S T A T E O F N E W Y O R K
________________________________________________________________________
4568
2013-2014 Regular Sessions
I N A S S E M B L Y
February 6, 2013
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Introduced by M. of A. KOLB, TEDISCO, BUTLER, OAKS, CORWIN, MONTESANO --
Multi-Sponsored by -- M. of A. BARCLAY, CROUCH, DUPREY, FINCH, FITZPA-
TRICK, GIGLIO, HAWLEY, JORDAN, P. LOPEZ, McDONOUGH, McKEVITT, RABBITT,
RAIA, REILICH, SALADINO, TENNEY, THIELE -- 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:
11. FOR ANY TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND THIRTEEN, A TAXPAYER WHO IS A MANUFACTURER SHALL BE FULLY
EXEMPT FROM ALL TAXES IMPOSED BY THIS ARTICLE.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05915-01-3
A. 4568 2
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 THIRTEEN. FOR PURPOSES OF THIS SECTION A PERSON SHALL BE CLAS-
SIFIED 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,
VITICULTURE OR COMMERCIAL FISHING. IN ADDITION, FOR PURPOSES OF COMPUT-
ING 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 THIRTEEN, SHALL BE ZERO.
S 5. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2013; 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.