NY State Senate Bill 2021-S2093

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to budget and revenue
Jan 19, 2021	referred to budget and revenue

2021-S2093 (ACTIVE) - Details

See Assembly Version of this Bill:: A4097
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §1116, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S6200, A8391
2015-2016: S1320, A3271
2017-2018: S190, A8113
2019-2020: S2652, A11023

2021-S2093 (ACTIVE) - Summary

Exempts certain senior citizen organizations from paying sales and compensating use taxes.

2021-S2093 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2093

SPONSOR: JORDAN
 
TITLE OF BILL:

An act to amend the tax law, in relation to exempting certain senior
citizen organizations from paying sales and compensating use taxes

 
PURPOSE:

To specifically provide that not-for profit Senior Citizen organizations
are exempt from paying sales and compensating use taxes.

 
SUMMARY OF PROVISIONS:

Sections 1 and 2 amend Subdivision (a) and (g) of section 1116 of the
Tax Law to specifically include not-for-profit senior citizen organiza-
tions which limit membership to members fifty and older, and which are
organized for pleasure, social, educational, recreational and/or other
nonprofit purposes, in the list of organizations which are exempt from
paying sales and compensating use taxes. These organizations are exempt

provided that no part of net earnings benefit any private share holder
or individual and the organizations' substantial part of activities is
not carrying propaganda, attempting to influence legislation or
campaigning on behalf of any candidate for public office. The exemption
applies to purchases made by the organization itself and not for
purposes of its members individually.

Section 3 provides that the Commissioner of Taxation and Finance is
authorized to include senior citizen organizations on Form ST-119.2, the
"Application for an Exempt Organization Certificate."

Section 4 states the effective date is January 1, 2022.

 
EXISTING LAW:

Senior citizen organizations are not explicitly named as tax-exempt.

 
JUSTIFICATION:

Senior citizen organizations have an easier time under federal law
attaining a tax exempt status than under New York State Law. New York
Tax Law Section 1116(a) (4) of Article 28 language mirrors the language
of Internal Revenue Code 501(c)(3). Organizations qualifying under
501(c)(3) of the Internal Revenue Code are exempt from Federal income
tax and may use their exempt status to receive automatic exemption from
New York Sales and Use Tax. The language providing exemption both Feder-
ally and in New York is "Any corporation, Association, trust or communi-
ty chest, fund or foundation, organized and operated exclusively for
religious, charitable, scientific, testing for public safety, literary
or educational purpose, or to foster national or international sports
competition or for the prevention of the cruelty of animals...." The
problem for senior citizen organizations is that unless they are organ-
ized and operated exclusively for any of these purposes, it cannot
attain tax exempt status. Senior citizen organizations attempt to claim
tax exempt status by stating that they are educational. The Division of
Tax Appeals in New York has determined that unless the senior organiza-
tion was organized and operated exclusively for educational purposes, it
is not exempt. In such a determination the appellate court looks at the
organization's purposes as defined by its organizing documents. If the
court finds that the purposes are broader than the educational purpose
specified in Section 1116(a), the organizational test is not met and
there is no grant of tax-exempt status. The court also looks at the
operational activities of the organization to see that all of its activ-
ities accomplish one or more of the exempt purposes. Unfortunately for
the senior citizen organizations, it has been determined that in most
instances a substantial part of the organizations' functions are social
and recreational, and the educational activities appear to be secondary.
Furthermore, the recreational trips taken by senior citizen organiza-
tions, though seemingly educational to the seniors, is considered recre-
ational to the Court. The Federal law on the other hand is able to grant
tax exempt status to senior citizen organizations if not by 501(c)(3),
but by 501(c) (7) as a social club. New York Tax Law has no such
provision. By specifically identifying Senior Citizen Organizations as
tax-exempt in New York Tax Law, it shall be clear cut that these organ-
izations may be educational and/or social in nature. This status would
help these organizations to save money that would normally go towards
the payment of sales tax, for the operation of their organizations. Such
monetary relief to our senior citizen organizations would go a long way
into ensuring that these organizations thrive for the benefit of New
York's senior population.

 
LEGISLATIVE HISTORY:

S.2652 of 2019-20 referred to Budget and Revenue.

S.190A of 2017-18 referred to Investigations and Government Operations.

S.1320 of 2015-16 committed to Finance.

