NEW YORK STATE SENATE

INTRODUCER'S MEMORANDUM IN SUPPORT

submitted in accordance with Senate Rule VI. Sec 1
BILL NUMBER:
SPONSOR: Funke
TITLE OF BILL: An act to amend the tax law, in relation Chapter 59 of the
laws of 2015, which provided an exemption of sales and compensating use taxes
on receipts in excess of two hundred thirty thousand dollars from every sale
of vessel and certain aircraft.
PURPOSE: To repeal Part SS and Part TT of the 2015 New York State Revenue
Budget Bill; S.2009/A.3009; which provided certain aircrafts and vessels a
tax exemption after the first $230,000 of sale price.
SUMMARY OF PROVISIONS:
Amends the sections of tax law that were changed by Part SS and TT of the
2015 New York State Revenue Budget Bill, which provided a tax exemption on
the receipt of sales in excess of $230,000 on vessels and certain aircrafts.
Section 1
Repeals Part SS of Chapter 59 of the laws of 2015, which
amends Section 1115 of the tax law by adding a new subdivision (jj).
Section 2
Adds noncommercial aircraft having a seating capacity of less
than twenty passengers and maximum payload capacity of less than six thousand
pounds back into Paragraph (A) of subdivision (i)of section 1111 of the tax
law.
Section 3

Adds aircraft back into section 1111 of the tax law

Section 4

Repeals paragraph 21-a of Section 1115 of tax law, which was

created be Chapter 59 of the laws of 2015

Section 5

Provides for the effective date

JUSTIFICATION: Buried in the Revenue portion of the 2015-2016 State Budget

was a bill aimed at exempting yachts and private aircraft from sales and
compensating use taxes for costs of $230,000 and above. Sales Tax exemptions
can be good public policy when they seek to encourage important public policy
prerogatives or incentivize the sale of particular technologies or products
which create jobs. One such example in this years State budget was a sales
tax exemption for power purchase agreements for solar energy. This exemption
contributes to a laudable goal-producing clean energy and reducing greenhouse
gas emissions-while also helping to create production and installation jobs
in the solar industry. Sales tax exemptions should not be used however, to
provide benefits to a very few New Yorkers who can afford a particular
product, while producing no discernible job creation benefit. The sales tax
exemption for certain yachts and planes is bad public policy. Tax reductions
should be broad based and above-all they should provide benefits to average

hard working New Yorkers. For example, in Monroe and Ontario counties that
comprise my Senate District-the median average family income is $52,700 and
$56,749 respectively. Families in the Finger Lakes region are working hard
every day to pay the bills and send their kids to school. These families need
tax relief, in order to better meet their basic needs. As such-the recently
adopted sales tax exemption for yachts and private planes of over $230,000
should be immediately repealed and any money that may become available should
be used for broader based tax relief of targeted job creation programs that
help hardworking taxpayers.

LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS: Recovery of revenue to the state.
EFFECTIVE DATE: Immediately-allowing the repeal of this sales tax exemption
due to take effect on September 1, 2015.