NY State Senate Bill S4376A

Archive: Last Bill Status - Passed Senate

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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Actions

view actions (16)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 24, 2016	referred to ways and means delivered to assembly passed senate
May 23, 2016	ordered to third reading cal.990 committee discharged and committed to rules
Mar 30, 2016	print number 4376a
Mar 30, 2016	amend and recommit to investigations and government operations
Jan 06, 2016	referred to investigations and government operations returned to senate died in assembly
Jun 11, 2015	referred to ways and means delivered to assembly passed senate ordered to third reading cal.1516 committee discharged and committed to rules
Mar 17, 2015	referred to investigations and government operations

Votes

Bill Amendments

Original

A (Active)

Original

A (Active)

Co-Sponsors

S4376 - Details

See Assembly Version of this Bill:: A6031
Law Section:: Tax Law
Laws Affected:: Add §42, amd §§209 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S3557, A3434
2019-2020: S3163, A6706, A7693
2021-2022: S702, A4824
2023-2024: A2087

S4376 - Summary

Relates to small business savings accounts; provides tax incentives for contributions and distributions.

S4376 - Sponsor Memo

BILL NUMBER:S4376

TITLE OF BILL:  An act to amend the tax law, in relation to
establishing small business savings accounts

PURPOSE:

This bill would allow small businesses to make contributions into a
small business tax-deferred savings account to which the monies in
such account may be withdrawn tax free during times of specified
economic hardship, for the purpose of job retention or creation, or
times where the Governor deems it a natural disaster to warrant
assistance from the federal government.

SUMMARY OF PROVISIONS:

Tax law is amended by adding a new section 42 requiring the
commissioner to set minimum standards in establishing small business
savings accounts while seeking to minimize fees, minimize risk of loss
of principal, and ensure a range of investment risk options available
to account beneficiaries. This section defines qualified contributions
and qualified distributions from these saving accounts.  The aggregate
amount of contributions for any taxable year shall not exceed an
amount equal to 10% of the gross profits of the business for the
preceding taxable year. Qualified Distributions from a small business
savings account shall not be includible in gross income. Any amounts

distributed out of the small business savings account that are not
qualified distributions shall be included in gross income for the
taxable year of the distribution. Qualified Distributions as defined
by this section are distributed during a specified period of economic
hardship, distributions that are certified by the taxpayer as part of
a plan which provides for the reinvestment of such distribution for
the funding of worker hiring or financial stabilization for the
purposes of job retention or creation, and distributions during a
period where the Governor deems it a natural disaster to warrant
assistance from the federal government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act. In addition this section
states that any amount contributed to a small business savings account
once distributed shall not be treated as a qualified distribution
unless such distribution is made no later than eight years after the
date of contribution.

Section 209 of the tax law is amended by adding a new subdivision 13
claims that for any taxable year beginning on or after January 1 2016
any eligible small business pursuant to section 42 shall be exempt
from imposed taxes for any contribution to and qualified distribution
from a small business savings account. If a taxpayer files and
receives funds that aren't considered qualified then the amount exempt
will be added back to the tax in the next succeeding taxable year.
Subsection c of section 612 of the tax law is amended by adding a new
paragraph 42 stating that if a taxpayer files for and receives
exemptions from the tax imposed under this section that are not
considered to be a qualified contribution to or a qualified
distribution from a small business savings account then the amount of
any such exemption claimed shall be added back to the tax in the next
succeeding taxable year.


JUSTIFICATION:

More than 170,000 small businesses were lost after the economic
downturn of 2008 and many that survived are still having trouble
obtaining loans and credit to help them stay open. This bill seeks to
serve as a remedy for the challenges that small businesses face
accessing credit to pay their bills by encouraging them to put money
into a special savings account that can be used tax-free in times of
economic hardship, for the purposes of job retention or creation, and
during natural disasters.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

This act shall take effect immediately and shall apply to taxable
years beginning after such date.

S4376 - Bill Text download pdf

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

                                  4376

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             March 17, 2015
                               ___________

Introduced  by  Sen. MARTINS -- 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 establishing small  business
  savings accounts

