senate Bill S4890

2011-2012 Legislative Session

Relates to the taxation of certain banking corporations

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to investigations and government operations
Jun 24, 2011 committed to rules
Jun 14, 2011 advanced to third reading
Jun 13, 2011 2nd report cal.
Jun 07, 2011 1st report cal.1120
Apr 28, 2011 referred to investigations and government operations

Votes

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Jun 7, 2011 - Investigations and Government Operations committee Vote

S4890
5
0
committee
5
Aye
0
Nay
3
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Investigations and Government Operations Committee Vote: Jun 7, 2011

aye wr (3)

S4890 - Bill Details

See Assembly Version of this Bill:
A8553
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §1452, Tax L; amd §11-640, NYC Ad Cd
Versions Introduced in 2011-2012 Legislative Session:
A8553

S4890 - Bill Texts

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Relates to transitional provisions regarding the Gramm-Leach-Bliley act.

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BILL NUMBER:S4890

TITLE OF BILL:
An act
to amend the tax law and the administrative code of the city of New York,
in relation to the taxation of certain banking corporations

PURPOSE OR GENERAL IDEA OF BILL:
This bill extends for two additional
years the provisions of the New York State and New York City bank
taxes dealing with the taxation of banks and other financial services
firms and the transitional provisions concerning the enactment and
implementation of the Federal Gramm-Leach-Bliley Act (GLBA).

SUMMARY OF SPECIFIC PROVISIONS:
These provisions state, among other
things, that a corporation required to be taxable, or electing to be
taxable as a banking corporation under the transitional provisions
shall continue to he taxable as such for those taxable years in which
the corporation still meets the definition of a banking corporation,
or satisfies the requirements allowing it to elect to be taxed as a
banking corporation.

JUSTIFICATION:
Starting in 2000, transitional provisions relating to
the Federal GLBA, which removed the prohibition against the
affiliation of banks, securities firms and insurance companies, were
added to both the Tax Law and the New York City Administrative Code.
These transitional provisions were intended to provide banks and
securities firms with some certainty about their taxable status under
the New York State and New York City taxes when and if the firms
exercised the expanded powers provided at the Federal level.

The provisions first enacted in 1985, as they relate to the taxation
of commercial banks, have been effective in accomplishing their
legislative goals. They have been extended many times without change.
However, because these provisions have been extended, without change,
for over 20 years, during that time some unintended consequences have
occurred. Consequently, this extension is modeled to alleviate these
unintended consequences, while still providing companies the certainty
they need.

For the last decade, New York has been routinely extending, for two
years at a time, provisions within New York's tax code to address the
Federal Gramm Leach,-Bliley statute. A part of that bi-annual
legislation requires that a company's tax status from 1999 (the year
before Gramm-Leach-Bliley was enacted): "is and will continue to be"
the company's tax status going forward.

Since then, however, some companies' status may have changed. For
instance, companies previously 65% of more owned by a regulated bank
may no longer be under such legal ownership and by extending
Gramm-Leach-Bliley it statutorily locks in these companies now
inappropriate classification as a bank.
Ironically, if these provisions were allowed to sunset, such companies


would not need any clarification - they would automatically be
appropriately classified as an Article 9-A corporation.

An important variable in a company's long-term planning and growth
strategy is clarity and certainty in tax laws. This legislation very
simply and directly clarifies, in law, that companies be taxed
equitably and the same as competitors.

PRIOR LEGISLATIVE HISTORY:
None.

FISCAL IMPLICATIONS:
None to State.

EFFECTIVE DATE:
Immediately, for taxable years starting on January 1, 2011.

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

                                  4890

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 28, 2011
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law and the administrative code of the  city  of
  New York, in relation to the taxation of certain banking corporations

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

  Section 1. Paragraph 1 of subsection (m) of section 1452  of  the  tax
law,  as  amended  by  section  4 of part J of chapter 61 of the laws of
2011, is amended to read as follows:
  (1) Notwithstanding anything to the contrary contained in this section
other than subsection (n) of this section, a  corporation  that  was  in
existence  before  January first, two thousand eleven and was subject to
tax under article nine-A of this  chapter  for  its  last  taxable  year
beginning  before  January first, two thousand eleven, shall continue to
be taxable under such article for all  taxable  years  beginning  on  or
after  January  first, two thousand eleven and before January first, two
thousand thirteen. The preceding sentence shall not apply to any taxable
year during which such corporation is a banking corporation described in
paragraphs  one  through  eight  of  subsection  (a)  of  this  section.
Notwithstanding anything to the contrary contained in this section other
than  subsection  (n)  of  this section, a banking corporation or corpo-
ration that was in existence before January first, two  thousand  eleven
and  was  subject  to  tax  under this article for its last taxable year
beginning before January first, two thousand eleven, shall  continue  to
be  taxable  under  this  article  for all taxable years beginning on or
after January first, two thousand eleven and before January  first,  two
thousand  thirteen  [or  in  which] ONLY IF THE CORPORATION IS A BANKING
CORPORATION AS DEFINED IN SUBSECTION (A) OF THIS SECTION OR  the  corpo-
ration satisfies the requirements for a corporation to elect to be taxa-
ble   under  this  article.  Provided  further,  that  nothing  in  this

