senate Bill S5926

2013-2014 Legislative Session

Eliminates the metropolitan commuter transportation mobility tax; repealer

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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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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to investigations and government operations
Aug 21, 2013 referred to rules

S5926 - Bill Details

Current Committee:
Law Section:
Tax Law
Laws Affected:
Rpld Art 23, §208 sub 9 ¶(b) sub¶ 20, §292 sub (a) ¶8, §612 sub§ (b) ¶39, §615 sub§ (c) ¶8, §1453 sub§ (b) ¶15, §1503 sub (b) ¶2 sub¶ (V), §1166-a, amd Tax L, generally; amd §§11-602, 11-641, 11-1712 & 11-1718, rpld §11-602 sub 8 ¶(b) sub¶ 19, §11-641 sub (b) ¶16, §11-1712 sub (b) ¶35, NYC Ad Cd; amd §3602, rpld §3609-g, Ed L; amd §38, Hway L; rpld §1270-h, Pub Auth L; rpld §92-ff, St Fin L
Versions Introduced in 2011-2012 Legislative Session:
A5326

S5926 - Bill Texts

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Eliminates the metropolitan commuter transportation mobility tax.

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BILL NUMBER:S5926

TITLE OF BILL: An act to amend the tax law, the administrative code
of the city of New York, the education law and the highway law in
relation to eliminating the metropolitan commuter transportation
mobility tax; and to repeal certain provisions of the tax law, the
administrative code of the city of New York, the education law, the
public authorities law and the state finance law, relating thereto

PURPOSE: This legislation will repeal the metropolitan commuter
transportation mobility tax (aka MTA Payroll Tax).

SUMMARY OF PROVISIONS: This legislation makes the proper repeals and
amendments to the laws of New York in order to eliminate the
metropolitan commuter transportation mobility tax.

EXISTING LAW: Enacted in 2009, Article 23 of the tax law imposes an
onerous tax of .34% on every $100 of payroll of nearly every employer
and a .34% of net-earnings that exceeds $10,000 annually for
self-employed located in the Metropolitan Commuter Transportation
District (the counties served by the MTA).

JUSTIFICATION: The MTA Payroll Tax must be eliminated. It was an ill
conceived tax which should never have been voted on or signed into
law. It is burdensome and has had a crippling effect on the economy,
especially on small businesses and entrepreneurs in the Hudson Valley.
It costs businesses and entrepreneurs $1.5 billion that could
otherwise have been invested in business growth and job creation.
Simply put, MTA Payroll tax is stifling economic growth in New York
State.

Metro-North has been an engine for growth for decades, and mass
transit has been good for the Hudson Valley and New York State's
economy, environment and quality of life. In short, a healthy MTA with
expanding service to the Hudson Valley is good for the Hudson Valley.
However, funding that good health and expansion on the back of small
business is misguided.

The tax is a major burden on businesses, not-for-profits and schools
in a time where we must be reducing the cost to do business,. One by
one our local businesses here in the Hudson Valley are closing their
doors due to this state's excessive tax rate. The MTA Payroll Tax has
cost them their ability to compete and hold onto jobs. At the same
time, the MTA continues to dole out raises and overtime while cutting
services and raising fares.

LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS: When fully implemented this bill will save small
business owners, such as plumbers, restaurant owners, and small
farmers and other drivers of our economy an estimated $1.5 billion is
taxes.

EFFECTIVE DATE: This act shall take effect immediately; provided that
the amendments to subdivision 4 of section 618 of the tax law made by
section nine of this act shall be subject to the expiration and
reversion of such subsection pursuant to chapter 782 of the laws of


1988, as amended, when upon such date the provisions of section ten of
this act shall take effect; and provided further that the amendments
to subdivision 4 of section 11-1718 of the administrative code of the
city of New York made by section twenty-two of this act shall be
subject to the expiration and reversion of such subdivision pursuant
to chapter 782 of the laws of 1988, as amended, when upon such date
the provisions of section twenty-three of this act shall take effect.

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

                                  5926

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             August 21, 2013
                               ___________

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

AN ACT to amend the tax law, the administrative code of the city of  New
  York, the education law and the highway law in relation to eliminating
  the  metropolitan  commuter transportation mobility tax; and to repeal
  certain provisions of the tax law, the administrative code of the city
  of New York, the education law, the public  authorities  law  and  the
  state finance law, relating thereto

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

  Section 1. Article 23 of the tax law is REPEALED.
  S 2. Clause (i) of subparagraph 5 of paragraph (a) of subdivision 9 of
section 208 of the tax law, as amended by section 2 of part C of chapter
25 of the laws of 2009, is amended to read as follows:
  (i) any refund or credit of a tax imposed under this article[, article
twenty-three,] or article thirty-two of this chapter, for which  tax  no
exclusion  or deduction was allowed in determining the taxpayer's entire
net income under this article[, article twenty-three,] or article  thir-
ty-two of this chapter for any prior year,
  S  3. Subparagraph 20 of paragraph (b) of subdivision 9 of section 208
of the tax law is REPEALED.
  S 4. Paragraph 2 of subdivision (a) of section 292 of the tax law,  as
amended  by  section  4  of part C of chapter 25 of the laws of 2009, is
amended to read as follows:
  (2) There shall be subtracted from federal unrelated business  taxable
income  the  amount  of  any  refund  or credit for overpayment of a tax
imposed under this article [or article twenty-three of this chapter].
  S 5. Paragraph 8 of subdivision (a) of section 292 of the tax  law  is
REPEALED.
  S  6.  Paragraph 39 of subsection (b) of section 612 of the tax law is
REPEALED.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05256-01-3

