N.Y. Comp. Codes R. & Regs. Tit. 9 §§ 1640-6.1
Under subdivision (a) of section 115 of the Internal Revenue Code, the income of local agencies is exempt from Federal income taxes. The exemption is automatic and local agencies are not required to establish their exempt character with the Commissioner of Internal Revenue or file annual information returns as are organizations claiming exemption under section 501 of the code. The income of officers and employees of a local agency is, however, subject to income tax and local agencies must comply with the requirements of the Internal Revenue Code with respect to withholding the income tax on salaries and wages paid by them, the filing of returns in connection therewith, etc. Interest on obligations issued by a local agency, such as temporary loan notes, is exempt from income tax.
Full details as to procedure to be followed in applying for social security coverage, forms, instructions, resolutions, proposed agreements, etc., may be obtained from the New York State Social Security Agency, with whom the authority should correspond direct.
With the exception of the individual payroll records, which is a stock form obtainable at most stationers, supplies of the above forms are obtained from the office of the District Director of Internal Revenue. The director will also furnish tables showing the rates of tax to be withheld. While it does not appear that employees of local agencies, who are not covered by social security, are required to obtain social security identification numbers, it is recommended that they do so. Applications may be obtained at the local post office. Local agencies, who have employees covered by social security are required to obtain employers' identification numbers.
Issue and transfer taxes, payable by means of adhesive stamps affixed to the related documents or instruments, do not apply to bonds, notes or other instruments issued by the United States, by any State, territory, the District of Columbia or any local subdivision of a State, territory, the District of Columbia or any local subdivision of a State. Temporary loan notes and certificates of indebtedness issued by a local agency (see Part 1643, Financing) are therefore exempt from stamp taxes upon issue or transfer thereof. Inasmuch as, in practice, excess local agency funds will ordinarily be invested in U.S. government obligations (see Part 1645, Investments), no stamp tax will be payable upon the acquisition or disposition of such investments by the local agency. Deeds conveying real estate by a local agency are subject to the stamp tax imposed upon the seller, by the Federal government at the rate of:
In calculating the amount of stamps which must be affixed to a deed of conveyance, the tax is computed upon the full consideration for transfer less all encumbrances which rest on the property before the sale and are not removed by the sale. If, however, property is conveyed to a municipality as a gift or to "promote public welfare", the conveyance is specifically exempt by the Revenue Act.
Section 4286 of the Internal Revenue Code imposes a tax of 10 per cent of the amount collected for the use of any safe deposit box. While the code itself is silent as to exemptions, local agencies would appear to be exempt from the tax inasmuch as, in the language of the code, the tax is imposed on "the person paying for the use of the safe deposit box".
The Internal Revenue Code imposes a tax, at the rate of 10 per cent of the retail sales price, on the following items:
The tax is ordinarily shown on the retailers' or other supplier's invoice as a separate item. Local agencies are exempt from the Federal retailers' excise tax. To obtain the exemption, the local agency, at the time of the purchase of any of the articles subject to the tax, must supply an exemption certificate executed by a duly authorized officer to the retailer or other supplier. The exemption certificate is not furnished by the Bureau of Internal Revenue, but is prepared by the local agency and may be printed, mimeographed or typed on the back of the purchase order or on separate sheets attached to the purchase order or delivered separately. If it is impracticable to furnish a separate exemption certificate for each order, a certificate covering all orders between given dates (the period not to exceed one month) will be acceptable. A specimen exemption certificate is shown as Exhibit 1 of Appendix S-6.
