senate Bill S388A

2013-2014 Legislative Session

Provides for an additional franchise tax on certain life insurance policies

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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 17, 2014 print number 388a
amend and recommit to investigations and government operations
Jan 08, 2014 referred to investigations and government operations
Jan 09, 2013 referred to investigations and government operations

Bill Amendments

Original
A (Active)
Original
A (Active)

S388 - Bill Details

See Assembly Version of this Bill:
A3896A
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Add §182-b, Tax L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S262A, A1111A
2009-2010: S6236A, A9439A

S388 - Bill Texts

view summary

Provides for an additional franchise tax on life insurance policies obtained by companies on its employees and/or retirees.

view sponsor memo
BILL NUMBER:S388

TITLE OF BILL:
An act
to amend the tax law, in relation to providing an additional franchise
tax on certain life insurance policies

PURPOSE:
Provides for an additional 50% tax on certain life insurance policies.

SUMMARY OF PROVISIONS:
Section 1. Amends the Tax Law by adding a new Section l82-b. Imposes a
fifty-percent (50%) tax on every company that has a corporate
franchise, or does business, or has employees or owns or leases
property, or maintains an office in this state and that receives
benefits from life insurance policies obtained on its employees
and/or retirees. Requires records to be kept in a form as the
Commissioner of Taxation and Finance may require. Provides that the
Commissioner of Taxation and Finance may consent to the destruction
of such records within three years or require that such records be
kept longer than three years.

Section 2. Effective Date

EXISTING LAW:
None.

JUSTIFICATION:
While the worst of the Great Recession seems to be over, New York
State continues to face budget deficits. Drastic spending cuts to
many worthy programs in the State Office for the Aging, the
Department of Health, SUNY and CUNY are likely. Unfortunately, little
has been done to find sources of revenue to mitigate New York State's
serious financial circumstances.

Despite this bleak economic picture, corporations are reaping huge
financial benefits from life insurance policies they take out on
their employees and or retirees. Corporate owned life insurance,
better known as "dead peasants" or "janitors" insurance, is a life
insurance policy that is taken out on low-level employees, often
without the knowledge or consent of the employee, and whose families
are not named as beneficiaries when the employee or retiree dies.
When the employee or retiree dies, these tax free benefits are
collected by the employer.
Furthermore, companies frequently use these policies to pay for
retirement benefits and other perks for their top executives.
Companies that supposedly engage in the practice of purchasing these
policies include Wal-Mart, Dow Chemical, Proctor & Gamble and Walt
Disney.

One tragic example of this practice is that of a 48 year old assistant
manager at Wal-Mart who died of a massive heart attack. The man's
widow became the lead plaintiff in a class action suit after she
learned that Wal-Mart collected $300,000 from a life insurance policy
it owned on him.


This bill would impose a 50% tax on all benefits received by companies
in New York State who take out life insurance policies on their
employees or retirees.

LEGISLATIVE HISTORY:
2012: S.262-A - Amend and recommit to investigations and Government
Operations/A.1111-A Amend and Recommit to Ways and Means
2011: S.262 - Defeated in Investigations and Government
Operations/A.1111 - Referred to Ways and Means
2010: S.6236A - Amend and Recommit to
Investigations and Government Operations/A.9439 Amend and Recommit
to Ways and Means
2009: S.6236 - Referred to Rules

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2016.

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

                                   388

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  DIAZ  --  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  providing  an  additional
  franchise tax on certain life insurance policies

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

  Section 1. The tax law is amended by adding a  new  section  182-b  to
read as follows:
  S  182-B. ADDITIONAL FRANCHISE TAX ON CERTAIN LIFE INSURANCE POLICIES.
1. NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER, OR OF ANY  OTHER
LAW, FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
SIXTEEN,  AN  ANNUAL  TAX IS HEREBY IMPOSED UPON EVERY COMPANY RECEIVING
BENEFITS FROM LIFE INSURANCE POLICIES IT HAS OBTAINED ON  ITS  EMPLOYEES
AND/OR RETIREES EQUAL TO FIFTY PER CENTUM OF ITS GROSS RECEIPTS FROM ALL
PROCEEDS  FROM  SUCH LIFE INSURANCE POLICIES, FOR THE PRIVILEGE OF EXER-
CISING ITS CORPORATE FRANCHISE, OR OF DOING BUSINESS,  OR  OF  EMPLOYING
CAPITAL,  OR  OF OWNING OR LEASING PROPERTY IN THIS STATE IN A CORPORATE
OR ORGANIZED CAPACITY, OR OF MAINTAINING AN OFFICE IN  THIS  STATE,  FOR
ALL OR ANY PART OF EACH OF ITS TAXABLE YEARS.
  2.  EVERY  COMPANY  SUBJECT  TO TAX UNDER THIS SECTION SHALL KEEP SUCH
RECORDS OF ITS BUSINESS IN SUCH FORM AS THE  COMMISSIONER  MAY  REQUIRE,
AND  SUCH RECORDS SHALL BE PRESERVED FOR A PERIOD OF THREE YEARS, EXCEPT
THAT THE COMMISSIONER MAY CONSENT TO THEIR DESTRUCTION WITHIN THAT PERI-
OD OR MAY REQUIRE THAT THEY BE KEPT LONGER.
  S 2. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2016.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00444-01-3

S388A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A3896A
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Add §182-b, Tax L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S262A, A1111A
2009-2010: S6236A, A9439A

S388A (ACTIVE) - Bill Texts

view summary

Provides for an additional franchise tax on life insurance policies obtained by companies on its employees and/or retirees.

view sponsor memo
BILL NUMBER:S388A

TITLE OF BILL: An act to amend the tax law, in relation to providing
an additional franchise tax on certain life insurance policies

PURPOSE:

Provides for an additional 50% tax on certain life insurance policies.

