Bill Text: NY A04070 | 2019-2020 | General Assembly | Amended

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Bill Title: Relates to terminal rental adjustment clauses in motor vehicle leases; provides that any increase in the consideration given pursuant to such clause upon termination of the lease shall be subject to tax, and that any decrease in the consideration given pursuant to such clause upon termination of the lease shall allow the lessor to claim a credit or refund of tax on such amount.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2020-01-29 - print number 4070a [A04070 Detail]

Download: New_York-2019-A04070-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         4070--A

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                    February 1, 2019
                                       ___________

        Introduced  by  M. of A. SCHIMMINGER, McDONALD -- read once and referred
          to the Committee on Ways and Means -- recommitted to the Committee  on
          Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee

        AN  ACT  to amend the tax law, in relation to terminal rental adjustment
          clauses in motor vehicle leases

          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 chapter 20 of the laws of 1992, is amended to read as
     3  follows:
     4    (B)  Notwithstanding  any inconsistent provisions of this subdivision,
     5  with respect to a lease of a motor vehicle described in paragraph (A) of
     6  this subdivision for a term of one year or more (1)  which  includes  an
     7  indeterminate  number  of  options to renew or other similar contractual
     8  provisions or which includes thirty-six or more monthly options to renew
     9  beyond the initial term, and (2) under which lease the  lessee  of  such
    10  motor  vehicle  has  certified in the writing described in clause (i) of
    11  subparagraph (C) of paragraph two of subsection (h) of section  7701  of
    12  the  internal  revenue  code of 1986, under penalty of perjury, that the
    13  lessee intends that more than fifty percent of the use of  such  vehicle
    14  is  to  be  in  a  trade  or business of the lessee, all receipts due or
    15  consideration given or contracted to be given under such lease  for  the
    16  first  thirty-two  months, or the period of the initial term if greater,
    17  of such lease shall be deemed to have been paid or given  and  shall  be
    18  subject  to  tax  in accordance with the provisions of this subdivision.
    19  For each such option to renew, or similar provision, or  combination  of
    20  them, exercised after the first thirty-two months, or the period of such
    21  initial  term,  if longer, of any such lease, tax due under this article
    22  shall be collected and paid or paid over without regard to this subdivi-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07642-03-0
        A. 4070--A                          2

     1  sion.  If any such lease contains a "terminal rental adjustment  clause"
     2  as  defined  in paragraph three of subsection (h) of section 7701 of the
     3  internal revenue code of 1986, (1) any  increase  in  the  consideration
     4  given  pursuant  to  such  clause upon termination of the lease shall be
     5  subject to tax, and (2) any decrease in the consideration given pursuant
     6  to such clause upon termination of the lease shall allow the  lessor  to
     7  exclude  such amount from taxable receipts. No interest shall be allowed
     8  or paid on the execution of amounts from  taxable  receipts  under  this
     9  subdivision.
    10    § 2. This act shall take effect immediately.