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Wednesday, July 10, 2013 at 2:09 pm

State denies targeting flight schools for special enforcement or changing the rules on sales tax

post by Howard B. Owens in Bob Miller Flight School, business, taxes

On July 2, we published, Aviation school owner says NYS Taxation and Finance driving him out of business. At the first opportunity the next morning, we sought comment from the NYS Taxation and Finance. After much unnecessary wrangling, we received answers to the following questions from the department's spokesman, Geoff Gloak.

Is Miller's general assertion true that the state has reinterpreted rules regarding sales tax on planes leased to flight schools? 

No. Any charge that DTF has suddenly reinterpreted rules regarding sales tax on planes leased to flight schools is inaccurate. There hasn’t been any recent change in the Tax Law on this matter, nor any court decisions we’re aware of that affects the matter. We have always taxed aircraft rental for flight training.

Is it true that over the past 40 years, there has been no sales tax on private planes used by students at flight schools and now there is?

No. An aircraft purchased for flight school training is not, and has not been, exempt from New York State sales tax. There has been no change in practice here.

Is it true that auditors are demanding payment of back taxes from plane owners for up to five years?

Your question seems to suggest that there’s some systematic campaign against people who own airplanes – and any such charge is categorically false. Our focus when it comes to audits is always exactly the same: Was tax due, and was it paid? This is the case for any business, in any industry.

Is it true that auditors are systematically going around to the state's flight schools and looking at whether sales tax has been paid on student's flight hours?

No. That's incorrect. There hasn’t been any change in our audit procedures, which is to examine in some form every tax return filed with the State – whether it’s personal income, corporation, or sales tax. That has been and continues to be our standard audit posture. 

If these assertions are true, what is the rational by taxation and finance? Not applicable.

Is taxation and finance concerned that private plane owners are choosing to end their association with flight schools because of this allegedly new enforcement?

There isn’t any “new enforcement.” Our goal is and always has been to help taxpayers understand the laws and regulations and to enforce those laws and regulations across the board in a fair and equitable manner.

Tuesday, July 2, 2013 at 10:04 pm

Aviation school owner says NYS Taxation and Finance driving him out of business

post by Howard B. Owens in batavia, business, Genesee County Airport, taxes

The way Bob Miller sees it, before long, if you want to learn to fly, you will need to go to Pennsylvania or Ohio because there will be no flight schools left in New York.

"The state is holding all the cards on this," Miller told members of the Ways and Means Committee on Tuesday.

Within the past year, NYS Taxation and Finance has started auditing the owners of airplanes that are used as rentals for flight school students.

The state is demanding payment, Miller said, of taxes that were once exempt.

According to Miller, he can't legally charge students tax for their flight hours, but when private plane owners rent their planes to flight schools, the state is now demanding the owners pay sales tax on those fees.

As a result private plane owners who have been audited by the state will no longer rent their planes to flight schools.

More than two months ago, plane owners in Lancaster were audited and Miller was forced to close his school there. Now the state has gone after Batavia plane owners and he must shut down his aviation school here.

"It's not a new law," Miller said. "It's a new interpretation. The executive branch is holding all of the private airplane owners hostage to their interpretation of the code."

According to Miller, this hasn't been an issue in New York for 40 years, and certainly not during the 20 years he's been involved in aviation instruction.

"The state is so desperate for sales tax revenue they're going after everything," Miller said.

Currently, according to Miller, investors buy airplanes without sales tax if they are renting the planes to flight schools. If the planes are rented to private pilots who are not students, then the owners must pay sales tax; if the owners take the planes on a flight for their own private use, they must pay a portion of sales tax for the usage, but for 40 years, there's been no sales tax, he said, on student rentals through flight schools.

The state is requiring plane owners to pay for past unpaid sales taxes going up to five years back.

As a result, Miller said, the plane owners are just ceasing rental services to aviation schools in the state.

