Assembly Bill A5401

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5401
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 16, 2021
                                ___________
 
 Introduced by M. of A. McDONALD -- read once and referred to the Commit-
   tee on Ways and Means
 
 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)  (1)  Notwithstanding any inconsistent provisions of this subdivi-
 sion, 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,  THE
 LESSOR  SHALL: (I) PAY TAX ON THE RECEIPTS FROM THE SALE OF OR CONSIDER-
 ATION GIVEN OR CONTRACTED TO BE GIVEN FOR THE PURCHASE, AS  MEASURED  BY
 SUBDIVISION  (B)  OF  SECTION  ELEVEN  HUNDRED TEN OF THIS PART, OF SUCH
 VEHICLE FOR LEASE; OR (II) COLLECT  AND  PAY  TAX  AS  MEASURED  BY  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]  (2)  IF A LESSOR COLLECTS AND PAYS TAX AS MEASURED UNDER CLAUSE
 (II) OF SUBPARAGRAPH ONE OF THIS PARAGRAPH,  FOR  each  such  option  to
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD08089-01-1

 A. 5401                             2
 
 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 subdivision.
   § 2. This act shall take effect immediately.