New York – Summary of 2013 -2014 Tax Provisions

SALT Report 2376 – The New York Department of Taxation and Finance has issued a summary of the corporate franchise, sales and use, personal income, property, and other tax provisions enacted as part of the 2013-2014 budget package. The sales tax provisions in the summary follow.

Industrial Development Agency Reform

  • Changes the way Industrial Development Agencies provide sales tax exemptions,
  • Requires IDA’s to recapture sales tax benefits that were provided to a project operator, agent or other person who was not entitled to the benefits or failed to meet the terms of the agreement,
  • IDA’s must file an annual compliance report with the Tax Department,
  • Places restrictions on the extent to which an IDA may provide financial assistance to facilities that are primarily used to make retail sales,
  • Requires additional recordkeeping and reporting for IDA’s regarding the sales and use tax benefits provided to each project, and
  • Requires IDA’s to notify the Tax Department when the IDA’s agent or project operator’s appointment has expired or been revoked

This provision takes effect immediately.

Compressed Natural Gas Sales Tax Exemption—Technical Fix

This modifies the current sales and use tax exemption, provided in section 1115(a)(42) of the Tax Law, to exempt natural gas that is purchased in an uncompressed state and converted into compressed natural gas (CNG). The exemption only applies to CNG that will be used or sold for use in a motor vehicle engine.

This provision takes effect on June 1, 2013.

Change in Highway Diesel Motor Fuel Taxation to Allow Tax-free Inter Distributor Sales

The exemption provisions under the excise tax, petroleum business tax and sales tax laws are amended to allow clear un-dyed diesel motor fuel to be sold in the State tax-free between registered distributors. These inter-distributor sales are permitted where the highway diesel fuel is:

  • Delivered by pipeline, railcar, barge, tanker or other vessel, or
  • Delivered within a registered diesel fuel terminal

Terminal operators in the State who receive, store, and dispense diesel fuel will be required to register with the Department as a terminal operator and file monthly activity returns. Diesel motor fuel sales from the terminal rack will follow current law regarding the taxability of highway and non-highway diesel fuel.

This provision takes effect on August 1, 2013.

The Budget Summary also discusses the tax reduction for qualified New York manufacturers; the elimination of the royalty income exclusion; the creation of a small business subtraction modification; the changes to the Empire State film production and post-production tax credits; the creation of a new STAR registration program; and the petroleum business tax reimbursement for volunteer ambulance services and volunteer fire departments.

For Further Information

New York Department of Taxation and Finance – Summary of Tax Provisions in 2013-14 Budget