  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 "savings accounts for a variable economy (SAVE) for small businesses
act".
  S  2.  The  tax  law  is amended by adding a new section 42 to read as
follows:
  S 42. SMALL BUSINESS SAVINGS ACCOUNTS. (A) GENERAL.  (1)  THE  COMMIS-
SIONER  SHALL ESTABLISH   A PROGRAM TO ADMINISTER SMALL BUSINESS SAVINGS
ACCOUNTS UNDER THIS SECTION.
  (2) THE COMMISSIONER SHALL ESTABLISH MINIMUM STANDARDS FOR SMALL BUSI-
NESS SAVINGS ACCOUNTS AND SHALL ESTABLISH ACCOUNTS, OR ENTER INTO AGREE-
MENTS THAT MEET THESE STANDARDS TO ADMINISTER SUCH ACCOUNTS.  IN  ESTAB-
LISHING  SUCH  STANDARDS  AND  MAKING  SUCH  AGREEMENTS THE COMMISSIONER
SHALL, TO THE EXTENT PRACTICABLE, SEEK TO MINIMIZE FEES,  MINIMIZE  RISK
OF  LOSS  OF  PRINCIPAL,  AND  ENSURE A RANGE OF INVESTMENT RISK OPTIONS
AVAILABLE TO ACCOUNT BENEFICIARIES.  ANY  ELIGIBLE  SMALL  BUSINESS  MAY
ESTABLISH A SMALL BUSINESS SAVINGS ACCOUNT WITH RESPECT TO SUCH BUSINESS
UNDER TERMS WHICH MEET THE REQUIREMENTS OF THIS SECTION.
  (B)  DEFINITION.  FOR  THE  PURPOSES  OF THIS SECTION, THE TERM "SMALL
BUSINESS SAVINGS ACCOUNT" MEANS A TAX PREFERRED SAVINGS ACCOUNT WHICH IS
DESIGNATED AT THE TIME OF ESTABLISHMENT OF THE PLAN AS A SMALL  BUSINESS
SAVINGS  ACCOUNT.  SUCH  DESIGNATION SHALL BE MADE IN SUCH MANNER AS THE
COMMISSIONER MAY BY REGULATION PRESCRIBE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09675-01-5