| Tires, made wholly or in part of rubber, natural or synthetic, and purchased for replacement. The tax is based on total weight of metal rims or rim bases and does not apply to tires furnished as part of the original equipment of autos, trucks, tractors etc. | 8 cents per pound |
| Inner Tubes, made wholly or in part of rubber, natural or synthetic, and purchased for replacement. The tax does not apply to tubes furnished as part of the original equipment of autos, trucks, tractors etc. | 9 cents per pound |
| Trucks and Buses | 10 per cent of manufacturer's sales price |
| Passenger Automobiles | 7 per cent of manufacturer's sales price |
| Automobile Parts and Accessories | 5 per cent of manufacturer's sales price |
| Tires, inner tubes and automobile radios are not included in this classification, being taxed at other rates. The tax is on parts and accessories sold separately. | |
| Radios, Phonographs, Records, Musical Instruments and Radio and Phonograph Parts such as Tubes | 10 per cent of manufacturer's sales price |
| Mechanical Refrigerators-Household Type | 5 per cent of manufacturer's sales price |
| Air Conditioning Units | 10 per cent of manufacturer's sales price |
| Electric, Gas and Oil Appliances | 5 per cent of manufacturer's sales price |
| The tax applies to the following appliances: electric fans and air circulators; electric, gas, or oil water heaters; electric flat irons, electric air heaters (not including furnaces); electric immersion heaters; electric heating pads and blankets; electric, gas, or oil appliances of the type used for cooking, warming or keeping food or beverages for consumption on the premises; electric mixers, whippers and juicers. | |
| Photographic Apparatus | 10 per cent of manufacturer's sales price |
| Cameras, enlargers, developing apparatus and accessories. | |
| Unexposed film, plates, and sensitized paper. | 10 per cent of manufacturer's sales price |
| Projectors (Motion or Still) - Household | 5 per cent of manufacturer's sales price |
| Business and Store Machines | 10 per cent of manufacturer's sales price |
| The tax applies to the following machines: adding, addressing, autographic register, book proof, billing, bookkeeping, calculating, card punching, cash registers (except the type used in registering over-the-counter retail sales), change-making, check-writing, check-signing, check-cancelling, check-perforating, check-cutting, check-dating, other check protector devices, computing machines, coin counter, dictographs, dictating, duplicating, embossing, envelope opening, erasing, folding, fanfold, fare register, fare boxes, listing, line-a-time, mailing, multigraphing, multigraph type-setting, multigraph type-justifying, numbering, portable paper-fastening, payroll, pencil sharpeners, postal permit mailing, punch card, sorting, stencil cutting, shorthand writing, sealing, tabulating ticket counting, ticket counting, ticket issuing, typewriters transcribing, time recording devices. | |
| Electric Light Bulbs and Tubes | 10 per cent of manufacturer's sales price |
| Firearms, Shells and Cartridges | 11 per cent of manufacturer's sales price |
| Matches, except fancy wooden or decorated | 2 cents per thousand |
| Matches, fancy wooden or decorated | 5 1/2 cents per thousand |
| Gasoline and Diesel Fuel | 3 cents per gallon |
| Lubricating Oils, but not including grease | 6 cents per gallon |
| Long distance telephone or radiotelephone message or conversation for which the charge for each message is more than 24 cents. | 10 per cent |
| Telegraph, cable or radio dispatches or messages | |
| (i) Domestic | 10 per cent |
| (ii) International | 10 per cent |
| Leased wire, teletype or talking circuit special service | 10 per cent |
| Wire and equipment service, including burglar or fire alarm service | 8 per cent |
| Local telephone service | 10 per cent |
No exemption certificate is necessary when payment for these services is made directly to the companies furnishing same. The local authority need only indicate on the invoice or contract that it is a political subdivision of the State and entitled to the exemption.
The Internal Revenue Code imposes a tax of 10 per cent on the amount paid for the transportation of persons by rail, motor vehicle, water, or air. The tax does not apply to fares which do not exceed 35 cents. Members of a local agency and officers or employees thereof are exempt from this tax when traveling on official business in connection with the affairs of the local agency. To obtain exemption from this tax, an exemption certificate should be presented to the carrier at the time the ticket is purchased. The exemption certificate is on Treasury Department form AC856, copies of which may be obtained from the District Director of Internal Revenue, travel agencies and ticket agencies. Form AC856 is shown as Exhibit 3 of Appendix S-6.
The Internal Revenue Code imposes a tax of three per cent upon the amount paid for the transportation of property, other than coal, by rail, motor vehicle, water, or air. The tax on the transportation of coal is at the rate of four cents per short ton of 2000 pounds. Local agencies are exempt from this tax, which is ordinarily shown as an addition to the other charges. However, to obtain the benefits of the exemption, the shipping papers must clearly show that the shipment is consigned to the local agency, as the exemption does not apply to shipments consigned to a dealer or distributor, even though such dealer or distributor subsequently sells or delivers the shipment to a local agency. Where the purchase is made through a dealer or distributor, local agencies may obtain the exemption by instructing the dealer to have the shipment consigned to the local agency or to the local agency in care of the dealer. The carrier is authorized to accept shipping papers on which the consignor or consignee is a local authority as proof that the shipment is exempt from tax. No exemption certificate is required. The effect of such instructions is to transfer title with the attendant risks and liabilities, to the local agency, rather than to the dealer. Local agencies should give some consideration to this factor before issuing such instructions.
The payment of Federal taxes improperly made by local agencies will be regarded as an ineligible expenditure by the division. Procedure in applying for refunds of Federal taxes varies with the particular tax. Generally speaking, the Director of Internal Revenue will consider a claim for refund only from the person who has actually paid the tax to him and filed the return for the tax in question. For example, claims for refund of manufacturers' excise taxes must be made by the manufacturer, the local agency merely furnishing the manufacturer with the exemption certificate and, if required, other supporting evidence. Claims for refunds of Federal taxes paid by the local agency directly to the Director of Internal Revenue are filed with the director to whom the tax was paid on Treasury Department form 843 and should be made before the time within which such claims may be legally filed expires. Supplies of these forms may be obtained from the office of the local Director of Internal Revenue.
N.Y. Comp. Codes R. & Regs. Tit. 9 §§ 1640-6.1