S. 5926 2
S 7. Paragraph 7 of subsection (c) of section 612 of the tax law, as
amended by section 7 of part C of chapter 25 of the laws of 2009, is
amended to read as follows:
(7) The amount of any refund or credit for overpayment of income taxes
imposed by this state, or any other taxing jurisdiction, [and any taxes
imposed by article twenty-three of this chapter,] to the extent properly
included in gross income for federal income tax purposes.
S 8. Paragraph 8 of subsection (c) of section 615 of the tax law is
REPEALED.
S 9. Subsection 4 of section 618 of the tax law, as amended by section
9 of part C of chapter 25 of the laws of 2009, is amended to read as
follows:
(4) There shall be added or subtracted (as the case may be) the
modifications described in paragraphs (6), (10), (17), (18), (19), (20),
(21), (22), (23), (24), (25), (26), (27), (29)[,] AND (38) [and (39)] of
subsection (b) and in paragraphs (11), (13), (15), (19), (20), (21),
(22), (23), (24), (25), (26) and (28) of subsection (c) of section six
hundred twelve of this part.
S 10. Subsection 4 of section 618 of the tax law, as separately
amended by section 5 of part HH-1 of chapter 57 of the laws of 2008 and
section 9 of part C of chapter 25 of the laws of 2009, is amended to
read as follows:
(4) There shall be added or subtracted (as the case may be) the
modifications described in paragraphs (6), (10), (17), (18), (19), (20),
(21), (22), (23), (24), (25), (26), (27), [(28),] (29)[,] AND (38) [and
(39)] of subsection (b) and in paragraphs (11), (13), (15), (19), (20),
(21), (22), (23), (24), (25), (26) and (28) of subsection (c) of section
six hundred twelve of this part.
S 11. Subsection (a) of section 686 of the tax law, as amended by
section 10 of part C of chapter 25 of the laws of 2009, is amended to
read as follows:
(a) General.-- The commissioner [of taxation and finance], within the
applicable period of limitations, may credit an overpayment of income
tax and interest on such overpayment against any liability in respect of
any tax imposed by this chapter[, including taxes imposed under article
twenty-three of this chapter,] on the person who made the overpayment,
against any liability in respect of any tax imposed pursuant to the
authority of this chapter or any other law on such person if such tax is
administered by the commissioner [of taxation and finance] and, as
provided in sections one hundred seventy-one-c, one hundred
seventy-one-d, one hundred seventy-one-e, one hundred seventy-one-f and
one hundred seventy-one-l of this chapter, against past-due support, a
past-due legally enforceable debt, a city of New York tax warrant judg-
ment debt, and against the amount of a default in repayment of a guaran-
teed student, state university or city university loan. The balance
shall be refunded by the comptroller out of the proceeds of the tax
retained by him for such general purpose. Any refund under this section
shall be made only upon the filing of a return and upon a certificate of
the commissioner approved by the comptroller. The comptroller, as a
condition precedent to the approval of such a certificate, may examine
into the facts as disclosed by the return of the person who made the
overpayment and other information and data available in the files of the
commissioner.
S 12. Paragraph 15 of subsection (b) of section 1453 of the tax law is
REPEALED.
S. 5926 3
S 13. Subsection (d) of section 1453 of the tax law, as amended by
section 13 of part C of chapter 25 of the laws of 2009, is amended to
read as follows:
(d) Entire net income shall not include any refund or credit of a tax
for which no exclusion or deduction was allowed in determining the
taxpayer's entire net income under this article or [articles nine-A or
twenty-three] ARTICLE NINE-A of this chapter for any prior year.
S 14. Subparagraph (C) of paragraph 1 of subdivision (b) of section
1503 of the tax law, as amended by section 14 of part C of chapter 25 of
the laws of 2009, is amended to read as follows:
(C) any refund or credit of a tax imposed under this article or
section one hundred eighty-seven[, or article twenty-three] of this
chapter heretofore in effect to the extent properly included as income
for federal income tax purposes, for which no exclusion or deduction was
allowed in determining the taxpayer's entire net income under this arti-
cle for any prior year;
S 15. Subparagraph (V) of paragraph 2 of subdivision (b) of section
1503 of the tax law is REPEALED.
S 16. Subparagraph 5 of paragraph (a) of subdivision 8 of section
11-602 of the administrative code of the city of New York, as amended by
section 16 of part C of chapter 25 of the laws of 2009, is amended to
read as follows:
(5) any refund or credit of a tax imposed under this chapter, or
imposed by article nine, nine-A[, twenty-three,] or thirty-two of the
tax law, for which tax no exclusion or deduction was allowed in deter-
mining the taxpayer's entire net income under this subchapter or
subchapter three of this chapter for any prior year;
S 17. Subparagraph 19 of paragraph (b) of subdivision 8 of section
11-602 of the administrative code of the city of New York is REPEALED.
