Own a racehorse in New York State and you don’t have to pay the sales tax. But operate a school bus as a contractor? That’s a different story.
And it’s one that the New York School Bus Contractors Association said needs a new ending, as taxpayers are footing a $14 million bill each year as a result. Mike Martucci, the group’s vice president, testified before the State Legislature on the 2015-2016 Executive Budget that the playing field should be leveled and costs cut.
Racehorses might be the most preposterous example. More commonly, school districts that do their own busing are exempt from the sales tax. And in the mid-1990s, lawmakers and then Gov. George Pataki also exempted transit agencies from paying the sales tax on new bus purchases in recognition of the public and environmental benefits.
Other vehicles that benefit from the sales tax exemption include tractors, semi-trailers, commercial airplanes, ferry boats and fishing vessels.
NYSBCA said it just wants a fair shake, relief for tax payers and the end to a bureaucratic morass.
“It seems logical that school buses, which produce direct public and environmental benefits, should be exempted from state and local sales taxes…especially given the fact that there would be no loss in revenue to the State of New York because the state is currently paying the sales taxes on school buses as part of the transportation contracts,” Martucci said.
He added that school districts would also be able to negotiate future savings through contract renewals or public bids and pass along the savings to property taxpayers.
An association spokesman explained that the tax is contained within the transportation contracts for schools that use private contractors, which accounts for more than half of all schools in New York. Contractors purchase the buses and related items such as parts, equipment and fuel but must pay state and local taxes under the contract, costs that are then passed on to the district customer. The state then must reimburse the district for the additional expense of the transportation contract that is not paid by taxpayers.
The spokesman likened the scenario to “a silly budgetary merry-go-round.”
“Exempting school buses, the parts, maintenance and fuel used to transport school children is the right thing to do,” Martucci said. “It will have no negative impact on the state’s fiscal plan and will save taxpayers millions of dollars each year. Let’s help our school districts reduce their costs and exempt school buses from the state and local sales tax so we can put the savings back into our classrooms. “
Eliminating the school bus sales tax is one part of an ongoing NYSBCA proposal to reduce transportation costs statewide by as much as $100 million.
