[JPL] NEW YORK STATE SAYS YES! FOR JAZZ

SGribetz at aol.com SGribetz at aol.com
Thu Aug 3 23:01:46 EDT 2006


>From the horse's mouth, here is the exact memorandum and text of  the law
 
 
 
SPONSORS MEMO:

NEW YORK STATE SENATE
INTRODUCER'S MEMORANDUM IN  SUPPORT
submitted in accordance with Senate Rule VI. Sec 1
 

BILL NUMBER:
S5398A  SPONSOR: MAZIARZ
TITLE OF BILL: An act to amend the tax law, in relation to admission charges 
on roof gardens, cabarets or other similar places   PURPOSE: To state that 
venues offering live dramatic of musical arts perform- ances, where the charge 
for admission is separate from the charge for food, refreshment or merchandise, 
are exempt from sales tax upon admis- sion charges.   SUMMARY OF PROVISIONS: 
Section 1 amends Paragraph 3 of subdivision (f) of section 1105 of the tax law 
by specifying that venues offering live musical or live dramatic arts 
performances, where the charge for admission is separate from the charge for food, 
refreshment or merchandise, are exempt from sales tax upon admission charges.  
Section 2 sets the effective date.  CURRENT LAW: Section 1101 (d) (12) of the 
tax law exempts sales tax on charges for admission when the serving or selling 
of food, refreshments or merchan- dise is "merely incidental."  JUSTIFICATION: 
Whether admission is exempt from sales tax is based upon a subjective 
standard, where the selling of food, refreshment or merchandise is "merely incidental" 
to a live musical or dramatic arts performance. Currently the admission 
charges to theater, opera, ballet, dinner thea- tre and live musical arts 
performances in venues both large and small are not subject to sales tax. However, 
admission to jazz clubs are subject to sales tax. This legislation addresses the 
subjective nature of the current language, by exempting sales tax on admission 
charges to all venues that offer live musical or dramatic arts performances, 
where the selling of food, refreshments or merchandise is separate from the 
charge of admis- sion. It establishes an objective standard, which stresses a 
"commer- cially reasonable rate" to prevent any circumvention of the law's 
intent, for example, by loading food charges into admission charges. The New York 
State Tax Department has acknowledged that the primary activity and focus of 
dinner theatre remains the dramatic presentation. The Department found that food 
and beverage is not connected to the perform- ances in any way other than the 
fact that it takes place in the same venue. Therefore, tax is not collected on 
the admission. It is, however, collected on the food and beverage service. 
Unfortunately, not all venues offering live musical and dramatic arts 
performances, (such as jazz clubs and dance halls) are afforded the same exemption.  
These venues and these artists are the source of a substantial portion of the 
estimated $2.5 billion in economic activity generated by NYC's night life, 
according to a New York night life Association's survey in 1997. The same survey 
found that employment, both direct and indirect, totaled 27,040 jobs. 35% of 
night life attendees are out-of-town visitors with 89% of these visitors saying 
that their night life attendance is the main reason for coming to NYC.  Visitors 
spend $1.021 billion as a result of attending music venues and related 
activities. This legis- lation ensures that all venues offering live musical and 
dramatic arts performances are allowed the same exemptions, providing those 
members of the entertainment industry with similar benefits. Supporting live 
dramatic and musical art forms with this legislation would strengthen New York 
City's unique and important cultural attractions, and enhance economic development. 
 LEGISLATIVE HISTORY: New Bill.  FISCAL IMPLICATIONS: Estimated $1.7M  
EFFECTIVE DATE: This act shall take effect on April first of the year following its 
enactment.BILL TEXT:
 

                STATE OF NEW YORK

        
________________________________________________________________________

 

                                         6972--B

 

                    IN SENATE

 

                                     March 10, 2006

                                       ___________

 

        Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and 
when

          printed to be committed to the Committee on Investigations and 
Govern-

          ment  Operations  --  committee  discharged,  bill  amended,   
ordered

          reprinted  as  amended  and recommitted to said committee -- 
committee

          discharged, bill amended, ordered reprinted as amended and 
recommitted

          to said committee

 

        AN ACT to amend the tax law, in relation to exempting from  sales  
taxes

          imposed by or pursuant to the authority of article 28 or 29 of the 
tax

          law  a  portion  of  the  amount  paid as the charge of a roof 
garden,

          cabaret or other similar place in respect of admission

 

          The People of the State of New York, represented in Senate and  
Assem-
bly, do enact as follows:  1    Section 1. The tax law is amended by adding a 
new section 1123 to read 2  as follows: 3    §  1123. Exemption from tax on 
the charge of a roof garden, cabaret or 4  other similar place. The portion of 
the amount paid as the charge  of  a 5  roof  garden,  cabaret or other 
similar place in the state for admission 6  to attend a dramatic or musical arts 
performance at the place  shall  be 7  exempt  from  the  tax  imposed by 
paragraph three of subdivision (f) of 8  section eleven hundred five of this article 
but only if: 9    (a) the recipient states the charge for such admission 
separately from 10  all other portions of such amount; 11    (b) either (i) the 
separately stated charges for food, drink,  service 12  and  merchandise  are  
not  less  on a day when such place offers such a 13  performance as on a day 
when such place does not offer such  performance 14  or  (ii)  if  such place is 
open for business only when it offers such a 15  performance, it separately 
states its charges for food,  drink,  service 16  and  merchandise  and  such  
separately stated charges are comparable to 17  charges for comparable food, 
drink, service  and  merchandise  at  other 18  such  places  and  restaurants  
and  taverns in the United States census 19  bureau metropolitan statistical 
area in which such place is  located  or 20  in  an immediately adjacent 
metropolitan statistical area or in a compa- 21  rable area if such place is not 
located in a   metropolitan  statistical 22  area; and  EXPLANATION--Matter in 
italics (underscored) is new; matter in brackets [ ] is old law to be omitted. 
LBD15567-03-6 
S. 6972--B                          2  1    (c)  such  place retains and 
makes available to the commissioner menus 2  and any other statements of its 
charges, showing all of its charges  for 3  food,  drink, service, merchandise and 
admission, as part of the records 4  required to be kept under section eleven  
hundred  thirty-five  of  this 5  article. 6    §  2. This act shall take 
effect on the first day of a sales tax quar- 7  terly period, as described in 
subdivision (b) of section 1136 of the tax 8  law, next commencing at least 60 
days after this act shall have become a 9  law and shall apply  in  accordance  
with  the  applicable  transitional 10  provisions of sections 1106 and 1217 
of the tax law.


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