S. 5926                             2

  S 7. Paragraph 7 of subsection (c) of section 612 of the tax  law,  as
amended  by  section  7  of part C of chapter 25 of the laws of 2009, is
amended to read as follows:
  (7) The amount of any refund or credit for overpayment of income taxes
imposed  by this state, or any other taxing jurisdiction, [and any taxes
imposed by article twenty-three of this chapter,] to the extent properly
included in gross income for federal income tax purposes.
  S 8. Paragraph 8 of subsection (c) of section 615 of the  tax  law  is
REPEALED.
  S 9. Subsection 4 of section 618 of the tax law, as amended by section
9  of  part  C  of chapter 25 of the laws of 2009, is amended to read as
follows:
  (4) There shall be added or  subtracted  (as  the  case  may  be)  the
modifications described in paragraphs (6), (10), (17), (18), (19), (20),
(21), (22), (23), (24), (25), (26), (27), (29)[,] AND (38) [and (39)] of
subsection  (b)  and  in  paragraphs (11), (13), (15), (19), (20), (21),
(22), (23), (24), (25), (26) and (28) of subsection (c) of  section  six
hundred twelve of this part.
  S  10.  Subsection  4  of  section  618  of the tax law, as separately
amended by section 5 of part HH-1 of chapter 57 of the laws of 2008  and
section  9  of  part  C of chapter 25 of the laws of 2009, is amended to
read as follows:
  (4) There shall be added or  subtracted  (as  the  case  may  be)  the
modifications described in paragraphs (6), (10), (17), (18), (19), (20),
(21),  (22), (23), (24), (25), (26), (27), [(28),] (29)[,] AND (38) [and
(39)] of subsection (b) and in paragraphs (11), (13), (15), (19),  (20),
(21), (22), (23), (24), (25), (26) and (28) of subsection (c) of section
six hundred twelve of this part.
  S  11.  Subsection  (a)  of  section 686 of the tax law, as amended by
section 10 of part C of chapter 25 of the laws of 2009,  is  amended  to
read as follows:
  (a)  General.-- The commissioner [of taxation and finance], within the
applicable period of limitations, may credit an  overpayment  of  income
tax and interest on such overpayment against any liability in respect of
any  tax imposed by this chapter[, including taxes imposed under article
twenty-three of this chapter,] on the person who made  the  overpayment,
against  any  liability  in  respect  of any tax imposed pursuant to the
authority of this chapter or any other law on such person if such tax is
administered by the commissioner  [of  taxation  and  finance]  and,  as
provided   in   sections   one   hundred   seventy-one-c,   one  hundred
seventy-one-d, one hundred seventy-one-e, one hundred seventy-one-f  and
one  hundred  seventy-one-l of this chapter, against past-due support, a
past-due legally enforceable debt, a city of New York tax warrant  judg-
ment debt, and against the amount of a default in repayment of a guaran-
teed  student,  state  university  or  city university loan. The balance
shall be refunded by the comptroller out of  the  proceeds  of  the  tax
retained  by him for such general purpose. Any refund under this section
shall be made only upon the filing of a return and upon a certificate of
the commissioner approved by the  comptroller.  The  comptroller,  as  a
condition  precedent  to the approval of such a certificate, may examine
into the facts as disclosed by the return of the  person  who  made  the
overpayment and other information and data available in the files of the
commissioner.
  S 12. Paragraph 15 of subsection (b) of section 1453 of the tax law is
REPEALED.

S. 5926                             3

  S  13.  Subsection  (d)  of section 1453 of the tax law, as amended by
section 13 of part C of chapter 25 of the laws of 2009,  is  amended  to
read as follows:
  (d)  Entire net income shall not include any refund or credit of a tax
for which no exclusion or  deduction  was  allowed  in  determining  the
taxpayer's  entire  net income under this article or [articles nine-A or
twenty-three] ARTICLE NINE-A of this chapter for any prior year.
  S 14. Subparagraph (C) of paragraph 1 of subdivision  (b)  of  section
1503 of the tax law, as amended by section 14 of part C of chapter 25 of
the laws of 2009, is amended to read as follows:
  (C)  any  refund  or  credit  of  a  tax imposed under this article or
section one hundred eighty-seven[,  or  article  twenty-three]  of  this
chapter  heretofore  in effect to the extent properly included as income
for federal income tax purposes, for which no exclusion or deduction was
allowed in determining the taxpayer's entire net income under this arti-
cle for any prior year;
  S 15. Subparagraph (V) of paragraph 2 of subdivision  (b)  of  section
1503 of the tax law is REPEALED.
  S  16.  Subparagraph  5  of  paragraph (a) of subdivision 8 of section
11-602 of the administrative code of the city of New York, as amended by
section 16 of part C of chapter 25 of the laws of 2009,  is  amended  to
read as follows:
  (5)  any  refund  or  credit  of  a tax imposed under this chapter, or
imposed by article nine, nine-A[, twenty-three,] or  thirty-two  of  the
tax  law,  for which tax no exclusion or deduction was allowed in deter-
mining the  taxpayer's  entire  net  income  under  this  subchapter  or
subchapter three of this chapter for any prior year;
  S  17.  Subparagraph  19  of paragraph (b) of subdivision 8 of section
11-602 of the administrative code of the city of New York is REPEALED.
  S 18. Paragraph 16 of subdivision (b) of section 11-641 of the  admin-
istrative code of the city of New York is REPEALED.
  S  19. Subdivision (d) of section 11-641 of the administrative code of
the city of New York, as amended by section 19 of part C of  chapter  25
of the laws of 2009, is amended to read as follows:
  (d)  Entire net income shall not include any refund or credit of a tax
for which no exclusion or  deduction  was  allowed  in  determining  the
taxpayer's  entire net income under this subchapter or subchapter two of
this chapter[, or imposed by article twenty-three of the  tax  law]  for
any prior year.
  S 20. Paragraph 35 of subdivision (b) of section 11-1712 of the admin-
istrative code of the city of New York is REPEALED.
  S  21. Paragraph 7 of subdivision (c) of section 11-1712 of the admin-
istrative code of the city of New York, as amended by section 21 of part
C of chapter 25 of the laws of 2009, is amended to read as follows:
  (7) The amount of any refund or credit for overpayment of income taxes
imposed by this city, OR any other taxing jurisdiction,  [or  any  taxes
imposed  by  article twenty-three of the tax law] to the extent properly
included in gross income for federal income tax purposes.
  S 22. Clauses (ii), (iv) and (v) of subparagraph (B) of paragraph 1 of
subdivision (o) of section 11-1712 of the  administrative  code  of  the
city  of  New York, clause (ii) as amended by chapter 333 of the laws of
1987, clauses (iv) and (v) as relettered by section 60 and such  section
as  renumbered  by  section  43  of chapter 639 of the laws of 1986, are
amended to read as follows:
  (ii) is, at the date of adoption of such  plan,  subject  to  taxation
(whether  or  not any amount is owing) under section one hundred eighty-

