Senate Bill S2701

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

                                  2701

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 23, 2013
                               ___________

Introduced  by  Sen.  PARKER -- 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, in relation to  eliminating  net  operating
  loss carryback deductions; and to repeal certain provisions of the tax
  law relating thereto

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

  Section 1. Section 659 of the tax law, as amended by  chapter  577  of
the laws of 1997, is amended to read as follows:
  S  659.   Report of federal changes, corrections or disallowances.  If
the amount of a taxpayer's federal taxable income, federal items of  tax
preference,  total  taxable  amount or ordinary income portion of a lump
sum distribution or includible gain of a trust reported on  his  federal
income  tax  return  for any taxable year, or the amount of a taxpayer's
earned income credit or credit for employment-related expenses set forth
on such return, or the amount of any federal foreign tax credit  affect-
ing  the  calculation  of the credit for Canadian provincial taxes under
section six hundred twenty or six hundred twenty-A of this  article,  or
the  amount of any claim of right adjustment, is changed or corrected by
the United States internal revenue service or other competent  authority
or  as  the  result of a renegotiation of a contract or subcontract with
the United States, or the amount an employer is required to  deduct  and
withhold  from  wages  for  federal  income  tax withholding purposes is
changed or corrected by such service or authority  or  if  a  taxpayer's
claim  for credit or refund of federal income tax is disallowed in whole
or in part, the  taxpayer  or  employer  shall  report  such  change  or
correction  or  disallowance within ninety days after the final determi-
nation of such change, correction, renegotiation or disallowance, or  as
otherwise  required  by the commissioner, and shall concede the accuracy
of such determination or state wherein it is erroneous.  [The  allowance

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07099-01-3
              

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of  a  tentative  carryback  adjustment  based upon a net operating loss
carryback pursuant to section sixty-four hundred eleven of the  internal
revenue  code  shall be treated as a final determination for purposes of
this section.]  Any taxpayer filing an amended federal income tax return
and any employer filing an amended federal return of income tax withheld
shall  also  file  within ninety days thereafter an amended return under
this article, and shall give such information as  the  commissioner  may
require.    The commissioner may by regulation prescribe such exceptions
to the requirements of this section as he or she deems appropriate.  For
purposes of this section, (i) the term "taxpayer" shall include a  part-
nership  having a resident partner or having any income derived from New
York sources, and a corporation with respect to which the  taxable  year
of  such  change,  correction,  disallowance or amendment is a year with
respect to which the election provided for in subsection (a) of  section
six  hundred  sixty  of  this  article  is  in effect, and (ii) the term
"federal income tax return" shall include the returns of income required
under sections six thousand thirty-one and six thousand thirty-seven  of
the  internal  revenue  code.    In the case of such a corporation, such
report shall  also  include  any  change  or  correction  of  the  taxes
described in paragraphs two and three of subsection (f) of section thir-
teen hundred sixty-six of the internal revenue code.  Reports made under
this  section by a partnership or corporation shall indicate the portion
of the change in each item of income, gain, loss or deduction  (and,  in
the case of a corporation, of each change in, or disallowance of a claim
for  credit  or  refund of, a tax referred to in the preceding sentence)
allocable to each partner or shareholder and shall set forth such  iden-
tifying  information  with respect to such partner or shareholder as may
be prescribed by the commissioner.
  S 2. Subsection (a) of section 1087 of the  tax  law,  as  amended  by
section 9 of part H of chapter 1 of the laws of 2003, is amended to read
as follows:
  (a)  General.--Claim  for  credit  or  refund of an overpayment of tax
under article nine or nine-A shall be filed by the taxpayer  within  (i)
three  years from the time the return was filed, (ii) two years from the
time the tax was paid or (iii) in the case of  any  overpayment  arising
from an erroneous denial by the department of environmental conservation
of  a  certification  of  completion  pursuant to section 27-1419 of the
environmental conservation law, two years from the time a final determi-
nation to the effect that such denial was erroneous is made  and  is  no
longer subject to judicial review, whichever of such periods expires the
latest,  or  if  no return was filed, within two years from the time the
tax was paid. If the claim is filed within the three  year  period,  the
amount  of  the credit or refund shall not exceed the portion of the tax
paid within the three years immediately  preceding  the  filing  of  the
claim plus the period of any extension of time for filing the return. If
the claim is not filed within the three year period, but is filed within
the two year period, the amount of the credit or refund shall not exceed
the  portion  of the tax paid during the two years immediately preceding
the filing of the claim. In the case of a claim  for  credit  or  refund
filed   within   the  period  prescribed  in  paragraph  (iii)  of  this
subsection, the amount of the credit or refund may exceed the portion of
the tax paid within the applicable period specified  in  the  two  imme-
diately preceding sentences, but only to the extent of the amount of the
overpayment  attributable  to  the  denial  described  in such paragraph
(iii). Except as otherwise provided in this  section,  if  no  claim  is
filed,  the  amount  of  a  credit or refund shall not exceed the amount

