Provides for the state to hold counties, cities, and school districts harmless for the loss of sales and compensating use tax revenues attributable to the exemption of certain articles of clothing and footwear from such taxes; provides for budgetary planning for this expenditure; provides for an offset of this payment by certain increases in real property tax revenues.
STATE OF NEW YORK
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4624
2011-2012 Regular Sessions
IN ASSEMBLY
February 4, 2011
___________
Introduced by M. of A. J. MILLER -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the state finance law, in relation to state aid to coun-
ties, cities, and school districts for tax receipts foregone as a
result of the exemption of clothing and footwear from sales and
compensating use taxes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The state finance law is amended by adding a new section
2 54-m to read as follows:
3 § 54-m. State tax relief for counties, cities, and school districts
4 for tax receipts foregone due to the exemption of clothing and footwear
5 from sales and compensating use taxes. 1. (a) Except as otherwise
6 provided by law, the provisions of this section shall be utilized by the
7 state to calculate the annual amount due to be paid to counties, cities,
8 and school districts by the state to hold harmless such counties,
9 cities, and school districts for tax receipts foregone as a result of
10 provisions of articles twenty-eight and twenty-nine of the tax law and
11 any other general, special, or local laws exempting the purchase of
12 clothing and footwear for which the receipt or consideration given or
13 contracted to be given is less than one hundred ten dollars per article
14 of clothing, per pair of shoes or other articles of footwear or per item
15 used or consumed to make or repair such clothing and which becomes a
16 physical component part of such clothing from sales or compensating use
17 taxes.
18 (b) The provisions of this section shall not apply to any jurisdiction
19 to which the provisions of subdivision (g) of section eleven hundred
20 nine of the tax law apply.
21 2. The amount of such reimbursement shall be equal to the tax receipts
22 foregone by counties, cities, and school districts pursuant to the
23 provisions of the tax reductions described in subdivision one of this
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08190-01-1
A. 4624 2
1 section for the calendar year ending in each such state fiscal year and
2 shall be determined annually beginning with the first state fiscal year
3 after the effective date of this section and each year thereafter. Such
4 amount, as finally determined pursuant to this section, shall represent
5 a state charge and shall be paid to counties, cities, and school
6 districts as provided in subdivision five of this section.
7 3. (a) The amount of such reimbursement shall be estimated by the
8 commissioner of taxation and finance on or before December first of the
9 year preceding the state fiscal year during which such amount is to be
10 paid begins. Such commissioner shall use the best available information
11 at his or her disposal to estimate such amount. In addition to such
12 methods and information such commissioner may use in making such esti-
13 mate, he or she shall consult with counties, cities, and school
14 districts during the preparation of the determination of such amount.
15 (b) The estimate shall be provided to the director of the budget for
16 use in preparing the budget for the next subsequent state fiscal year on
17 or before the tenth day of December in each such year, and copies of
18 such estimate shall also be supplied to the chairman of the senate
19 finance committee and to the chairman of the assembly ways and means
20 committee.
21 (c) In each year following the preparation of the initial determi-
22 nation of such amount the commissioner of taxation and finance shall
23 revise such estimate and shall provide such revision to the director of
24 the budget and shall also supply copies of such revision to the chairman
25 of the senate finance committee and to the chairman of the assembly ways
26 and means committee.
27 4. The governor shall include the amounts determined in paragraphs (a)
28 and (c) of subdivision three of this section as an identifiable item of
29 appropriation in each annual executive budget submission required by
30 this chapter for first fiscal years following the effective date of this
31 section and thereafter.
32 5. Amounts determined to be due counties, cities, and school districts
33 pursuant to this section shall be paid out pursuant to the following
34 schedule: for the first state fiscal year following the effective date
35 of this section, one hundred percent of any required amount shall be
36 made by March fifteenth in such fiscal year; for the second state fiscal
37 year following the effective date of this section, fifty percent shall
38 be paid out on March fifteenth and fifty percent on December fifteenth
39 of such year; and for the third state fiscal year following the effec-
40 tive date of this section and thereafter, thirty-three and one-third
41 percent shall be paid out on the fifteenth day of September, December
42 and March of such year.
43 6. The calculation of the amount of tax receipts foregone by any coun-
44 ty, city, or school district shall be based on the amount of sales and
45 compensating use taxes accruing to each such county, city, or school
46 district for the period December first, two thousand nine through Novem-
47 ber thirtieth, two thousand ten on the basis of tax liability incurred
48 during such period and a comparison of such amount with the same amount
49 accruing during the period of December first, two thousand ten through
50 November thirtieth, two thousand eleven. Any excess of the former over
51 the latter shall be termed the differential. The state shall hold each
52 county, city, and school district harmless for the differential, if any.
53 In the event that sales and compensating use taxes receipts for any
54 annual period exceed receipts for the latter period, the differential,
55 for that year, shall be accordingly adjusted or eliminated.
A. 4624 3
1 7. Payment of hold harmless reimbursement pursuant to this section
2 shall be offset by property tax receipts as follows: Any additional
3 property tax receipts, resulting not from increases in tax rates but
4 from additional assessed valuation attributable to business establish-
5 ments selling exempted clothing and footwear, such additional assessed
6 valuation being added to the assessment rolls after the effective date
7 of this section shall, to the extent of fifty percent thereof, be offset
8 against any payment otherwise due pursuant to this section. The office
9 of real property services, in consultation with county, city, and school
10 district real property tax officials, shall assist the department of
11 taxation and finance in making the calculations and determinations
12 necessitated by this subdivision.
13 § 2. This act shall take effect on the first of December next succeed-
14 ing the date on which it shall have become a law. State agencies and
15 municipal corporations are authorized to promulgate any and all rules
16 and regulations and take any other measures necessary to implement this
17 act on its effective date on or before such date.
