NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A820
SPONSOR: Dinowitz 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 one of the bill provides for a Declaration of Policy.
Section two of the bill adds paragraph (7-a) to subdivision (a) of §
1115 of the tax law 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 three of the bill adds paragraph 10 to subdivision (a) of § 1116
of the tax law to add as organizations exempt from sales tax cemetery
corporations as defined in paragraph (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 buildings of the corporation.
Section four of the bill provides the effective date.
EXISTING LAW:
Tax Law section 1115 lists certain activities and sales that are exempt
from sales taxes; Tax Law section 1116 lists certain entities that are
exempt from sales taxes.
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 deter-
mined based upon its interpretation of current statues that sales of
certain goods and services by cemeteries for use within 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 endowment 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 imposi-
tion of sales taxes coupled with high penalties and interest will jeop-
ardize 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:
2021-22: A.1422 - Referred to Ways and Means / S.2749 - Referred to
Budget and Revenue
2019-20: A.3726-B - Referred to Ways and Means / S.3701-B - Referred to
Budget and Revenue
2018:A.7647- Referred to Ways and Means/S.4623 - Passed Senate
2017:A.7647- Referred to Ways and Means/S.4623 - Passed Senate
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
820
2023-2024 Regular Sessions
IN ASSEMBLY
January 11, 2023
___________
Introduced by M. of A. DINOWITZ, HYNDMAN, JEAN-PIERRE, CRUZ, JONES --
read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to providing an exemption for
tangible personal property and services sold by a cemetery
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Declaration of policy. The people of this state have a
2 vital interest in the maintenance and preservation of cemetery corpo-
3 rations to prevent them from becoming a burden upon local governments
4 and the community. The preservation of cemetery funds is vital to the
5 long-term maintenance and preservation of these burial grounds to
6 prevent abandonment and dilapidation. In order to preserve this order,
7 and the uniqueness of cemetery corporations, clarifications of cemetery
8 sales tax collections are necessary.
9 § 2. Subdivision (a) of section 1115 of the tax law is amended by
10 adding a new paragraph 7-a to read as follows:
11 (7-a) Tangible personal property and services with charges and rates
12 that have been submitted and approved by the state cemetery board and
13 that are sold by a cemetery for the exclusive use on the grounds and in
14 the buildings of the cemetery corporation including but not limited to
15 the additional services provided by a cemetery as defined in paragraph
16 (b) of section fifteen hundred nine of the not-for-profit corporation
17 law and for the maintenance and preservation of lots, plots and parts
18 thereof.
19 § 3. Subdivision (a) of section 1116 of the tax law is amended by
20 adding a new paragraph 10 to read as follows:
21 (10) A cemetery corporation, as defined in paragraph (a) of section
22 fifteen hundred two of the not-for-profit corporation law, including but
23 not limited to those cemeteries regulated by the religious corporations
24 law where it is the purchaser, user, or consumer, or where it is the
25 vendor of services or property exclusively to be used on the grounds or
26 buildings of the corporation.
27 § 4. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00600-01-3