Miller has a lease for hangars and office space in the Genesee County Airport through 2015 and he's being asked to be let out of the lease because he's now out of business as a result of the state's actions.

Highway Superintendent Tim Hens recommended the Legislature require Miller to pay rent for 90 days, giving the county time to find a new tenant.

Hens said he isn't worried about filling the hangars -- there's a waiting list for hangar space, but he isn't sure the office space in the terminal will be filled, especially since it will be hard to find another filght school under the current circumstances.

The county will lose about $2,400 a month $2,700 per year in revenue with the flight school closed, due to a decrease in aviation fuel sales.

Monday, June 10, 2013 at 4:28 pm

Governor's office releases legislation for proposed 'Tax Free New York' program

post by Howard B. Owens in Andrew Cuomo, GCC, taxes

The language of the proposed law that would create "Tax Free New York" has been released. It articulates how tax free zones would be created on SUNY campuses, as suggested by Gov. Andrew Cuomo.

Genesee Community College would be among the state's colleges that could potentially host tax-free zones.

In order to foster entrepreneurial businesses, especially in tech fields, Cuomo hopes the proposal will lead to start-ups and business expansions on college campuses.

Highlights:

  • Colleges would apply for use of vacant space on campus or on property owned by the college and within one mile of the campus with space allocated to business not to exceed 200,000 square feet.
  • The state could also select up to 20 strategic locations of currently vacant or soon to be vacant state buildings for tax-free zones.
  • The college must demonstrate how a business located within a zone would align with or further the academic mission of the college.
  • In its application, the college must discuss whether the business in the tax-free zone would compete with a business in the community, but outside the tax-free zone.
  • Businesses would be required to create new jobs and pay employees prevailing wage in accordance with the Labor Law.
  • The tax exemption would last for 10 years and in order to maintain tax-free status, a business must retain the new jobs it created or face sanctions.
  • Businesses that cannot participate: retail, real estate and professional services.
  • The state will not reimburse local governments for any tax revenue loss.

The state Legislature has this week to either pass or reject the proposal.

Documents (PDF):

Thursday, May 30, 2013 at 9:16 pm

Cuomo pitches 'tax free' at GCC, a campus that might be well suited for the program

post by Howard B. Owens in business, GCC, GCEDC, New York Tax Free, taxes

Genesee Community College sits high on a hill surrounded by a lot of open space.

Gov. Andrew Cuomo visited GCC today to promote his "New York Tax Free" proposal, which would allow SUNY campuses such as GCC to play host to new businesses or businesses that are creating new jobs.

Up to 200,000 square feet of land around a SUNY campus could also be used for the 100-percent-tax-free zone.

All that open space around GCC, then, might also be described as opportunity.

"That was the vision 10 years ago that we started developing with GCC and Dr. Steiner and now Dr. Sunser," said Steve Hyde, CEO of GCEDC. The agency now has offices across the street from the college campus in what's known as the Upstate Med-Tech Center. "I think we're really well positioned to rock and roll together and really make a difference here."

Cuomo is clearly passionate about his proposal.  Whatever its critics might have to say about it, Cuomo has an answer and at times during his speech and afterward made his points with the fervor of an evangelist for Upstate New York.

Cuomo:

Nobody ever said (speaking of those who have left New York), I didn’t like New York or I didn’t like Upstate New York. Nobody.

We did this (mess up the state and cause 50 years of decline) to ourselves. We did this to ourselves because this state has every asset imaginable.

I spent eight years in the Clinton Administration. I worked in every state in this nation, literally, dozens and dozens of times. I know everything else that’s out there. I’ve seen the best that every state has. No state has to offer what we have to offer in New York. No state has our combination of talents.

Our geography, our diversity, our history, the most beautiful natural resources, mountain ranges, the greatest cities, beaches, we have it all, all in one state – the best of everything with the distillation of the best of America -- in one state called New York.

So it’s not that that they're beating us. We're beating us. We created these conditions. We can reverse these conditions. Reduce the taxes. Make this state as competitive as any state out there from a tax point of view.

