S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7721
 
                             I N  S E N A T E
 
                              January 7, 2022
                                ___________
 
 Introduced  by  Sen. KENNEDY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the tax law, in relation to terminal  rental  adjustment
   clauses in motor vehicle leases; and to amend a chapter of the laws of
   2021  amending  the  tax  law  relating  to terminal rental adjustment
   clauses in motor vehicle leases,  as  proposed  in  legislative  bills
   numbers S. 3926 and A. 5401, in relation to the effectiveness thereof
 
   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 a chapter of the laws of 2021 amending  the  tax  law
 relating  to terminal rental adjustment clauses in motor vehicle leases,
 as proposed in legislative bills numbers S. 3926 and A. 5401, 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 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 under which lease the lessee of such motor
 vehicle has certified in the writing described in clause (i) of subpara-
 graph (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 consideration 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 ACCORD-
 ANCE WITH THE PROVISIONS OF THIS SUBDIVISION.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08089-02-2
              

 S. 7721                             2
 
   [(2) If a lessor collects and pays tax as measured under  clause  (ii)
 of  subparagraph  one  of  this  paragraph, for] 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 subdivision.
   (2) IF AT THE TERMINATION OF A LEASE DESCRIBED IN SUBPARAGRAPH ONE  OF
 THIS  PARAGRAPH THE LESSOR REFUNDS A PORTION OF THE RECEIPT OR CONSIDER-
 ATION TO THE LESSEE AS REQUIRED BY A TERMINAL RENTAL  ADJUSTMENT  CLAUSE
 OF  SUCH  LEASE, EITHER: (I) THE LESSEE MAY CLAIM A REFUND OR CREDIT FOR
 THE SALES TAX IT PAID ON SUCH REFUNDED RECEIPT OR CONSIDERATION; OR (II)
 THE LESSOR MAY CLAIM A REFUND OR CREDIT OF THE SALES  TAX  PAID  BY  THE
 LESSEE  ON SUCH REFUNDED RECEIPT OR CONSIDERATION IF IT HAS DEMONSTRATED
 TO THE SATISFACTION OF THE COMMISSIONER THAT IT FIRST REFUNDED SUCH  TAX
 TO  THE  LESSEE.    NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION (C) OF
 SECTION ELEVEN HUNDRED THIRTY-NINE  OF  THIS  ARTICLE,  SUCH  CLAIM  FOR
 REFUND  OR  CREDIT SHALL BE CONSIDERED TIMELY IF IT IS MADE WITHIN THREE
 YEARS AFTER THE TAX WAS PAID BY THE LESSOR TO THE  COMMISSIONER  OR  ONE
 YEAR  AFTER  SUCH  RECEIPT  OR CONSIDERATION WAS REFUNDED TO THE LESSEE,
 WHICHEVER IS LATER; PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID ON
 A REFUND OR CREDIT MADE PURSUANT TO THIS SUBPARAGRAPH.
   § 2. Section 2 of a chapter of the laws of 2021, amending the tax  law
 relating  to terminal rental adjustment clauses in motor vehicle leases,
 as proposed in legislative bills numbers S. 3926 and A. 5401, is amended
 to read as follows:
   § 2. This act shall take effect [immediately] ON THE FIRST  DAY  OF  A
 SALES  TAX QUARTERLY PERIOD DESCRIBED IN SUBDIVISION (B) OF SECTION 1136
 OF THE TAX LAW NEXT COMMENCING AT LEAST THIRTY DAYS AFTER THIS ACT SHALL
 TAKE EFFECT, AND SHALL APPLY TO REFUNDS  OR  RECEIPTS  OR  CONSIDERATION
 PAID  PURSUANT TO A TERMINAL RENTAL ADJUSTMENT CLAUSE DESCRIBED IN PARA-
 GRAPH (B) OF SUBDIVISION (I) OF SECTION 1111 OF THE TAX LAW ON AND AFTER
 SUCH DATE.
   § 3. This act shall take effect on the  same  date  and  in  the  same
 manner as a chapter of the laws of 2021 amending the tax law relating to
 terminal  rental adjustment clauses in motor vehicle leases, as proposed
 in legislative bills numbers S. 3926 and A. 5401, takes effect.