S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4816
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                    April 20, 2015
                                      ___________
       Introduced  by  Sens.  FUNKE, RITCHIE -- read twice and ordered printed,
         and when printed to be committed to the  Committee  on  Investigations
         and Government 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.
                                                                  LBD10484-02-5
       S. 4816                             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    S 2. Subdivision (q) of section 1111 of  the  tax  law,  as  added  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. 4816                             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 subdivi-
    6  sion (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 commission-
   25  er may, in his or her discretion  and  notwithstanding  any  other  law,
   26  waive  the  application  requirement  for  any or all classes of persons
   27  where the amount of the credit or refund is equal to the amount  of  the
   28  tax due from the purchaser. The provisions of subdivisions (a), (b), and
   29  (c) of section eleven hundred thirty-nine of this article shall apply to
   30  applications  for  refund  or credit under this subdivision. No interest
   31  shall 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    S 3. Paragraph 21-a of subdivision (a) of section 1115 of the tax  law
   37  is REPEALED.
   38    S 4. Subdivision (jj) of section 1115 of the tax law is REPEALED.
   39    S 5. Subdivision 13 of section 1118 of the tax law is REPEALED.
   40    S  6.  This  act shall take effect immediately; provided that sections
   41  one, two and three of this act shall take effect on the same date and in
   42  the same manner as part TT of chapter 59  of  the  laws  of  2015  takes
   43  effect;  and sections four and five of this act shall take effect on the
   44  same date and in the same manner as part SS of chapter 59 of the laws of
   45  2015 takes effect.