What's happening
This bill excludes motor vehicle dealer rebates from the taxable price when calculating state and local sales taxes in New York.
Why it matters
Reduces the effective sales tax burden on car buyers. By excluding dealer-offered rebates from the taxable price, consumers will pay less in both state and local sales taxes when purchasing a motor vehicle, potentially making new vehicles more affordable.
Aligns tax treatment with actual transaction price. The bill ensures that sales tax is calculated based on the amount a consumer actually pays out-of-pocket, rather than the higher pre-rebate price, making the tax system more consistent and transparent.
May incentivize car sales and benefit local economies. Lowering the upfront tax cost could make promotional rebates more attractive, potentially boosting vehicle sales and supporting related economic activity (dealerships, financing, etc.) in New York.
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Who cares
Headline styles
Exclude Rebates From Car Tax
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
1602
2019-2020 Regular Sessions
IN SENATE
January 15, 2019
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.
LBD04049-01-9
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 limita- tions 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 compen- sating 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. Howev- er, 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
2018: S.2774
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.