Senate Bill S7667

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

    S. 7667                                                 A. 10139

                      S E N A T E - A S S E M B L Y

                              May 12, 2016
                               ___________

IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
  ed,  and  when  printed  to  be committed to the Committee on Investi-
  gations and Government Operations

IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once  and  referred
  to the Committee on Ways and Means

AN  ACT  to  amend  the tax law, in relation to the business income base
  rate and certain small business taxpayers

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

  Section  1.  Short title.  This act shall be known and may be cited as
the "small business tax reform act".
  S 2. Subparagraph (iv) of paragraph (a) of subdivision  1  of  section
210  of the tax law, as amended by section 12 of part A of chapter 59 of
the laws of 2014, is amended to read as follows:
  (iv) (A) for taxable years beginning before January first,  two  thou-
sand  sixteen,  if the business income base is not more than two hundred
ninety thousand dollars the amount shall be six and one-half percent  of
the  business  income base; if the business income base is more than two
hundred ninety thousand dollars but not over three hundred ninety  thou-
sand  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  business  income  base over two hundred ninety thousand dollars but
not over three hundred ninety thousand dollars and (3) four and  thirty-
five  hundredths  percent of the excess of the business income base over
three hundred fifty thousand dollars but not over three  hundred  ninety
thousand dollars;
  (B)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND SIXTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND  SEVENTEEN,  IF  THE
BUSINESS  INCOME BASE IS NOT MORE THAN FIVE HUNDRED THOUSAND DOLLARS THE
AMOUNT SHALL BE THREE AND ONE-QUARTER PERCENT  OF  THE  BUSINESS  INCOME
BASE;  IF  THE  BUSINESS  INCOME BASE IS MORE THAN FIVE HUNDRED THOUSAND
DOLLARS BUT NOT OVER SIX HUNDRED THOUSAND DOLLARS THE  AMOUNT  SHALL  BE
THE  SUM  OF (1) SIXTEEN THOUSAND TWO HUNDRED FIFTY DOLLARS, (2) SIX AND

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

                                                           LBD15209-01-6

S. 7667                             2                           A. 10139

ONE-HALF PERCENT OF THE EXCESS OF THE BUSINESS  INCOME  BASE  OVER  FIVE
HUNDRED  THOUSAND  DOLLARS BUT NOT OVER SIX HUNDRED THOUSAND DOLLARS AND
(3) THIRTY-TWO AND ONE-HALF PERCENT OF THE EXCESS OF THE BUSINESS INCOME
BASE  OVER  FIVE HUNDRED FIFTY THOUSAND DOLLARS BUT NOT OVER SIX HUNDRED
THOUSAND DOLLARS;
  (C) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,  TWO  THOU-
SAND  SEVENTEEN  AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN, IF THE
BUSINESS INCOME BASE IS NOT MORE THAN FIVE HUNDRED THOUSAND DOLLARS  THE
AMOUNT SHALL BE TWO AND NINE-TENTHS PERCENT OF THE BUSINESS INCOME BASE;
IF  THE  BUSINESS INCOME BASE IS MORE THAN FIVE HUNDRED THOUSAND DOLLARS
BUT NOT OVER SIX HUNDRED THOUSAND DOLLARS THE AMOUNT SHALL BE THE SUM OF
(1) FOURTEEN THOUSAND FIVE HUNDRED DOLLARS, (2) SIX AND ONE-HALF PERCENT
OF THE EXCESS OF THE BUSINESS INCOME BASE  OVER  FIVE  HUNDRED  THOUSAND
DOLLARS  BUT  NOT  OVER  SIX HUNDRED THOUSAND DOLLARS AND (3) THIRTY-SIX
PERCENT OF THE EXCESS OF THE BUSINESS  INCOME  BASE  OVER  FIVE  HUNDRED
FIFTY THOUSAND DOLLARS BUT NOT OVER SIX HUNDRED THOUSAND DOLLARS;
  (D)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND EIGHTEEN, IF THE BUSINESS INCOME BASE IS NOT MORE THAN FIVE HUNDRED
THOUSAND DOLLARS THE AMOUNT SHALL BE TWO AND  ONE-HALF  PERCENT  OF  THE
BUSINESS  INCOME  BASE;  IF  THE  BUSINESS INCOME BASE IS MORE THAN FIVE
HUNDRED THOUSAND DOLLARS BUT NOT OVER SIX HUNDRED THOUSAND  DOLLARS  THE
AMOUNT SHALL BE THE SUM OF (1) TWELVE THOUSAND FIVE DOLLARS, (2) SIX AND
ONE-HALF  PERCENT  OF  THE  EXCESS OF THE BUSINESS INCOME BASE OVER FIVE
HUNDRED THOUSAND DOLLARS BUT NOT OVER SIX HUNDRED THOUSAND  DOLLARS  AND
(3)  FORTY  PERCENT  OF THE EXCESS OF THE BUSINESS INCOME BASE OVER FOUR
HUNDRED FIFTY THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE  HUNDRED  THOUSAND
DOLLARS;
  S  3. Paragraph 39 of subsection (c) of section 612 of the tax law, as
added by section 1 of part Y of chapter 59  of  the  laws  of  2013,  is
amended to read as follows:
  (39)  In  the case of a taxpayer who is a small business who has busi-
ness income and/or farm income as defined in  the  laws  of  the  United
States,  an  amount  equal  to three percent of the net items of income,
gain, loss and deduction attributable to such business or farm  entering
into  federal adjusted gross income, but not less than zero, for taxable
years beginning ON OR after JANUARY FIRST, two thousand thirteen[,]  BUT
BEFORE  JANUARY  FIRST,  TWO THOUSAND FOURTEEN; an amount equal to three
and three-quarters percent of the net items of income,  gain,  loss  and
deduction  attributable  to  such business or farm entering into federal
adjusted gross income, but not less than zero, for taxable years  begin-
ning  ON OR after JANUARY FIRST, two thousand fourteen[, and] BUT BEFORE
JANUARY FIRST, TWO THOUSAND FIFTEEN; an amount equal to five percent  of
the  net  items of income, gain, loss and deduction attributable to such
business or farm entering into federal adjusted gross  income,  but  not
less  than  zero, for taxable years beginning ON OR after JANUARY FIRST,
two thousand fifteen BUT BEFORE JANUARY FIRST, TWO THOUSAND SIXTEEN;  AN
AMOUNT  EQUAL  TO TEN PERCENT OF THE NET ITEMS OF INCOME, GAIN, LOSS AND
DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM  ENTERING  INTO  FEDERAL
ADJUSTED  GROSS INCOME, BUT NOT LESS THAN ZERO, FOR TAXABLE YEARS BEGIN-
NING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN BUT BEFORE  JANUARY
FIRST, TWO THOUSAND SEVENTEEN; AN AMOUNT EQUAL TO FIFTEEN PERCENT OF THE
NET ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO SUCH BUSI-
NESS  OR  FARM ENTERING INTO FEDERAL ADJUSTED GROSS INCOME, BUT NOT LESS
THAN ZERO, FOR TAXABLE YEARS BEGINNING ON OR AFTER  JANUARY  FIRST,  TWO
THOUSAND  SEVENTEEN BUT BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN; AND
AN AMOUNT EQUAL TO TWENTY PERCENT OF THE NET ITEMS OF INCOME, GAIN, LOSS

