S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2556
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 23, 2023
                                ___________
 
 Introduced  by  Sens.  HOYLMAN-SIGAL, JACKSON, RAMOS, RIVERA, SANDERS --
   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)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04834-01-3
              

 S. 2556                             2
 
 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
 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  amended  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
 S. 2556                             3
 
 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
 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, 2023.