S. 5926                             4

three[,] OR one hundred eighty-four [or one hundred eighty-six of  arti-
cle  nine]  of  the tax law, or under article [nine-a] NINE-A of the tax
law [or article twenty-three of the tax law, or would have been  subject
to  tax  under  article twenty-three of such law (as such article was in
effect on January first, nineteen hundred eighty) if such  article  were
still  in effect], and the first taxable period for which such new busi-
ness became subject to such taxation commenced on or after  July  first,
nineteen  hundred  eighty-one and before January first, nineteen hundred
eighty-eight, and  such  first  taxable  period  includes  the  date  of
adoption  of  such plan; if not so subject to taxation, the new business
must be subject to taxation under such  sections  or  articles  for  the
first time within one year from the date of adoption of such plan, and
  (iv)  within  ninety days after adoption of such plan, or, if a return
is required, as part of such return, under  [such]  article  nine[,]  OR
article [nine-a or article twenty-three] NINE-A OF THE TAX LAW, whichev-
er  is  sooner,  shall  file  a  new  business certificate with the [tax
commission] COMMISSIONER attesting to whether it meets,  if  subject  to
taxation under such articles, or intends to meet, if not so subject, all
of the conditions stated in clauses (i), (ii) and (iii) of this subpara-
graph  within  the time set forth therein.  Thereafter, during the first
four taxable years of such new business, along with, and as part of, any
return required under such articles, such new business  shall  make  and
file  a  new  business certificate for the period covered by such return
attesting to whether it has met the conditions specified in this subpar-
agraph during the taxable period covered by such return. If no return is
required under such articles, such certificate shall be  filed  annually
on  or  before  the  fifteenth day of March which shall cover the twelve
consecutive calendar month period ending on the  last  day  of  December
immediately  preceding  such March fifteenth. If such new business fails
to meet such conditions specified in this  subparagraph,  it  shall,  in
addition,  give  notice  of this fact, within the time prescribed by the
[tax commission] COMMISSIONER, to  the  holders  of  its  "new  business
investments." The [tax commission] COMMISSIONER shall prescribe the form
and  content  of  such  new business certification and may require a new
business to file such certificate for periods  (even  if  no  return  is
filed or required, but for this section) covering up to eight years from
the  date  of  adoption of such plan, as in its discretion, it deems the
same necessary for the enforcement of this section, and
  (v) Special rules:
  (1) For any taxable period, in order to constitute a new  business,  a
business  enterprise  must  have  derived more than sixty percent of its
aggregate gross receipts from sources other than royalties, rents, divi-
dends, interest, annuities and sales or exchanges of  stock  or  securi-
ties.
  (2)  A  new  business  does not include: (i) any new business of which
twenty-five percent or more of the number of shares of stock that  enti-
tle  the  holders thereof to vote for the election of directors or trus-
tees is owned, directly or indirectly, by  a  taxpayer  subject  to  tax
under  section  one  hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article  nine]  of
the  tax  law,  or  under article [nine-a] NINE-A, thirty-two or thirty-
three of the tax law or (ii) any new business substantially  similar  in
operation and in ownership, directly or indirectly, to a business entity
(or  entities)  taxable, or previously taxable, under such section, such
article[, article twenty-three of the tax law] or which would have  been
subject  to [tax under such article twenty-three (as such article was in

