S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7135
 
                             I N  S E N A T E
 
                              January 8, 2020
                                ___________
 
 Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the tax law, in relation to the imposition of sales  and
   compensating use taxes with respect to certain aircraft; and to repeal
   paragraph  21-a  of  subdivision  (a)  of section 1115 of the tax law,
   relating thereto

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph (A) of subdivision (i) of section 1111 of the tax
 law, as added by section 1 of part TT of chapter 59 of the laws of 2015,
 is amended to read as follows:
   (A)  Notwithstanding  any contrary provisions of this article or other
 law, with respect to any lease for a term of one year or more of  (1)  a
 motor  vehicle,  as  defined  in  section one hundred twenty-five of the
 vehicle and traffic law, with a gross vehicle  weight  of  ten  thousand
 pounds  or  less,  [or]  (2)  a vessel, as defined in section twenty-two
 hundred fifty of such law (including any inboard or outboard  motor  and
 any  trailer,  as  defined in section one hundred fifty-six of such law,
 leased in conjunction with such a vessel) OR (3) NONCOMMERCIAL  AIRCRAFT
 HAVING  A  SEATING CAPACITY OF LESS THAN TWENTY PASSENGERS AND A MAXIMUM
 CAPACITY OF LESS THAN SIX THOUSAND POUNDS, or an option to renew such  a
 lease  or a similar contractual provision, all receipts due or consider-
 ation given or contracted to be given for such property  under  and  for
 the  entire  period of such lease, option to renew or similar provision,
 or combination of them, shall be deemed to have been paid or  given  and
 shall  be subject to tax, and any such tax due shall be collected, as of
 the date of first payment under such lease, option to renew  or  similar
 provision,  or combination of them, or as of the date of registration of
 such property with the commissioner  of  motor  vehicles,  whichever  is
 earlier.  Notwithstanding any inconsistent provisions of subdivision (b)
 of this section or of section eleven hundred seventeen of  this  article
 or  of other law, for purposes of such a lease, option to renew or simi-
 lar provision originally entered into outside this state,  by  a  lessee
 (1)  who  was a resident of this state, and leased such property for use
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD14669-02-0

 S. 7135                             2
 
 outside the state and who subsequently brings such  property  into  this
 state for use here or (2) who was a nonresident and subsequently becomes
 a  resident  and  brings  the property into this state for use here, any
 remaining  receipts  due  or consideration to be given after such lessee
 brings such property into this state shall be subject to tax as  if  the
 lessee  had  entered  into  or  exercised such lease, option to renew or
 similar provision, or combination thereof, for the first  time  in  this
 state  and  the  relevant  provisions  of  sections  eleven  hundred ten
 concerning imposition and computation of tax,  eleven  hundred  eighteen
 concerning  exemption from use tax for tax paid to another jurisdiction,
 eleven hundred  thirty-two  concerning  presumption  of  taxability  and
 conditions  for  registration  and eleven hundred thirty-nine concerning
 refunds, of this article, shall be applicable to any sales or compensat-
 ing use tax paid by the lessee before the lessee  brought  the  property
 into  this state, except to the extent that any such provision is incon-
 sistent with a provision of  this  subdivision.  For  purposes  of  this
 subdivision,  (1)  a  lease for a term of one year or more shall include
 any lease for a shorter term which includes an option to renew or  other
 like  provision  (or  more  than  one of such option or other provision)
 where the cumulative period that the lease, with or without such  option
 or provision, may be in effect upon exercise of such option or provision
 is  one  year  or  more  and (2) receipts due and consideration given or
 contracted to be given under any  such  lease  or  other  provision  for
 excess mileage charges shall be subject to tax as and when paid or due.
   §  2.  Subdivision  (q)  of  section  1111 of the tax law, as added by
 section 2 of part TT of chapter 59 of the laws of 2015,  is  amended  to
 read as follows:
   (q)  (1) The exclusions from the definition of retail sale in subpara-
 graph (iv) of paragraph  four  of  subdivision  (b)  of  section  eleven
 hundred one of this article shall not apply to transfers, distributions,
 or  contributions  of AN AIRCRAFT OR a vessel, except where, in the case
 of the exclusion in subclause (I) of clause  (A)  of  such  subparagraph
 (iv),  the  two corporations to be merged or consolidated are not affil-
 iated persons with respect to each other. For purposes of this  subdivi-
 sion,  corporations  are  affiliated  persons with respect to each other
 where (i) more than five percent of their combined shares are  owned  by
 members  of  the same family, as defined by paragraph four of subsection
 (c) of section two hundred sixty-seven of the internal revenue  code  of
 nineteen  hundred eighty-six; (ii) one of the corporations has an owner-
 ship interest of more than five percent, whether direct or indirect,  in
 the  other; or (iii) another person or a group of other persons that are
 affiliated persons with respect to each other hold an ownership interest
 of more than five percent, whether direct or indirect, in  each  of  the
 corporations.
   (2)  Notwithstanding any contrary provision of law, in relation to any
 transfer, distribution, or contribution of AN AIRCRAFT OR a vessel  that
 qualifies as a retail sale as a result of paragraph one of this subdivi-
 sion, the sales tax imposed by subdivision (a) of section eleven hundred
 five  of  this  part  shall  be computed based on the price at which the
 seller purchased the tangible personal property, provided that where the
 seller or purchaser affirmatively shows that the seller owned the  prop-
 erty  for  six  months  prior  to  making  the transfer, distribution or
 contribution covered by paragraph one of this subdivision, such AIRCRAFT
 OR vessel shall be taxed on the basis of the current market value of the
 AIRCRAFT OR vessel at  the  time  of  that  transfer,  distribution,  or
 contribution.  For  the  purposes of the prior sentence, "current market