SUMMARY OF PROVISIONS:

Section 1. Amends the Tax Law by adding a new Section 182-b. imposes a
fifty-percent (50%) tax on every company that has a corporate
franchise, or does business, or has employees or owns or leases
property, or maintains an office in this state and that receives
benefits from life insurance policies obtained on its employees and/or
retirees. Requires records to be kept in a form as the Commissioner of
Taxation and Finance may require. Provides that the Commissioner of
Taxation and Finance may consent to the destruction of such records
within three years or require that such records be kept longer than
three years.

Section 2. Effective Date

EXISTING LAW:

None.

JUSTIFICATION:

While the worst of the Great Recession seems to be over, New York
State continues to face budget deficits. Drastic spending cuts to many
worthy programs in the State Office for the Aging, the Department of
Health, SUNY and CUNY are likely. Unfortunately, little has been done
to find sources of revenue to mitigate New York State's serious
financial circumstances.

Despite this bleak economic picture, corporations are reaping huge
financial benefits from life insurance policies they take out on their
employees and or retirees. Corporate owned life insurance, better
known as "dead peasants" or "janitors" insurance, is a life insurance
policy that is taken out on low-level employees, often without the
knowledge or consent of the employee, and whose families are not named
as beneficiaries when the employee or retiree dies. When the employee
or retiree dies, these tax free benefits are collected by the
employer. Furthermore, companies frequently use these policies to pay
for retirement benefits and other perks for their top executives.
Companies that supposedly engage in the practice of purchasing these
policies include Wal-Mart, Dow Chemical, Proctor & Gamble and Walt
Disney.

One tragic example of this practice is that of a 48 year old assistant
n-anager at Wal-Mart who died of a massive heart attack. The man's
widow became the lead plaintiff in a class action suit after she
learned that Wal-Mart collected $300,000 from a life insurance policy
it owned on him.


This bill would impose a 50% tax on all benefits received by companies
in New Yolk State who take out life insurance policies on their
employees or retirees.

LEGISLATIVE HISTORY:

2013: S.388 - Referred to Investigations and Government Operation/A.
3896 - Referred to Ways and Means
2012: S.262-A - Amend and recommit to Investigations and Government
Operations/A.1111-A Amend and recommit to Ways and Means
2011: S.262 - Defeated in Investigations and Government
Operations/A.1111 - Referred to Ways and Means
2010: S.6236A - Amend and Recommit to Investigations and Government
Operations/A.9439Amend and Recommit to Ways and Means
2009: S.6236 - Referred to Rules

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1 , 2017.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 388--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  DIAZ  --  read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations -- recommitted to the Committee on Investigations  and
  Government  Operations  in  accordance  with  Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN  ACT  to  amend  the  tax law, in relation to providing an additional
  franchise tax on certain life insurance policies

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

  Section  1.  The  tax  law is amended by adding a new section 182-b to
read as follows:
  S 182-B. ADDITIONAL FRANCHISE TAX ON CERTAIN LIFE INSURANCE  POLICIES.
1.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER, OR OF ANY OTHER
LAW, FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
SEVENTEEN, AN ANNUAL TAX IS HEREBY IMPOSED UPON EVERY COMPANY  RECEIVING
BENEFITS  FROM  LIFE INSURANCE POLICIES IT HAS OBTAINED ON ITS EMPLOYEES
AND/OR RETIREES EQUAL TO FIFTY PER CENTUM OF ITS GROSS RECEIPTS FROM ALL
PROCEEDS FROM SUCH LIFE INSURANCE POLICIES, FOR THE PRIVILEGE  OF  EXER-
CISING  ITS  CORPORATE  FRANCHISE, OR OF DOING BUSINESS, OR OF EMPLOYING
CAPITAL, OR OF OWNING OR LEASING PROPERTY IN THIS STATE IN  A  CORPORATE
OR  ORGANIZED  CAPACITY,  OR OF MAINTAINING AN OFFICE IN THIS STATE, FOR
ALL OR ANY PART OF EACH OF ITS TAXABLE YEARS.
  2. EVERY COMPANY SUBJECT TO TAX UNDER THIS  SECTION  SHALL  KEEP  SUCH
RECORDS  OF  ITS  BUSINESS IN SUCH FORM AS THE COMMISSIONER MAY REQUIRE,
AND SUCH RECORDS SHALL BE PRESERVED FOR A PERIOD OF THREE YEARS,  EXCEPT
THAT THE COMMISSIONER MAY CONSENT TO THEIR DESTRUCTION WITHIN THAT PERI-
OD OR MAY REQUIRE THAT THEY BE KEPT LONGER.
  S 2. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2017.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00444-02-4

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