S 18. Paragraph 16 of subdivision (b) of section 11-641 of the admin-
istrative code of the city of New York is REPEALED.
S 19. Subdivision (d) of section 11-641 of the administrative code of
the city of New York, as amended by section 19 of part C of chapter 25
of the laws of 2009, is amended to read as follows:
(d) Entire net income shall not include any refund or credit of a tax
for which no exclusion or deduction was allowed in determining the
taxpayer's entire net income under this subchapter or subchapter two of
this chapter[, or imposed by article twenty-three of the tax law] for
any prior year.
S 20. Paragraph 35 of subdivision (b) of section 11-1712 of the admin-
istrative code of the city of New York is REPEALED.
S 21. Paragraph 7 of subdivision (c) of section 11-1712 of the admin-
istrative code of the city of New York, as amended by section 21 of part
C of chapter 25 of the laws of 2009, is amended to read as follows:
(7) The amount of any refund or credit for overpayment of income taxes
imposed by this city, OR any other taxing jurisdiction, [or any taxes
imposed by article twenty-three of the tax law] to the extent properly
included in gross income for federal income tax purposes.
S 22. Clauses (ii), (iv) and (v) of subparagraph (B) of paragraph 1 of
subdivision (o) of section 11-1712 of the administrative code of the
city of New York, clause (ii) as amended by chapter 333 of the laws of
1987, clauses (iv) and (v) as relettered by section 60 and such section
as renumbered by section 43 of chapter 639 of the laws of 1986, are
amended to read as follows:
(ii) is, at the date of adoption of such plan, subject to taxation
(whether or not any amount is owing) under section one hundred eighty-
S. 5926 4
three[,] OR one hundred eighty-four [or one hundred eighty-six of arti-
cle nine] of the tax law, or under article [nine-a] NINE-A of the tax
law [or article twenty-three of the tax law, or would have been subject
to tax under article twenty-three of such law (as such article was in
effect on January first, nineteen hundred eighty) if such article were
still in effect], and the first taxable period for which such new busi-
ness became subject to such taxation commenced on or after July first,
nineteen hundred eighty-one and before January first, nineteen hundred
eighty-eight, and such first taxable period includes the date of
adoption of such plan; if not so subject to taxation, the new business
must be subject to taxation under such sections or articles for the
first time within one year from the date of adoption of such plan, and
(iv) within ninety days after adoption of such plan, or, if a return
is required, as part of such return, under [such] article nine[,] OR
article [nine-a or article twenty-three] NINE-A OF THE TAX LAW, whichev-
er is sooner, shall file a new business certificate with the [tax
commission] COMMISSIONER attesting to whether it meets, if subject to
taxation under such articles, or intends to meet, if not so subject, all
of the conditions stated in clauses (i), (ii) and (iii) of this subpara-
graph within the time set forth therein. Thereafter, during the first
four taxable years of such new business, along with, and as part of, any
return required under such articles, such new business shall make and
file a new business certificate for the period covered by such return
attesting to whether it has met the conditions specified in this subpar-
agraph during the taxable period covered by such return. If no return is
required under such articles, such certificate shall be filed annually
on or before the fifteenth day of March which shall cover the twelve
consecutive calendar month period ending on the last day of December
immediately preceding such March fifteenth. If such new business fails
to meet such conditions specified in this subparagraph, it shall, in
addition, give notice of this fact, within the time prescribed by the
[tax commission] COMMISSIONER, to the holders of its "new business
investments." The [tax commission] COMMISSIONER shall prescribe the form
and content of such new business certification and may require a new
business to file such certificate for periods (even if no return is
filed or required, but for this section) covering up to eight years from
the date of adoption of such plan, as in its discretion, it deems the
same necessary for the enforcement of this section, and
(v) Special rules:
(1) For any taxable period, in order to constitute a new business, a
business enterprise must have derived more than sixty percent of its
aggregate gross receipts from sources other than royalties, rents, divi-
dends, interest, annuities and sales or exchanges of stock or securi-
ties.