"NY Tax Free" would turn SUNY campuses into zones with no state or local taxes of any kind for businesses based on the campuses (or in the 200K zone), and a company's employees, for up to 10 years.

The businesses would have to match the educational mission of the host campus, working in industries of related fields of study.

Cuomo's dream is clearly to incubate the next Apple or Google.

"If you look at the places that are creating jobs, it's the higher education institutions that are doing research and development. It's the 28-year-old who develops the new chip or the new iPhone of the new application, but the schools are actually creating the jobs."

These sorts of companies are getting founded on NY campuses now, Cuomo said, but 75 percent of them leave New York within the first year, taken either by founders or investors to lower tax states such as Florida or Texas.

Yes, the proposal is big and bold, Cuomo said. No other state in the nation has ever dared to take on such an audacious project, but New York does big and bold well, Cuomo said (while a picture of the Erie Canal was projected on the screen behind him).

Big problems, he said, require big solutions.

"People have been leaving," Cuomo said. "Jobs have been leaving. At the same time, we have more and more government and the costs of governing are going up and up while there are fewer and fewer people to pay for the increasing cost of government, which makes taxes higher, making the tax burden higher, which causes more people to leave. That's the dynamic and the longer the dynamic continues, the worst it gets."

Upstate, especially, needs the help, Cuomo said, and with 55 of the 64 SUNY campuses located in Upstate, and 95 percent of Upstate residents living within 30 miles of a SUNY campus, this proposal makes a lot of sense.

In the past several years, there has been only a 5-percent increase in new jobs in Upstate, while New York City has grown jobs at a clip of 16 percent. The 5-percent growth rate doesn't even keep up with the national average.

The proposal would create 120 million square feet of entrepreneurial space in Upstate, Cuomo said, which is more commercial space than in San Francisco and Philadelphia combined, and more than Buffalo, Rochester and Syracuse combined.

Speaking with reporters after his speech, Cuomo said the major criticism he's heard of the proposal is that taxes should be lowered to zero for everyone.

"It's the right idea to have zero taxes across the board," Cuomo said, "but there's some problems with the details."

If the proposal seems unfair, Cuomo argued that the current tax system is unfair.

"There is not a level playing field in the current tax code," Cuomo said. "The more you make, the more you pay. Some businesses get tax breaks that others don't. We have tax breaks for manufacturing. Why? Because we decided we want manufacturing businesses here. We have tax breaks for the film business ... because we want to produce movies here. It's a falsity that the tax code is equal, but for this. The tax code is anything but equal."

He also argued that residents around SUNY campuses will benefit from the job creation, with employees of these companies buying groceries, cars and houses locally.

"There will be economic activity in your community and that will be a good thing for you," Cuomo said.

He added, "We can't sustain what's going on now in Upstate New York. We cannot sustain the population decline. Nobody moving in. Everybody moving out. Fewer and fewer people paying the cost of a growing government.  We cannot continue the trajectory we've been on."

Thursday, May 16, 2013 at 1:37 pm

Tax advocate encourages property owners to pay attention to local assessments

post by Howard B. Owens in taxes

Press release:

New York State Taxpayer Rights Advocate Camille Siano Enders today encouraged homeowners, businesses and others who own property to review their assessments before the deadline, which is May 28 in most communities.

“In only two years, the property tax cap is controlling the growth of property taxes and shining unprecedented light on local budgets,” Enders said. “By visiting your city or town’s Web site and checking your assessment, you can make sure that you are not paying more than your fair share of local taxes.”

Local assessment rolls, required to be available from local Web sites, list the property’s estimated market value and property tax exemptions. If the market value is significantly higher than the price for which the property could be sold, the property owner should consider the following steps:

  1. Talk with the assessor -- Often, an informal discussion between a property owner and an assessor can be beneficial to both parties.
     
  2. File an assessment grievance -- If an informal meeting doesn’t result in relief, property owners can file for assessment review. The local board of assessment review will review and respond to the information provided.
     
