New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter IV - Sales And Use And Other Miscellaneous Taxes › Subchapter A - Sales And Use Taxes › Part 534 - Refunds And Credits › Section 534.10 - Refunds and credits for vessel operators engaged in local transit service

Current through Register Vol. 46, No. 28, July 10, 2024
[Tax Law, § 1119(b)]
(a)
Definitions.
(1)
Vessel operator.
For
				  purposes of this section, a
vessel operator
is a person that
				  operates a vessel used to provide local transit service in this State and that
				  operates pursuant to a certificate of public convenience and necessity issued
				  by the Commissioner of Transportation of this State or by a like officer or
				  agency of the United States or pursuant to a contract, franchise, or consent
				  between such person and a city in this State having a population of more than
				  one million inhabitants, or any agency of such city.
(2)
Vessel.
For purposes of
				  this section, a
vessel
is any type of watercraft with a
				  seating capacity of more than 20 passengers that is used for the transportation
				  on water of passengers for hire.
(3)
Local transit service.
(i) For purposes of this section,
local transit service
means a mass transit service provided by
				  a vessel operator in which passengers are carried by a vessel from one point in
				  this State to another point in this State and in performance of which the
				  vessel:
(a) regularly picks up and discharges
				  such passengers as scheduled, or at their convenience, at designated piers,
				  slips, docks, or other landings along waterways, as distinguished from
				  buildings or similar facilities used as terminals or stations;
(b) picks up and discharges passengers at
				  terminals or stations, the distance between which is not more than 75 miles
				  (5,280 feet per mile), measured along the route traveled by the vessel;
				  or
(c) picks up and discharges
				  passengers as described in both clauses (
a
) and
				  (
b
) of this subparagraph.
(ii) Local transit service does not include
				  charter, contract, excursion, sight-seeing, or other passenger service.
Example 1:
A vessel operator uses vessels to provide mass transit
					 service. The vessels pick up passengers from Terminal A and make scheduled
					 landings at designated piers throughout the city to pick up and discharge
					 passengers before returning to the terminal at the end of the day. The terminal
					 and all of the landings are located in New York State. The vessels are operated
					 in local transit service.
Example 2:
A vessel operator uses vessels to provide mass transit
					 service. The vessels pick up passengers from Terminal A, proceed to Stations B
					 and C, and continue to Terminal D. All of these facilities and all of the
					 mileage are located in New York State. The distance along the route traveled
					 from A to B is 80 miles, from B to C is 80 miles, and from C to D is 60 miles.
					 Between Terminal A and Station B, the vessels pick up and discharge passengers
					 at designated piers along the waterway. However, they do not do this between
					 Stations B and C or between Station C and Terminal D. Between A and B and
					 between C and D, these vessels are operated in local transit service. Between
					 Stations B and C, however, the vessels are not operated in local transit
					 service because they do not stop to pick up and discharge passengers and the
					 facilities are more than 75 miles apart.
Example 3:
A vessel operator uses vessels to provide mass transit
					 service. The vessels transport passengers to and from Terminals A and B.
					 Terminal A is located in New York State. Terminal B is located outside of the
					 State. There are no scheduled landings at which to pick up or discharge
					 passengers between Terminal A and the State boundary. These vessels are not
					 being operated in local transit service because they are not carrying
					 passengers from one point in this State to another point in this State.
Example 4:
A vessel operator uses vessels to provide mass transit
					 service. The vessels pick up passengers from Terminal A, proceed to Station B,
					 and continue to Terminal C. Terminals A and C are located in New York State,
					 and Station B is located outside of the State. The distance from Terminal A to
					 Station B along the route traveled by the vessels is 20 miles, as is the
					 distance from Station B to Terminal C. There are no scheduled landings made
					 along the way. The vessels are operated in local transit service because the
					 total distance traveled between Terminals A and C is less than 75 miles, even
					 though the route from A to C includes some mileage outside of the State.
Example 5:
Assume the facts in Example 4, except that the distance
					 between Terminal A and Station B and between Station B and Terminal C is each
					 40 miles. The vessels are not operating in local transit service because the
					 total distance traveled between Terminals A and C is greater than 75 miles. The
					 fact that the vessel operator carries passengers from Terminal A to Station B,
					 a distance of 40 miles, does not qualify as local transit service because it is
					 not between two points within New York State.
(4)
Vessel hours.
For
				  purposes of this section,
vessel hours
means the number of
				  hours that all vessels are operated by a vessel operator in the performance of
				  local transit service, plus the number of idle hours used to reach the point at
				  which such service begins and from the point at which such service terminates.
				  Such hours include only those hours operated in this State.
(5)
Total hours operated.
For purposes of this section,
total hours operated
means the
				  vessel hours computed pursuant to paragraph (4) of this subdivision, plus the
				  number of hours used in charter, contract, excursion, sight-seeing, and all
				  other passenger service, which hours are not included in the meaning of vessel
				  hours. Such hours include only hours operated in this State.
(6)
Local transit service
				  percentage.
(i) For purposes of this
				  section, the
local transit service percentage
is the
				  proportion that the vessel operator's vessel hours occurring in local transit
				  service in this State, as defined in paragraph (4) of this subdivision, bear to
				  the vessel operator's total hours operated in this State, as defined in
				  paragraph (5) of this subdivision, for the calendar year immediately preceding
				  the end of the quarterly return period (
i.e.,
the last day of
				  February, May, August, or November) to which a refund or credit under this
				  section relates.
(ii) Special
				  computation. For the first four quarterly return periods of a vessel operator
				  that is not engaged in local transit service in the preceding calendar year,
				  such vessel operator shall compute its local transit service percentage by
				  using the proportion that such operator's vessel hours in local transit service
				  in this State in the first three months of such operation bear to the
				  operator's total hours operated in this State in such period.
Example 6:
Under the facts of Example 4 set forth in paragraph (3) of
					 this subdivision, the vessel operator operates its vessels for 15,000 hours. Of
					 this number of hours: 4,000 hours are operated between Terminal A and Station
					 B, of which 500 hours are operated outside of New York State; 4,000 hours are
					 also operated between Station B and Terminal C, of which 500 hours are operated
					 outside of the State; 3,500 hours are operated in charter services in New York
					 State; and another 3,500 hours are operated in sight- seeing services in this
					 State. The vessel hours in local transit service is 7,000 hours, which is
					 composed of the 3,500 hours operated is this State between Terminal A and
					 Station B (4,000 - 500) and the 3,500 hours operated in this State between
					 Station B and Terminal C (4,000 - 500). Total hours operated is 14,000 hours,
					 which is all of the hours operated except the 1,000 hours that were operated
					 outside of the State. The local transit service percentage is 50 percent (the
					 percentage that 7,000 vessel hours bear to 14,000 total hours
					 operated).