(2) A new business does not include: (i) any new business of which
twenty-five percent or more of the number of shares of stock that enti-
tle the holders thereof to vote for the election of directors or trus-
tees is owned, directly or indirectly, by a taxpayer subject to tax
under section one hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article nine] of
the tax law, or under article [nine-a] NINE-A, thirty-two or thirty-
three of the tax law or (ii) any new business substantially similar in
operation and in ownership, directly or indirectly, to a business entity
(or entities) taxable, or previously taxable, under such section, such
article[, article twenty-three of the tax law] or which would have been
subject to [tax under such article twenty-three (as such article was in
S. 5926 5
effect on January first, nineteen hundred eighty) or] the income (or
losses) of which is (or was) includible under article twenty-two of
[such] THE tax law whereby the intent and purpose of this section would
be evaded.
S 23. Subdivision (p) of section 11-1712 of the administrative code of
the city of New York, as amended by chapter 333 of the laws of 1987, is
amended to read as follows:
(p) New business investment deferral. For taxable years beginning
before January first, nineteen hundred eighty-eight, at the option of
the taxpayer, there may be subtracted from federal adjusted gross income
a reinvested amount of long-term capital gain realized in a taxable year
from the sale of a capital asset, as such term is defined in section
twelve hundred twenty-one of the internal revenue code, which is not a
new business investment. A reinvested amount of long-term capital gain
shall mean an amount which bears the same ratio to the long-term capital
gain realized from the sale of a capital asset which was includible in
New York adjusted gross income as that portion of the sale proceeds
which is reinvested, within one year from date of sale, in a New York
new business bears to the total sale proceeds. For the purposes of this
subdivision, a New York new business is a business enterprise which: (1)
has been a taxpayer under article nine-A, twenty-two, thirty-two or
thirty-three of the tax law for no more than three taxable years
(including short taxable years), (2) over fifty percent of the number of
shares of stock that entitle the holders thereof to vote for the
election of directors or trustees is not owned, directly or indirectly,
by a taxpayer subject to tax under section one hundred eighty-three, one
hundred eighty-four[,] OR one hundred eighty-five [or one hundred eight-
y-six of article nine] of the tax law, or under article nine-A, thirty-
two or thirty-three of the tax law, (3) is not substantially similar in
operation or ownership, directly or indirectly, to a business entity (or
entities) taxable, or previously taxable, under such sections, such
articles[, article twenty-three of the tax law] or which would have been
subject to [tax under article twenty-three (as such article was in
effect on January first, nineteen hundred eighty) or] the income (or
losses) of which is (or was) includible under article twenty-two of the
tax law whereby the intent and purpose of this subdivision would be
evaded, (4) locates and employs at least ninety percent of its assets in
the state, (5) employs principally in the state eighty percent of its
employees (as ascertained within the meaning and intent of subparagraph
three of paragraph (a) of subdivision three of section two hundred ten
of the tax law and, in addition, in the case of a partnership, excluding
partners), and (6) derives less than forty percent of its gross income
from dividends, interest, royalties (other than mineral, oil, or gas
royalties or copyright royalties), annuities and (7) reports at least
twenty-five hundred dollars in gross income in any taxable year. The
reinvested amount must qualify as a capital asset as defined pursuant to
section twelve hundred twenty-one of the internal revenue code and must
be retained by the taxpayer for at least twelve months. The modification
allowable under this subdivision shall be utilized with respect to the
taxable year in which the twelve month retention period ends.
S 24. Subdivision 4 of section 11-1718 of the administrative code of
the city of New York, as amended by section 22 of part C of chapter 25
of the laws of 2009, is amended to read as follows:
(4) There shall be added or subtracted (as the case may be) the
modifications described in paragraphs six, ten, seventeen, eighteen,
nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four,
S. 5926 6
twenty-five, twenty-six, twenty-seven, twenty-nine[,] AND thirty-four
[and thirty-five] of subdivision (b) and in paragraphs eleven, thirteen,
fifteen, nineteen, twenty, twenty-one, twenty-two, twenty-three, twen-
ty-four, twenty-five, twenty-six and twenty-eight of subdivision (c) of
section 11-1712 of this subchapter.
S 25. Subdivision 4 of section 11-1718 of the administrative code of
the city of New York, as separately amended by section 12 of part HH-1
of chapter 57 of the laws of 2008 and section 22 of part C of chapter 25
of the laws of 2009, is amended to read as follows:
(4) There shall be added or subtracted (as the case may be) the
modifications described in paragraphs six, ten, seventeen, eighteen,
nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four,
twenty-five, twenty-seven, [twenty-eight,] twenty-nine[,] AND thirty-
four [and thirty-five] of subdivision (b) and in paragraphs eleven,
thirteen, fifteen, nineteen, twenty, twenty-one, twenty-two, twenty-
three, twenty-four, twenty-five, twenty-six and twenty-eight of subdivi-
sion (c) of section 11-1712 of this subchapter.