  3. File for small claims assessment review -- Available only to homeowners who don’t receive relief through the formal grievance process. Cost is $30 and review will be conducted by a court-appointed hearing officer. 

When requesting an assessment reduction, it is helpful for property owners to have an estimate of the market value of their home and documentation to support the decrease.  

Is your community keeping assessments up-to-date?

Reassessments enable cities and towns to ensure that assessments reflect current market values. During a reassessment, all of the properties in the community are reviewed, and assessments are increased or decreased where appropriate.

“The longer it has been since your locality has done a reassessment, the more likely it is that your assessment no longer reflects the market value of your property,” Enders said. “For each property that is under-assessed, there is another property that is paying more than its fair share of taxes.”  

Some municipalities keep assessments up-to-date annually, while others haven’t reassessed in decades.  

When properties do not reflect market value and are under-assessed, it does not mean the town, county or school district is collecting less in taxes. Rather, the under-assessment shifts the tax burden to other properties that are over-assessed or assessed fairly. 

For more information:

Friday, May 10, 2013 at 10:38 am

Ranzenhofer urges WNYers to rise up against proposed federal tax change

post by Howard B. Owens in Mike Ranzenhofer, taxes

Press release:

State Senator Michael H. Ranzenhofer today urged New Yorkers to sign his new online petition, rejecting Federal budget proposals that would increase taxes on Western New Yorkers by an average of $2,800. Residents can sign the petition by visiting Senator Ranzenhofer’s Web site, ranzenhofer.nysenate.gov.
 
“If enacted, this federal budget proposal would negatively impact the budgets of thousands of Western New Yorkers. I am urging Western New Yorkers to say NO to a new $2,800 tax increase,” Ranzenhofer said. “It is important for residents to be heard on this issue. By working together, we can send a strong message to Washington that Western New Yorkers are not an ATM machine.”
 
New Federal budget proposals would end a longstanding policy of allowing taxpayers to deduct state and local tax liability, including property taxes, on Federal tax returns. Eliminating the deduction would effectively double tax residents, since residents would be subject to Federal tax on income used to pay state and local taxes.
 
The impact of the proposal in Western New York is estimated to increase tax bills by an average of $2,800 for more than 139,101 residents. Federal tax bills for affected taxpayers would increase by an average of 30 percent.
 
Additional information is available in a report by Governor Cuomo, entitled "Impact on New Yorkers of Federal Tax Proposals," at http://www.governor.ny.gov/assets/documents/Impact-of-Federal-Tax-Proposals.pdf.
Wednesday, May 8, 2013 at 5:47 am

NY is Open for Business

post by Bob Harker in Andrew Cuomo, business, ny, politics, taxes

"ALBANY, N.Y. (AP) - Chief Executive magazine ranks New York as the49th worst state for business in the opinion of CEOs questioned. The ninth annual survey of CEOs blamed New York's high taxes, bureaucracy and a regulatory system that is difficult to navigate. The CEOs ranked New York just better than California. Most larger states with strong labor unions faired poorly in the rankings. CEOs liked Texas most for the ninth straight year, followed by Florida, North Carolina, Tennessee and Indiana. The ranking comes as New York Gov. Andrew Cuomo is continuing a "New York Open for Business" campaign with TV ads that say the Empire State is now far more welcoming of business and employers. A Cuomo spokesman notes the state is now at its highest work force size ever."

Tuesday, March 19, 2013 at 9:51 am

Hawley trying to get a 'hidden' utility tax rescinded

post by Howard B. Owens in steve hawley, taxes

Press release:

Assemblyman Steve Hawley (R,I,C-Batavia) recently joined his legislative colleagues and members of the business community at a press conference in opposition to a hidden utility tax. The 18-A Utility Assessment was enacted in 2009 and was set to expire this year, although the governor’s Executive Budget includes an extension of the tax. Hawley sponsored Assembly Bill 382 to repeal the tax as soon as it was enacted, receiving 17 bipartisan cosponsors, and noted the strain the surcharge puts on both families and businesses.

