BILL NUMBER:  S5503

 TITLE OF BILL :

An act to amend the tax law, in relation to the imposition of
additional rates of sales and compensating use taxes by Erie county

 PURPOSE OF THE BILL :

To authorize Erie County to impose an additional one percent rate and
an additional three-quarters of one percent rate of sales and
compensating use taxes, for the period commencing December 1, 2017,
and ending November 30, 2019, and to provide for retention for solely
county purposes of all net collections from the additional
three-quarters of one percent rate.

 SUMMARY OF SPECIFIC PROVISIONS :

Bill section 1 would amend clause 4 of subparagraph (i) of the opening
paragraph of section 1210 of the Tax Law, which authorizes counties
and cities to impose sales and use taxes at specified rates. Clause 4
would authorize Erie County to impose an additional one percent rate
and an additional three-quarters of one percent rate of such taxes for
the period commencing December 1, 2017, and ending November 30, 2019.
Currently the county is authorized to impose these two additional
rates through November 30, 2017 pursuant to section 1210 of the Tax
              

Law.

Bill section 2 would amend paragraph 2 of Tax Law section 1262-q to
continue to provide that net collections from the additional
three-quarters of one percent rate shall be used by the county solely
for county purposes and shall not be subject to any revenue
distribution agreement the county entered into under section 1262(c)
of the Tax Law.

Bill section 3 provides that the bill would take effect immediately.

 EXISTING LAW :

Section 1210 of the Tax Law authorizes counties and cities to impose
sales and compensating use taxes generally at a rate not to exceed
three percent. More than 50 counties outside New York City and five
cities are each authorized to impose an additional rate of tax in
excess of three percent. Pursuant to section 1210(a), a county or city
can impose the "general" sales and use taxes, consisting of the six
subdivisions of section 1105 of the Tax Law, which imposes the State's
sales taxes, and of the related compensating use taxes in section 1110
of the Tax Law, which imposes the State's use taxes. Or, pursuant to
section 1210(b), a county or city can impose one or more of the taxes
described in section 1105(b), (d), (e), or (f), which are known as the
"segmented taxes," plus related use taxes. Erie County currently
imposes the "general" sales and use taxes at the rate of three
percent. The county is also authorized to, and does, impose an
additional one percent rate pursuant to section 1210 of the Tax Law
for the period commencing December 1, 2017, through November 30, 2019.
The county is also authorized to, and does, impose an additional
three-quarters of one percent rate pursuant to section 1210 of the Tax
Law for the period commencing December 1, 2017, through November 30,
2019.

 JUSTIFICATION :

Erie County has requested authorization to impose an additional one
percent and three-quarters percent sales and compensating use tax. The
revenue anticipated from this additional tax will allow the County of

Erie to continue to provide services deemed vital to the community
while maintaining a balanced budget.

 PRIOR LEGISLATIVE HISTORY :

Chapter 184 of the Laws of 2015;
Chapter 324 of the Laws of 2013.

 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS :

None to the State. Failure to extend the additional one percent and
three-quarters percent sales and compensating use tax rate would mean
the annual loss of nearly $278 million in County revenue, $12.5
million of which is shared with local governments, and would create a
severe challenge to the continued operation of County government and
its delivery of services.

 EFFECTIVE DATE :
This act shall take effect immediately.