S 26. Subparagraphs 16, 17 and 18 of paragraph t of subdivision 1 of
section 3602 of the education law, as amended by section 2 of part D of
chapter 25 of the laws of 2009, are amended to read as follows:
(16) any tuition payments made pursuant to a contract under the
provisions of paragraphs e, f, g, h, i and l of subdivision two of
section forty-four hundred one of this chapter or any tuition payments
on behalf of pupils attending a state school under paragraph d of such
subdivision; AND (17) in any year in which expenditures are made to the
New York state teachers' retirement system or the New York state and
local employees' retirement system for both the prior school year and
the current school year, any expenditures made to such retirement
systems and recorded in the school year prior to the school year in
which such obligations are paid[; and (18) any payments to the commis-
sioner of taxation and finance pursuant to article twenty-three of the
tax law].
S 27. Section 3609-g of the education law is REPEALED.
S 28. Paragraph (e) of subdivision 7 of section 38 of the highway law,
as amended by chapter 196 of the laws of 1981 and as relettered by chap-
ter 153 of the laws of 1984, is amended to read as follows:
(e) No such certificate approving or authorizing the first partial
payment or any final payment to a foreign contractor shall be made
unless such contractor shall furnish satisfactory proof that all taxes
due the [state tax commission] COMMISSIONER by such contractor, under
the provisions of or pursuant to a law enacted pursuant to the authority
of article nine, [nine-a, twelve-a, sixteen, sixteen-a,] NINE-A,
TWELVE-A, twenty-one, twenty-two, [twenty-three,] twenty-eight, twenty-
nine or thirty of the tax law [or article two-E of the general city law]
have been paid. The certificate of the [state tax commission] COMMIS-
SIONER to the effect that all such taxes have been paid shall be, for
THE purpose of this paragraph, conclusive proof of the payment of such
taxes. The term "foreign contractor" as used in this subdivision means,
in the case of an individual, a person who is not a resident of this
state, in the case of a partnership, one having one or more partners not
a resident of this state, and in the case of a corporation, one not
organized under the laws of this state.
S 29. Section 1270-h of the public authorities law is REPEALED.
S 30. Section 92-ff of the state finance law is REPEALED.
S 31. Paragraphs 1 and 2 and subparagraph (B) of paragraph 4 of subdi-
vision (j) of section 14 of the tax law, paragraphs 1 and 2 as amended
S. 5926 7
by section 10 of part CC of chapter 85 of the laws of 2002 and subpara-
graph (B) of paragraph 4 as amended by chapter 161 of the laws of 2005,
are amended to read as follows:
(1) A new business shall include any corporation, except a corporation
which is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or previously taxable, under section
one hundred eighty-three, one hundred eighty-four[,] OR one hundred
eighty-five [or one hundred eighty-six of article nine] OF THIS CHAPTER;
article nine-A, article thirty-two or thirty-three of this chapter;
[article twenty-three of this chapter] or which would have been subject
to [tax under such article twenty-three (as such article was in effect
on January first, nineteen hundred eighty) or] the income (or losses) of
which is (or was) includable under article twenty-two of this chapter.
(2) For purposes of article twenty-two of this chapter, an individual
who is either a sole proprietor or a member of a partnership shall qual-
ify as an owner of a new business unless the business of which the indi-
vidual is an owner is substantially similar in operation and in owner-
ship to a business entity taxable, or previously taxable, under section
one hundred eighty-three, one hundred eighty-four[,] OR one hundred
eighty-five [or one hundred eighty-six of article nine] OF THIS CHAPTER;
article nine-A, thirty-two or thirty-three of this chapter; [article
twenty-three of this chapter] or which would have been subject to [tax
under such article twenty-three (as such article was in effect on Janu-
ary first, nineteen hundred eighty) or] the income (or losses) of which
is (or was) includable under article twenty-two OF THIS CHAPTER.
(B) Notwithstanding any provisions of this subdivision to the contrary
and notwithstanding subdivision c of section eighteen of part CC of
chapter eighty-five of the laws of two thousand two, a corporation or
partnership, which was first certified under article eighteen-B of the
general municipal law before August first, two thousand two, has a base
period of zero years or zero employment for its base period, and is
similar in operation and in ownership to a business entity or entities
taxable, or previously taxable, under sections specified in paragraph
one or two of this subdivision or which would have been subject to [tax
under article twenty-three of this chapter (as such article was in
effect on January first, nineteen hundred eighty) or] the income or
losses of which is or was includable under article twenty-two of this
chapter shall not be deemed a new business if it was not formed for a
valid business purpose, as such term is defined in clause (D) of subpar-
agraph one of paragraph (o) of subdivision nine of section two hundred
eight of this chapter and was formed solely to gain empire zone bene-
fits.
