it is located.
(b) if the county of Oneida imposes sales and compensating use taxes at a rate which is one and three-quarters percent additional to the three percent rate authorized by section twelve hundred ten of this article, as authorized pursuant to clause two of subparagraph (i) of the opening paragraph of section twelve hundred ten of this article, net collections attributable to the additional three-quarters percent of such additional rate shall not be subject to any revenue distribution agreement entered into by the county and the cities in the county pursuant to the authority of subdivision (c) of section twelve hundred sixty-two of this part.
§ 9. The opening paragraph of section 1262-r of the tax law, as added by chapter 37 of the laws of 2006, is amended to read as follows:
(1) Notwithstanding any contrary provision of law, if the county of Ontario imposes the additional one-eighth of one percent and the additional three-eighths of one percent rates of tax authorized pursuant to clause two of subparagraph (i) of the opening paragraph of section twelve hundred ten of this article, net collections from such additional three-eighths of one percent rate of such taxes shall be set aside for county purposes and shall not be subject to any agreement entered into by the county and the cities in the county pursuant to the authority of subdivision (c) of section twelve hundred sixty-two of this part.
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 authority of counties and cities to impose sales and compensating use taxes pursuant to the authority of article 29 of such law; and to repeal certain provisions of section 1210, section 1210-E and section 1224 of such law relating thereto
Purpose
This bill would amend the Tax Law to make permanent the authority for counties to impose their current additional rates of sales and compensating use taxes for two-year periods, thus obviating the need for counties to obtain approval through the State legislative process every two years.
Summary of provisions
Section 1 of the bill would repeal subparagraph (i) of the opening paragraph of Tax L. § 1210 and replace it with a new subparagraph (i) that recodifies the current additional rates of sales and compensating use tax authorized to be imposed in. New York City and certain counties, and makes the authority of those counties to impose such additional rates permanent. New York City's authorization to impose an additional rate is permanent in current law.
Read the full memo (958 words)
Section 2 of the bill would repeal subparagraph (ii) of the opening paragraph of Tax L. § 1210 and replace it with a new subparagraph (ii) that recodifies the current additional rates of sales and compensating use tax authorized to be imposed by certain cities and preserves the duration of that authority under current law.
Section 3 of the bill would repeal subparagraphs (iii) and (iv) of the opening paragraph of Tax L. § 1210 and replace it with a new subparagraph (iii) to maintain the provision in existing law that provides that the maximum rates imposed in Tax L. § 1224 relating to prior rights and pre-emption (where cities and county levy the same tax) shall be calculated without reference to the additional rate of sales and compensating use tax authorized for counties, with the exception of the counties of Cayuga, Cortland, Fulton, Madison, and Otsego, and for the cities of Mount Vernon, New Rochelle, Oswego, White Plains, and Yonkers.
Section 4 of the bill would amend Tax L. § 1210 by adding a new subdivision (p) that would require the counties authorized to impose an additional rate of sales and compensating use tax pursuant to the provisions in the bill to adopt such tax by local law, ordinance, or resolution by a majority vote of its governing body for a period not to exceed two years.
Section 5 of the bill would repeal Tax L. § 1210 -E. Under current law, Herkimer County is authorized to impose an additional rate of 1% under clause (19) of the opening paragraph of Tax L. § 1210, and an additional rate of tax of '4% under Tax L. § 1210 -E, subject to the same provisions as the 1% rate. The County's current authority of 1 14% is consolidated in bill section 1, rendering § 1210 -E unnecessary.
Section 6 of the bill would repeal subdivisions (d), (e), (f), (g), (h) ,(i), (j), (k), (1), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (z-1), (aa), (bb), (cc), (dd), (ee), (ff), (gg), and (ii) of Tax L. § 1224. These subdivisions relate to the sole right of certain counties and cities to impose additional rates of sales tax without preemption, which are recodified by bill section 7.
Section 7 of the bill would amend Tax L. § 1224 by adding subdivisions (d), (e), and (f) to recodify the sole right of counties and cities authorized by this bill to impose an additional sales and compensating use fax without pre-emption. Provided, however, the cities of Auburn, Cortland, Gloversville, Johnstown, Oneida, and Oneonta, may pre-empt any sales and compensating use tax imposed by the county in which it is located.
Sections 8, 9, 10, and 11 of the bill would amend Tax L. §§ 1262-g, 1262-r, 1262-s, and 1262-u to, for the counties of Oneida, Ontario, Clinton, Herkimer, recodify and conform the distribution of the amount of the sales and compensating use tax to be used for county or educational purposes to the provisions of this bill.
Section 12 of the bill would provide that any reference to net collections or revenue imposed by a county or city in a local law, ordinance or resolution adopted under Tax L. Art. 29 that refers to a provision repealed by this bill is deemed to be a reference to the corresponding provision in this bill.
Section 13 of the bill would make the bill effective immediately.
Statement in support
This bill would amend Article 29 of the Tax Law to make permanent the authority for counties to impose their current additional rates of sales and use taxes and would obviate the need for counties to obtain approval through the State legislative 'process every two years. Currently, nearly all counties are authorized to impose an additional rate of sales and use taxes for a two-year period that expires November 30, 2017.
Each county that is currently authorized to impose the additional rate would still have to adopt a local enactment by a majority vote of its governing body every two years to impose its additional rate above 3%.
This bill would not change the additional rates currently authorized for counties. It would also not change current laws that require counties to adopt a home rule message and obtain approval through the State legislative process before they may increase sales and compensating use taxes above their current additional tax rate.
Finally, the bill would amend and recodify other related provisions of Article 29 of the Tax Law to conform them to the above described provisions.
Budget implications
None.
Effective date
Immediately.
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