Summary of 2022 sales and other tax type changes
A summary of 2022 legislative changes is provided below.
- Sales tax refunds related to commercial motor vehicle leases with terminal rental adjustment clauses (Article 28)
- Extension of the vending machine exemption for candy, fruit drinks, soft drinks and bottled water (Article 28)
- Suspension of certain taxes on motor fuel and diesel motor fuel (Articles 12-A and 28)
- Location requirement waiver for tax benefits (Articles 28 and 31)
- Waste tire management fee (Environmental Conservation Law Article 27; Tax Law Article 28)
- Sales and use tax exemption for diapers (Article 28)
Excise tax on motor fuel
Peer-to-peer car sharing
Petroleum business tax
Real estate transfer tax
Waste tire management fee
Sales tax refunds related to commercial motor vehicle leases with terminal rental adjustment clauses (Article 28)
Beginning June 1, 2022, a credit or refund is allowed under certain conditions for sales taxes paid on commercial motor vehicle leases with terminal rental adjustment clauses (TRAC leases). A TRAC lease is a lease that includes:
- an unspecified number of options to renew or other similar contract provisions, or
- 36 or more monthly options to renew beyond the initial term of the lease; and
- a separate written statement signed and certified under penalty of perjury by the lessee (the party who will possess and use the vehicle under a lease agreement) stating the lessee intends that more than 50% of the vehicle’s use will be for the lessee’s business or trade.
If, at the end of a lease described above, the lessor (the party that transfers possession of the vehicle to the user under a lease agreement) refunds a portion of the receipt or consideration to the lessee, as required by a terminal rental adjustment clause in the lease, either:
- the lessee may claim a refund of the sales tax they paid on the refunded amount by filing Form AU-11, Application for Credit or Refund of Sales or Use Tax. If the lessee is a registered sales tax vendor, they may file Form AU-11 with their periodic sales and use tax return.
- the lessor may claim a refund or credit of the sales tax paid by the lessee on the refunded amount if the lessor can demonstrate to the satisfaction of the Tax Department that they have refunded the tax to the lessee by filing Form AU-11, Application for Credit or Refund of Sales or Use Tax. If the lessor is a registered sales tax vendor, they may file Form AU-11 with their periodic sales and use tax return.
Either party can claim a refund within 3 years after the tax was paid by the lessor to the Tax Department, or 1 year after the refund to the lessee of the excess residual value under the lease. These provisions apply to refunds of excess residual value made on or after June 1, 2022.
Refunds or credits on the tax amounts described above are not eligible for interest.
[Chapter 87 of the Laws of 2022; Tax Law § 1111(i)(B)]
Extension of the vending machine exemption for candy, fruit drinks, soft drinks and bottled water (Article 28)
The exemption for certain candy, fruit drinks, soft drinks and bottled water sold from vending machines is extended to May 31, 2023.
Currently, candy, fruit drinks, soft drinks and bottled water are exempt if:
- sold for $1.50 or less from vending machines that accept cash and/or coins only, or
- sold for $2.00 or less from vending machines that accept forms of payment other than cash and/or coins, whether or not it also accepts cash and/or coins.
[Part GG of Chapter 59 of the Laws of 2022; Tax Law §§ 1105(a), 1105(d)(i)(3), and 1115(a)(1)]
Effective December 1, 2022, retail sales of diapers intended for human use are exempt from state and local sales and use taxes. This includes, but is not limited to, disposable, reusable, adult, and children's diapers.
[Chapter 386 of the Laws of 2022; Tax Law § 1115(a)(30-a)]
Beginning April 1, 2022, a tax is imposed on the sale or transfer of adult-use cannabis products by a distributor to a retail dispensary. In addition, tax is imposed on the sale or transfer of adult-use cannabis products to an adult-use customer. This tax is imposed on the person who sells or transfers adult-use cannabis at retail at the time of sale or transfer.
All distributors and retailers of adult-use cannabis products in New York State must first obtain the applicable license from the Office of Cannabis Management. After doing so, they must apply online for an Adult-Use Cannabis Certificate of Registration with the Tax Department before engaging in business. There is a $600 application fee for the Tax Department registration. An Adult-Use Cannabis Certificate of Registration is valid until the date printed on it, unless it has been suspended or revoked earlier.
For more information, see Adult-use cannabis products excise tax.
[Chapter 92 of the Laws of 2021; Tax Law §§ 471, 492, 493, 494, 495, 496, 496-a, 496-b, 496-c, 1115, 1181]
Relief provisions for the disposition of an estate when the surviving spouse is not a United States citizen were set to expire July 1, 2022.
They will now expire on July 1, 2025. The relief provisions are described in TSB-M-14(5)M, 2013 Legislation Amending the New York State Estate Tax.
[Chapter 357 of the Laws of 2022; Tax Law § 951(b)]
Effective June 1, 2022, and continuing through December 31, 2022, the following taxes on motor fuel and highway diesel motor fuel are suspended:
- excise tax;
- prepaid sales tax and state retail sales tax; and
- additional state sales tax imposed in the Metropolitan Commuter Transportation District (MCTD).
These taxes must be excluded from all sales of motor fuel and highway diesel motor fuel made during the suspension period.