S 32. Paragraph (c) of subdivision 1-c of section 210 of the tax law,
as amended by chapter 1043 of the laws of 1981, is amended to read as
follows:
(c) is not a corporation which is substantially similar in operation
and in ownership to a business entity (or entities) taxable, or previ-
ously taxable, under this article; section one hundred eighty-three, one
hundred eighty-four[,] OR one hundred eighty-five [or one hundred eight-
y-six of article nine] OF THIS CHAPTER; article thirty-two or thirty-
three of this chapter; [article twenty-three of this chapter] or which
would have been subject to [tax under such article twenty-three (as such
article was in effect on January first, nineteen hundred eighty) or] the
income (or losses) of which is (or was) includable under article twen-
ty-two of this chapter, and
S. 5926 8
S 33. Subparagraph 2 of paragraph (j) of subdivision 12 of section 210
of the tax law, as amended by chapter 1043 of the laws of 1981, is
amended to read as follows:
(2) is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or previously taxable, under this
article; section one hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article nine] OF
THIS CHAPTER; article thirty-two or thirty-three of this chapter; [arti-
cle twenty-three of this chapter] or which would have been subject to
[tax under such article twenty-three (as such article was in effect on
January first, nineteen hundred eighty) or] the income (or losses) of
which is (or was) includable under article twenty-two of this chapter
whereby the intent and purpose of this paragraph and paragraph (e) of
this subdivision with respect to refunding of credit to new business
would be evaded; or
S 34. Subdivision 2-a of section 280-a of the tax law, as amended by
chapter 267 of the laws of 1987, is amended to read as follows:
2-a. In addition to the rebate allowable under the provisions of
subdivision one of this section, the portion of the amount of stock
transfer tax paid which is to be allowed as a rebate to any person,
firm, company or corporation registered with the United States securi-
ties and exchange commission in accordance with subsection (b) of
section fifteen of the securities exchange act of nineteen hundred thir-
ty-four, as amended, and acting as a dealer in a transaction described
in paragraph (e) of subdivision twelve of this section, other than such
a person, firm, company or corporation liable to file a report or return
under article nine-A of this chapter, [or article twenty-three of this
chapter, (as such article was in effect on or before December thirtieth,
nineteen hundred eighty-two),] shall be one hundred percent of the stock
transfer tax incurred and paid on transactions subject to the stock
transfer tax executed by such person, firm, company or corporation
pursuant to the acceptance of an order placed through an intermarket
linkage system developed pursuant to subsection (a) of section eleven-A
of such securities exchange act under a plan submitted by one or more
national securities exchanges or national securities associations regis-
tered with such securities and exchange commission occurring on and
after April seventeenth, nineteen hundred seventy-eight and on or before
September thirtieth, nineteen hundred seventy-nine, seventy percent of
the tax incurred and paid on such a transaction occurring on and after
October first, nineteen hundred seventy-nine and on or before September
thirtieth, nineteen hundred eighty and forty percent of the tax incurred
and paid on such a transaction occurring on and after October first,
nineteen hundred eighty and on or before September thirtieth, nineteen
hundred eighty-one. Notwithstanding any other provision of law, the net
amount to be rebated to any such person, firm, company or corporation
under this subdivision with respect to stock transfer tax allowable as
rebates during each of the periods ending on September thirtieth
hereinbefore set forth shall not be allowed or paid prior to the first
day of the eighth month following September thirtieth of each of such
periods nor until the subsequent date on which the commissioner [of
taxation and finance] shall next determine the amount allowable as
rebates pursuant to the provisions of section ninety-two-i of the state
finance law, provided, however, that the net amount to be allowed for
the April seventeenth, nineteen hundred seventy-eight through September
thirtieth, nineteen hundred seventy-eight period shall not be allowed or
paid until the last business day of June, nineteen hundred seventy-nine.
S. 5926 9
No rebate shall be allowed under this subdivision with respect to any
stock transfer tax incurred in a market making transaction occurring on
or after October first, nineteen hundred eighty-one. No rebate shall be
allowed or paid under this subdivision for stock transfer tax paid
pursuant to section two hundred seventy-nine-a of this chapter nor shall
any rebate be allowed or paid until the person, firm, company or corpo-
ration claiming the rebate complies with the rules, regulations and
instructions of the [state tax commission] COMMISSIONER issued under
this article including furnishing of a just and true book of account
within the state as may be required by the [state tax commission]
COMMISSIONER.
