BILL NUMBER: S5247

SPONSOR: RYAN S
 
TITLE OF BILL:

An act to amend the tax law, in relation to the imposition of additional
rates of sales and compensating use taxes by Erie county

 
PURPOSE:

The purpose of this bill is to authorize Erie County to impose an addi-
tional one percent rate and an additional three-quarters of one percent
rate of sales and compensating use taxes, for the period commencing
December 1, 2025, and ending November 30, 2027, and to provide for
retention for solely county purposes of all net collections from the
additional three-quarters of one percent rate.

 
SUMMARY OF PROVISIONS:

Section 1: amends clause 4 of subparagraph (i) of the opening paragraph
of section 1210 of the Tax Law, which authorizes counties and cities to
impose sales and use taxes at specified rates, by authorizing Erie Coun-
              

ty to impose an additional one percent rate and an additional three-
quarters of one percent rate of such taxes for the period commencing
December 1, 2025, and ending November 30, 2027.

Section 2: amends subdivision 2 of section 1262-q of the Tax Law to
continue to provide that net collections from the additional three-quar-
ters of one percent rate shall be used by the county solely for county
purposes and shall not be subject to any revenue distribution agreement
the county entered into under section 1262(c) of the Tax Law.

Section 3: effective date.

 
EXISTING LAW:

Section 1210 of the Tax Law authorizes counties and cities to impose
sales and compensating use taxes generally at a rate not to exceed three
percent. More than 50 counties outside New York City and five cities are
each authorized to impose an additional rate of tax in excess of three
percent. Pursuant to section 1210(a), a county or city can impose the
"general" sales and use taxes, consisting of the six subdivisions of
section 1105 of the Tax Law, which imposes the State's sales taxes, and
of the related compensating use taxes in section 1110 of the Tax Law,
which imposes the State's use taxes. Or, pursuant to section 1210(b), a
county or city can impose one or more of the taxes described in section
1105(b), (d), (e), or (f), which are known as the "segmented taxes,"
plus related use taxes. Erie County currently imposes the "general"
sales and use taxes at the rate of three percent. The county is also
authorized to, and does, impose an additional one percent rate pursuant
to section 1210 of the Tax Law for the period December 1, 2023, through
November 30, 2025. The county is also authorized to, and does, impose an
additional three-quarters of one percent rate pursuant to section 1210
of the Tax Law for the period December 1, 2023, through November 30,
2025.

 
JUSTIFICATION:


Erie County has requested authorization to impose an additional one
percent and three-quarters percent sales and compensating use tax.  The
revenue anticipated from this additional tax will allow the County of
Erie to continue to provide services deemed vital to the community while
maintaining a balanced budget.

Failure to extend the additional one percent and three-quarters percent
sales and compensating use tax rate would mean the annual loss of nearly
$390 million in County revenue and would create a severe challenge to
the continued operation of County government and its delivery of
services. This loss in revenue would require an exorbitant property tax
increase of 100 percent, more than doubling the existing levy. In addi-
tion, it would be likely that entire departments not mandated by state
law would be eliminated and Erie County would put a stop to all capital
work, including road and bridge reconstruction throughout our community.
Finally, Erie County shares its sales tax with its municipalities and
school districts. If the sales tax extension is not approved, Erie Coun-
ty's cities, towns, and villages would lose $12.5 million annually.

 
LEGISLATIVE HISTORY:

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect immediately.