S. 2701                             3

which would be allowable if a claim had been filed on the date the cred-
it or refund is allowed. For special restriction in a  proceeding  on  a
claim  for refund of tax paid pursuant to an assessment made as a result
of  (i)  [a  net  operating loss carryback or capital loss carryback, or
(ii)] an increase or decrease in federal taxable income or federal  tax,
or  [(iii)]  (II)  a  federal  change or correction or renegotiation, or
computation or recomputation of tax, which is treated in the same manner
as if it were a deficiency for federal income tax  purposes,  see  para-
graph  [(7)]  SEVEN  of  subsection  (c) of section one thousand eighty-
three.
  S 3. Subsection (b) of section 1089 of the  tax  law,  as  amended  by
chapter 55 of the laws of 1982, is amended to read as follows:
  (b)  Petition  for  redetermination  of  a deficiency.---Within ninety
days, or one hundred fifty days if the notice is addressed to a taxpayer
whose last known address is outside of  the  United  States,  after  the
mailing  of  the notice of deficiency authorized by section one thousand
eighty-one, the taxpayer may file a petition with the tax commission for
a redetermination of the deficiency. Such petition  may  also  assert  a
claim  for  refund  for  the  same taxable year or years, subject to the
limitations of subsection (g) of section one thousand eighty-seven.  For
special restriction where the notice of deficiency relates to a proposed
assessment  made  as  a result of (i) [a net operating loss carryback or
capital loss carryback, (ii)] an increase or decrease in federal taxable
income or federal tax, or [(iii)] (II) a federal change or correction or
renegotiation, or computation or recomputation of tax, which is  treated
in  the  same  manner  as if it were a deficiency for federal income tax
purposes, see paragraph [(7)] SEVEN of subsection  (c)  of  section  one
thousand eighty-three.
  S 4.  Subparagraph 3 of paragraph (a) and paragraph (d) of subdivision
8-b and paragraph (f) and subparagraph 3 of paragraph (g) of subdivision
9 of section 208 of the tax law are REPEALED.
  S  4-a.  Paragraph (e) of subdivision 13 of section 210 of the tax law
is REPEALED.
  S 5. Subdivision 3 of section 211 of the tax law is REPEALED.
  S 6. Subdivision (e) of section 213-b of the tax law is REPEALED.
  S 7. Paragraph 3 of subdivision (a) of section 292 of the tax  law  is
REPEALED.
  S  8.  Paragraph  3 of subsection (a) of section 622 of the tax law is
REPEALED.
  S 9. Paragraph 4 of subsection (b) of section 631 of the  tax  law  is
REPEALED.
  S 10. Subsection (b) of section 633 of the tax law is REPEALED.
  S  11.  Paragraph 3 of subsection (a) of section 636 of the tax law is
REPEALED.
  S 12. Paragraph 4 of subsection (c) of section 683 of the tax  law  is
REPEALED.
  S 13. Subsection (e) of section 684 of the tax law is REPEALED.
  S 14. Subsection (d) of section 687 of the tax law is REPEALED.
  S  15. Paragraph 4 of subsection (c) of section 1083 of the tax law is
REPEALED.
  S 16. Subsection (e) of section 1084 of the tax law is REPEALED.
  S 17. Subsection (a) of section 1087 of the tax law is REPEALED.
  S 18. Subsection (d) of section 1088 of the tax law is REPEALED.
  S 19. Subsection (k-1) of section 1453 of the tax law is REPEALED.
  S 20. Paragraph 4 of subdivision (b) of section 1503 of the tax law is
REPEALED.

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  S 21. Paragraph 1 of subdivision (e) of section 1515 of the tax law is
REPEALED.
  S  22.  This  act  shall  take effect on the one hundred eightieth day
after it shall have become a law.