S 35. Subparagraph (A) of paragraph 10 of subsection (a) of section
606 of the tax law, as amended by section 3 of part CC of chapter 85 of
the laws of 2002, is amended to read as follows:
(A) the business of which the individual is an owner is substantially
similar in operation and in ownership to a business entity taxable, or
previously taxable, under section one hundred eighty-three, one hundred
eighty-four[,] OR one hundred eighty-five [or one hundred eighty-six of
article nine] OF THIS CHAPTER; article nine-A, thirty-two or thirty-
three of this chapter; [article twenty-three of this chapter] or which
would have been subject to [tax under such article twenty-three (as such
article was in effect on January first, nineteen hundred eighty) or] the
income (or losses) of which is (or was) includable under THIS article
[twenty-two] of this chapter whereby the intent and purpose of this
paragraph and paragraph five of this subsection with respect to refund-
ing of credit to new business would be evaded; or
S 36. Clauses (ii), (iv) and subclause 2 of clause (v) of subparagraph
(B) of paragraph 1 of subsection (o) of section 612 of the tax law,
clause (ii) as amended by chapter 28 of the laws of 1987, clause (iv) as
amended by chapter 267 of the laws of 1987 and subclause 2 of clause (v)
as amended by chapter 1043 of the laws of 1981, are amended to read as
follows:
(ii) is, at the date of adoption of such plan, subject to taxation
(whether or not any amount is owing) under section one hundred eighty-
three[,] OR one hundred eighty-four [or one hundred eighty-six of arti-
cle nine] of this chapter, or under article nine-a of this chapter [or
article twenty-three of this chapter, or would have been subject to tax
under article twenty-three (as such article was in effect on January
first, nineteen hundred eighty) if such article were still in effect],
and the first taxable period for which such new business became subject
to such taxation commenced on or after July first, nineteen hundred
eighty-one and before January first, nineteen hundred eighty-eight, and
such first taxable period includes the date of adoption of such plan; if
not so subject to taxation, the new business must be subject to taxation
under such sections or articles for the first time within one year from
the date of adoption of such plan, and
(iv) within ninety days after the adoption of such plan, or, if a
return is required, as part of such return, under such article nine[,]
OR article nine-A [or article twenty-three (as such article was in
effect on or before December thirtieth, nineteen hundred eighty-two),
whichever is sooner] OF THIS CHAPTER, shall file a new business certif-
icate with the [state tax commission] COMMISSIONER attesting to whether
it meets, if subject to taxation under such articles, or intends to
meet, if not so subject, all of the conditions stated in clauses (i),
(ii) and (iii) of this subparagraph within the time set forth therein.
Thereafter, during the first four taxable years of such new business,
S. 5926 10
along with, and as part of, any return required under such articles,
such new business shall make and file a new business certificate for the
period covered by such return attesting to whether it has met the condi-
tions specified in this subparagraph during the taxable period covered
by such return. If no return is required under such articles, such
certificate shall be filed annually on or before the fifteenth day of
March which shall cover the twelve consecutive calendar month period
ending on the last day of December immediately preceding such March
fifteenth. If such new business fails to meet such conditions specified
in this subparagraph, it shall, in addition, give notice of this fact,
within the time prescribed by the [state tax commission] COMMISSIONER,
to the holders of its "new business investments." The [state tax commis-
sion] COMMISSIONER shall prescribe the form and content of such new
business certification and may require a new business to file such
certificate for periods (even if no return is filed or required, but for
this section) covering up to eight years from the date of adoption of
such plan, as in its discretion, it deems the same necessary for the
enforcement of this subparagraph, and
(2) A new business does not include (i) any new business of which
twenty-five percent or more of the number of shares of stock that enti-
tle the holders thereof to vote for the election of directors or trus-
tees is owned, directly or indirectly, by a taxpayer subject to tax
under section one hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article nine] of
this chapter, or under article nine-A, thirty-two or thirty-three of
this chapter or (ii) any new business substantially similar in operation
and in ownership, directly or indirectly, to a business entity (or enti-
ties) taxable, or previously taxable, under such sections, such arti-
cles, [article twenty-three] or which would have been subject to [tax
under article twenty-three (as such article was in effect on January
first, nineteen hundred eighty) or] the income (or losses) of which is
(or was) includable under THIS article [twenty-two] whereby the intent
and purpose of this subsection would be evaded.