 S. 7135                             3
 
 value" shall not exceed the cost of the AIRCRAFT OR vessel. See subdivi-
 sion (b) of this section for a similar rule on the  computation  of  any
 compensating  use  tax due under section eleven hundred ten of this part
 on such transfers, distributions, or contributions.
   (3) A purchaser of AN AIRCRAFT OR a vessel covered by paragraph one of
 this  subdivision  will  be  entitled  to a refund or credit against the
 sales or compensating use tax due as a result of  a  transfer,  distrib-
 ution,  or  contribution of such AIRCRAFT OR vessel in the amount of any
 sales or use tax paid to this state or any other state on  the  seller's
 purchase or use of the AIRCRAFT OR vessel so transferred, distributed or
 contributed,  but  not  to  exceed the tax due on the transfer, distrib-
 ution, or contribution of the AIRCRAFT OR vessel or on  the  purchaser's
 use  in  the state of the AIRCRAFT OR vessel so transferred, distributed
 or contributed. An application for a refund or credit under this  subdi-
 vision  must  be filed and shall be in such form as the commissioner may
 prescribe. Where an application for credit has been filed, the applicant
 may immediately take such credit on the return which is  due  coincident
 with or immediately subsequent to the time the application for credit is
 filed.  However,  the taking of the credit on the return shall be deemed
 to be part of the application for credit. Provided that the commissioner
 may, in his or her discretion and notwithstanding any other  law,  waive
 the  application requirement for any or all classes of persons where the
 amount of the credit or refund is equal to the amount  of  the  tax  due
 from  the purchaser. The provisions of subdivisions (a), (b), and (c) of
 section eleven hundred thirty-nine of this article shall apply to appli-
 cations for refund or credit under this subdivision. No  interest  shall
 be  allowed  or  paid  on  any  refund made or credit allowed under this
 subdivision. If a refund is granted or a credit allowed under this para-
 graph, the seller or purchaser shall not be eligible  for  a  refund  or
 credit  pursuant to subdivision seven of section eleven hundred eighteen
 of this article with regard to the same purchase or use.
   § 3. Paragraph 21-a of subdivision (a) of section 1115 of the tax  law
 is REPEALED.
   § 4. This act shall take effect June 1, 2020.