STATE OF NEW YORK
________________________________________________________________________
4740
2017-2018 Regular Sessions
IN SENATE
February 27, 2017
___________
Introduced by Sen. AVELLA -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
AN ACT to amend the tax law, in relation to sales and compensating use
taxes imposed with respect to certain aircraft and vessels by article
28 and pursuant to the authority of article 29 of such law; and to
repeal certain provisions of such law relating thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (A) of subdivision (i) of section 1111 of the tax
2 law, as amended by section 1 of part TT of chapter 59 of the laws of
3 2015, is amended to read as follows:
4 (A) Notwithstanding any contrary provisions of this article or other
5 law, with respect to any lease for a term of one year or more of (1) a
6 motor vehicle, as defined in section one hundred twenty-five of the
7 vehicle and traffic law, with a gross vehicle weight of ten thousand
8 pounds or less, [or] (2) a vessel, as defined in section twenty-two
9 hundred fifty of such law (including any inboard or outboard motor and
10 any trailer, as defined in section one hundred fifty-six of such law,
11 leased in conjunction with such a vessel) and (3) noncommercial aircraft
12 having a seating capacity of less than twenty passengers and a maximum
13 payload capacity of less than six thousand pounds, or an option to renew
14 such a lease or a similar contractual provision, all receipts due or
15 consideration given or contracted to be given for such property under
16 and for the entire period of such lease, option to renew or similar
17 provision, or combination of them, shall be deemed to have been paid or
18 given and shall be subject to tax, and any such tax due shall be
19 collected, as of the date of first payment under such lease, option to
20 renew or similar provision, or combination of them, or as of the date of
21 registration of such property with the commissioner of motor vehicles,
22 whichever is earlier. Notwithstanding any inconsistent provisions of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10308-01-7
S. 4740 2
1 subdivision (b) of this section or of section eleven hundred seventeen
2 of this article or of other law, for purposes of such a lease, option to
3 renew or similar provision originally entered into outside this state,
4 by a lessee (1) who was a resident of this state, and leased such prop-
5 erty for use outside the state and who subsequently brings such property
6 into this state for use here or (2) who was a nonresident and subse-
7 quently becomes a resident and brings the property into this state for
8 use here, any remaining receipts due or consideration to be given after
9 such lessee brings such property into this state shall be subject to tax
10 as if the lessee had entered into or exercised such lease, option to
11 renew or similar provision, or combination thereof, for the first time
12 in this state and the relevant provisions of sections eleven hundred ten
13 concerning imposition and computation of tax, eleven hundred eighteen
14 concerning exemption from use tax for tax paid to another jurisdiction,
15 eleven hundred thirty-two concerning presumption of taxability and
16 conditions for registration and eleven hundred thirty-nine concerning
17 refunds, of this article, shall be applicable to any sales or compensat-
18 ing use tax paid by the lessee before the lessee brought the property
19 into this state, except to the extent that any such provision is incon-
20 sistent with a provision of this subdivision. For purposes of this
21 subdivision, (1) a lease for a term of one year or more shall include
22 any lease for a shorter term which includes an option to renew or other
23 like provision (or more than one of such option or other provision)
24 where the cumulative period that the lease, with or without such option
25 or provision, may be in effect upon exercise of such option or provision
26 is one year or more and (2) receipts due and consideration given or
27 contracted to be given under any such lease or other provision for
28 excess mileage charges shall be subject to tax as and when paid or due.