S 37. Subsection (p) of section 612 of the tax law, as amended by
chapter 28 of the laws of 1987, is amended to read as follows:
(p) New business investment deferral. For taxable years beginning
before January first, nineteen hundred eighty-eight, at the option of
the taxpayer, there may be subtracted from federal adjusted gross income
a reinvested amount of long-term capital gain realized in a taxable year
from the sale of a capital asset, as such term is defined in section
1221 of the internal revenue code, which is not a new business invest-
ment. A reinvested amount of long-term capital gain shall mean an amount
which bears the same ratio to the long-term capital gain realized from
the sale of a capital asset which was includable in New York adjusted
gross income as that portion of the sale proceeds which is reinvested,
within one year from date of sale, in a New York new business bears to
the total sale proceeds. For the purposes of this subsection, a New York
new business is a business enterprise which (1) has been a taxpayer
under this article for no more than three taxable years (including short
taxable years), (2) over fifty percent of the number of shares of stock
that entitle the holders thereof to vote for the election of directors
or trustees is not owned, directly or indirectly, by a taxpayer subject
to tax under section one hundred eighty-three, one hundred eighty-
four[,] OR one hundred eighty-five [or one hundred eighty-six of article
nine] of this chapter, or under article nine-A, thirty-two or thirty-
three of this chapter, (3) is not substantially similar in operation or
S. 5926 11
ownership, directly or indirectly, to a business entity (or entities)
taxable, or previously taxable, under such sections, such articles,
[article twenty-three] or which would have been subject to [tax under
article twenty-three (as such article was in effect on January first,
nineteen hundred eighty) or] the income (or losses) of which is (or was)
includable under THIS article [twenty-two] whereby the intent and
purpose of this subsection would be evaded, (4) locates and employs at
least ninety percent of its assets in the state, (5) employs principally
in the state eighty percent of its employees (as ascertained within the
meaning and intent of subparagraph three of paragraph (a) of subdivision
three of section two hundred ten of this chapter and, in addition, in
the case of a partnership, excluding partners), (6) derives less than
forty percent of its gross income from dividends, interest, royalties
(other than mineral, oil, or gas royalties or copyright royalties), and
annuities and (7) reports at least twenty-five hundred dollars in gross
income in any taxable year. The reinvested amount must qualify as a
capital asset as defined in section 1221 of the internal revenue code
and must be retained by the taxpayer for at least twelve months. The
modification allowable under this subsection shall be utilized with
respect to the taxable year in which the twelve month retention period
ends. The commissioner [of taxation and finance] may require annual
information reports on the investments in new businesses made pursuant
to this subsection, and such other reports as he may require to ensure
against the evasion of the intent and purposes of this subsection.
S 38. Subsection (g) of section 697 of the tax law, as amended by
chapter 267 of the laws of 1987, is amended to read as follows:
(g) Cooperation with the cities of the state of New York. Notwith-
standing the provisions of subsection (e) OF THIS SECTION, the tax
commission may permit the proper city officer of any city of the state
of New York imposing a personal income tax upon the incomes of resi-
dents, or an unincorporated business income tax, or an earnings tax on
nonresidents, or the authorized representative of any such officer, to
inspect any return filed under this article, [or article twenty-three
(as such article was in effect on or before December thirtieth, nineteen
hundred eighty-two),] or may furnish to such officer or his authorized
representative an abstract of any such return or supply him with infor-
mation concerning an item contained in any such return, or disclosed by
any investigation of tax liability under this article [or article twen-
ty-three (as such article was in effect on or before December thirtieth,
nineteen hundred eighty-two)], but such permission shall be granted or
such information furnished to such officer or his representative only if
the local laws of such city grant substantially similar privileges to
the commission or officer of this state charged with the administration
of the tax imposed by this article and such information is to be used
for tax purposes only; and provided further the commissioner [of taxa-
tion and finance] may furnish to such city officer or the legal repre-
sentative of such city such returns filed under this article [or article
twenty-three (as such article was in effect on or before December thir-
tieth, nineteen hundred eighty-two)] and other tax information, as he
may consider proper, for use in court actions or proceedings under such
local law, whether civil or criminal, where a written request therefor
has been made to the commissioner [of taxation and finance] by such city
officer or his delegate, provided the local law of such city grants
substantially similar powers to such city officer or his delegate. Where
the commissioner [of taxation and finance] has so authorized use of
returns and other information in such actions or proceedings, officers
S. 5926 12
and employees of the department [of taxation and finance] may testify in
such actions or proceedings in respect to such returns or other informa-
tion.
