S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4070--A
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 1, 2019
                                ___________
 
 Introduced  by  M. of A. SCHIMMINGER, McDONALD -- read once and referred
   to the Committee on Ways and Means -- recommitted to the Committee  on
   Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee

 AN  ACT  to amend the tax law, in relation to terminal rental adjustment
   clauses in motor vehicle leases
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph (B) of subdivision (i) of section 1111 of the tax
 law, as amended by chapter 20 of the laws of 1992, is amended to read as
 follows:
   (B)  Notwithstanding  any inconsistent provisions of this subdivision,
 with respect to a lease of a motor vehicle described in paragraph (A) of
 this subdivision for a term of one year or more (1)  which  includes  an
 indeterminate  number  of  options to renew or other similar contractual
 provisions or which includes thirty-six or more monthly options to renew
 beyond the initial term, and (2) under which lease the  lessee  of  such
 motor  vehicle  has  certified in the writing described in clause (i) of
 subparagraph (C) of paragraph two of subsection (h) of section  7701  of
 the  internal  revenue  code of 1986, under penalty of perjury, that the
 lessee intends that more than fifty percent of the use of  such  vehicle
 is  to  be  in  a  trade  or business of the lessee, all receipts due or
 consideration given or contracted to be given under such lease  for  the
 first  thirty-two  months, or the period of the initial term if greater,
 of such lease shall be deemed to have been paid or given  and  shall  be
 subject  to  tax  in accordance with the provisions of this subdivision.
 For each such option to renew, or similar provision, or  combination  of
 them, exercised after the first thirty-two months, or the period of such
 initial  term,  if longer, of any such lease, tax due under this article
 shall be collected and paid or paid over without regard to this subdivi-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07642-03-0

 A. 4070--A                          2
 
 sion.  IF ANY SUCH LEASE CONTAINS A "TERMINAL RENTAL ADJUSTMENT  CLAUSE"
 AS  DEFINED  IN PARAGRAPH THREE OF SUBSECTION (H) OF SECTION 7701 OF THE
 INTERNAL REVENUE CODE OF 1986, (1) ANY  INCREASE  IN  THE  CONSIDERATION
 GIVEN  PURSUANT  TO  SUCH  CLAUSE UPON TERMINATION OF THE LEASE SHALL BE
 SUBJECT TO TAX, AND (2) ANY DECREASE IN THE CONSIDERATION GIVEN PURSUANT
 TO SUCH CLAUSE UPON TERMINATION OF THE LEASE SHALL ALLOW THE  LESSOR  TO
 EXCLUDE  SUCH AMOUNT FROM TAXABLE RECEIPTS. NO INTEREST SHALL BE ALLOWED
 OR PAID ON THE EXECUTION OF AMOUNTS FROM  TAXABLE  RECEIPTS  UNDER  THIS
 SUBDIVISION.
   § 2. This act shall take effect immediately.