BILL NUMBER:S5235

TITLE OF BILL:
An act
relating to the sales and compensating use tax on receipts derived from
removing waste material from certain regulated transfer stations or
construction and demolition debris processing facilities

PURPOSE:
To reaffirm the intention of the legislature that the
services of removing waste material from a waste transfer station or
a construction and demolition debris processing facility, where the
waste removed was not generated by said facility, was not subject to
New York state and local sales taxes as the service of maintaining,
servicing or repairing the real property of those facilities, and
ensure a uniform policy with regard to such services.

SUMMARY OF PROVISIONS:
Section 1 of the bill provides that any
liability for state and local sales and compensating use taxes with
respect to the services of removing waste material from a waste
transfer station or construction and demolition debris processing
facility regulated by the NYS Department of Environmental
conservation, where the waste removed was not generated by said
facility, for periods ending after April 1, 1997, and before December
1, 2005, shall be cancelled and, if paid, refunded.
              

Section 2 of the bill provides that the act shall take effect
immediately.

JUSTIFICATION:
One of the categories of enumerated services that are
subject to sales tax is the maintaining, servicing or repairing of
real property. These are services that relate to keeping real
property in a condition of fitness, efficiency, readiness or safety,
or restoring it to such condition. Examples of such services would be
painting, lawn maintenance and tree spraying as well as plumbing or
electrical repairs.
The removal of trash or garbage is also considered to be such a
taxable service.

Once trash is taken from a home or business property, it is often
taken to a transfer station, regulated by the NYS Department of
Environmental Conservation, where it is sorted and combined with
refuse taken from other facilities so that it can be economically
shipped in bulk to its ultimate destination. Previously, the question
was raised as to whether this subsequent bulk shipment was merely a
nontaxable transportation service or should be considered by itself
as a taxable maintenance service to the real property of the transfer
station. In May of 1997, an Advisory Opinion was issued by the
Department of Taxation and Finance that considered it to be such a
taxable service. TSB-A-97(32)S.

That Advisory opinion contains a strained interpretation of the Tax
Law that is beyond that contemplated by the Legislature when it
sought to impose a tax on the services of maintaining real property.


For that reason, the legislature passed a law in 2005 to specifically
exclude such services from taxation. This bill seeks to address the
tax status for the services of such waste removal from a transfer
station for the
period between the issuance of the Advisory Opinion and the effective
date of Chapter 321 of the Laws of 2005 to solidify one cohesive
policy and cease the continued application of sales and compensating
use tax by the Department of Taxation and Finance for this period.

FISCAL IMPLICATIONS:
To be determined.

PRIOR LEGISLATIVE HISTORY:
New bill.

EFFECTIVE DATE:
This act shall take effect immediately.