What's happening
This bill exempts certain nonprofit senior citizen organizations from paying New York State sales and use taxes.
Why it matters
Direct financial relief for senior-focused nonprofits. By exempting qualifying senior citizen organizations from state sales and use taxes, the bill allows these groups to allocate more resources directly to their social, recreational, educational, and wellness activities for older adults.
Strict eligibility to prevent abuse. Only organizations under IRS 501(c)(3) or 501(c)(7) status, with membership limited to those age 50+, and with no earnings benefiting private individuals, can qualify—ensuring the benefit targets legitimate, community-based groups.
Limits on use and oversight. The exemption applies only to purchases made by the organization itself (not by individual members), and organizations must comply with rules against political activity and lobbying, maintaining their nonprofit focus and accountability.
Administrative changes anticipated. The bill requires updates to tax exemption processes and forms, which could streamline how senior organizations obtain and use their sales tax exemption, potentially making participation easier and more transparent.
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Who cares
Headline styles
No Sales Tax for Seniors
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to budget and revenue
- Referred to budget and revenue
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 Seniors
In Assembly Committee · Ways And Means · Sponsor Colin Schmitt
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2652
2019-2020 Regular Sessions
IN SENATE
January 28, 2019
Introduced by Sen. JORDAN -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to exempting certain senior citizen organizations from paying sales and compensating use taxes
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision (a) of section 1116 of the tax law, as amended by chapter 530 of the laws of 1976, paragraph 4 as amended by chapter 270 of the laws of 2001, paragraph 5 as amended by chapter 366 of the laws of 1983, subparagraph (B) of paragraph 5 as amended by chapter 418 of the laws of 2004, subparagraph (C) of paragraph 5 as amended by chapter 296 of the laws of 2006, paragraph 7 as added by chapter 903 of the laws of 1980, paragraph 8 as added by chapter 888 of the laws of 1983, paragraph 9 as amended by chapter 591 of the laws of 2005, is amended to read as follows:
(a) Except as otherwise provided in this section, any sale or amusement charge by or to any of the following or any use or occupancy by any of the following shall not be subject to the sales and compensating use taxes imposed under this article:
(1) The state of New York, or any of its agencies, instrumentalities, public corporations (including a public corporation created pursuant to agreement or compact with another state or Canada) or political subdivisions where it is the purchaser, user or consumer, or where it is a vendor of services or property of a kind not ordinarily sold by private persons[;].
(2) The United States of America, and any of its agencies and instrumentalities, insofar as it is immune from taxation where it is the purchaser, user or consumer, or where it sells services or property of a kind not ordinarily sold by private persons[;].
(3) The United Nations or any international organization of which the United States of America is a member where it is the purchaser, user or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08903-01-9
S. 2652 2
consumer, or where it sells services or property of a kind not ordinarily sold by private persons[;].
(4) Any corporation, association, trust, or community chest, fund, foundation, or limited liability company, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, (except as otherwise provided in subsection (h) of section five hundred one of the United States internal revenue code of nineteen hundred fifty-four, as amended), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office[;].
(5) A post or organization of past or present members of the armed forces of the United States, or an auxiliary unit or society of, or a trust or foundation for, any such post or organization:
(A) organized in this state,
(B) at least seventy-five percent of the members of which are past or present members of the armed forces of the United States as defined in section thirteen-a of the general construction law and substantially all of the other members of which are individuals who are cadets or are spouses, widows, widowers, ancestors, or lineal descendants of past or present members of the armed forces of the United States or of cadets, and
(C) no part of the net earnings of which inures to the benefit of any private shareholder or individual.
(6) The following Indian nations or tribes residing in New York state: Cayuga, Oneida, Onondaga, Poospatuck, Saint Regis Mohawk, Seneca, Shinnecock, Tonawanda and Tuscarora, where it is the purchaser, user or consumer.
(7) A not-for-profit corporation operating as a health maintenance organization subject to the provisions of article forty-four of the public health law.
(8) Cooperative and foreign corporations doing business in this state pursuant to the rural electric cooperative law.
(9) A credit union, as defined in subdivision nine of section two of the banking law, where it is the purchaser, user, or consumer, or where it is a vendor of services or property of a kind not ordinarily sold by private persons.
(10) Senior citizen organizations organized pursuant to section 501(c)(3) or section 501(c)(7) of the Internal Revenue Code (26 U.S.C. §501) which limit membership to members age fifty and older, and which are organized for pleasure, social, educational, recreational and/or other non-profit purposes, provided:
(A) no part of the net earnings of which inure to the benefit of any private shareholder or individual;
(B) no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, (except as otherwise provided in subsection (h) of section five hundred one of the United States internal revenue code of nineteen hundred fifty-four, as amended), and which does not participate in, or intervene in (including
S. 2652 3
the publishing or distributing of statements), any political campaign on behalf of any candidate for public office; and
(C) the exemption applies only to purchases that are made by the organization itself and not for purchases by any of its members individually.