S. 5926                             5

effect on January first, nineteen hundred eighty)  or]  the  income  (or
losses)  of  which  is  (or  was) includible under article twenty-two of
[such] THE tax law whereby the intent and purpose of this section  would
be evaded.
  S 23. Subdivision (p) of section 11-1712 of the administrative code of
the  city of New York, as amended by chapter 333 of the laws of 1987, is
amended to read as follows:
  (p) New business investment  deferral.  For  taxable  years  beginning
before  January  first,  nineteen hundred eighty-eight, at the option of
the taxpayer, there may be subtracted from federal adjusted gross income
a reinvested amount of long-term capital gain realized in a taxable year
from the sale of a capital asset, as such term  is  defined  in  section
twelve  hundred  twenty-one of the internal revenue code, which is not a
new business investment. A reinvested amount of long-term  capital  gain
shall mean an amount which bears the same ratio to the long-term capital
gain  realized  from the sale of a capital asset which was includible in
New York adjusted gross income as that  portion  of  the  sale  proceeds
which  is  reinvested,  within one year from date of sale, in a New York
new business bears to the total sale proceeds. For the purposes of  this
subdivision, a New York new business is a business enterprise which: (1)
has  been  a  taxpayer  under  article nine-A, twenty-two, thirty-two or
thirty-three of the tax  law  for  no  more  than  three  taxable  years
(including short taxable years), (2) over fifty percent of the number of
shares  of  stock  that  entitle  the  holders  thereof  to vote for the
election of directors or trustees is not owned, directly or  indirectly,
by a taxpayer subject to tax under section one hundred eighty-three, one
hundred eighty-four[,] OR one hundred eighty-five [or one hundred eight-
y-six  of article nine] of the tax law, or under article nine-A, thirty-
two or thirty-three of the tax law, (3) is not substantially similar  in
operation or ownership, directly or indirectly, to a business entity (or
entities)  taxable,  or  previously  taxable,  under such sections, such
articles[, article twenty-three of the tax law] or which would have been
subject to [tax under article  twenty-three  (as  such  article  was  in
effect  on  January  first,  nineteen hundred eighty) or] the income (or
losses) of which is (or was) includible under article twenty-two of  the
tax  law  whereby  the  intent  and purpose of this subdivision would be
evaded, (4) locates and employs at least ninety percent of its assets in
the state, (5) employs principally in the state eighty  percent  of  its
employees  (as ascertained within the meaning and intent of subparagraph
three of paragraph (a) of subdivision three of section two  hundred  ten
of the tax law and, in addition, in the case of a partnership, excluding
partners),  and  (6) derives less than forty percent of its gross income
from dividends, interest, royalties (other than  mineral,  oil,  or  gas
royalties  or  copyright  royalties), annuities and (7) reports at least
twenty-five hundred dollars in gross income in  any  taxable  year.  The
reinvested amount must qualify as a capital asset as defined pursuant to
section  twelve hundred twenty-one of the internal revenue code and must
be retained by the taxpayer for at least twelve months. The modification
allowable under this subdivision shall be utilized with respect  to  the
taxable year in which the twelve month retention period ends.
  S  24.  Subdivision 4 of section 11-1718 of the administrative code of
the city of New York, as amended by section 22 of part C of  chapter  25
of the laws of 2009, is amended to read as follows:
  (4)  There  shall  be  added  or  subtracted  (as the case may be) the
modifications described in paragraphs  six,  ten,  seventeen,  eighteen,
nineteen,  twenty,  twenty-one,  twenty-two,  twenty-three, twenty-four,

S. 5926                             6

twenty-five, twenty-six, twenty-seven,  twenty-nine[,]  AND  thirty-four
[and thirty-five] of subdivision (b) and in paragraphs eleven, thirteen,
fifteen,  nineteen,  twenty, twenty-one, twenty-two, twenty-three, twen-
ty-four,  twenty-five, twenty-six and twenty-eight of subdivision (c) of
section 11-1712 of this subchapter.
  S 25. Subdivision 4 of section 11-1718 of the administrative  code  of
the  city  of New York, as separately amended by section 12 of part HH-1
of chapter 57 of the laws of 2008 and section 22 of part C of chapter 25
of the laws of 2009, is amended to read as follows:
  (4) There shall be added or  subtracted  (as  the  case  may  be)  the
modifications  described  in  paragraphs  six, ten, seventeen, eighteen,
nineteen, twenty,  twenty-one,  twenty-two,  twenty-three,  twenty-four,
twenty-five,  twenty-seven,  [twenty-eight,]  twenty-nine[,] AND thirty-
four [and thirty-five] of subdivision  (b)  and  in  paragraphs  eleven,
thirteen,  fifteen,  nineteen,  twenty,  twenty-one, twenty-two, twenty-
three, twenty-four, twenty-five, twenty-six and twenty-eight of subdivi-
sion (c) of section 11-1712 of this subchapter.
  S 26. Subparagraphs 16, 17 and 18 of paragraph t of subdivision  1  of
section  3602 of the education law, as amended by section 2 of part D of
chapter 25 of the laws of 2009, are amended to read as follows:
  (16) any tuition payments  made  pursuant  to  a  contract  under  the
provisions  of  paragraphs  e,  f,  g,  h, i and l of subdivision two of
section forty-four hundred one of this chapter or any  tuition  payments
on  behalf  of pupils attending a state school under paragraph d of such
subdivision; AND (17) in any year in which expenditures are made to  the
New  York  state  teachers'  retirement system or the New York state and
local employees' retirement system for both the prior  school  year  and
the  current  school  year,  any  expenditures  made  to such retirement
systems and recorded in the school year prior  to  the  school  year  in
which  such  obligations are paid[; and (18) any payments to the commis-
sioner of taxation and finance pursuant to article twenty-three  of  the
tax law].
  S 27. Section 3609-g of the education law is REPEALED.
  S 28. Paragraph (e) of subdivision 7 of section 38 of the highway law,
as amended by chapter 196 of the laws of 1981 and as relettered by chap-
ter 153 of the laws of 1984, is amended to read as follows:
  (e)  No  such  certificate  approving or authorizing the first partial
payment or any final payment to  a  foreign  contractor  shall  be  made
unless  such  contractor shall furnish satisfactory proof that all taxes
due the [state tax commission] COMMISSIONER by  such  contractor,  under
the provisions of or pursuant to a law enacted pursuant to the authority
of   article  nine,  [nine-a,  twelve-a,  sixteen,  sixteen-a,]  NINE-A,
TWELVE-A, twenty-one, twenty-two, [twenty-three,] twenty-eight,  twenty-
nine or thirty of the tax law [or article two-E of the general city law]
have  been  paid.  The certificate of the [state tax commission] COMMIS-
SIONER to the effect that all such taxes have been paid  shall  be,  for
THE  purpose  of this paragraph, conclusive proof of the payment of such
taxes. The term "foreign contractor" as used in this subdivision  means,
in  the  case  of  an individual, a person who is not a resident of this
state, in the case of a partnership, one having one or more partners not
a resident of this state, and in the case  of  a  corporation,  one  not
organized under the laws of this state.
  S 29. Section 1270-h of the public authorities law is REPEALED.
  S 30. Section 92-ff of the state finance law is REPEALED.
  S 31. Paragraphs 1 and 2 and subparagraph (B) of paragraph 4 of subdi-
vision  (j)  of section 14 of the tax law, paragraphs 1 and 2 as amended