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11144-01-1

S. 4890                             2

subsection  shall  prohibit  a  corporation  that  elected  pursuant  to
subsection  (d)  of  this  section to be taxable under article nine-A of
this chapter  from  revoking  that  election  in  accordance  with  such
subsection (d).
  For  purposes  of this paragraph, a corporation shall be considered to
be subject to tax under article nine-A of this  chapter  for  a  taxable
year if such corporation was not a taxpayer but was properly included in
a  combined  report filed pursuant to section two hundred eleven of this
chapter for such taxable year and a corporation shall be  considered  to
be  subject  to tax under this article for a taxable year if such corpo-
ration was not a taxpayer but was properly included in a combined return
filed pursuant to subsection (f) or  (g)  of  section  fourteen  hundred
sixty-two  of this article for such taxable year. A corporation that was
in existence before January first, two thousand eleven but first becomes
a taxpayer in a taxable year beginning on or after  January  first,  two
thousand  eleven  and before January first, two thousand thirteen, shall
be considered for purposes of this paragraph to have been subject to tax
under article nine-A of this chapter for its last taxable year beginning
before January first, two thousand eleven if such corporation would have
been subject to tax under such article for such taxable year if  it  had
been  a  taxpayer  during  such  taxable year. A corporation that was in
existence before January first, two thousand eleven but first becomes  a
taxpayer  in  a  taxable  year  beginning on or after January first, two
thousand eleven and before January first, two thousand  thirteen,  shall
be considered for purposes of this paragraph to have been subject to tax
under  this  article  for its last taxable year beginning before January
first, two thousand eleven if such corporation would have  been  subject
to tax under this article for such taxable year if it had been a taxpay-
er during such taxable year.
  S  2. Paragraph 1 of subdivision (l) of section 11-640 of the adminis-
trative code of the city of New York, as amended by section 5 of part  J
of chapter 61 of the laws of 2011, is amended to read as follows:
  (1) Notwithstanding anything to the contrary contained in this section
other  than  subdivision  (m) of this section, a corporation that was in
existence before January first, two thousand eleven and was  subject  to
tax  under  subchapter  two  of  this  chapter for its last taxable year
beginning before January first, two thousand eleven, shall  continue  to
be  taxable  under such subchapter for all taxable years beginning on or
after January first, two thousand eleven and before January  first,  two
thousand thirteen. The preceding sentence shall not apply to any taxable
year during which such corporation is a banking corporation described in
paragraphs  one  through  eight  of  subdivision  (a)  of  this section.
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a banking  corporation  or  corpo-
ration  that  was in existence before January first, two thousand eleven
and was subject to tax under this subchapter for its last  taxable  year
beginning  before  January first, two thousand eleven, shall continue to
be taxable under this subchapter for all taxable years beginning  on  or
after  January  first, two thousand eleven and before January first, two
thousand thirteen [or in which] ONLY IF THE  CORPORATION  IS  A  BANKING
CORPORATION  AS DEFINED IN SUBDIVISION (A) OF THIS SECTION OR the corpo-
ration satisfies the requirements for a corporation to elect to be taxa-
ble under this subchapter. Provided further, that nothing in this subdi-
vision shall prohibit a corporation that elected pursuant to subdivision
(d) of this section to be taxable under subchapter two of  this  chapter
from  revoking  that election in accordance with subdivision (d) of this

S. 4890                             3

section. For purposes of this paragraph, a corporation shall be  consid-
ered  to  be  subject  to tax under subchapter two of this chapter for a
taxable year if such corporation was not a  taxpayer  but  was  properly
included  in  a  combined  report  filed pursuant to subdivision four of
section 11-605 of this chapter for such taxable year and  a  corporation
shall  be  considered  to  be subject to tax under this subchapter for a
taxable year if such corporation was not a  taxpayer  but  was  properly
included  in  a combined report filed pursuant to subdivision (f) or (g)
of section 11-646 of this part for such taxable year. A corporation that
was in existence before January first, two  thousand  eleven  but  first
becomes  a  taxpayer  in  a  taxable  year beginning on or after January
first, two thousand eleven and before January first, two thousand  thir-
teen,  shall  be  considered for purposes of this paragraph to have been
subject to tax under subchapter two of this chapter for its last taxable
year beginning before January first, two thousand eleven if such  corpo-
ration  would  have  been  subject to tax under such subchapter for such
taxable year if it had been a  taxpayer  during  such  taxable  year.  A
corporation  that  was  in  existence before January first, two thousand
eleven but first becomes a taxpayer in a taxable year  beginning  on  or
after  January  first, two thousand eleven and before January first, two
thousand thirteen, shall be considered for purposes of this paragraph to
have been subject to tax under this subchapter for its last taxable year
beginning before January first, two thousand eleven if such  corporation
would  have  been  subject to tax under this subchapter for such taxable
year if it had been a taxpayer during such taxable year.
  S 3. This act shall take effect immediately.

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