A03431 Summary:

BILL NO    A03431 

SAME AS    SAME AS S00815

SPONSOR    Lupardo (MS)

COSPNSR    Schimminger, Magnarelli, Lifton, Morelle, Cook, Scarborough, Titone,
           Cahill, Lavine, Miller, Weprin, Titus, Brindisi, Englebright,
           Gunther, Barrett, Thiele, DenDekker, Aubry, Skartados, Santabarbara

MLTSPNSR   Arroyo, Ceretto, Crespo, Crouch, DiPietro, Duprey, Finch,
           Fitzpatrick, Friend, Glick, Graf, Hawley, Hooper, Lopez, Lupinacci,
           Magee, Markey, McLaughlin, Montesano, Oaks, Palmesano, Paulin, Perry,
           Pretlow, Raia, Saladino, Schimel, Stec, Wright

Amd S1115, Tax L

Provides for an exemption from sales and use taxes on the sale of general
aviation aircraft.
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A03431 Actions:

BILL NO    A03431 

01/22/2015 referred to ways and means
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A03431 Votes:

There are no votes for this bill in this legislative session.
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A03431 Memo:

BILL NUMBER:A3431

TITLE OF BILL:

An act to amend the tax law, in relation to exempting from sales and
compensating use taxes the purchase of general aviation aircraft; and
providing for the repeal of certain provisions upon expiration thereof

PURPOSE:

This bill would establish a 5-year pilot program to exempt from sales
and use taxes the purchase of general aviation aircraft for a limited
time and require a study be conducted by the commissioner of taxation
and finance as to the economic and revenue impacts of the exemption.

SUMMARY OF PROVISIONS:

S 1 - Titles the act the "New York Aviation Jobs Act."

S 2 - Amends Tax Law S 1115 (dd) by amending paragraph 1 to exempt
from sales and use taxation the purchase of general aviation aircraft
similar to the current exemption granted to commercial service
aircraft.

S 3 - Requires a study be conducted by the commissioner of taxation
and finance as to the economic and revenue impacts of the exemption to
be submitted on or after November 1, 2019, to the Governor, temporary
president of the senate and the speaker of the assembly.

S 4 - Effective date is April 1, 2016 and shall apply to all sales of
general aviation aircraft on or after that date and until March 31,
2021.

JUSTIFICATION:

Airports are among the economic engines that fuel growth in the
economy of the state and in the communities which they serve. The
economic benefits of airports in this state are quite impressive.
Annual economic activity attributable to aviation is $50 billion. The
aviation sector employs more than 394,500 state residents and
generates $18 billion in payroll and $4.5 billion in State and local
tax revenue annually.

This bill will make New York competitive with other states that
already exempt sales taxes related to the purchase of general aviation
aircraft.  Connecticut, Massachusetts, New Jersey, Maine and New
Hampshire are a few of the regional states that exempt these aviation
purchases from sales and use taxes or provide more favorable tax
treatment. NY has lost 700 such aircraft over a ten-year period since
2002.

Therefore, this bill establishes a 5-year tax exemption pilot program,
similar to what was successfully enacted to exempt maintenance and
repair of general aviation aircraft from the sales and use tax several
years ago. A NY Tax Department report-A Review of the Sales and Use
Tax Exemption for Private Aircraft Parts and Service-on that exemption
found that, since its enactment in 2004, New York has attracted


significant investment in aviation services, resulting in an expansion
of aviation maintenance and repair businesses, the creation of jobs
here in New York and an increase in state tax revenue. (FAA data
indicates the establishment of 23 such major aviation maintenance and
repair businesses and 686 new jobs in the state since 2004).

By adopting a 5 year exemption pilot program for the purchase of
general aviation aircraft, New York will encourage such aircraft and
business jets to locate here. Like the maintenance and repair
exemption, an exemption for the purchase of aircraft is expected to
increase state revenues and leverage significant economic returns for
local communities and the state.

LEGISLATIVE HISTORY:

2005-2006: S.3655 - Passed Senate/A.6819-A - Ways & Means
2007-2008: S.425-B - Passed Senate/A.3806-B - Ways & Means
2009-2010: S.4551-A - Investigations & Government Operations/A.5960 -
Ways & Means
2011-2012: S.2678 - Passed Senate/A.4818 - Ways & Means
2013-2014: S.273-B - Passed Senate/A.3677-B - Ways & Means

FISCAL IMPLICATIONS:

Estimated reduction of $7 million annually (a clear indication that
there is barely any new aircraft sales and basings activities
happening in New York) will be more than offset by increases in
economic activity, jobs and state and local tax revenue (the impact of
each business aircraft on average is 5 on airport jobs and $1 million
of economic activity according to DOT). The economic development
benefits at airports will generate payroll taxes, property taxes, and
sales taxes in other ancillary services and increased fuel tax
collections from the expected increase of in-state basing of general
aviation aircraft and the resulting increase in aviation activity.