S. 5926                             7

by section 10 of part CC of chapter 85 of the laws of 2002 and  subpara-
graph  (B) of paragraph 4 as amended by chapter 161 of the laws of 2005,
are amended to read as follows:
  (1) A new business shall include any corporation, except a corporation
which  is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or previously taxable, under  section
one  hundred  eighty-three,  one  hundred  eighty-four[,] OR one hundred
eighty-five [or one hundred eighty-six of article nine] OF THIS CHAPTER;
article nine-A, article thirty-two  or  thirty-three  of  this  chapter;
[article  twenty-three of this chapter] or which would have been subject
to [tax under such article twenty-three (as such article was  in  effect
on January first, nineteen hundred eighty) or] the income (or losses) of
which is (or was) includable under article twenty-two of this chapter.
  (2)  For purposes of article twenty-two of this chapter, an individual
who is either a sole proprietor or a member of a partnership shall qual-
ify as an owner of a new business unless the business of which the indi-
vidual is an owner is substantially similar in operation and  in  owner-
ship  to a business entity taxable, or previously taxable, under section
one hundred eighty-three, one  hundred  eighty-four[,]  OR  one  hundred
eighty-five [or one hundred eighty-six of article nine] OF THIS CHAPTER;
article  nine-A,  thirty-two  or  thirty-three of this chapter; [article
twenty-three of this chapter] or which would have been subject  to  [tax
under  such article twenty-three (as such article was in effect on Janu-
ary first, nineteen hundred eighty) or] the income (or losses) of  which
is (or was) includable under article twenty-two OF THIS CHAPTER.
  (B) Notwithstanding any provisions of this subdivision to the contrary
and  notwithstanding  subdivision  c  of  section eighteen of part CC of
chapter eighty-five of the laws of two thousand two,  a  corporation  or
partnership,  which  was first certified under article eighteen-B of the
general municipal law before August first, two thousand two, has a  base
period  of  zero  years  or  zero employment for its base period, and is
similar in operation and in ownership to a business entity  or  entities
taxable,  or  previously  taxable, under sections specified in paragraph
one or two of this subdivision or which would have been subject to  [tax
under  article  twenty-three  of  this  chapter  (as such article was in
effect on January first, nineteen hundred  eighty)  or]  the  income  or
losses  of  which  is or was includable under article twenty-two of this
chapter shall not be deemed a new business if it was not  formed  for  a
valid business purpose, as such term is defined in clause (D) of subpar-
agraph  one  of paragraph (o) of subdivision nine of section two hundred
eight of this chapter and was formed solely to gain  empire  zone  bene-
fits.
  S  32. Paragraph (c) of subdivision 1-c of section 210 of the tax law,
as amended by chapter 1043 of the laws of 1981, is amended  to  read  as
follows:
  (c)  is  not a corporation which is substantially similar in operation
and in ownership to a business entity (or entities) taxable,  or  previ-
ously taxable, under this article; section one hundred eighty-three, one
hundred eighty-four[,] OR one hundred eighty-five [or one hundred eight-
y-six  of  article  nine] OF THIS CHAPTER; article thirty-two or thirty-
three of this chapter; [article twenty-three of this chapter]  or  which
would have been subject to [tax under such article twenty-three (as such
article was in effect on January first, nineteen hundred eighty) or] the
income  (or  losses) of which is (or was) includable under article twen-
ty-two of this chapter, and

S. 5926                             8

  S 33. Subparagraph 2 of paragraph (j) of subdivision 12 of section 210
of the tax law, as amended by chapter 1043  of  the  laws  of  1981,  is
amended to read as follows:
  (2)  is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or  previously  taxable,  under  this
article; section one hundred eighty-three, one hundred eighty-four[,] OR
one  hundred  eighty-five [or one hundred eighty-six of article nine] OF
THIS CHAPTER; article thirty-two or thirty-three of this chapter; [arti-
cle twenty-three of this chapter] or which would have  been  subject  to
[tax  under  such article twenty-three (as such article was in effect on
January first, nineteen hundred eighty) or] the income  (or  losses)  of
which  is  (or  was) includable under article twenty-two of this chapter
whereby the intent and purpose of this paragraph and  paragraph  (e)  of
this  subdivision  with  respect  to refunding of credit to new business
would be evaded; or
  S 34. Subdivision 2-a of section 280-a of the tax law, as  amended  by
chapter 267 of the laws of 1987, is amended to read as follows:
  2-a.  In  addition  to  the  rebate  allowable under the provisions of
subdivision one of this section, the portion  of  the  amount  of  stock
transfer  tax  paid  which  is  to be allowed as a rebate to any person,
firm, company or corporation registered with the United  States  securi-
ties  and  exchange  commission  in  accordance  with  subsection (b) of
section fifteen of the securities exchange act of nineteen hundred thir-
ty-four, as amended, and acting as a dealer in a  transaction  described
in  paragraph (e) of subdivision twelve of this section, other than such
a person, firm, company or corporation liable to file a report or return
under article nine-A of this chapter, [or article twenty-three  of  this
chapter, (as such article was in effect on or before December thirtieth,
nineteen hundred eighty-two),] shall be one hundred percent of the stock
transfer  tax  incurred  and  paid  on transactions subject to the stock
transfer tax executed by  such  person,  firm,  company  or  corporation
pursuant  to  the  acceptance  of an order placed through an intermarket
linkage system developed pursuant to subsection (a) of section  eleven-A
of  such  securities  exchange act under a plan submitted by one or more
national securities exchanges or national securities associations regis-
tered with such securities and  exchange  commission  occurring  on  and
after April seventeenth, nineteen hundred seventy-eight and on or before
September  thirtieth,  nineteen hundred seventy-nine, seventy percent of
the tax incurred and paid on such a transaction occurring on  and  after
October  first, nineteen hundred seventy-nine and on or before September
thirtieth, nineteen hundred eighty and forty percent of the tax incurred
and paid on such a transaction occurring on  and  after  October  first,
nineteen  hundred  eighty and on or before September thirtieth, nineteen
hundred eighty-one. Notwithstanding any other provision of law, the  net
amount  to  be  rebated to any such person, firm, company or corporation
under this subdivision with respect to stock transfer tax  allowable  as
rebates  during  each  of  the  periods  ending  on  September thirtieth
hereinbefore set forth shall not be allowed or paid prior to  the  first
day  of  the  eighth month following September thirtieth of each of such
periods nor until the subsequent date  on  which  the  commissioner  [of
taxation  and  finance]  shall  next  determine  the amount allowable as
rebates pursuant to the provisions of section ninety-two-i of the  state
finance  law,  provided,  however, that the net amount to be allowed for
the April seventeenth, nineteen hundred seventy-eight through  September
thirtieth, nineteen hundred seventy-eight period shall not be allowed or
paid until the last business day of June, nineteen hundred seventy-nine.