“This tax hurts every family, senior and job creator who pays utility bills in New York State,” Hawley said. “It was a bad idea when it was passed and it’s an even worse idea to extend it. This is an example of state government saying one thing and doing the exact opposite. That’s why I have sponsored legislation to repeal the tax, and that’s why I was proud to stand with my fellow Assembly members and business leaders urging that this tax expire as promised.”

In attendance at the press conference were representatives from the Business Council of New York State, Inc., Manufacturers Association of Central New York, National Federation of Independent Business, Unshackle Upstate and the New York Farm Bureau.

Monday, February 4, 2013 at 12:24 pm

Proposal to curtail sales tax exemptions could hamper job growth projects locally

post by Howard B. Owens in batavia, GCEDC, taxes

A proposal by Gov. Andrew Cuomo to curtail sales tax exemptions on new development and redevelopment projects could hurt such projects locally, according to City Manager Jason Molino and Steve Hyde, CEO of the Genesee County Economic Development Center.

"Losing the ability to offer state portion of sales tax exemptions dilutes our financial assistance offerings at the local level," Hyde said. "That hurts since we remain the 49th most expensive state to do business in."

Nearly all projects that come to the Industrial Development Agency for assistance and the promise of job growth receive a sales tax exemption on building materials, plant expansion and/or new equipment.

The City of Batavia has been aggressively pursuing projects that redevelop commercial parts of the city -- called "brownfield redevelopment" -- and the loss of the sales tax exemption could be a setback for those plans.

While Molino is reserved in his judgement since the governor's budget is still in the early proposal phase, he said if the elimination of sales tax exemptions goes through, it won't be good for Batavia.

"I think it has the potential to negatively affect any economic development effort that would use sales tax exemptions as part of its model for development," Molino said.

Hyde said much of the redevelopment necessary in the city won't qualify for the state's "excelsior program," which provides tax credits for strategically targeted industries, so maintaining the sales tax exemption is critical.

"We can support some really exciting things developing in the city to the fullest extent possible," Hyde said.

The Buffalo News carried a story this morning about how the budget proposal will be a setback for redevelopment in Buffalo.

Hyde encouraged constituents to reach out to the governor's office and express concern about the proposal.

"This topic is important as community development projects will be negatively impacted considerably and those are the lifestyle projects important to our  residents," Hyde said.

Wednesday, January 30, 2013 at 8:36 pm

Genesee ARC will receive tax-exempt status for West Main property after all

post by Howard B. Owens in Genesee ARC, genesee county, taxes

Genesee ARC will be able to claim its recycling center at 3785 W. Main St. Road, Batavia, as a tax-exempt property despite missing an important deadline.

According to the county's Deputy Treasurer Matt Landers the nonprofit organization failed to apply for tax-exempt status on the property by the tax status deadline date.

As a result, three local government agencies included in their budgets anticipated revenue from the 5.3-acre parcel, which has an accessed value of $860,000.

When ARC asked to receive tax-exempt status, Landers said his initial reaction was "no," because of the budget concerns.

Then a staff member found a legal opinion that states that an owner is eligible for reconsideration of tax-exempt status after a missed deadline if the assessor concurs in writing that the property was eligible on the tax status date.

The decision wipes out more than $30,000 of anticipated revenue for local governments.

Batavia City Schools anticipated in its 2012-2013 budget revenue of $21,543.07.

According to Landers, district officials, when faced with the revenue loss, double checked the legal opinion and reached the same conclusion as the county Assessor's Office.

The county was set to receive in 2013 $3,650.37 in Medicaid mandate taxes and another $4,189.84 in county property tax.

The Town of Batavia Fire District will see its revenue for 2013 drop by $2,012.36.

Genesee ARC held its grand opening for its new recycling facility on West Main, formally a location for Duro Shed, in September.

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