senate Bill S3754

Extends the provisions relating to the franchise tax on banking

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
view actions

actions

  • 03 / Mar / 2011
    • REFERRED TO BANKS
  • 09 / Mar / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 04 / Jan / 2012
    • REFERRED TO BANKS
  • 09 / Jan / 2012
    • RECOMMIT, ENACTING CLAUSE STRICKEN

Summary

Extends the provisions relating to the franchise tax on banking.

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Bill Details

Versions:
S3754
Legislative Cycle:
2011-2012
Current Committee:
Senate Banks
Law Section:
Taxation
Laws Affected:
Amd §51, Chap 298 of 1985; amd §110, Chap 817 of 1987; amd §68, Chap 525 of 1988

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Sponsor Memo

BILL NUMBER:S3754

TITLE OF BILL:

An act
to amend chapter 298 of the laws of 1985, amending the tax law relating
to the franchise tax on banking corporations imposed by the tax law,
authorized to be imposed by any city having a population of one million
or more by chapter 772 of the laws of 1966 and imposed by the
administrative code of the city of New York and relating to other
provisions of the tax law, chapter 883 of the laws of 1975 and the
administrative code of the city of New York which relates to such
franchise tax, to amend chapter 817 of the laws of 1987, amending the
tax law and the environmental conservation law, constituting the
business tax reform and rate reduction act of 1987, and to amend
chapter 525 of the laws of 1988, amending the tax law and the
administrative code of the city of New York relating to the imposition
of taxes in the city of New York, in relation to the effectiveness of
certain provisions of such chapters

PURPOSE:

This bill would make permanent the current bank tax statute. The
provisions of the current bank tax are scheduled to expire for
taxable years beginning on or after January 1, 2011. This bill would
extend them permanently.

SUMMARY OF PROVISIONS:

This bill would amend Section 51 of Chapter 298 of the Laws of 1985 by
deleting the sunset provisions which were contained in that law's
effective date. The law currently provides that the amendments
enacted by Chapter 298 shall not apply to taxable years beginning on
or after January 1, 2011.

The bill also amend Section 110 of Chapter 817 of the Laws of 1987 by
deleting the sunset provisions relating to certain amendments
regarding the bad debt deduction for commercial banks. The law
currently provides that the amendments enacted by Chapter 817 shall
not apply to taxable years beginning on or after January 1, 2011.

JUSTIFICATION:

The State tax on the banking industry was significantly restructured
by Chapter 298 of the Laws of 1985. The intent of this law was to
make the franchise tax on banking corporations more similar to the
franchise tax on general business corporations. It also sought to
treat commercial banks and thrift institutions in a more similar
manner. Another purpose was to make it easier to more accurately
calculate the amount of the required tax.

Because of the extensive changes made in the Tax Law, and the
uncertain impact of these amendments, the provisions of Chapter 298
were only temporarily authorized. The impermanent nature of the Bank
Tax has, however, caused uncertainty in the industry about the future
tax liability of banking corporations. This has complicated tax


calculation, record keeping and efforts to plan for the future. The
current Bank Tax has been in effect for fifteen taxable years. This
has provided sufficient time to analyze and evaluate the impact of
Chapter 298 of the Laws of 1985. The 1985 law resolved many of the
problems that had existed regarding the taxation of banks. The
provisions of Chapter 298 of 1985 and Chapter 67 of 2010 should
therefore be made permanent.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget as it preserves current revenue.

EFFECTIVE DATE:

This bill takes effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3754

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              March 3, 2011
                               ___________

Introduced  by  Sens.  GRIFFO, FARLEY -- read twice and ordered printed,
  and when printed to be committed to the Committee on Banks

AN ACT to amend chapter 298 of the laws of 1985, amending  the  tax  law
  relating  to  the franchise tax on banking corporations imposed by the
  tax law, authorized to be imposed by any city having a  population  of
  one  million or more by chapter 772 of the laws of 1966 and imposed by
  the administrative code of the city of New York and relating to  other
  provisions  of  the  tax  law, chapter 883 of the laws of 1975 and the
  administrative code of the city of New  York  which  relates  to  such
  franchise  tax, to amend chapter 817 of the laws of 1987, amending the
  tax law and the environmental conservation law, constituting the busi-
  ness tax reform and rate reduction act of 1987, and to  amend  chapter
  525  of  the laws of 1988, amending the tax law and the administrative
  code of the city of New York relating to the imposition  of  taxes  in
  the  city  of  New  York,  in relation to the effectiveness of certain
  provisions of such chapters

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 51 of chapter 298 of the laws of 1985, amending the
tax law relating to the franchise tax on banking corporations imposed by
the tax law, authorized to be imposed by any city having a population of
one  million  or  more by chapter 772 of the laws of 1966 and imposed by
the administrative code of the city of New York and  relating  to  other
provisions  of  the  tax  law,  chapter  883 of the laws of 1975 and the
administrative code of the city of New York which relates to such  fran-
chise  tax,  as amended by chapter 67 of the laws of 2010, is amended to
read as follows:
  S 51. This act shall take effect immediately and shall apply to  taxa-
ble years beginning on or after January 1, 1985[, except that:
  (a) sections one through eight shall not apply to taxable years begin-
ning on or after January 1, 2011;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09960-02-1