S. 5926                             9

  No  rebate shall be allowed under this subdivision with respect to any
stock transfer tax incurred in a market making transaction occurring  on
or  after October first, nineteen hundred eighty-one. No rebate shall be
allowed or paid under this  subdivision  for  stock  transfer  tax  paid
pursuant to section two hundred seventy-nine-a of this chapter nor shall
any  rebate be allowed or paid until the person, firm, company or corpo-
ration claiming the rebate complies  with  the  rules,  regulations  and
instructions  of  the  [state  tax commission] COMMISSIONER issued under
this article including furnishing of a just and  true  book  of  account
within  the  state  as  may  be  required  by the [state tax commission]
COMMISSIONER.
  S 35. Subparagraph (A) of paragraph 10 of subsection  (a)  of  section
606  of the tax law, as amended by section 3 of part CC of chapter 85 of
the laws of 2002, is amended to read as follows:
  (A) the business of which the individual is an owner is  substantially
similar  in  operation and in ownership to a business entity taxable, or
previously taxable, under section one hundred eighty-three, one  hundred
eighty-four[,]  OR one hundred eighty-five [or one hundred eighty-six of
article nine] OF THIS CHAPTER; article  nine-A,  thirty-two  or  thirty-
three  of  this chapter; [article twenty-three of this chapter] or which
would have been subject to [tax under such article twenty-three (as such
article was in effect on January first, nineteen hundred eighty) or] the
income (or losses) of which is (or was) includable  under  THIS  article
[twenty-two]  of  this  chapter  whereby  the intent and purpose of this
paragraph and paragraph five of this subsection with respect to  refund-
ing of credit to new business would be evaded; or
  S 36. Clauses (ii), (iv) and subclause 2 of clause (v) of subparagraph
(B)  of  paragraph  1  of  subsection (o) of section 612 of the tax law,
clause (ii) as amended by chapter 28 of the laws of 1987, clause (iv) as
amended by chapter 267 of the laws of 1987 and subclause 2 of clause (v)
as amended by chapter 1043 of the laws of 1981, are amended to  read  as
follows:
  (ii)  is,  at  the  date of adoption of such plan, subject to taxation
(whether or not any amount is owing) under section one  hundred  eighty-
three[,]  OR one hundred eighty-four [or one hundred eighty-six of arti-
cle nine] of this chapter, or under article nine-a of this  chapter  [or
article  twenty-three of this chapter, or would have been subject to tax
under article twenty-three (as such article was  in  effect  on  January
first,  nineteen  hundred eighty) if such article were still in effect],
and the first taxable period for which such new business became  subject
to  such  taxation  commenced  on  or after July first, nineteen hundred
eighty-one and before January first, nineteen hundred eighty-eight,  and
such first taxable period includes the date of adoption of such plan; if
not so subject to taxation, the new business must be subject to taxation
under  such sections or articles for the first time within one year from
the date of adoption of such plan, and
  (iv) within ninety days after the adoption of  such  plan,  or,  if  a
return  is  required, as part of such return, under such article nine[,]
OR article nine-A [or article  twenty-three  (as  such  article  was  in
effect  on  or  before December thirtieth, nineteen hundred eighty-two),
whichever is sooner] OF THIS CHAPTER, shall file a new business  certif-
icate  with the [state tax commission] COMMISSIONER attesting to whether
it meets, if subject to taxation under  such  articles,  or  intends  to
meet,  if  not  so subject, all of the conditions stated in clauses (i),
(ii) and (iii) of this subparagraph within the time set  forth  therein.
Thereafter,  during  the  first four taxable years of such new business,

