senate Bill S152A

Places a limit on the personal income tax levy by New York state

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Bill Status


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

  • 09 / Jan / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 28 / Jan / 2014
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 28 / Jan / 2014
    • PRINT NUMBER 152A

Summary

Places a limit on the personal income tax levy by New York state.

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Bill Details

Versions:
S152
S152A
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Add ยง608, Tax L
Versions Introduced in 2011-2012 Legislative Cycle:
S6122

Sponsor Memo

BILL NUMBER:S152A

TITLE OF BILL: An act to amend the tax law, in relation to placing a
limit upon the personal income tax by the state of New York

PURPOSE: This bill imposes a cap on the levy collected by the personal
income tax by New York State. In the event the cap is exceeded, rebate
checks will be mailed to all New York taxpayers. This bill seeks to
prevent any future tax levy increases over a certain allowable growth
factor while making New York's income tax system more progressive over
time.

SUMMARY OF PROVISIONS:

Section 1 establishes a cap on the levy of the personal income tax and
establishes a rebate check program if receipts exceed this levy cap.

Section 2 states that this act shall take effect immediately.

JUSTIFICATION: In New York, income taxes account for more revenue than
any other type of tax At the same time, the income tax is one of the
most burdensome taxes. It takes money directly out of consumers'
paychecks, disincentivizing work and reducing consumption.

The average New Yorker pays far too much in income taxes. It is no acci-
dent that New York State has lagged in job creation and been a leader in
out-of-state migration while zero income tax states like Texas and
Florida have seen an influx of both businesses and individuals. This
bill seeks to prevent further increases to New York State's income taxes
by capping the total income tax levy at the 2013-14 fiscal year amount
plus a growth factor.

Importantly, this growth factor is a value that is historically smaller
than the increase in total income from state taxpayers. This will result
in income taxes consuming less and less as a percentage of the New York
economy every year. With incomes rising faster than the rate of
inflation, this bill will provide the impetus for government to reduce
tax rates every year in order to stay under the cap.

If, however, no agreement to reduce tax rates are made during a given
year, this bill automatically makes the income tax code more progressive
by providing a rebate to each taxpayer of an equal amount, up to the
amount they paid in taxes, for the total amount of income tax revenue in
excess of the cap If a taxpayer making $40,000 receives a $500 tax
rebate, a taxpayer making $40,000,000 would receive the same $500 tax
rebate In the absence of other reform, this bill does not create a tax
cut for just the wealthy or just the middle class, but instead an equal
tax rebate for all taxpayers.

This bill will send the signal that New York is committed to controlling
the growth of its income tax and will not use reform of the tax code to
disguise a net tax increase. Small businesses, many of which are subject

to the income tax, need certainty to make intelligent investments in
personnel and equipment. This bill will give them confidence that New
York will not change the economic rules on small businesses year to
year.

This bill will also ensure that all New Yorkers will share in the pros-
perity as incomes grow. As the number of individuals making high incomes
increases, all taxpayers will see their yearly rebate checks grow.

LEGISLATIVE HISTORY: 2011-12: S.6122 Referred to Investigations &
Government Operations

EFFECTIVE DATE: This act shall take effect immediately.

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

                                 152--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by Sen. GALLIVAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations -- recommitted to the Committee on Investigations  and
  Government  Operations  in  accordance  with  Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN  ACT  to  amend  the tax law, in relation to placing a limit upon the
  personal income tax by the state of New York

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

  Section 1.  The tax law is amended by adding a new section 608 to read
as follows:
  S  608.  LIMIT  UPON  THE PERSONAL INCOME TAX LEVY BY THE STATE OF NEW
YORK.
  1. UNLESS OTHERWISE PROVIDED BY LAW, THE  AMOUNT  OF  PERSONAL  INCOME
TAXES  THAT MAY BE LEVIED BY OR ON BEHALF OF THE STATE OF NEW YORK SHALL
NOT EXCEED THE TAX LEVY LIMIT ESTABLISHED PURSUANT TO THIS SECTION.
  2. WHEN USED IN THIS SECTION:
  (A) "ALLOWABLE LEVY GROWTH FACTOR" FOR ALL  FISCAL  YEARS  THAT  BEGIN
AFTER  TWO  THOUSAND  FOURTEEN  SHALL  BE THE HIGHER OF: (I) ONE AND TWO
ONE-HUNDREDTHS; OR (II) THE SUM OF NINETY-NINE ONE-HUNDREDTHS  PLUS  THE
INFLATION FACTOR.
  (B)  "AVAILABLE  CARRYOVER" MEANS THE AMOUNT BY WHICH THE TAX LEVY FOR
THE PRIOR FISCAL YEAR WAS BELOW THE TAX LEVY LIMIT FOR SUCH FISCAL YEAR,
IF ANY, BUT NO MORE THAN AN AMOUNT THAT EQUALS ONE AND ONE-HALF  PERCENT
OF THE TAX LEVY LIMIT FOR SUCH FISCAL YEAR.
  (C) "COMING FISCAL YEAR" MEANS THE FISCAL YEAR OF THE STATE GOVERNMENT
FOR WHICH A TAX LEVY LIMIT SHALL BE DETERMINED PURSUANT TO THIS SECTION.
  (D)  "INFLATION  FACTOR" MEANS THE QUOTIENT OF: (I) THE AVERAGE OF THE
NATIONAL CONSUMER PRICE INDEXES DETERMINED BY THE UNITED STATES  DEPART-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01978-02-4

