TAF-22-09-00002-P Farming and Commercial Horse Boarding Operations

6/3/09 N.Y. St. Reg. TAF-22-09-00002-P

NEW YORK STATE REGISTER

VOLUME XXXI, ISSUE 22

June 03, 2009

RULE MAKING ACTIVITIES

DEPARTMENT OF TAXATION AND FINANCE

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. TAF-22-09-00002-P

Farming and Commercial Horse Boarding Operations

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

This is a consensus rule making to amend section 528.7(a) of Title 20 NYCRR. This rule is proposed pursuant to [SAPA § 207(3)], 5-Year Review of Existing Rules.

Statutory authority:

Tax Law, sections 171, subd. First; 1142(1) and (8); and 1250 (not subdivided)

Subject:

Farming and commercial horse boarding operations.

Purpose:

To update section 528.7(a) to reflect the termination of the taxes imposed in New York City by section 1107 of the Tax Law.

Text of proposed rule:

Section 1. Paragraph (2) of subdivision (a) of section 528.7 of such regulations is amended to read as follows:

(2) The services of installing, maintaining, servicing, and repairing the tangible personal property specified as exempt in paragraph (1) of this subdivision are excluded from the State and local sales and compensating use taxes. [However, this exclusion does not apply to the sales and compensating use taxes imposed in New York City under section 1107 of the Tax Law.] (See section 527.5 of this Title for rules pertaining to installing, maintaining, servicing, and repairing tangible personal property.)

Section 2. Example 2 in subdivision (a) of section 528.7 of such regulations is REPEALED, and Example 1 of such subdivision is amended to read as follows:

"Example [1]:" A farmer (or an operator of a commercial horse boarding operation) [located in an upstate county] in this State has a tractor repaired. The tractor is used predominantly in farm production (or in a commercial horse boarding operation). The charge for materials is $100, and the charge for labor is $50. The farmer gives the vendor a timely filed and properly completed exemption certificate and is not required to pay the New York State and local sales and compensating use taxes on the total charge for materials and labor. It does not matter whether the vendor's invoice separately states the charges for the materials and labor[,] since neither is subject to tax.

Text of proposed rule and any required statements and analyses may be obtained from:

John W. Bartlett, Tax Regulations Specialist 4, Department of Taxation and Finance, Taxpayer Guidance Division, Building 9, W. A. Harriman Campus, Albany, NY 12227, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Consensus Rule Making Determination

The Department of Taxation and Finance has determined that no person is likely to object to the adoption of this rule as written because the amendments merely repeal regulatory provisions that are no longer applicable to any person and conform to non-discretionary statutory provisions. The amendments update section 528.7(a) of the sales and compensating use tax regulations by making technical changes to reflect the termination of the taxes imposed in New York City by section 1107 of the Tax Law. These amendments are not controversial in nature.

Reasoned Justification for Modification of the Rule

The Department of Taxation and Finance submitted for publication in the Rule Review section of the January 7, 2009, issue of the State Register summaries of rules that were adopted by the Commissioner of Taxation and Finance in 1999 and 2004, and a notice of the department's intent to review such rules pursuant to section 207 of the State Administrative Procedure Act. On December 30, 2008, this information was also posted on the department=s web site (http://www.tax.state.ny.us/rulemaker/regulations/fiveyearrev.htm). Comments from the public concerning the continuation or modification of these rules were invited until February 23, 2009.

No public comments were received by the department concerning the 2004 amendments that were made to sections 528.7 and 528.22 of the Sales and Use Taxes Regulations as they pertained to farming and commercial horse boarding operations. These regulations were updated to reflect Chapter 407 of the Laws of 1999 and Chapters 63 and 472 of the Laws of 2000. The amendments were adopted by the commissioner on April 29, 2004, and published in the State Register on May 19, 2004, (TAF 10 04 00025 A).

This notwithstanding, the department determined as a result of its 2009 review that one of the provisions addressed in the 2004 amendments was dated and could not be continued without modification.

Section 1 of Part SS-1 of Chapter 57 of the Laws of 2008 amended section 1105(c)(3)(vi) of the Tax Law to repeal an obsolete and non-conforming provision concerning the now-terminated Municipal Assistance Corporation (MAC) taxes imposed in New York City by section 1107 of the Tax Law. The repealed provision provided that the exclusion from tax for services of installing, maintaining, servicing, and repairing exempt tangible personal property used predominantly either in farm production or in a commercial horse boarding operation (or both) did not apply to the taxes imposed in New York City by section 1107 of the Tax Law. These services are now excluded from the local New York City sales and compensating use taxes imposed pursuant to the authority of section 1210 of the Tax Law, which had been suspended but immediately resumed after the termination of the section 1107 taxes.

Because section 528.7(a)(2) and Example 2 in this section of the regulations reference the section 1107 taxes and because Example 1 includes a reference to "upstate" that is no longer relevant, this rule is necessary to bring the regulations up to date in this regard.

It is noted that the remainder of the amendments made in 2004 to these regulations are valid and are continued without modification.

Job Impact Statement

A Job Impact Statement is not being submitted with this rule because it is evident from the subject matter that the rule will have no impact on jobs or employment opportunities. The purpose of the rule is simply to update section 528.7(a) of the sales and compensating use tax regulations by making technical amendments to reflect the termination of the taxes imposed in New York City by section 1107 of the Tax Law.