S. 5926                            10

along with, and as part of, any return  required  under  such  articles,
such new business shall make and file a new business certificate for the
period covered by such return attesting to whether it has met the condi-
tions  specified  in this subparagraph during the taxable period covered
by such return. If no return  is  required  under  such  articles,  such
certificate  shall  be  filed annually on or before the fifteenth day of
March which shall cover the twelve  consecutive  calendar  month  period
ending  on  the  last  day  of December immediately preceding such March
fifteenth. If such new business fails to meet such conditions  specified
in  this  subparagraph, it shall, in addition, give notice of this fact,
within the time prescribed by the [state tax  commission]  COMMISSIONER,
to the holders of its "new business investments." The [state tax commis-
sion]  COMMISSIONER  shall  prescribe  the  form and content of such new
business certification and may require  a  new  business  to  file  such
certificate for periods (even if no return is filed or required, but for
this  section)  covering  up to eight years from the date of adoption of
such plan, as in its discretion, it deems the  same  necessary  for  the
enforcement of this subparagraph, and
  (2)  A  new  business  does  not include (i) any new business of which
twenty-five percent or more of the number of shares of stock that  enti-
tle  the  holders thereof to vote for the election of directors or trus-
tees is owned, directly or indirectly, by  a  taxpayer  subject  to  tax
under  section  one  hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article  nine]  of
this  chapter,  or  under  article nine-A, thirty-two or thirty-three of
this chapter or (ii) any new business substantially similar in operation
and in ownership, directly or indirectly, to a business entity (or enti-
ties) taxable, or previously taxable, under such  sections,  such  arti-
cles,  [article  twenty-three]  or which would have been subject to [tax
under article twenty-three (as such article was  in  effect  on  January
first,  nineteen  hundred eighty) or] the income (or losses) of which is
(or was) includable under THIS article [twenty-two] whereby  the  intent
and purpose of this subsection would be evaded.
  S  37.  Subsection  (p)  of  section 612 of the tax law, as amended by
chapter 28 of the laws of 1987, is amended to read as follows:
  (p) New business investment  deferral.  For  taxable  years  beginning
before  January  first,  nineteen hundred eighty-eight, at the option of
the taxpayer, there may be subtracted from federal adjusted gross income
a reinvested amount of long-term capital gain realized in a taxable year
from the sale of a capital asset, as such term  is  defined  in  section
1221  of  the internal revenue code, which is not a new business invest-
ment. A reinvested amount of long-term capital gain shall mean an amount
which bears the same ratio to the long-term capital gain  realized  from
the  sale  of  a capital asset which was includable in New York adjusted
gross income as that portion of the sale proceeds which  is  reinvested,
within  one  year from date of sale, in a New York new business bears to
the total sale proceeds. For the purposes of this subsection, a New York
new business is a business enterprise which  (1)  has  been  a  taxpayer
under this article for no more than three taxable years (including short
taxable  years), (2) over fifty percent of the number of shares of stock
that entitle the holders thereof to vote for the election  of  directors
or  trustees is not owned, directly or indirectly, by a taxpayer subject
to tax under section  one  hundred  eighty-three,  one  hundred  eighty-
four[,] OR one hundred eighty-five [or one hundred eighty-six of article
nine]  of  this  chapter, or under article nine-A, thirty-two or thirty-
three of this chapter, (3) is not substantially similar in operation  or

S. 5926                            11

ownership,  directly  or  indirectly, to a business entity (or entities)
taxable, or previously taxable,  under  such  sections,  such  articles,
[article  twenty-three]  or  which would have been subject to [tax under
article  twenty-three  (as  such article was in effect on January first,
nineteen hundred eighty) or] the income (or losses) of which is (or was)
includable under  THIS  article  [twenty-two]  whereby  the  intent  and
purpose  of  this subsection would be evaded, (4) locates and employs at
least ninety percent of its assets in the state, (5) employs principally
in the state eighty percent of its employees (as ascertained within  the
meaning and intent of subparagraph three of paragraph (a) of subdivision
three  of  section  two hundred ten of this chapter and, in addition, in
the case of a partnership, excluding partners), (6)  derives  less  than
forty  percent  of  its gross income from dividends, interest, royalties
(other than mineral, oil, or gas royalties or copyright royalties),  and
annuities  and (7) reports at least twenty-five hundred dollars in gross
income in any taxable year.   The reinvested amount must  qualify  as  a
capital  asset  as  defined in section 1221 of the internal revenue code
and must be retained by the taxpayer for at  least  twelve  months.  The
modification  allowable  under  this  subsection  shall be utilized with
respect to the taxable year in which the twelve month  retention  period
ends.  The  commissioner  [of  taxation  and finance] may require annual
information reports on the investments in new businesses  made  pursuant
to  this  subsection, and such other reports as he may require to ensure
against the evasion of the intent and purposes of this subsection.
  S 38. Subsection (g) of section 697 of the  tax  law,  as  amended  by
chapter 267 of the laws of 1987, is amended to read as follows:
  (g)  Cooperation  with  the cities of the state of New York.  Notwith-
standing the provisions of subsection  (e)  OF  THIS  SECTION,  the  tax
commission  may  permit the proper city officer of any city of the state
of New York imposing a personal income tax upon  the  incomes  of  resi-
dents,  or  an unincorporated business income tax, or an earnings tax on
nonresidents, or the authorized representative of any such  officer,  to
inspect  any  return  filed under this article, [or article twenty-three
(as such article was in effect on or before December thirtieth, nineteen
hundred eighty-two),] or may furnish to such officer or  his  authorized
representative  an abstract of any such return or supply him with infor-
mation concerning an item contained in any such return, or disclosed  by
any  investigation of tax liability under this article [or article twen-
ty-three (as such article was in effect on or before December thirtieth,
nineteen hundred eighty-two)], but such permission shall be  granted  or
such information furnished to such officer or his representative only if
the  local  laws  of such city grant substantially similar privileges to
the commission or officer of this state charged with the  administration
of  the  tax  imposed by this article and such information is to be used
for tax purposes only; and provided further the commissioner  [of  taxa-
tion  and  finance] may furnish to such city officer or the legal repre-
sentative of such city such returns filed under this article [or article
twenty-three (as such article was in effect on or before December  thir-
tieth,  nineteen  hundred  eighty-two)] and other tax information, as he
may consider proper, for use in court actions or proceedings under  such
local  law,  whether civil or criminal, where a written request therefor
has been made to the commissioner [of taxation and finance] by such city
officer or his delegate, provided the local  law  of  such  city  grants
substantially similar powers to such city officer or his delegate. Where
the  commissioner  [of  taxation  and  finance] has so authorized use of
returns and other information in such actions or  proceedings,  officers