S.6200 of 2013-14 referred to Investigations and Government Operations.

 
FISCAL IMPLICATIONS:

Fiscal Note 3/25/15, Department of Taxation and Finance: "We estimate it
would reduce State and local revenues by a minimal amount (less than $1
million. The State's share of this revenue reduction would be minimal
(less than $1 million). During its first full year of implementation, we
estimate this legislation could reduce State and local revenues by more
than $1 million as it would likely encourage additional senior groups to
take advantage of the sales and use tax exemptions provided by this
legislation."

 
EFFECTIVE DATE:
January 1, 2022.

2021-S2093 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2093
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 19, 2021
                                ___________
 
 Introduced  by  Sen.  JORDAN -- 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  exempting  certain  senior
   citizen organizations from paying sales and compensating use taxes
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision (a) of section 1116 of the tax law, as  amended
 by  chapter  530  of the laws of 1976, paragraph 4 as amended by chapter
 407 of the laws of 2019, paragraph 5 as amended by chapter  366  of  the
 laws  of 1983, subparagraph (B) of paragraph 5 as amended by chapter 418
 of the laws of 2004, subparagraph (C) of paragraph 5 as amended by chap-
 ter 296 of the laws of 2006, paragraph 7 as added by chapter 903 of  the
 laws  of  1980, paragraph 8 as added by chapter 888 of the laws of 1983,
 paragraph 9 as amended by chapter 591 of the laws of 2005, is amended to
 read as follows:
   (a) Except as otherwise provided in this section, any sale  or  amuse-
 ment charge by or to any of the following or any use or occupancy by any
 of  the following shall not be subject to the sales and compensating use
 taxes imposed under this article:
   (1) The state of New York, or any of its agencies,  instrumentalities,
 public  corporations (including a public corporation created pursuant to
 agreement or compact with another state or Canada) or political subdivi-
 sions where it is the purchaser, user or consumer,  or  where  it  is  a
 vendor  of services or property of a kind not ordinarily sold by private
 persons[;].
   (2) The United States of America, and any of its agencies and  instru-
 mentalities,  insofar  as  it  is  immune  from taxation where it is the
 purchaser, user or consumer, or where it sells services or property of a
 kind not ordinarily sold by private persons[;].
   (3) The United Nations or any international organization of which  the
 United  States of America is a member where it is the purchaser, user or

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01350-01-1

 S. 2093                             2
 
 consumer, or where it sells services or property of a kind not  ordinar-
 ily sold by private persons[;].
   (4)  Any  corporation,  association,  trust, or community chest, fund,
 foundation, or limited liability company, organized and operated  exclu-
 sively for religious, charitable, scientific, testing for public safety,
 literary or educational purposes, or to foster national or international
 amateur  sports  competition  (but  only  if  no  part of its activities
 involve the provision of athletic facilities or equipment), or  for  the
 prevention  of  cruelty to children or animals, no part of the net earn-
 ings of which inures to the benefit of any private shareholder or  indi-
 vidual,  no  substantial  part of the activities of which is carrying on
 propaganda, or otherwise attempting to influence legislation, (except as
 otherwise provided in subsection (h) of section five hundred one of  the
 United  States  internal revenue code of nineteen hundred fifty-four, as
 amended), and which does not participate in, or intervene in  (including
 the publishing or distributing of statements), any political campaign on
 behalf  of  or  in  opposition  to  any candidate for public office. The
 provisions of this paragraph regarding political campaign activity shall
 be interpreted in the same manner as section  501(c)(3)  of  the  United
 States  internal  revenue  code has been interpreted as of the effective
 date of [the] chapter FOUR HUNDRED SEVEN of the  laws  of  two  thousand
 nineteen [that amended this paragraph;].
   (5)  A  post  or  organization of past or present members of the armed
 forces of the United States, or an auxiliary unit or society  of,  or  a
 trust or foundation for, any such post or organization:
   (A) organized in this state,
   (B)  at least seventy-five percent of the members of which are past or
 present members of the armed forces of the United States as  defined  in
 section thirteen-a of the general construction law and substantially all
 of  the  other  members  of  which are individuals who are cadets or are
 spouses, widows, widowers, ancestors, or lineal descendants of  past  or
 present  members  of the armed forces of the United States or of cadets,
 and
   (C) no part of the net earnings of which inures to the benefit of  any
 private shareholder or individual.
   (6) The following Indian nations or tribes residing in New York state:
 Cayuga,  Oneida, Onondaga, Poospatuck, Saint Regis Mohawk, Seneca, Shin-
 necock, Tonawanda and Tuscarora, where it  is  the  purchaser,  user  or
 consumer.
   (7)  A  not-for-profit  corporation  operating as a health maintenance
 organization subject to the provisions  of  article  forty-four  of  the
 public health law.
   (8)  Cooperative and foreign corporations doing business in this state
 pursuant to the rural electric cooperative law.
   (9) A credit union, as defined in subdivision nine of section  two  of
 the  banking law, where it is the purchaser, user, or consumer, or where
 it is a vendor of services or property of a kind not ordinarily sold  by
 private persons.
   (10)  SENIOR  CITIZEN  ORGANIZATIONS  ORGANIZED  PURSUANT  TO  SECTION
 501(C)(3) OR SECTION 501(C)(7) OF THE INTERNAL REVENUE CODE  (26  U.S.C.
 §501)  WHICH  LIMIT MEMBERSHIP TO MEMBERS AGE FIFTY AND OLDER, AND WHICH
 ARE ORGANIZED FOR PLEASURE,  SOCIAL,  EDUCATIONAL,  RECREATIONAL  AND/OR
 OTHER NON-PROFIT PURPOSES, PROVIDED:
   (A)  NO  PART OF THE NET EARNINGS OF WHICH INURE TO THE BENEFIT OF ANY
 PRIVATE SHAREHOLDER OR INDIVIDUAL;

