senate Bill S7650

2011-2012 Legislative Session

Establishes a small business tax credit

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Archive: Last Bill Status - Passed Senate


  • 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
Jun 18, 2012 referred to ways and means
delivered to assembly
passed senate
ordered to third reading cal.1292
Jun 11, 2012 referred to rules

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S7650 - Bill Details

Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd ยงยง606 & 210, Tax L

S7650 - Bill Texts

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Establishes a small business tax credit.

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BILL NUMBER:S7650

TITLE OF BILL:
An act
to amend the tax law, in relation to establishing a small business tax
credit

PURPOSE:
To create a small business personal income tax credit and reduce
corporate franchise taxes for small businesses to encourage growth
among this state's small businesses to help spur job creation.

SUMMARY OF PROVISIONS:
20% TAX CUT FOR SMALL BUSINESSES: This bill would provide small
businesses with a corporate tax rate cut from 6.5 percent to 5.2
percent - a 20 percent reduction. The corporate tax rate for small
business applies to those businesses with entire net income base of
not more than $290,000. It would also virtually eliminate the fixed
dollar minimum for small businesses (those businesses with New York
receipts of not more than $1 million). This reduction will save small
businesses $20 million in SFY 2012-13 and $49 million on an annual
basis.

SMALL BUSINESS JOBS CREDIT: Provides a credit of 10% of business
income for about 800,000 small businesses that have at least one
employee, have business income of less than $250,000, and that file
under the personal income tax. This tax credit would save small
businesses $80 million annually.

JUSTIFICATION:
This bill will deliver tax relief to small businesses to make New York
State more economically competitive to encourage our small businesses
to stay and expand.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
This bill will save New York businesses $20 million this year.

EFFECTIVE DATE:
Effective immediately.

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

                                  7650

                            I N  S E N A T E

                              June 11, 2012
                               ___________

Introduced  by  Sen.  SKELOS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in relation to establishing a  small  busi-
  ness tax credit

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

  Section 1. Section 606 of the tax law  is  amended  by  adding  a  new
subsection (uu) to read as follows:
  (UU)  SMALL  BUSINESS  TAX  CREDIT.  (1) GENERAL. A QUALIFIED TAXPAYER
SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE  EQUAL
TO SIX AND SIXTY-FIVE HUNDREDTHS PERCENT OF QUALIFIED BUSINESS INCOME.
  (2) DEFINITIONS. FOR THE PURPOSES OF THIS SUBSECTION, THE TERM:
  (A)  "QUALIFIED TAXPAYER" SHALL MEAN A SOLE PROPRIETOR WHO EMPLOYS ONE
OR MORE PERSONS AND WHO HAS NET BUSINESS INCOME OF LESS THAN TWO HUNDRED
FIFTY THOUSAND DOLLARS.
  (B) "QUALIFIED BUSINESS INCOME" SHALL MEAN TEN PERCENT OF THE BUSINESS
INCOME OF THE TAXPAYER AS DEFINED IN THE LAWS OF THE UNITED STATES.
  (3) IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR  ANY
TAXABLE  YEAR  SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN
ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS
ARTICLE, PROVIDED, HOWEVER, NO INTEREST SHALL BE PAID THEREON.
  S  2.  Subparagraph  (iv) of paragraph (a) of subdivision 1 of section
210 of the tax law, as amended by section 2 of part N of chapter  60  of
the laws of 2007, is amended to read as follows:
  (iv)  for taxable years beginning on or after January first, two thou-
sand seven AND ENDING BEFORE JANUARY FIRST, TWO  THOUSAND  THIRTEEN,  if
the  entire net income base is not more than two hundred ninety thousand
dollars the amount shall be six and one-half percent of the  entire  net
income  base;  if  the  entire  net income base is more than two hundred
ninety thousand dollars but  not  over  three  hundred  ninety  thousand
dollars  the  amount  shall  be  the  sum of (1) eighteen thousand eight
hundred fifty dollars, (2) seven and one-tenth percent of the excess  of
the  entire net income base over two hundred ninety thousand dollars but

