BILL NUMBER: S5649
SPONSOR: ASHBY
 
TITLE OF BILL:
An act to amend the tax law, in relation to exempting student organiza-
tions from sales taxes on certain prepared foods sold
 
PURPOSE:
To exempt student organizations from sales tax when selling certain
prepared foods.
 
SUMMARY OF PROVISIONS:
Section 1 amends the Tax Law by adding a new subdivision which provides
that student organizations shall be exempt from a sales tax when food or
food products are sold heated, sold for consumption on the premises,
have been prepared by the seller and are able to be readily eaten on or
off premises, and when the total revenue from such sales is less than
$250
Section 2 of the bill is the effective date.
 
JUSTIFICATION:
Student organizations, such as Science Olympiad and Students Against
Destructive Decisions, engage students in meaningful and educational
activities. They motivate students to be better scholars and better
citizens in their communities. However, the sheer amount of paperwork
that these organizations have to report and safeguard for accounting and
auditing purposes is astronomical, not to mention costly. These organ-
izations work hard to fundraise but often face a sales tax that eats
away at their profits.
It's also very confusing. If they sell brownies, they don't need to
report sales tax; if they pop popcorn, bag it and sell it, they must
remit tax. Thus, say they sell the popcorn for $1 and then add tax- they
need to have a lot of change on hand. Consequently, the organization
will usually still charge a flat $1 to keep it simple, but a certain
percentage of that $1 will go to the State in sales tax when they report
it. Add to that the cost incurred in supplies, and the organization's
profits are shrinking rapidly.
This bill aims to relieve student organizations from remitting sales tax
when food or food products are sold heated, sold for consumption on the
premises, have been prepared by the seller and are able to be readily
eaten on or off premises, and when the total revenue from such sales is
less than $250.
This would allow students organizations, who work so hard on their
fundraisers, to keep more of their hard-earned profits.
 
LEGISLATIVE HISTORY:
2023-24: S.4257-A, referred to Budget and Revenue.
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S5649: 1115 tax law