S T A T E   O F   N E W   Y O R K
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                                  3048

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 22, 2009
                               ___________

Introduced  by M. of A. KOLB, TEDISCO, BACALLES, BUTLER, OAKS, CORWIN --
  Multi-Sponsored by -- M. of A. ALFANO, AMEDORE, BALL, BARCLAY,  BARRA,
  BOYLE, BURLING, CALHOUN, CONTE, CROUCH, DUPREY, ERRIGO, FINCH, FITZPA-
  TRICK,  GIGLIO,  HAWLEY, HAYES, P. LOPEZ, McDONOUGH, McKEVITT, MILLER,
  MOLINARO, O'MARA, QUINN, RABBITT, RAIA,  REILICH,  SALADINO,  SAYWARD,
  SCOZZAFAVA,  SPANO, THIELE, TOBACCO, TOWNSEND, WALKER -- read once and
  referred to the Committee on Ways and Means

AN ACT to amend the tax law, in relation to  eliminating  the  corporate
  franchise and personal income tax on manufacturers

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

  Section 1. Section 208 of the tax law is amended  by  adding  two  new
subdivisions 20 and 21 to read as follows:
  20. "MANUFACTURER" SHALL MEAN A TAXPAYER WHICH DURING THE TAXABLE YEAR
IS  PRINCIPALLY  ENGAGED  IN  THE  PRODUCTION OF GOODS BY MANUFACTURING,
PROCESSING, ASSEMBLING, REFINING, MINING, EXTRACTING, FARMING,  AGRICUL-
TURE,  HORTICULTURE,  FLORICULTURE,  VITICULTURE  OR COMMERCIAL FISHING.
MOREOVER, FOR PURPOSES OF COMPUTING  THE  CAPITAL  BASE  IN  A  COMBINED
REPORT,  THE  GROUP SHALL BE CONSIDERED A "MANUFACTURER" FOR PURPOSES OF
THIS ARTICLE ONLY IF THE COMBINED GROUP DURING THE TAXABLE YEAR IS PRIN-
CIPALLY ENGAGED IN THE ACTIVITIES SET FORTH  IN THIS SUBDIVISION, OR ANY
COMBINATION THEREOF.
  21. "PRINCIPALLY ENGAGED" SHALL INCLUDE A TAXPAYER OR A COMBINED GROUP
IF, DURING THE TAXABLE YEAR,  MORE  THAN  FIFTY  PERCENT  OF  THE  GROSS
RECEIPTS  OF  THE  TAXPAYER OR COMBINED GROUP, RESPECTIVELY, ARE DERIVED
FROM RECEIPTS FROM THE SALE  OF  GOODS  PRODUCED  BY  MANUFACTURING.  IN
COMPUTING  A  COMBINED  GROUP'S  GROSS RECEIPTS, INTERCORPORATE RECEIPTS
SHALL BE ELIMINATED.
  S 2. Section 209 of the tax law is amended by adding a new subdivision
11 to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03830-01-9

              

A. 3048                             2

  11. FOR ANY TAXABLE YEAR BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
THOUSAND  NINE,  A  TAXPAYER WHO IS A MANUFACTURER SHALL BE FULLY EXEMPT
FROM ALL TAXES IMPOSED BY THIS ARTICLE.
  S 3. Subsection (f) of section 601 of the tax law, as amended by chap-
ter 248 of the laws of 1997, is amended to read as follows:
  (f)  Partners  and  partnerships.  A  partnership as such shall not be
subject to tax under this article. Persons carrying on business as part-
ners shall be liable for tax under this article only in  their  separate
or  individual capacities.  NOTWITHSTANDING THIS OR ANY OTHER SECTION OF
THIS ARTICLE, A PERSON'S LIABILITY FOR TAX  UNDER  THIS  SUBSECTION,  IF
SUCH  PERSON'S PRIMARY ACTIVITY IS IN HIS OR HER ROLE AS A MANUFACTURER,
SHALL BE ZERO FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND NINE. FOR PURPOSES OF THIS SECTION A PERSON SHALL BE CLASSIFIED
AS A MANUFACTURER IF, HE OR SHE IS PRINCIPALLY ENGAGED IN THE PRODUCTION
OF GOODS BY MANUFACTURING,  PROCESSING,  ASSEMBLING,  REFINING,  MINING,
EXTRACTING,  FARMING,  AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICUL-
TURE OR COMMERCIAL FISHING. IN ADDITION, FOR PURPOSES OF  COMPUTING  THE
CAPITAL  BASE  IN  A  COMBINED  REPORT,  THE GROUP SHALL BE CONSIDERED A
MANUFACTURER FOR PURPOSES OF THIS ARTICLE, ONLY IF  THE  COMBINED  GROUP
DURING  THE  TAXABLE  YEAR  IS PRINCIPALLY ENGAGED IN THE ACTIVITIES SET
FORTH IN THIS SUBSECTION, OR ANY COMBINATION THEREOF.  FOR  PURPOSES  OF
THIS  SUBSECTION,  A  TAXPAYER IS "PRINCIPALLY ENGAGED" IN THE DESCRIBED
ACTIVITY IF, DURING THE TAXABLE YEAR, MORE THAN  FIFTY  PERCENT  OF  THE
GROSS RECEIPTS OF THE TAXPAYER ARE DERIVED FROM RECEIPTS FROM ACTIVITIES
COVERED  BY THIS SUBSECTION. As used in this article, the term "partner-
ship" shall include, unless a different meaning is clearly  required,  a
subchapter  K  limited liability company. The term "subchapter K limited
liability company" shall mean a limited liability company classified  as
a partnership for federal income tax purposes. The term "limited liabil-
ity  company"  means  a  domestic limited liability company or a foreign
limited liability company, as defined in section one hundred two of  the
limited  liability  company  law, a limited liability investment company
formed pursuant to section five hundred seven of the banking law,  or  a
limited  liability  trust company formed pursuant to section one hundred
two-a of the banking law.
  S 4. Subsection (b) of section 602 of the tax law, as amended by chap-
ter 333 of the laws of 1987, is amended to read as follows:
  (b) The tax imposed by  this  section  on  New  York  minimum  taxable
income,  as  defined  in  section  six hundred twenty-two or section six
hundred thirty-six, as the case may be, shall be  at  the  rate  of  six
percent,  EXCEPT  FOR,  IN THE CASE OF INCOME DERIVED FROM ACTIVITY OF A
PERSON CLASSIFIED AS A MANUFACTURER UNDER SUBSECTION (F) OF SECTION  SIX
HUNDRED  ONE  OF  THIS PART, THE TAX IMPOSED BY THIS SECTION ON NEW YORK
MINIMUM TAXABLE INCOME FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY
FIRST, TWO THOUSAND NINE, SHALL BE ZERO.
  S 5. This act shall take effect immediately and shall apply to taxable
years  commencing  on  or after January 1, 2009; provided, however, that
the commissioner of taxation and finance is authorized to promulgate any
and all rules and regulations and take any other measures necessary  for
the timely implementation of this act on its effective date on or before
such date.