Assembly Bill A5659

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

                                  5659

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 24, 2011
                               ___________

Introduced  by  M. of A. TOWNS, BOYLAND -- read once and referred to the
  Committee on Ways and Means

AN ACT to amend the tax law, in relation  to  banking  corporations  and
  credit card receivables

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

  Section 1. Subparagraph (v)  of  paragraph  2  of  subsection  (f)  of
section 1462 of the tax law, as added by section 3 of part EE-1 of chap-
ter 57 of the laws of 2008, is amended to read as follows:
  (v) A banking corporation [doing business in this state solely because
it] THAT meets one or more of the tests in subparagraphs (i) through (v)
of paragraph one of subsection (c) of section fourteen hundred fifty-one
of  this  article  [(]  AND WHICH ORIGINATES CREDIT CARD RECEIVABLES AND
DERIVES ITS RECEIPTS IN NEW YORK PRINCIPALLY FROM THE COLLECTION OR SALE
OF THOSE CREDIT CARD RECEIVABLES, INCLUDED BUT NOT LIMITED TO  INTEREST,
FEES  AND  PENALTIES IN THE NATURE OF INTEREST, SERVICE CHARGES AND FEES
FROM CREDIT CARD RECEIVABLES AND RECEIPTS FROM MERCHANT  DISCOUNTS  (ANY
SUCH  ENTITY  BEING  HEREAFTER  referred  to in this subparagraph as the
"credit card bank") will not be included in a combined  return  pursuant
to  subparagraph  (i) of this paragraph with another banking corporation
or bank holding company which is exercising its corporate  franchise  or
doing  business in this state unless the credit card bank or the commis-
sioner shows that the inclusion of the credit card bank in the  combined
return  is necessary to properly reflect the tax liability of the credit
card bank, the banking corporation or bank holding  company  under  this
article.  However, any banking corporation that meets one or more of the
tests in subparagraphs (i) through (v) of paragraph  one  of  subsection
(c)  of  section  fourteen  hundred  fifty-one  OF  THIS ARTICLE and was
included in a combined return for its last taxable year beginning before
January first, two thousand eight may  continue  to  be  included  in  a
combined  return for future taxable years, provided that once that bank-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09348-01-1
              

A. 5659                             2

ing corporation has been included in a combined return for  any  taxable
year  beginning  on  or after January first, two thousand eight, it must
continue to be included in  a  combined  return  until  it  obtains  the
consent of the commissioner to cease being included in a combined return
because  the combined return no longer properly reflects the tax liabil-
ity under this article of  any  of  the  corporations  included  in  the
combined  return.  Further,  the  credit card bank will be included in a
combined return with (i) any banking  corporation  not  subject  to  tax
under  this  article sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by the credit card bank, or
(ii) any banking corporation or bank holding company not subject to  tax
under  this  article  which  owns  or  controls, directly or indirectly,
sixty-five percent or more of the voting stock of the credit card  bank,
or  (iii)  any banking corporation not subject to tax under this article
sixty-five percent or more of the voting stock  of  which  is  owned  or
controlled,  directly  or  indirectly, by the same corporation or corpo-
rations that own or control, directly or indirectly, sixty-five  percent
or  more of the voting stock of the credit card bank, if the corporation
or corporations described in clauses (i), (ii) and (iii) of this subpar-
agraph provide services for or support to the credit card  bank's  oper-
ations,  unless  the credit card bank or the commissioner shows that the
inclusion of any of those corporations in the combined return  fails  to
properly reflect the tax liability of the credit card bank. For purposes
of  this subparagraph, services for or support to the credit card bank's
operations include such activities as billing, credit investigation  and
reporting,  marketing, research, advertising, mailing, customer service,
information technology, lending and  financing  services,  and  communi-
cations  services,  but  will not include accounting, legal or personnel
services.
  S 2. This act shall take effect immediately.