NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8429
SPONSOR: Braunstein TITLE OF BILL:
An act to amend the tax law, in relation to exempting certain dry clean-
ing equipment or machinery certified by the department of environmental
conservation from sales and use taxes
PURPOSE OR GENERAL IDEA OF BILL:
Exempts certain dry cleaning equipment or machinery certified by the
Department of Environmental Conservation from sales and use taxes.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends subdivision (a) of Section 1115 of the tax
law, by adding a new paragraph 45. Paragraph 45 exempts equipment or
machinery from sales and use taxes if it is certified by the Department
of Environmental Conservation for pollution prevention or control, which
includes any process, facility, device, fixture, equipment or machinery
used primarily for the control, prevention, or abatement of pollution or
contaminants from the operation of a dry cleaning plant, including any
structure, machinery or equipment installed in the reconstruction or
replacement of such process, facility, device, fixture, equipment or
machinery.
This paragraph applies only to professional cleaning systems that do not
rely on EPA Classified Hazardous Air Pollutants and qualify for or are
exempt from air facility registration with the Department of Environ-
mental Conservation.
JUSTIFICATION:
In 1997, the New York State Department of Environmental Conservation
adopted regulation Part 232, governing dry cleaners using perchloroethy-
lene. According to the National Cleaners Association, Part 232 is the
nation's most stringent dry cleaning regulation, making New York State
dry cleaning operations the safest in relation to the environment and
the workplace. However, the adoption of Part 232 has had a devastating
impact on small business owners, since over half the cleaners in New
York have gone out of business, along with the commensurate loss of
jobs.
In 1997 when Part 232 was adopted, over 4,000 dry cleaning facilities
were registered statewide with the Department of Environmental Conserva-
tion. As of 2017, the department has slightly less than 2,000 regis-
tered.
A financial incentive for those cleaners that remain in business, to
help them invest in more modern eco-friendly operations, is the best way
to encourage environmentally friendly choices. An exemption from sales
tax would encourage and incentivize cleaners to make the more ecofriend-
ly and expensive choice when purchasing new cleaning equipment. The cost
of this equipment is estimated to be in excess of $65,000.
According to the National Cleaners Association, a sales tax exemption
would provide at least a $3,000 benefit to each dry cleaner. Therefore,
this legislation would not only help to protect our environment, but
will also help keep, dry cleaners in business and stem the major loss of
jobs in the dry cleaning industry over the last 20 years.
PRIOR LEGISLATIVE HISTORY:
2017-2018: A.6914-A/S.5456-A - Amend and Recommit to Ways and Means.
2019-2020: A.565/S.4051 - Referred to Ways and Means.
2021-2022: A.495/S.4228 - Referred to Ways and Means.
FISCAL IMPACT:
To be determined.
EFFECTIVE DATE:
First day of the sales tax quarterly period, as designated in subdivi-
sion (b) of Section 1136 of the tax law, next commencing after this act
shall have become a law and shall apply to sales made on or after the
effective date of this act; provided, however that effective immediate-
ly, the addition, amendment and/or repeal of any rules or regulations
necessary for the implementation of the foregoing provisions of this act
on its effective date are authorized and directed to be made and
completed on or before such effective date.