In addition, counties and cities can elect a cents-per-gallon rate sales tax method on fuel. See Publication 718-F, Local Sales and Use Tax Rates on Qualified Motor Fuel, Highway Diesel Motor Fuel, and B20 Biodiesel, for the current local rates. The local sales tax imposed by localities will continue to be included in the retail price of motor fuel and highway diesel motor fuel throughout the suspension period.
For more information, see Suspension of Certain Taxes on Motor Fuel and Diesel Motor Fuel and Important Notice N-22-1, Suspension of Certain Taxes on Motor Fuel and Diesel Motor Fuel Beginning June 1, 2022.
[Part RR, Chapter 59 of the Laws of 2022; Tax Law §§ 47, 1111(m)(4)]
Effective September 1, 2022, new taxes are imposed on the gross receipts paid by the shared vehicle driver for use of a shared vehicle under a peer-to-peer car sharing program in New York State. Peer-to-peer car sharing means the authorized use of a shared vehicle by an individual other than the vehicle’s owner through a peer-to-peer car sharing program.
These taxes are in addition to the state and local sales and use taxes imposed under Tax Law Articles 28 and 29.
A state-wide peer-to-peer car sharing tax of 3% is due on the gross receipts paid by the shared vehicle driver for the use of a shared vehicle when the shared vehicle driver takes possession of the shared vehicle in New York State.
In addition to the state-wide peer-to-peer tax, one of the following taxes are also due:
- regional transportation tax of 3% on the gross receipts paid by the shared vehicle driver for use of a shared vehicle when the shared vehicle driver takes possession of the shared vehicle within New York State but outside of the MCTD, or
- Metropolitan Commuter Transportation District (MCTD) tax of 3% on the gross receipts paid by the shared vehicle driver for use of a shared vehicle when the shared vehicle driver takes possession of the shared vehicle within the MCTD.
The MCTD includes New York City and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.
It is presumed that every transfer of possession of a shared vehicle to a shared vehicle driver anywhere in New York State is subject to the special taxes on peer-to-peer car sharing until the contrary is established.
These taxes are collected from the shared vehicle driver by the peer-to-peer car sharing program administrator and are reported and paid with the peer-to-peer car sharing program administrator’s applicable sales tax returns. Use taxes corresponding to the state-wide, MCTD and regional transportation taxes described above are imposed at the rate of 3% on gross receipts paid or contracted to be paid by the shared vehicle driver for the use of a shared vehicle in New York State when these special taxes have not been collected by the administrator.
For more information, see:
- TSB-M-22(1)S, Special Tax on Peer-to-Peer Car Sharing, and
- New York State Department of Motor Vehicles, New York DMV | Information for Peer-to-Peer Car Sharing Programs (ny.gov).
[Chapter 129 of the Laws of 2022; Tax Law §§ 1190, 1191, 1192, 1193, 1194, 1195, 1196, and 1197]
Beginning September 1, 2022, the use of motor fuel, diesel motor fuel, or residual petroleum product by tugboats and towboats is exempt from the petroleum business tax.
In addition, purchasers of motor fuel, diesel motor fuel, or residual petroleum product used by tugboats and towboats may claim a reimbursement of the full amount of tax that has been passed through to the purchaser. Proof that these fuels are used in an exempt manner must be provided to claim exemption or reimbursement.
Use new Form PT-375 (9/22), Certificate of Exemption from Petroleum Business Tax for Purchases of Fuel Used in Tugboats or Towboats, to claim the exemption. Use Form AU-630 (9/22), Application for Reimbursement of the Petroleum Business Tax, to claim a refund.
Subscribe to Miscellaneous Tax to receive updates by email when new information is available on the Tax Department’s website.
[Part T of Chapter 59 of the Laws of 2022; Tax Law §§ 301-b(j), 301-c, 301-c(q)]
Effective 11/26/2021, and for the duration of the state disaster emergency declaration pursuant to Executive Order 211 of 2021, the employment location requirements for businesses receiving tax benefits based on:
- maintaining a presence within the state or within specific areas of the state, and
- whose employees’ work location was affected by the COVID-19 pandemic,
may be satisfied by the employer designating remote work of employees as having been performed at the location where the work was preformed prior to the disaster emergency declaration.
Eligible businesses are required to certify that for the entire period the benefit is claimed, the business continued to operate within the state. Businesses are not entitled to any tax benefits for periods of time they moved their operations outside of the state.
This provision specifically includes but is not limited to the Start-Up NY Program.
[Part LL of Chapter 59 of the Laws of 2022; Tax Law § 39]
The waste tire management fee has been extended until December 31, 2025. In addition, the way you report and pay your waste tire management fee is changing.
Effective for the filing periods beginning on or after March 1, 2023, you will no longer need to file a separate waste tire management fee return each quarter. Instead, you will report and pay the waste tire management fee on your sales tax return.
Your final separate waste tire management fee return for the period ending February 28, 2023, is due by March 31, 2023.
For sales tax filing periods and due dates, see Filing Requirements for Sales and Use Tax Returns.
[Part MM of Chapter 58 of the Laws of 2022; Tax Law Article 28; Environmental Conservation Law Article 27]