§ 2. Subdivision (g) of section 1116 of the tax law, as amended by chapter 3 of the laws of 2004, is amended to read as follows:
(g) For purposes of [paragraph] paragraphs five and ten of subdivision (a) of this section, duly authorized representatives of any such post or organization, while acting on behalf of such post or organization, shall not be subject to the tax imposed under subdivision (e) of section eleven hundred five or the unit fee imposed by section eleven hundred four of this article, provided that such representatives provide an exempt organization certificate from such post or organization certifying that such representative is acting on its behalf.
§ 3. The commissioner of taxation and finance is authorized and directed to develop and place into effect all rules and regulations, and take all other measures necessary, to implement the provisions of this act on or before its effective date, including, but not limited to making all necessary changes to the "Application for an Exempt Organization Certificate" (Form ST-119.2) and any other forms utilized by taxexempt entities.
§ 4. This act shall take effect January 1, 2020.
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 exempting certain senior citizen organizations from paying sales and compensating use taxes
Purpose
To specifically provide that not-for profit Senior Citizen organizations are exempt from paying sales and compensating use taxes.
Summary of provisions
Sections 1 and 2 amend Subdivision (a) and (g) of section 1116 of the Tax Law to specifically include not-for-profit senior citizen organiza- tions which limit membership to members fifty and older, and which are organized for pleasure, social, educational, recreational and/or other nonprofit purposes, in the list of organizations which are exempt from paying sales and compensating use taxes. These organizations are exempt provided that no part of net earnings benefit any private share holder or individual and the organizations' substantial part of activities is not carrying propaganda, attempting to influence legislation or campaigning on behalf of any candidate for public office. The exemption applies to purchases made by the organization itself and not for purposes of its members individually.
Read the full memo (788 words)
Section 3 provides that the Commissioner of Taxation and Finance is authorized to include senior citizen organizations on Form ST-119.2, the "Application for an Exempt Organization Certificate."
Section 4 states the effective date is January 1, 2020.
Existing law
Senior citizen organizations are not explicitly named as tax-exempt.
Justification
Senior citizen organizations have an easier time under federal law attaining a tax exempt status than under New York State Law. New York Tax Law Section 1116(a) (4) of Article 28 language mirrors the language of Internal Revenue Code 501(c)(3). Organizations qualifying under 501(c)(3) of the Internal Revenue Code are exempt from Federal income tax and may use their exempt status to receive automatic exemption from New York Sales and Use Tax. The language providing exemption both Feder- ally and in New York is "Any corporation, Association, trust or communi- ty chest, fund or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purpose, or to foster national or international sports competition or for the prevention of the cruelty of animals...." The problem for senior citizen organizations is that unless they are organ- ized and operated exclusively for any of these purposes, it cannot attain tax exempt status. Senior citizen organizations attempt to claim tax exempt status by stating that they are educational. The Division of Tax Appeals in New York has determined that unless the senior organiza- tion was organized and operated exclusively for educational purposes, it is not exempt. In such a determination the appellate court looks at the organization's purposes as defined by its organizing documents. If the court finds that the purposes are broader than the educational purpose specified in Section 1116(a), the organizational test is not met and there is no grant of tax-exempt status. The court also looks at the operational activities of the organization to see that all of its activ- ities accomplish one or more of the exempt purposes. Unfortunately for the senior citizen organizations, it has been determined that in most instances a substantial part of the organizations' functions are social and recreational, and the educational activities appear to be secondary. Furthermore, the recreational trips taken by seni or citizen organiza- tions, though seemingly educational to the seniors, is considered recre- ational to the Court. The Federal law on the other hand is able to grant tax exempt status to senior citizen organizations if not by 501(c)(3), but by 501(c) (7) as a social club. New York Tax Law has no such provision. By specifically identifying Senior Citizen Organizations as tax-exempt in New York Tax Law, it shall be clear cut that these organ- izations may be educational and/or social in nature. This status would help these organizations to save money that would normally go towards the payment of sales tax, for the operation of their organizations. Such monetary relief to our senior citizen organizations would go a long way into ensuring that these organizations thrive for the benefit of New York's senior population.
Legislative history
S.190A of 2017-18 referred to Investigations and Government Operations.
S.1320 of 2015-16 committed to Finance.
S.6200 of 2013-14 referred to Investigations and Government Operations.
Fiscal implications
Fiscal Note 3/25/15, Department of Taxation and Finance: "We estimate it would reduce State and local revenues by a minimal amount (less than $1 million. The State's share of this revenue reduction would be minimal (less than $1 million). During its first full year of implementation, we estimate this legislation could reduce State and local revenues by more than $1 million as it would likely encourage additional senior groups to take advantage of the sales and use tax exemptions provided by this legislation."
Effective date
January 1, 2020.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.