BILL NUMBER: S685

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the tax law, in relation to providing an exemption for
tangible personal property and services sold by a cemetery

 
SUMMARY OF PROVISIONS:

Section 1- declaration of policy. Section 2 - amends subdivision (a) of
section 1115 of the Tax Law to add a new paragraph (7-a) to exclude from
sales tax tangible personal property and services sold by a cemetery
with rates already approved by the State Cemetery Board for exclusive
use on the grounds and in the buildings of the cemetery corporation
including, but not limited to, the additional services provided by a
cemetery as defined in paragraph (b) of section 1509 of the Not For
Profit Corporation Law and for the maintenance and preservation of lots,
plots and parts thereof. Section 3 - amends subdivision (a) of section
116 of the Tax Law by adding a new paragraph (10) to add as Organiza-
tions exempt from sales tax cemetery corporations as defined in para-
graph (a) of section 1502 of the Not For Profit Law, including, but not
limited to, cemeteries regulated by the Religious Corporations Law,
              

where it is the purchaser, user or consumer, or where it is the vendor
of services or property exclusively to be used on the grounds or build-
ings of the corporation. Section 4 - Effective date.

 
JUSTIFICATION:

Cemeteries in New York are not-for-profit entities.

Regulated cemeteries in the state become the responsibility of local
governments should they become insolvent or face serious financial
distress. Recently the Department of Taxation and Finance has conducted
audits and has determined based upon its interpretation of current stat-
ues that sales of certain goods and services by cemeteries for use with-
in the cemeteries are subject to sales taxes, even though cemeteries
have not regularly, if ever, been collecting such sales tax. The reviews
for such sales have gone back years to determine sales tax liability.
The Department has also unofficially opined that certain cemetery
services may also be taxable even though those services only relate to
the care of cemetery property. The cemeteries, not believing that sales
tax was due on such sales, have not been collecting sales taxes from
purchasers, and find themselves with unexpected liabilities with no
reasonable way to pay them. It is well recognized that many cemeteries
across the state are facing financial difficulties. Underfunded endow-
ment funds, coupled with low rates of return because of continuing low
interest rates, have meant that cemeteries are struggling and the failed
cemetery operations must be assumed by the localities where they are
located. Unexpected imposition of sales taxes coupled with high penal-
ties and interest will jeopardize the fiscal wellbeing of additional
cemeteries. Such costs then become a continuing burden and unfunded
mandate on local taxpayers. This bill clarifies what New York's not-for-
profit cemeteries generally understood to be the law.

 
LEGISLATIVE HISTORY:

2022: S2749- referred to budget and revenue

2019-20 - A.3726-B - Referred to Ways and Means / S.3701-B - REFERRED TO
BUDGET AND REVENUE

2017-18 Similar Bill 5.4623/A.7647 - PASSED SENATE/Ways & Means.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.