No Tax on Green Dry Cleaners

Title of bill

An act to amend the tax law, in relation to exempting certain dry clean- ing equipment or machinery certified by the department of environmental conservation from sales and use taxes

Purpose or general idea of bill

Exempts certain dry cleaning equipment or machinery certified by the Department of Environmental Conservation from sales and use taxes.

Summary of specific provisions

Section 1 of the bill amends subdivision (a) of Section 1115 of the tax law, by adding a new paragraph 45. Paragraph 45 exempts equipment or machinery from sales and use taxes if it is certified by the Department of Environmental Conservation for pollution prevention or control, which includes any process, facility, device, fixture, equipment or machinery used primarily for the control, prevention, or abatement of pollution or contaminants from the operation of a dry cleaning plant, including any structure, machinery or equipment installed in the reconstruction or replacement of such process, facility, device, fixture, equipment or machinery.

This paragraph applies only to professional cleaning systems that do not rely on EPA Classified Hazardous Air Pollutants and qualify for or are exempt from air facility registration with the Department of Environ- mental Conservation.

Justification

In 1997, the New York State Department of Environmental Conservation adopted regulation Part 232, governing dry cleaners using perchloroethy- lene. According to the National Cleaners Association, Part 232 is the nation's most stringent dry cleaning regulation, making New York State dry cleaning operations the safest in relation to the environment and the workplace. However, the adoption of Part 232 has had a devastating impact on small business owners, since over half the cleaners in New York have gone out of business, along with the commensurate loss of jobs.

In 1997 when Part 232 was adopted, over 4,000 dry cleaning facilities were registered statewide with the Department of Environmental Conserva- tion. As of 2017, the department has slightly less than 2,000 regis- tered.

A financial incentive for those cleaners that remain in business, to help them invest in more modern eco-friendly operations, is the best way to encourage environmentally friendly choices. An exemption from sales tax would encourage and incentivize cleaners to make the more ecofriend- ly and expensive choice when purchasing new cleaning equipment. The cost of this equipment is estimated to be in excess of $65,000.

According to the National Cleaners Association, a sales tax exemption would provide at least a $3,000 benefit to each dry cleaner. Therefore, this legislation would not only help to protect our environment, but will also help keep dry cleaners in business and stem the major loss of jobs in the dry cleaning industry over the last 20 years.

Prior legislative history

2017-2018: S.5456-A/A.6914-A - Amend and Recommit to Investigations and Government Operations.

Fiscal impact

To be determined.

Effective date

First day of the sales tax quarterly period, as designated in subdivi- sion (b) of Section 1136 of the tax law, next commencing after this act shall have become a law and shall apply to sales made on or after the effective date of this act; provided, however that effective immediate- ly, the addition, amendment and/or repeal of any rules or regulations necessary for the implementation of the foregoing provisions of this act on its effective date are authorized and directed to be made and completed on or before such effective date.