Association Calls for Elimination of Sales Tax from School Buses

Published on February 5th, 2015

New York School Bus Contractors Association Calls for the Elimination of Sales Tax from School Buses

Latham, N.Y. – The New York School Bus Contractors Association is calling for a budget initiative that will help taxpayers and school districts save nearly $14 million per year – the elimination of the sales tax from school buses. Currently, school districts pay the state and local sales tax on the purchase of every school bus purchased by private operators as a portion of their transportation contracts.

During his testimony for the New York State Joint Legislative Hearing on the 2015 – 2016 Executive Budget, New York School Bus Contractor Association Vice President Mike Martucci said, “Removing the sales tax from school buses is a simple cost-saving solution that will help reduce the cost of student transportation in New York, and allow the state to put that savings where it belongs – in our classrooms.”

School districts that utilize private school bus contractors pay, as a portion of their transportation contracts, the costs associated with the state and local sales tax. The state then reimburses the school district for the expense of the transportation contract not paid by school district taxpayers.

Martucci continued, “The New York State legislature and Governor exempted private coach buses from the sales tax back in the mid-90’s because of the public and environmental benefits of riding a coach bus; 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.”

Transit buses, commercial airplanes, ferry boats, fishing vessels, tractors, semi-trailers and even race horses, are excluded from the sales tax; yet, school buses are still taxed even though New York’s school buses are transporting 2.3 million children a day.

In addition, removal of the sales tax on school buses will not lead to any loss of revenue for the state because the state will no longer have to pay the sales tax via transportation aid. School Districts will also be able to negotiate future savings through contract renewals or public bids, passing the savings on to property taxpayers.

Martucci concluded, “Exempting school buses, the parts, maintenance, and fuel used to transport school children is the right thing to do. 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. ”