S. 7667                             3                           A. 10139

AND DEDUCTION ATTRIBUTABLE TO SUCH BUSINESS OR FARM ENTERING INTO FEDER-
AL ADJUSTED GROSS INCOME, BUT NOT LESS  THAN  ZERO,  FOR  TAXABLE  YEARS
BEGINNING  ON  OR  AFTER JANUARY FIRST, TWO THOUSAND EIGHTEEN.  PROVIDED
THAT  SUCH BUSINESS OR FARM INCOME IS LESS THAN OR EQUAL TO FIVE HUNDRED
THOUSAND DOLLARS.  For the purposes of this paragraph,  the  term  small
business  shall mean a [sole proprietor] BUSINESS or a farm business who
employs one or more persons during the taxable  year  and  who  has  net
business income or net farm income of EQUAL TO OR less than [two hundred
fifty]  FIVE  HUNDRED  thousand  dollars. FOR THE PURPOSES OF THIS PARA-
GRAPH, IF THE TAXPAYER IS A MEMBER, PARTNER, OR SHAREHOLDER OF A LIMITED
LIABILITY COMPANY, PARTNERSHIP OR S-CORPORATION, THE TAXPAYER WILL  ONLY
BE  ELIGIBLE UNDER THIS PARAGRAPH IF THE NEW YORK SOURCE GROSS INCOME OF
THE LIMITED LIABILITY COMPANY, PARTNERSHIP  OR  S-CORPORATION  DOES  NOT
EXCEED  ONE MILLION DOLLARS.  NEW YORK SOURCE GROSS INCOME IS THE SUM OF
THE MEMBERS, PARTNERS, OR SHAREHOLDERS SHARES OF  FEDERAL  GROSS  INCOME
FROM  THE  LIMITED  LIABILITY  COMPANY,  PARTNERSHIP,  OR  S-CORPORATION
DERIVED FROM OR CONNECTED WITH NEW YORK SOURCES, DETERMINED  IN  ACCORD-
ANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED THIRTY-ONE OF THIS ARTI-
CLE AS IF THOSE PROVISIONS AND ANY RELATED PROVISIONS EXPRESSLY REFERRED
TO A COMPUTATION OF FEDERAL GROSS INCOME FROM NEW YORK SOURCES.
  S 4. This act shall take effect immediately.