S. 152--A                           2

MENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE
START  OF  THE  COMING  FISCAL  YEAR  MINUS  THE AVERAGE OF THE NATIONAL
CONSUMER PRICE INDEXES DETERMINED BY THE  UNITED  STATES  DEPARTMENT  OF
LABOR  FOR  THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE START
OF THE PRIOR FISCAL YEAR, DIVIDED BY: (II) THE AVERAGE OF  THE  NATIONAL
CONSUMER  PRICE  INDEXES  DETERMINED  BY THE UNITED STATES DEPARTMENT OF
LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO  THE  START
OF THE PRIOR FISCAL YEAR, WITH THE RESULT EXPRESSED AS A DECIMAL TO FOUR
PLACES.
  (E) "PRIOR FISCAL YEAR" MEANS THE FISCAL YEAR OF THE STATE IMMEDIATELY
PRECEDING THE COMING FISCAL YEAR.
  (F) "TAX LEVY LIMIT" MEANS THE AMOUNT OF TAXES AUTHORIZED TO BE LEVIED
BY  OR  ON BEHALF OF THE STATE PURSUANT TO THIS SECTION FOR FISCAL YEARS
BEGINNING AFTER TWO THOUSAND THIRTEEN.
  (G) "TAX" OR "TAXES" MEANS PERSONAL  INCOME  TAXES  LEVIED  BY  OR  ON
BEHALF OF THE STATE.
  3.  (A) SUBJECT TO THE PROVISIONS OF SUBDIVISION FIVE OF THIS SECTION,
BEGINNING WITH THE FISCAL YEAR THAT BEGINS AFTER TWO THOUSAND  FOURTEEN,
THE  STATE  SHALL  NOT  ADOPT  A BUDGET THAT REQUIRES A TAX LEVY THAT IS
GREATER THAN THE TAX LEVY LIMIT FOR THE COMING FISCAL YEAR.
  (B) THE STATE SHALL CALCULATE THE TAX LEVY  LIMIT  APPLICABLE  TO  THE
COMING FISCAL YEAR WHICH SHALL BE DETERMINED AS FOLLOWS:
  (I)  ASCERTAIN  THE  TOTAL AMOUNT OF TAXES LEVIED FOR THE PRIOR FISCAL
YEAR.
  (II) MULTIPLY THE RESULT BY THE ALLOWABLE LEVY GROWTH FACTOR.
  (III) ADD THE AVAILABLE CARRYOVER, IF ANY.
  4. IN THE EVENT THE STATE'S ACTUAL TAX LEVY FOR A  GIVEN  FISCAL  YEAR
EXCEEDS  THE  TAX  LEVY  LIMIT  BY MORE THAN ONE PERCENT OF THE TAX LEVY
LIMIT, THE STATE SHALL REBATE THE TOTAL AMOUNT THAT THE ACTUAL TAX  LEVY
EXCEEDS  THE  TAX  LEVY  LIMIT  SO THAT EACH INDIVIDUAL FILER RECEIVES A
REBATE OF EQUAL AMOUNT ROUNDED DOWN TO THE NEAREST CENT,  PROVIDED  THAT
NO INDIVIDUAL SHALL RECEIVE A REBATE OF A GREATER AMOUNT THAN THE INCOME
TAXES  PAID  DURING THE SAME FISCAL YEAR.  THESE REBATES SHALL BE MAILED
IN THE FORM OF CHECKS PAYABLE TO THE FILING INDIVIDUAL NO LATER THAN THE
FIRST OF SEPTEMBER FOLLOWING THE END OF EACH FISCAL YEAR.
  5. IN THE EVENT THE STATE'S ACTUAL TAX LEVY FOR A  GIVEN  FISCAL  YEAR
EXCEEDS  THE  TAX  LEVY LIMIT AS ESTABLISHED PURSUANT TO THIS SECTION BY
LESS THAN ONE PERCENT OF THE TAX LEVY LIMIT, THE STATE SHALL  PLACE  THE
EXCESS  AMOUNT  OF  THE LEVY IN RESERVE IN ACCORDANCE WITH SUCH REQUIRE-
MENTS AS THE STATE COMPTROLLER MAY PRESCRIBE, AND SHALL USE  SUCH  FUNDS
AND  ANY  INTEREST EARNED THEREON TO OFFSET THE TAX LEVY FOR THE ENSUING
FISCAL YEAR.
  S 2. This act shall take effect immediately.

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