EFFECTIVE DATE:

This act shall take effect April 1, 2016, and shall apply to sales of
general aviation aircraft made and uses occurring on or after that
date in accordance with the applicable transitional provisions of
section 1106 and 1107 of the tax law, but shall not apply to sales
occurring after March 31, 2021, and section one of this act shall
expire and be deemed repealed April 1, 2021. Provided, however, that
aircraft subject to exemption pursuant to paragraph 1 of subdivision
(dd) of section 1115 of the tax law, as amended by section two of this
act, shall remain so exempt after the expiration and repeal of section
two of this act, including instances where the aircraft is
subsequently sold or the ownership is transferred or assigned, for the
useful life of the aircraft.
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A03431 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                         3431

                              2015-2016 Regular Sessions

                                 I N  A S S E M B L Y

                                   January 22, 2015
                                      ___________

       Introduced  by  M.  of  A.  LUPARDO,  SCHIMMINGER,  MAGNARELLI,  LIFTON,
         MORELLE, COOK, SCARBOROUGH, TITONE, CAHILL,  LAVINE,  MILLER,  WEPRIN,
         TITUS,  BRINDISI,  ENGLEBRIGHT,  GUNTHER,  BARRETT, THIELE, DenDEKKER,
         AUBRY, SKARTADOS -- Multi-Sponsored by -- M. of A.    ARROYO,  CAMARA,
         CERETTO, CRESPO, CROUCH, DiPIETRO, DUPREY, FINCH, FITZPATRICK, FRIEND,
         GLICK, GRAF, HAWLEY, HEASTIE, HOOPER, LOPEZ, LUPINACCI, MAGEE, MARKEY,
         McLAUGHLIN,  MONTESANO, OAKS, PALMESANO, PAULIN, PERRY, PRETLOW, RAIA,
         SALADINO, SCHIMEL, STEC, WRIGHT --  read  once  and  referred  to  the
         Committee on Ways and Means

       AN  ACT  to  amend  the tax law, in relation to exempting from sales and
         compensating use taxes the purchase of general aviation aircraft;  and
         providing for the repeal of certain provisions upon expiration thereof

         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. Short title. This act shall be known and may  be  cited  as
    2  the "New York aviation jobs act".
    3    S  2.  Paragraph 1 of subdivision (dd) of section 1115 of the tax law,
    4  as added by section 1 of part L of chapter 60 of the laws  of  2004,  is
    5  amended to read as follows:
    6    (1)  Services  otherwise  taxable under paragraph three of subdivision
    7  (c) of section eleven hundred five or under section eleven  hundred  ten
    8  of  this  article,  SALES  OF  GENERAL  AVIATION  AIRCRAFT, and tangible
    9  personal property purchased and  used  by  the  person  who  sells  such
   10  services  in  performing  such  services,  where such property becomes a
   11  physical component part of the property  upon  which  the  services  are
   12  performed  or  where  such  property is a lubricant applied to aircraft,
   13  shall be exempt from tax under this  article  where  such  services  are
   14  performed on aircraft.
   15    S 3. The commissioner of taxation and finance, in conjunction with the
   16  commissioner of transportation, shall review and analyze all statistical
   17  data  available  for the purpose of determining the economic and revenue

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD06332-01-5
       A. 3431                             2

    1  impact of the sales and compensating use tax exemption for the  sale  of
    2  general  aviation  aircraft  enacted  by  section  two of this act. Such
    3  review and analysis shall include, but not be limited to, any  increases
    4  in  aviation-related  employment,  aircraft basing, aircraft maintenance
    5  and aircraft hangering within the state. The commissioner shall  compile
    6  his  or  her  findings  into  a  report, which shall be submitted, on or
    7  before November 1, 2020, to the governor, the temporary president of the
    8  senate and the speaker of the assembly.
    9    S 4. This act shall take effect April 1,  2016,  and  shall  apply  to
   10  sales  of  general aviation aircraft made and uses occurring on or after
   11  such effective date  in  accordance  with  the  applicable  transitional
   12  provisions of sections 1106 and 1107 of the tax law, but shall not apply
   13  to  sales  occurring  after  March 31, 2021, and section two of this act
   14  shall expire and be deemed repealed April 1, 2021.   Provided,  however,
   15  that  aircraft  subject to exemption pursuant to paragraph 1 of subdivi-
   16  sion (dd) of section 1115 of the tax law, as amended by section  two  of
   17  this  act,  shall  remain  so  exempt after the expiration and repeal of
   18  section two of this act,  including  instances  where  the  aircraft  is
   19  subsequently  sold  or the ownership is transferred or assigned, for the
   20  useful life of the aircraft. Provided, further, that the commissioner of
   21  taxation and finance shall be immediately authorized to adopt and  amend
   22  any   rules  or  regulations  and  to  issue  any  procedure,  forms  or
   23  instructions necessary to implement section  two  of  this  act  on  its
   24  effective date.
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