S. 3754                             2

  (b)  sections  nine,  twelve,  the  amendment  made  to paragraph 9 of
subsection (a) of section 1452 of  the  tax  law  by  section  thirteen,
sections  fifteen,  sixteen,  eighteen,  nineteen, twenty, twenty-three,
twenty-seven, thirty and thirty-two, the amendment made to  paragraph  9
of  subdivision  (a) of section 11-640 of the administrative code of the
city of New York by section thirty-three, sections thirty-five,  thirty-
six, thirty-eight, thirty-nine, forty, and forty-five shall not apply to
corporations  other than savings banks and savings and loan associations
for taxable years beginning on or after January 1, 2011.
  (c)  sections  twenty-one,  twenty-two,  twenty-four,  forty-one   and
forty-two  shall  not apply to corporations other than savings banks and
savings and loan associations for taxable years beginning  on  or  after
January 1, 2011, provided, however, that the provisions of such sections
which  relate  to the alternative minimum tax measured by taxable assets
shall continue to apply to all taxpayers for taxable years beginning  on
or after January 1, 2011;
  (d)  the amendment to the section heading and the opening paragraph of
section 11-643.3 of the administrative code of the city of New York made
by section forty-three  shall  not  apply  to  corporations  other  than
savings banks and savings and loan associations for taxable years begin-
ning  on  or  after  January 1, 2011 with respect to those provisions of
such section 11-643.3 which relate to the basic tax measured  by  entire
net income; and
  (e)  section twenty-eight, and the addition of new section 11-643.5 of
the administrative code of the city of New York made by  section  forty-
four  shall  not  apply  to  corporations  other  than savings banks and
savings and loan associations for taxable years beginning  on  or  after
January 1, 2011, provided, however, that the provisions of such sections
which relate to the alternative minimum taxes measured by assets, issued
capital  stock  and  one  hundred  twenty-five dollars shall continue to
apply to all taxpayers for taxable years beginning on or  after  January
1, 2011].
  S  2.  Subdivisions  (d)  and (f) of section 110 of chapter 817 of the
laws of 1987, amending the tax law and  the  environmental  conservation
law,  constituting  the  business  tax  reform and rate reduction act of
1987, as amended by chapter 67 of the laws of 2010, are amended to  read
as follows:
  (d)  The  provisions of section sixty-seven of this act except insofar
as it amends paragraph 10 of subsection (b) of section 1453 of  the  tax
law, seventy-one and seventy-four shall apply to taxable years beginning
after  December 31, 1986[, provided, however, that new paragraphs 11 and
12 of subsection (b) of section 1453 of the tax law as added by  section
sixty-seven  of  this act, the amendments made by section seventy-one of
this act, and new subsection (i) of section 1453 of the tax law as added
by section seventy-four of this act shall not  apply  to  taxable  years
beginning on or after January 1, 2011];
  (f) The provisions of section one hundred four of this act shall apply
to taxable years beginning after December 31, 1986[, and shall not apply
to  corporations  other  than savings banks and savings and loan associ-
ations for  taxable  years  beginning  on  or  after  January  1,  2011,
provided,  however,  that the provisions of such section which relate to
the alternative minimum tax measured by taxable assets shall continue to
apply to all taxpayers for taxable years beginning on or  after  January
1, 2011].
  S 3. Subdivisions (c) and (d) of section 68 of chapter 525 of the laws
of 1988, amending the tax law and the administrative code of the city of

S. 3754                             3

New York relating to the imposition of taxes in the city of New York, as
amended  by  chapter  67  of  the  laws  of 2010, are amended to read as
follows:
  (c)  The  provisions  of sections one, thirty-one, thirty-two, thirty-
three, thirty-six, thirty-seven, forty through  forty-five,  forty-seven
and forty-eight of this act shall apply to taxable years beginning after
December  31,  1986[,  provided,  however,  that  the amendments made by
sections thirty-six and forty-one of this act, and new  subdivision  (i)
of  section 11-641 of the administrative code of the city of New York as
added by section forty-four of this act shall not apply to taxable years
beginning on or after January 1, 2011];
  (d) The provisions of section forty-six of this  act  shall  apply  to
taxable years beginning after December 31, 1986[, and shall not apply to
corporations  other than savings banks and savings and loan associations
for taxable years beginning on  or  after  January  1,  2011,  provided,
however,  that the provisions of such section which relate to the alter-
native minimum tax measured by taxable assets shall continue to apply to
all taxpayers for taxable years beginning on or after January 1, 2011];
  S 4. This act shall take effect immediately.

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