BILL NUMBER: S8339

SPONSOR: KAPLAN
 
TITLE OF BILL:

An act to amend the tax law, in relation to extending sales tax
exemption for certain food and drink vending machines

 
PURPOSE:

This legislation extends the exemption from sales and use tax for food
and drink items sold through any vending machines until May 31, 2025.
This bill would increase the exemption from sales and use taxes for food
and drink items sold through any vending machine from the current
exemption amount of $2.00 to $2.50.

 
SUMMARY OF SPECIFIC PROVISIONS:

§ 1 - Amends paragraph 1 of subdivision (a) of § 1115 of the Tax Law to
increase the exemption from sales and use taxes for food and drink items
sold through any vending machine from the current exemption amount of
$2.00 to $2.50 through May 31, 2025.
              

§ 2 - Effective date.

 
JUSTIFICATION:

In 1997, legislation was enacted that removed the state and local sales
tax from vended hot drink sales and some snack items.  In 2000, legis-
lation was enacted that exempted all vended sales, including candy and
carbonated drinks, costing 75 cents or less. In 2014, that exemption was
increased from sales of 75 cents and under to sales of $1.50 and under.
In 2019, that exemption was increased from sales of $1.50 and under to
$2.00 and under. This continual increase of sales tax exemption has
allowed for New York State's vending machine industry to reinvest in
their businesses, thus permitting many to acquire newer machinery to
make available more New York State based agricultural products, such as
yogurt and cheese, to consumers. This also has allowed the industry to
respond to customers' demand for more nutritious and health conscious
foods and drinks. In addition, the "Taste NY" program is bolstered by
the vending machine sales tax exemption.

This legislation would provide the vendors operating within the State of
New York the necessary financial relief they need to be competitive with
other outlets, and would preserve and promote the growth of jobs and
availability of New York State locally produced products. It would
enable some 200 vendors, mostly small businesses (about half of whom are
sole proprietor or "mom and pop" businesses), to remain in business
given the rising costs of doing business including a variety of
increased taxes.

 
PRIOR LEGISLATIVE HISTORY:

S. 4367A/A.6137A of  2019/20

2017-2018: A.6491/S.4653.

 
FISCAL IMPLICATIONS:

A further increase from $1.50 to $2.50 is expected to cost an additional
$4 million per year.

 
EFFECTIVE DATE:
This act shall take effect immediately.