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Legislative Memo

Ken Pokalsky
Vice President
T 518.465.7511
www.bcnys.org

BILL:

S.4209 Part EEE Senate Budget Bill

Support

SUBJECT:

Sales Tax Exemption for School Buses

 

DATE:

March 13, 2015

 

The Business Council supports Part EEE of Senate Budget Bill S.4209, which exempts school buses and any parts, equipment, lubricants and fuel purchased and used in their operation from state and local sales and compensating use tax.

School bus and related items that are sold to public entities are currently exempt from the sales tax. However, many school districts choose to use private school bus contractors to provide student transportation in their respective school districts, and bus and material purchases by those contractors are sales taxable under current law. This results in significant business expenses for these private entities which are passed through to the contracting schools, and leads to increased cost for school districts and ultimately the property taxpayer who finances them. So at the same time that the state is providing school districts with transportation aid, the state is recapturing a portion of that aid through sales tax collections on contracted transportation services.

The proposed Part EEE addresses this issue, and will result in reduced costs on school districts using contracted transportation services.

For these reasons, The Business Council supports the Senate budget proposal exempting state and local sales and compensating use tax on school buses and related items used in their operation.