Assembly Bill A2375A

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

                                 2375--A

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 16, 2015
                               ___________

Introduced  by  M.  of A. LAVINE, McDONOUGH, SCHIMMINGER, SCHIMEL, OTIS,
  SIMANOWITZ, ZEBROWSKI, SALADINO, PERRY, RAIA, RA,  GJONAJ,  BENEDETTO,
  GUNTHER, CLARK, FAHY, ROBINSON, SKARTADOS, GRAF, HOOPER -- Multi-Spon-
  sored  by  --  M.  of A. CERETTO, COOK, FINCH, GOODELL, HEVESI, LALOR,
  PALMESANO, PEOPLES-STOKES, RIVERA, SOLAGES, THIELE --  read  once  and
  referred  to  the Committee on Small Business -- committee discharged,
  bill amended, ordered reprinted as amended  and  recommitted  to  said
  committee

AN  ACT  to  amend  the  economic  development  law  and the tax law, in
  relation to authorizing the creation of  small  business  tax-deferred
  savings accounts

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

  Section 1. The economic development law is amended  by  adding  a  new
section 139 to read as follows:
  S  139.  SMALL  BUSINESS  TAX-DEFERRED SAVINGS ACCOUNTS.   1. A "SMALL
BUSINESS TAXPAYER" OR "SMALL BUSINESS" SHALL HAVE THE  SAME  MEANING  AS
DEFINED IN SECTION ONE HUNDRED THIRTY-ONE OF THIS ARTICLE AND SHALL MEET
THE  REQUIREMENTS  OF  PARAGRAPH  (F)  OF SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN OF THE TAX LAW.
  2. ANY SMALL BUSINESS SHALL BE AUTHORIZED  TO  ESTABLISH  AND  DEPOSIT
PROFITS INTO A SMALL BUSINESS TAX-DEFERRED SAVINGS ACCOUNT.
  3.  THE  MONIES IN SUCH TAX-DEFERRED SAVINGS ACCOUNTS MAY BE DEPOSITED
OR WITHDRAWN TAX FREE WHEN THEY ARE EXPENDED FOR EXPANSION OF SUCH SMALL
BUSINESS FOR THE PURPOSE OF CREATING OR PRESERVING FULL TIME JOBS.
  4. FOR THE PURPOSES OF THIS ACT, A QUALIFYING  PURPOSE  SHALL  INCLUDE
SMALL  BUSINESS  TAXPAYER  EXPENDITURES  THAT  RESULT IN THE CREATION OR
RETENTION OF FULL-TIME JOBS. IN ADDITION, WORKING CAPITAL USED FOR OTHER
ACTIVITIES, DEEMED APPROPRIATE BY THE DEPARTMENT, WHICH WILL IMPROVE THE
COMPETITIVENESS AND PRODUCTIVITY OF A SMALL BUSINESS AND RESULTS IN  THE
CREATION OR RETENTION OF FULL-TIME JOBS SHALL BE CONSIDERED A QUALIFYING

