Bill Text: NY S07721 | 2021-2022 | General Assembly | Introduced

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Bill Title: Relates to terminal rental adjustment clauses in motor vehicle leases; provides multiple tax payment options for the lessor.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2022-02-24 - SIGNED CHAP.87 [S07721 Detail]

Download: New_York-2021-S07721-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7721

                    IN SENATE

                                     January 7, 2022
                                       ___________

        Introduced  by  Sen. KENNEDY -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        AN ACT to amend the tax law, in relation to terminal  rental  adjustment
          clauses in motor vehicle leases; and to amend a chapter of the laws of
          2021  amending  the  tax  law  relating  to terminal rental adjustment
          clauses in motor vehicle leases,  as  proposed  in  legislative  bills
          numbers S. 3926 and A. 5401, in relation to the effectiveness thereof

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Paragraph (B) of subdivision (i) of section 1111 of the tax
     2  law, as amended by a chapter of the laws of 2021 amending  the  tax  law
     3  relating  to terminal rental adjustment clauses in motor vehicle leases,
     4  as proposed in legislative bills numbers S. 3926 and A. 5401, is amended
     5  to read as follows:
     6    (B) (1) Notwithstanding any inconsistent provisions of  this  subdivi-
     7  sion,  with respect to a lease of a motor vehicle described in paragraph
     8  (A) of this subdivision for a term of one year or more which includes an
     9  indeterminate number of options to renew or  other  similar  contractual
    10  provisions or which includes thirty-six or more monthly options to renew
    11  beyond  the initial term, and under which lease the lessee of such motor
    12  vehicle has certified in the writing described in clause (i) of subpara-
    13  graph (C) of paragraph two of subsection (h)  of  section  7701  of  the
    14  internal revenue code of 1986, under penalty of perjury, that the lessee
    15  intends that more than fifty percent of the use of such vehicle is to be
    16  in  a trade or business of the lessee, [the lessor shall: (i) pay tax on
    17  the receipts from the sale of or consideration given or contracted to be
    18  given for the purchase, as measured by subdivision (b) of section eleven
    19  hundred ten of this part, of such vehicle for lease; or (ii) collect and
    20  pay tax as measured by] all  receipts  due  or  consideration  given  or
    21  contracted to be given under such lease for the first thirty-two months,
    22  or  the  period  of  the initial term if greater, of such lease shall be
    23  deemed to have been paid or given and shall be subject to tax in accord-
    24  ance with the provisions of this subdivision.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08089-02-2
        S. 7721                             2

     1    [(2) If a lessor collects and pays tax as measured under  clause  (ii)
     2  of  subparagraph  one  of  this  paragraph, for] For each such option to
     3  renew, or similar provision, or combination of them, exercised after the
     4  first thirty-two months, or the period of such initial term, if  longer,
     5  of  any  such  lease,  tax due under this article shall be collected and
     6  paid or paid over without regard to this subdivision.
     7    (2) If at the termination of a lease described in subparagraph one  of
     8  this  paragraph the lessor refunds a portion of the receipt or consider-
     9  ation to the lessee as required by a terminal rental  adjustment  clause
    10  of  such  lease, either: (i) the lessee may claim a refund or credit for
    11  the sales tax it paid on such refunded receipt or consideration; or (ii)
    12  the lessor may claim a refund or credit of the sales  tax  paid  by  the
    13  lessee  on such refunded receipt or consideration if it has demonstrated
    14  to the satisfaction of the commissioner that it first refunded such  tax
    15  to  the  lessee.    Notwithstanding the provisions of subdivision (c) of
    16  section eleven hundred thirty-nine  of  this  article,  such  claim  for
    17  refund  or  credit shall be considered timely if it is made within three
    18  years after the tax was paid by the lessor to the  commissioner  or  one
    19  year  after  such  receipt  or consideration was refunded to the lessee,
    20  whichever is later; provided, however, that no interest shall be paid on
    21  a refund or credit made pursuant to this subparagraph.
    22    § 2. Section 2 of a chapter of the laws of 2021, amending the tax  law
    23  relating  to terminal rental adjustment clauses in motor vehicle leases,
    24  as proposed in legislative bills numbers S. 3926 and A. 5401, is amended
    25  to read as follows:
    26    § 2. This act shall take effect [immediately] on the first  day  of  a
    27  sales  tax quarterly period described in subdivision (b) of section 1136
    28  of the tax law next commencing at least thirty days after this act shall
    29  take effect, and shall apply to refunds  or  receipts  or  consideration
    30  paid  pursuant to a terminal rental adjustment clause described in para-
    31  graph (B) of subdivision (i) of section 1111 of the tax law on and after
    32  such date.
    33    § 3. This act shall take effect on the  same  date  and  in  the  same
    34  manner as a chapter of the laws of 2021 amending the tax law relating to
    35  terminal  rental adjustment clauses in motor vehicle leases, as proposed
    36  in legislative bills numbers S. 3926 and A. 5401, takes effect.