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14994-06-2

S. 7650                             2

not over three hundred ninety thousand dollars and (3) four and  thirty-
five hundredths percent of the excess of the entire net income base over
three  hundred  fifty thousand dollars but not over three hundred ninety
thousand dollars;
  S  3.  Paragraph (a) of subdivision 1 of section 210 of the tax law is
amended by adding a new subparagraph (vii) to read as follows:
  (VII) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND THIRTEEN, IF THE ENTIRE NET  INCOME  BASE  IS  NOT  MORE  THAN  TWO
HUNDRED  NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE FIVE AND TWO-TENTHS
PERCENT OF THE ENTIRE NET INCOME BASE; IF THE ENTIRE NET INCOME BASE  IS
MORE THAN TWO HUNDRED NINETY THOUSAND DOLLARS BUT NOT OVER THREE HUNDRED
NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE THE SUM OF (1) FIFTEEN THOU-
SAND EIGHTY DOLLARS, (2) NINE AND SEVENTY-FIVE ONE-HUNDREDTHS PERCENT OF
THE  EXCESS  OF THE ENTIRE NET INCOME BASE OVER TWO HUNDRED NINETY THOU-
SAND DOLLARS BUT NOT OVER THREE HUNDRED NINETY THOUSAND DOLLARS AND  (3)
SEVEN AND ONE-TENTHS PERCENT OF THE EXCESS OF THE ENTIRE NET INCOME BASE
OVER  THREE  HUNDRED  FIFTY  THOUSAND DOLLARS BUT NOT OVER THREE HUNDRED
NINETY THOUSAND DOLLARS;
  S 4. The opening paragraph of  subparagraph  4  of  paragraph  (d)  of
subdivision  1  of  section 210 of the tax law, as added by section 2 of
part AA-1 of chapter 57 of the laws of  2008,  is  amended  to  read  as
follows:
  Notwithstanding subparagraphs one and two of this paragraph, for taxa-
ble  years  beginning  on or after January first, two thousand eight AND
ENDING  BEFORE  JANUARY  FIRST,  TWO  THOUSAND  THIRTEEN,   the   amount
prescribed  by this paragraph for New York S corporations will be deter-
mined in accordance with the following table:
  S 5. Subparagraph 5 of paragraph (d) of subdivision 1 of  section  210
of the tax law is renumbered subparagraph 6.
  S  6.  Paragraph (d) of subdivision 1 of section 210 of the tax law is
amended by adding a new subparagraph 5 to read as follows:
  (5) NOTWITHSTANDING SUBPARAGRAPHS ONE AND TWO OF THIS  PARAGRAPH,  FOR
TAXABLE  YEARS  BEGINNING  ON OR AFTER JANUARY FIRST, TWO THOUSAND THIR-
TEEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH  FOR  NEW  YORK  S  CORPO-
RATIONS WILL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLE:
IF NEW YORK RECEIPTS ARE:               THE FIXED DOLLAR MINIMUM TAX IS:
NOT MORE THAN $100,000                                      $1
MORE THAN $100,000 BUT NOT OVER $250,000                    $1
MORE THAN $250,000 BUT NOT OVER $500,000                    $1
MORE THAN $500,000 BUT NOT OVER $1,000,000                  $1
MORE THAN $1,000,000 BUT NOT OVER $5,000,000                $1,000
MORE THAN $5,000,000 BUT NOT OVER $25,000,000               $3,000
OVER $25,000,000                                            $4,500
OTHERWISE  THE AMOUNT PRESCRIBED BY THIS PARAGRAPH WILL BE DETERMINED IN
ACCORDANCE WITH THE FOLLOWING TABLE:
IF NEW YORK RECEIPTS ARE:               THE FIXED DOLLAR MINIMUM TAX IS:
NOT MORE THAN $100,000                                      $1
MORE THAN $100,000 BUT NOT OVER $250,000                    $1
MORE THAN $250,000 BUT NOT OVER $500,000                    $1
MORE THAN $500,000 BUT NOT OVER $1,000,000                  $1
MORE THAN $1,000,000 BUT NOT OVER $5,000,000                $1,500
MORE THAN $5,000,000 BUT NOT OVER $25,000,000               $3,500
OVER $25,000,000                                            $5,000
FOR PURPOSES OF THIS PARAGRAPH,  NEW  YORK  RECEIPTS  ARE  THE  RECEIPTS
COMPUTED  IN ACCORDANCE WITH SUBPARAGRAPH TWO OF PARAGRAPH (A) OF SUBDI-
VISION THREE OF THIS SECTION FOR THE TAXABLE YEAR.

S. 7650                             3

  S 7. Subparagraph 6 of paragraph (d) of subdivision 1 of  section  210
of  the  tax  law,  as added by section 3 of part C of chapter 56 of the
laws of 2011 and as renumbered by section five of this act,  is  amended
to read as follows:
  (6)  For  taxable years beginning on or after January first, two thou-
sand twelve and before January first, two thousand fifteen, the  amounts
prescribed in subparagraphs one and [four] FIVE of this paragraph as the
fixed dollar minimum tax for an eligible qualified New York manufacturer
shall  be  one-half  of  the  amounts stated in those subparagraphs. For
purposes of this subparagraph, the term  "eligible  qualified  New  York
manufacturer"  shall  have  the  same meaning as in subparagraph (vi) of
paragraph (a) of this subdivision.
  S 8. This act shall take effect immediately;  provided  that  sections
one  and  seven of this act shall apply to taxable years beginning on or
after January 1, 2013.

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