29 § 2. Subdivision (q) of section 1111 of the tax law, as amended by
30 section 2 of part TT of chapter 59 of the laws of 2015, is amended to
31 read as follows:
32 (q) (1) The exclusions from the definition of retail sale in subpara-
33 graph (iv) of paragraph four of subdivision (b) of section eleven
34 hundred one of this article shall not apply to transfers, distributions,
35 or contributions of [a] an aircraft or vessel, except where, in the case
36 of the exclusion in subclause (I) of clause (A) of such subparagraph
37 (iv), the two corporations to be merged or consolidated are not affil-
38 iated persons with respect to each other. For purposes of this subdivi-
39 sion, corporations are affiliated persons with respect to each other
40 where (i) more than five percent of their combined shares are owned by
41 members of the same family, as defined by paragraph four of subsection
42 (c) of section two hundred sixty-seven of the internal revenue code of
43 nineteen hundred eighty-six; (ii) one of the corporations has an owner-
44 ship interest of more than five percent, whether direct or indirect, in
45 the other; or (iii) another person or a group of other persons that are
46 affiliated persons with respect to each other hold an ownership interest
47 of more than five percent, whether direct or indirect, in each of the
48 corporations.
49 (2) Notwithstanding any contrary provision of law, in relation to any
50 transfer, distribution, or contribution of [a] an aircraft or vessel
51 that qualifies as a retail sale as a result of paragraph one of this
52 subdivision, the sales tax imposed by subdivision (a) of section eleven
53 hundred five of this part shall be computed based on the price at which
54 the seller purchased the tangible personal property, provided that where
55 the seller or purchaser affirmatively shows that the seller owned the
56 property for six months prior to making the transfer, distribution or
S. 4740 3
1 contribution covered by paragraph one of this subdivision, such aircraft
2 or vessel shall be taxed on the basis of the current market value of the
3 aircraft or vessel at the time of that transfer, distribution, or
4 contribution. For the purposes of the prior sentence, "current market
5 value" shall not exceed the cost of the aircraft or vessel. See subdi-
6 vision (b) of this section for a similar rule on the computation of any
7 compensating use tax due under section eleven hundred ten of this part
8 on such transfers, distributions, or contributions.
9 (3) A purchaser of [a] an aircraft or vessel covered by paragraph one
10 of this subdivision will be entitled to a refund or credit against the
11 sales or compensating use tax due as a result of a transfer, distrib-
12 ution, or contribution of such aircraft or vessel in the amount of any
13 sales or use tax paid to this state or any other state on the seller's
14 purchase or use of the aircraft or vessel so transferred, distributed or
15 contributed, but not to exceed the tax due on the transfer, distrib-
16 ution, or contribution of the aircraft or vessel or on the purchaser's
17 use in the state of the aircraft or vessel so transferred, distributed
18 or contributed. An application for a refund or credit under this subdi-
19 vision must be filed and shall be in such form as the commissioner may
20 prescribe. Where an application for credit has been filed, the applicant
21 may immediately take such credit on the return which is due coincident
22 with or immediately subsequent to the time the application for credit is
23 filed. However, the taking of the credit on the return shall be deemed
24 to be part of the application for credit. Provided that the commissioner
25 may, in his or her discretion and notwithstanding any other law, waive
26 the application requirement for any or all classes of persons where the
27 amount of the credit or refund is equal to the amount of the tax due
28 from the purchaser. The provisions of subdivisions (a), (b), and (c) of
29 section eleven hundred thirty-nine of this article shall apply to appli-
30 cations for refund or credit under this subdivision. No interest shall
31 be allowed or paid on any refund made or credit allowed under this
32 subdivision. If a refund is granted or a credit allowed under this para-
33 graph, the seller or purchaser shall not be eligible for a refund or
34 credit pursuant to subdivision seven of section eleven hundred eighteen
35 of this article with regard to the same purchase or use.
36 § 3. Paragraph 21-a of subdivision (a) of section 1115 of the tax law
37 is REPEALED.
38 § 4. Subdivision (jj) of section 1115 of the tax law, as added by
39 section 1 of part SS of chapter 59 of the laws of 2015, is REPEALED.
40 § 5. Subdivision 13 of section 1118 of the tax law, as added by
41 section 2 of part SS of chapter 59 of the laws of 2015, is REPEALED.
42 § 6. This act shall take effect immediately.