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07416-04-5
              

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BUSINESS  EXPENDITURE.  QUALIFYING  SMALL BUSINESS TAXPAYER EXPENDITURES
FOR THE PURPOSE OF THIS SECTION SHALL INCLUDE, BUT NOT  BE  LIMITED  TO,
NEW CONSTRUCTION, RENOVATION OR LEASEHOLD IMPROVEMENTS, AND THE ACQUISI-
TION OF LAND, BUILDINGS, MACHINERY AND EQUIPMENT.
  5. THE MONIES ON DEPOSIT IN SUCH TAX-DEFERRED SAVINGS ACCOUNTS MAY NOT
EXCEED MORE THAN FIVE THOUSAND DOLLARS IN ANY TAXABLE YEAR.
  6.  ON OR BEFORE APRIL FIRST, AND ANNUALLY THEREAFTER, THE DEPARTMENT,
IN CONSULTATION WITH THE  DEPARTMENT  OF  TAXATION  AND  FINANCE,  SHALL
REPORT ON THE NUMBER OF SMALL BUSINESS TAXPAYERS UTILIZING THIS PROGRAM,
THE  AVERAGE  AGGREGATE  AMOUNT  ON  DEPOSIT,  THE  QUALIFYING  EXPENSES
CLAIMED, ANY QUALIFYING EXPENSES DEEMED INAPPROPRIATE AND ANY OTHER SUCH
DATA DEEMED NECESSARY AND APPROPRIATE BY THE DEPARTMENT.
  S 2. Section 209 of the tax law is amended by adding a new subdivision
13 to read as follows:
  13. FOR ANY TAXABLE YEAR BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
THOUSAND  SIXTEEN,  ANY SMALL BUSINESS, AS SUCH TERM IS DEFINED PURSUANT
TO SECTION ONE HUNDRED THIRTY-NINE  OF  THE  ECONOMIC  DEVELOPMENT  LAW,
SHALL  BE  EXEMPT  FROM  ALL STATE INCOME TAXES IMPOSED PURSUANT TO THIS
ARTICLE FOR ANY DEPOSIT OR WITHDRAWAL FROM A SMALL BUSINESS TAX-DEFERRED
SAVINGS ACCOUNT ESTABLISHED PURSUANT TO SECTION ONE HUNDRED  THIRTY-NINE
OF THE ECONOMIC DEVELOPMENT LAW AND USED FOR THE EXPANSION OF SUCH SMALL
BUSINESS  FOR THE PURPOSE OF CREATING OR PRESERVING FULL TIME JOBS. IF A
SMALL BUSINESS TAXPAYER FILES FOR AND RECEIVES  AN  EXEMPTION  FROM  THE
STATE  INCOME  TAX IMPOSED UNDER THIS SECTION PURSUANT TO THE PROVISIONS
OF THIS SUBDIVISION AND THE FUNDS DEPOSITED OR WITHDRAWN, OR ANY PORTION
THEREOF, ARE NOT EXPENDED FOR A  QUALIFYING  PURPOSE  AS  SET  FORTH  IN
SECTION  ONE  HUNDRED  THIRTY-NINE OF THE ECONOMIC DEVELOPMENT LAW, THEN
THE AMOUNT OF SUCH EXEMPTION CLAIMED  BY  THE  SMALL  BUSINESS  TAXPAYER
SHALL  BE  ADDED BACK TO THE AMOUNT OF STATE INCOME LIABILITY TAX IN THE
NEXT SUCCEEDING TAXABLE YEAR OR IN THE YEAR IN WHICH  THE  EXEMPTION  IS
DISALLOWED.
  S 3. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 42 to read as follows:
  (42)  ANY  DEPOSIT  OR  WITHDRAWAL  FROM A SMALL BUSINESS TAX-DEFERRED
SAVINGS ACCOUNT ESTABLISHED PURSUANT TO SECTION ONE HUNDRED  THIRTY-NINE
OF THE ECONOMIC DEVELOPMENT LAW AND USED FOR THE EXPANSION OF SUCH SMALL
BUSINESS  FOR THE PURPOSE OF CREATING OR PRESERVING FULL TIME JOBS. IF A
SMALL BUSINESS TAXPAYER FILES FOR AND RECEIVES  AN  EXEMPTION  FROM  THE
STATE  INCOME  TAX IMPOSED UNDER THIS SECTION PURSUANT TO THE PROVISIONS
OF THIS PARAGRAPH AND THE FUNDS DEPOSITED OR WITHDRAWN, OR  ANY  PORTION
THEREOF,  ARE  NOT  EXPENDED  FOR  A  QUALIFYING PURPOSE AS SET FORTH IN
SECTION ONE HUNDRED THIRTY-NINE OF THE ECONOMIC  DEVELOPMENT  LAW,  THEN
THE  AMOUNT  OF  SUCH  EXEMPTION  CLAIMED BY THE SMALL BUSINESS TAXPAYER
SHALL BE ADDED BACK TO STATE INCOME TAX IN THE NEXT  SUCCEEDING  TAXABLE
YEAR OR IN THE YEAR IN WHICH THE EXEMPTION IS DISALLOWED.
  S  4. The department of taxation and finance, in consultation with the
department of economic development, shall review and analyze all statis-
tical data available for such purposes of determining the  economic  and
revenue  impact associated with this act. Such data shall be included in
an annual report that shall also include, but not  be  limited  to,  the
number  of  small business taxpayers utilizing this program, the average
aggregate amount on deposit, the qualifying expenses claimed, any quali-
fying expenses deemed inappropriate  and  any  other  such  data  deemed
necessary and appropriate by the department. Such annual report shall be
posted on the websites of the department of taxation and finance and the
department of economic development, and transmitted to the governor, the

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temporary  president  of  the  senate,  the  senate minority leader, the
speaker of the assembly and the assembly minority leader.
  S  5. Rules and regulations. The department of taxation and finance in
consultation with the department  of  economic  development,  is  hereby
authorized  to  promulgate  rules and regulations in accordance with the
state administrative procedure act that are  necessary  to  fulfill  the
purposes  of this act. Such regulations shall include but not be limited
to deadlines for establishing a  small  business  tax  deferred  savings
account,  standard  procedures  and forms to be utilized in the program,
and any other such regulations deemed  necessary  to  promote  the  full
utilization  of  this  program.  Such  rules  and  regulations  shall be
completed within 180 days after the effective date of this chapter.
  S 6. This act shall take effect immediately.