Senate Bill S6163

                                BILL NUMBER:S6163

TITLE OF BILL:

An act
to amend the
tax law, in relation to providing an exemption from sales tax for sales
made to other states, other political subdivisions of the United States
and their political subdivisions

PURPOSE:

To provide an automatic exemption for New York state sales and use tax
to other states and political subdivisions of the United States for
uses which would otherwise be immune from taxation.

SUMMARY OF PROVISIONS:

Section 1. Amends paragraph 2 of subdivision (a) of section 1116 of
the tax law to provide that any state, any political subdivision,
agency, or instrumentality which would otherwise be immune from
taxation where it is a purchaser, user or consumer, or where it sells
services or property of a kind not ordinarily sold by private persons.

Section 2. Provides that this act shall take effect July 1, 2012 or on
the first day of a sales tax quarterly period, as described in
              

subdivision (b) of section 1136 of the tax law, next commencing after
signature.

JUSTIFICATION:

New York currently does not provide an automatic exemption for sales
and services performed in New York state for out-of-state
governmental and other municipal entities. This results in a
situation where other states and their municipal governments are
discouraged from conducting business within New York. The situation
is particularly troublesome for business close to the borders of
other states and is resulting in the loss of such business for in
state business concerns.

Many other states currently provide such a blanket sales tax exemption
to other governmental entities, realizing that it is an incentive to
encourage out of state revenue for their employers.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

Undetermined.

EFFECTIVE DATE:

This act shall take effect July 1, 2012 or upon an immediately
preceding sales tax quarter.