Bill > A2590

Introduced Session

This bill revises the sales and use tax treatment of garbage removal services to ensure "tipping fees" and other similar charges that are required to be paid by a garbage removal business to a landfill or transfer facility for the acceptance or disposal of garbage and typically passed along to be paid as part of the bill presented to the customer are not included in the taxable receipt that is subject to taxation. Under current law, garbage removal services are generally subject to the State's sales and use tax, unless the services are performed on a regular contractual basis for a term not less than 30 days. This means that businesses that provide garbage removal services are required to charge and collect the tax on the sales price paid by the customer for the temporary rental of a dumpster to dispose of construction debris or for a one-time collection of yard waste following a storm, but are not required to charge and collect the tax on the sales price paid for a weekly trash collection service billed on a quarterly basis. Because of the way sales price is defined, businesses providing garbage removal services must also include in the receipt upon which the tax is calculated any "tipping fees" or other similar charges that are paid to the landfill or transfer facility for the acceptance or disposal of the garbage and passed along to be paid as part of the bill presented to the customer. Sales price is defined as the measure subject to tax and is determined without deduction for the cost of materials used, labor or service cost, interest, losses, costs of transportation to the seller, taxes imposed on the seller, and any other expense of the seller, regardless of whether those costs, taxes, or expenses are separately stated. However, "tipping fees" and other similar charges paid by a business to the landfill or transfer facility for the acceptance or disposal of a customer's garbage should not be included as part of the taxable receipt. These charges and fees are, independent of garbage removal services, not subject to taxation, and often are part of a separate service determined and assessed beyond the control of the business responsible for the removal of garbage from a customer's premises. This bill ensures "tipping fees" and other similar charges are not included as part of the taxable receipt subject to taxation by establishing a statutory definition of garbage removal services. The bill eliminates the current exclusion from tax for garbage removal services, and imposes tax on a more narrowly defined service that limits the scope of the taxable service. Under the bill, "garbage removal services" is defined as all services performed by the service provider for the collection, pick up, and physical removal of garbage from a customer's premises within this State and the transportation of the garbage from the customer's premises to a facility for processing, treatment, or disposal or transfer to another facility for processing, treatment, or disposal. The defined term does not include, and the taxable service therefore does not apply to, services performed by the service provider, or another person on behalf of the provider, to process, treat, or dispose or transfer garbage that has been removed from a customer's premises, provided those services are separately stated to the customer. The bill maintains the current tax treatment of garbage removal services performed on a regular contractual basis. The bill provides an exemption from tax for garbage removal services performed on a regular contractual basis for a term not less than 30 days to ensure, for example, that charges for regularly scheduled residential curb-side trash pick up are not subject to taxation as a result of the bill. In addition, the bill clarifies the application of an existing exemption for the transportation of persons and property. The bill provides that the exemption does not apply to the transportation of garbage that is provided in connection with taxable garbage removal services not performed on a regular contractual basis. The bill takes effect immediately and applies to garbage removal services performed on or after the first day of the first month of the first calendar quarter beginning at least 90 days after the date of enactment.

Committee Categories

Wayne DeAngelo (D)*, 

Introduced, Referred to Assembly State and Local Government Committee (on 02/13/2020)