S 39. Section 1311 of the tax law, as amended by chapter 682 of the
laws of 1976, is amended to read as follows:
S 1311. Enforcement with other taxes. (a) If there is assessed a tax
under a city income tax imposed pursuant to the authority of this arti-
cle and there is also assessed a tax or taxes against the same taxpayer
pursuant to article twenty-two [or articles twenty-two and twenty-three]
of this chapter [or under a local law enacted pursuant to the authority
of article two-E of the general city law] and payment of a single amount
is required under the provisions of this article, such payment shall be
deemed to have been made with respect to the taxes so assessed in
proportion to the amounts of such taxes due, including tax, penalties,
interest and additions to tax.
(b) If the [state tax commission] COMMISSIONER takes action under such
article twenty-two [or articles twenty-two and twenty-three or under a
local law enacted pursuant to the authority of article two-E of the
general city law] OF THIS CHAPTER with respect to the enforcement and
collection of the tax or taxes assessed under such [articles] ARTICLE
the [state tax commission] COMMISSIONER shall, wherever possible, accom-
pany such action with a similar action under similar enforcement and
collection provisions of such city income tax.
(c) Any moneys collected as a result of such joint action shall be
deemed to have been collected in proportion to the amounts due, includ-
ing tax, penalties, interest and additions to tax, under article twen-
ty-two [or articles twenty-two and twenty-three] of this chapter and
such city income tax.
(d) Whenever the [state tax commission] COMMISSIONER takes any action
with respect to a deficiency of income tax under article twenty-two [or
articles twenty-two and twenty-three] of this chapter [or under a local
law enacted pursuant to the authority of article two-E of the general
city law], other than the action set forth in subdivision (a) of this
section, it may in its discretion accompany such action with a similar
action under such city income tax.
S 40. Subparagraph (B) of paragraph 8 of subsection (i) of section
1456 of the tax law, as added by section 27 of part A of chapter 56 of
the laws of 1998, is amended to read as follows:
(B) is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or previously taxable, under this
article; section one hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article nine] OF
THIS CHAPTER; article nine-A or article thirty-three of this chapter;
[article twenty-three of this chapter or which would have been subject
to tax under such article twenty-three (as such article was in effect on
January first, nineteen hundred eighty)] or the income (or losses) of
which is (or was) includable under article twenty-two of this chapter
whereby the intent and purpose of this paragraph and paragraph five of
this subsection with respect to refunding of credit to new business
would be evaded; or
S 41. Subparagraph (B) of paragraph 7 of subdivision (q) of section
1511 of the tax law, as added by section 1 of part L of chapter 63 of
the laws of 2000, is amended to read as follows:
(B) is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or previously taxable, under this
article; section one hundred eighty-three, one hundred eighty-four[,] OR
S. 5926 13
one hundred eight-five [or one hundred eighty-six of article nine] OF
THIS CHAPTER; article nine-A or article thirty-two of this chapter;
[article twenty-three of this chapter or which would have been subject
to tax under such article twenty-three (as such article was in effect of
January first, nineteen hundred eighty)] or the income (or losses) of
which is (or was) includable under article twenty-two of this chapter
whereby the intent and purpose of this paragraph and paragraph four of
this subdivision with respect to refunding of credit to new business
would be evaded; or
S 42. Section 1166-a of the tax law is REPEALED.
S 43. Section 1167 of the tax law, as amended by section 3 of part F
of chapter 25 of the laws of 2009, is amended to read as follows:
S 1167. Deposit and disposition of revenue. All taxes, interest and
penalties collected or received by the commissioner under this article
shall be deposited and disposed of pursuant to the provisions of section
one hundred seventy-one-a of this chapter, except that after reserving
amounts in accordance with such section one hundred seventy-one-a of
this chapter, the remainder shall be paid by the comptroller to the
credit of the highway and bridge trust fund established by section
eighty-nine-b of the state finance law[, provided, however, taxes,
interest and penalties collected or received pursuant to section eleven
hundred sixty-six-a of this article shall be paid to the credit of the
metropolitan transportation authority aid trust account of the metropol-
itan transportation authority financial assistance fund established by
section ninety-two-ff of the state finance law].
S 44. This act shall take effect immediately; provided, however that:
(a) the amendments to subsection (4) of section 618 of the tax law
made by section nine of this act shall be subject to the expiration and
reversion of such subsection pursuant to chapter 782 of the laws of
1988, as amended, when upon such date the provisions of section ten of
this act shall take effect; and
(b) the amendments to subdivision (4) of section 11-1718 of the admin-
istrative code of the city of New York made by section twenty-four of
this act shall be subject to the expiration and reversion of such subdi-
vision pursuant to chapter 782 of the laws of 1988, as amended, when
upon such date the provisions of section twenty-five of this act shall
take effect.
