NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9033
SPONSOR: Lupardo TITLE OF BILL:
An act to amend the tax law, in relation to exempting certain property
and services used in the cultivation of cannabis for adult-use from
sales and compensating use taxes
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to include licensed cannabis cultiva-
tors in the category of farming operations which receive exemptions of
certain sales and use taxes.
SUMMARY OF PROVISIONS:
Section 1: Paragraph 6 of subdivision (a) of section 1115 of the tax law
is amended. This paragraph exempts sales tax on tangible personal prop-
erty which is used for the production for sale of tangible personal
property by farming or commercial horse boarding.
Section 2: Establishes the effective date. JUSTIFICATION: Currently,
farming and commercial horse boarding operations are allowed exemptions
from certain sales and use taxes when the tangible personal property is
used or consumed predominately in the production of farming products.
The current law also includes the exemption of paying sales taxes on
motor vehicles that are used predominately on the farm:
This legislation seeks to clarify that cannabis cultivation is a farming
activity that qualifies for the same sales and use tax exemptions.
PRIOR LEGISLATIVE HISTORY:
This is new legislation.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
The fiscal implications are unknown at this time as the Office of Canna-
bis Management has not issued any cannabis cultivators licenses.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
9033
IN ASSEMBLY
January 21, 2022
___________
Introduced by M. of A. LUPARDO -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, in relation to exempting certain property
and services used in the cultivation of cannabis for adult-use from
sales and compensating use taxes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 6 of subdivision (a) of section 1115 of the tax
2 law, as amended by section 5 of part B of chapter 63 of the laws of
3 2000, is amended to read as follows:
4 (6) (A) Tangible personal property, whether or not incorporated in a
5 building or structure, for use or consumption predominantly [either] in
6 the production for sale of tangible personal property by farming [or],
7 in a commercial horse boarding operation, or [in both] in the culti-
8 vation of cannabis for adult-use pursuant to an adult-use cultivator
9 license, an adult-use cooperative license, or a microbusiness license
10 pursuant to article four of the cannabis law.
11 (B) With respect to the exemption of motor vehicles under this para-
12 graph, (i) use of a motor vehicle [either] in the production phase of
13 farming [or], in a commercial horse boarding operation, or [in both,] in
14 the cultivation of cannabis for adult-use pursuant to an adult-use
15 cultivator license, an adult-use cooperative license, or a microbusiness
16 license pursuant to article four of the cannabis law shall be defined as
17 any use of the motor vehicle on property [either] farmed [or], used in a
18 commercial horse boarding operation, or [both] used in the cultivation
19 of cannabis for adult-use pursuant to an adult-use cultivator license,
20 an adult-use cooperative license, or a microbusiness license pursuant to
21 article four of the cannabis law, by the motor vehicle purchaser or user
22 or in direct and uninterrupted trips between properties farmed or used
23 in such operation[, or both,] or cultivation by the motor vehicle
24 purchaser or user, and (ii) "predominantly" shall mean that more than
25 fifty percent of the motor vehicle's use is either in the production
26 phase of farming [or], in a commercial horse boarding operation, or in
27 [both] the cultivation of cannabis for adult-use pursuant to an adult-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14079-01-1
A. 9033 2
1 use cultivator license, an adult-use cooperative license, or a micro-
2 business license pursuant to article four of the cannabis law. The
3 percentage of such vehicle's use [either] in the production phase of
4 farming [or], in a commercial horse boarding operation, or in [both] the
5 cultivation of cannabis for adult-use pursuant to an adult-use cultiva-
6 tor license, an adult-use cooperative license, or a microbusiness
7 license pursuant to article four of the cannabis law, may be computed
8 either on the basis of mileage or hours of use, at the discretion of the
9 motor vehicle purchaser or user. A person may purchase a motor vehicle
10 qualifying for exemption under this paragraph without payment of tax
11 imposed by section eleven hundred five or eleven hundred ten of this
12 article by furnishing the vendor a properly completed exemption certif-
13 icate promulgated by the commissioner; and such purchaser may register
14 such vehicle or apply for a certificate of title for such vehicle with
15 the commissioner of motor vehicles or a county clerk, without payment of
16 such taxes, by furnishing such a properly completed certificate to such
17 commissioner or clerk.
18 § 2. This act shall take effect immediately.