S. 5926                            12

and employees of the department [of taxation and finance] may testify in
such actions or proceedings in respect to such returns or other informa-
tion.
  S  39.  Section  1311 of the tax law, as amended by chapter 682 of the
laws of 1976, is amended to read as follows:
  S 1311. Enforcement with other taxes. (a) If there is assessed  a  tax
under  a city income tax imposed pursuant to the authority of this arti-
cle and there is also assessed a tax or taxes against the same  taxpayer
pursuant to article twenty-two [or articles twenty-two and twenty-three]
of  this chapter [or under a local law enacted pursuant to the authority
of article two-E of the general city law] and payment of a single amount
is required under the provisions of this article, such payment shall  be
deemed  to  have  been  made  with  respect  to the taxes so assessed in
proportion to the amounts of such taxes due, including  tax,  penalties,
interest and additions to tax.
  (b) If the [state tax commission] COMMISSIONER takes action under such
article  twenty-two  [or articles twenty-two and twenty-three or under a
local law enacted pursuant to the authority  of  article  two-E  of  the
general  city  law]  OF THIS CHAPTER with respect to the enforcement and
collection of the tax or taxes assessed under  such  [articles]  ARTICLE
the [state tax commission] COMMISSIONER shall, wherever possible, accom-
pany  such  action  with  a similar action under similar enforcement and
collection provisions of such city income tax.
  (c) Any moneys collected as a result of such  joint  action  shall  be
deemed  to have been collected in proportion to the amounts due, includ-
ing tax, penalties, interest and additions to tax, under  article  twen-
ty-two  [or  articles  twenty-two  and twenty-three] of this chapter and
such city income tax.
  (d) Whenever the [state tax commission] COMMISSIONER takes any  action
with  respect to a deficiency of income tax under article twenty-two [or
articles twenty-two and twenty-three] of this chapter [or under a  local
law  enacted  pursuant  to the authority of article two-E of the general
city law], other than the action set forth in subdivision  (a)  of  this
section,  it  may in its discretion accompany such action with a similar
action under such city income tax.
  S 40. Subparagraph (B) of paragraph 8 of  subsection  (i)  of  section
1456  of  the tax law, as added by section 27 of part A of chapter 56 of
the laws of 1998, is amended to read as follows:
  (B) is substantially similar in operation and in ownership to a  busi-
ness  entity  (or  entities)  taxable, or previously taxable, under this
article; section one hundred eighty-three, one hundred eighty-four[,] OR
one hundred eighty-five [or one hundred eighty-six of article  nine]  OF
THIS  CHAPTER;  article  nine-A or article thirty-three of this chapter;
[article twenty-three of this chapter or which would have  been  subject
to tax under such article twenty-three (as such article was in effect on
January  first,  nineteen  hundred eighty)] or the income (or losses) of
which is (or was) includable under article twenty-two  of  this  chapter
whereby  the  intent and purpose of this paragraph and paragraph five of
this subsection with respect to refunding  of  credit  to  new  business
would be evaded; or
  S  41.  Subparagraph  (B) of paragraph 7 of subdivision (q) of section
1511 of the tax law, as added by section 1 of part L of  chapter  63  of
the laws of 2000, is amended to read as follows:
  (B)  is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or  previously  taxable,  under  this
article; section one hundred eighty-three, one hundred eighty-four[,] OR

S. 5926                            13

one  hundred  eight-five  [or one hundred eighty-six of article nine] OF
THIS CHAPTER; article nine-A or  article  thirty-two  of  this  chapter;
[article  twenty-three  of this chapter or which would have been subject
to tax under such article twenty-three (as such article was in effect of
January  first,  nineteen  hundred eighty)] or the income (or losses) of
which is (or was) includable under article twenty-two  of  this  chapter
whereby  the  intent and purpose of this paragraph and paragraph four of
this subdivision with respect to refunding of  credit  to  new  business
would be evaded; or
  S 42. Section 1166-a of the tax law is REPEALED.
  S  43.  Section 1167 of the tax law, as amended by section 3 of part F
of chapter 25 of the laws of 2009, is amended to read as follows:
  S 1167. Deposit and disposition of revenue. All  taxes,  interest  and
penalties  collected  or received by the commissioner under this article
shall be deposited and disposed of pursuant to the provisions of section
one hundred seventy-one-a of this chapter, except that  after  reserving
amounts  in  accordance  with  such section one hundred seventy-one-a of
this chapter, the remainder shall be paid  by  the  comptroller  to  the
credit  of  the  highway  and  bridge  trust fund established by section
eighty-nine-b of the  state  finance  law[,  provided,  however,  taxes,
interest  and penalties collected or received pursuant to section eleven
hundred sixty-six-a of this article shall be paid to the credit  of  the
metropolitan transportation authority aid trust account of the metropol-
itan  transportation  authority financial assistance fund established by
section ninety-two-ff of the state finance law].
  S 44. This act shall take effect immediately; provided, however that:
  (a) the amendments to subsection (4) of section 618  of  the  tax  law
made  by section nine of this act shall be subject to the expiration and
reversion of such subsection pursuant to chapter  782  of  the  laws  of
1988,  as  amended, when upon such date the provisions of section ten of
this act shall take effect; and
  (b) the amendments to subdivision (4) of section 11-1718 of the admin-
istrative code of the city of New York made by  section  twenty-four  of
this act shall be subject to the expiration and reversion of such subdi-
vision  pursuant  to  chapter  782 of the laws of 1988, as amended, when
upon such date the provisions of section twenty-five of this  act  shall
take effect.

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