 S. 2093                             3
 
   (B) NO SUBSTANTIAL PART OF THE ACTIVITIES  OF  WHICH  IS  CARRYING  ON
 PROPAGANDA, OR OTHERWISE ATTEMPTING TO INFLUENCE LEGISLATION, (EXCEPT AS
 OTHERWISE  PROVIDED IN SUBSECTION (H) OF SECTION FIVE HUNDRED ONE OF THE
 UNITED STATES INTERNAL REVENUE CODE OF NINETEEN HUNDRED  FIFTY-FOUR,  AS
 AMENDED),  AND WHICH DOES NOT PARTICIPATE IN, OR INTERVENE IN (INCLUDING
 THE PUBLISHING OR DISTRIBUTING OF STATEMENTS), ANY POLITICAL CAMPAIGN ON
 BEHALF OF ANY CANDIDATE FOR PUBLIC OFFICE; AND
   (C) THE EXEMPTION APPLIES ONLY TO  PURCHASES  THAT  ARE  MADE  BY  THE
 ORGANIZATION ITSELF AND NOT FOR PURCHASES BY ANY OF ITS MEMBERS INDIVID-
 UALLY.
   §  2.  Subdivision  (g)  of section 1116 of the tax law, as amended by
 chapter 3 of the laws of 2004, is amended to read as follows:
   (g) For purposes of [paragraph] PARAGRAPHS five AND TEN of subdivision
 (a) of this section, duly authorized representatives of any such post or
 organization, while acting on behalf of such post or organization, shall
 not be subject to the tax imposed under subdivision (e) of section elev-
 en hundred five or the unit fee imposed by section eleven  hundred  four
 of  this  article,  provided that such representatives provide an exempt
 organization certificate from such post or organization certifying  that
 such representative is acting on its behalf.
   §  3.  The  commissioner  of  taxation  and  finance is authorized and
 directed to develop and place into effect all rules and regulations, and
 take all other measures necessary, to implement the provisions  of  this
 act  on  or  before  its  effective  date, including, but not limited to
 making all necessary changes to the "Application for an Exempt Organiza-
 tion Certificate" (Form ST-119.2) and any other forms utilized  by  tax-
 exempt entities.
   § 4. This act shall take effect January 1, 2022.

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Senate Bill S2093

Sponsored By

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

2021-S2093 (ACTIVE) - Details

2021-S2093 (ACTIVE) - Summary

2021-S2093 (ACTIVE) - Sponsor Memo

2021-S2093 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2093

Share this bill

Sponsored By

Daphne Jordan

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

2021-S2093 (ACTIVE) - Details

2021-S2093 (ACTIVE) - Summary

2021-S2093 (ACTIVE) - Sponsor Memo

2021-S2093 (ACTIVE) - Bill Text download pdf

Comments