S. 4376                             2

  (C) CONTRIBUTIONS. (1) THERE SHALL BE ALLOWED AS A DEDUCTION AN AMOUNT
EQUAL TO THE CONTRIBUTIONS TO A SMALL BUSINESS SAVINGS ACCOUNT  FOR  THE
TAXABLE YEAR.
  (2)  THE AGGREGATE AMOUNT OF CONTRIBUTIONS FOR ANY TAXABLE YEAR TO ALL
SMALL BUSINESS SAVINGS ACCOUNTS MAINTAINED FOR THE BENEFIT OF AN  ELIGI-
BLE  SMALL  BUSINESS  SHALL NOT EXCEED AN AMOUNT EQUAL TO TEN PERCENT OF
THE GROSS PROFITS OF THE BUSINESS FOR THE PRECEDING TAXABLE YEAR.
  (D) DISTRIBUTIONS. (1) ANY QUALIFIED DISTRIBUTION FROM A  SMALL  BUSI-
NESS SAVINGS ACCOUNT SHALL NOT BE INCLUDIBLE IN GROSS INCOME.
  (2)  ANY  AMOUNTS  DISTRIBUTED OUT OF A SMALL BUSINESS SAVINGS ACCOUNT
THAT ARE NOT QUALIFIED DISTRIBUTIONS SHALL BE INCLUDED IN  GROSS  INCOME
FOR THE TAXABLE YEAR OF THE DISTRIBUTION.
  (3) FOR PURPOSES OF THIS SECTION:
  (A) THE TERM "QUALIFIED DISTRIBUTION" MEANS ANY AMOUNT:
  (I)  DISTRIBUTED FROM A SMALL BUSINESS SAVINGS ACCOUNT DURING A SPECI-
FIED PERIOD OF ECONOMIC HARDSHIP; AND
  (II) THE DISTRIBUTION OF WHICH IS CERTIFIED BY THE TAXPAYER AS PART OF
A PLAN WHICH PROVIDES FOR THE REINVESTMENT OF SUCH DISTRIBUTION FOR  THE
FUNDING  OF WORKER HIRING OR FINANCIAL STABILIZATION FOR THE PURPOSES OF
JOB RETENTION OR CREATION.
  (B) THE TERM "SPECIFIED PERIOD OF ECONOMIC HARDSHIP" MEANS:
  (I) ANY ONE-YEAR PERIOD BEGINNING IMMEDIATELY AFTER THE END OF ANY TWO
CONSECUTIVE QUARTERS DURING WHICH THE ANNUAL RATE OF REAL GROSS DOMESTIC
PRODUCT (AS DETERMINED BY THE BUREAU OF ECONOMIC ANALYSIS OF THE DEPART-
MENT OF COMMERCE) DECREASES, OR
  (II) ANY PERIOD, IN NO EVENT SHORTER THAN ONE YEAR, SPECIFIED  BY  THE
COMMISSIONER FOR PURPOSES OF THIS SECTION.
  (C) THE COMMISSIONER MAY SPECIFY A PERIOD UNDER CLAUSE (II) OF SUBPAR-
AGRAPH  (B)  OF  THIS  PARAGRAPH WITH RESPECT TO A SPECIFIED AREA IN THE
CASE OF AN AREA DETERMINED BY THE GOVERNOR TO  WARRANT  ASSISTANCE  FROM
THE  FEDERAL GOVERNMENT UNDER THE ROBERT T. STAFFORD DISASTER RELIEF AND
EMERGENCY ASSISTANCE ACT.
  (D) THE COMMISSIONER SHALL, FOR  EACH  SPECIFIED  PERIOD  OF  ECONOMIC
HARDSHIP ESTABLISH A DISTRIBUTION LIMITATION FOR QUALIFIED DISTRIBUTIONS
FROM  ELIGIBLE  SMALL BUSINESS ACCOUNTS WITH RESPECT TO SUCH PERIOD. THE
AGGREGATE QUALIFIED DISTRIBUTIONS FOR ANY SUCH PERIOD FROM ALL  ACCOUNTS
WITH RESPECT TO AN ELIGIBLE SMALL BUSINESS SHALL NOT EXCEED SUCH LIMITA-
TION.
  (E)  ANY  DISTRIBUTION NOT USED IN THE MANNER CERTIFIED UNDER SUBPARA-
GRAPH (A) OF THIS PARAGRAPH SHALL BE TREATED  AS  A  DISTRIBUTION  OTHER
THAN A QUALIFIED DISTRIBUTION IN THE TAXABLE YEAR OF SUCH DISTRIBUTION.
  (F)  ANY  AMOUNT  CONTRIBUTED TO A SMALL BUSINESS SAVINGS ACCOUNT (AND
ANY EARNINGS ATTRIBUTABLE  THERETO),  ONCE  DISTRIBUTED,  SHALL  NOT  BE
TREATED AS A QUALIFIED DISTRIBUTION UNLESS SUCH DISTRIBUTION IS MADE NOT
LATER THAN EIGHT YEARS AFTER THE DATE OF SUCH CONTRIBUTION. FOR PURPOSES
OF  THIS  SUBPARAGRAPH,  AMOUNTS (AND THE EARNINGS ATTRIBUTABLE THERETO)
SHALL BE TREATED AS DISTRIBUTED ON A FIRST-IN FIRST-OUT BASIS.
  (E) ELIGIBLE SMALL BUSINESS. FOR PURPOSES OF THIS SECTION:
  (1) THE TERM "ELIGIBLE SMALL BUSINESS"  MEANS,  WITH  RESPECT  TO  ANY
CALENDAR  YEAR,  ANY  PERSON  IF  THE ANNUAL AVERAGE NUMBER OF FULL-TIME
EMPLOYEES EMPLOYED BY SUCH PERSON DURING THE PRECEDING CALENDAR YEAR WAS
FIFTY OR FEWER. FOR PURPOSES OF THIS  PARAGRAPH,  A  PRECEDING  CALENDAR
YEAR  MAY  BE  TAKEN  INTO  ACCOUNT  ONLY IF THE PERSON WAS IN EXISTENCE
THROUGHOUT THE YEAR.

S. 4376                             3

  (2)(A) THE TERM "FULL-TIME EMPLOYEE" MEANS, WITH RESPECT TO ANY  YEAR,
AN  EMPLOYEE  WHO IS EMPLOYED ON AVERAGE AT LEAST FORTY HOURS OF SERVICE
PER WEEK.
  (B)  THE  COMMISSIONER  SHALL  PRESCRIBE  SUCH REGULATIONS, RULES, AND
GUIDANCE AS MAY BE NECESSARY TO DETERMINE THE HOURS  OF  SERVICE  OF  AN
EMPLOYEE,  INCLUDING  RULES  FOR  THE APPLICATION OF THIS SUBDIVISION TO
EMPLOYEES WHO ARE NOT COMPENSATED ON AN HOURLY BASIS.
  (F) EFFECT OF PLEDGING ACCOUNT AS SECURITY.  IF,  DURING  ANY  TAXABLE
YEAR  OF  THE  ELIGIBLE  SMALL  BUSINESS FOR WHOSE BENEFIT AN ACCOUNT IS
ESTABLISHED, THE ACCOUNT OR ANY PORTION THEREOF IS PLEDGED  AS  SECURITY
FOR  A LOAN, THE PORTION SO PLEDGED SHALL BE TREATED AS DISTRIBUTED IN A
DISTRIBUTION OTHER THAN A QUALIFIED DISTRIBUTION.
  S 3. 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 ELIGIBLE SMALL BUSINESS, AS SUCH TERM IS DEFINED
PURSUANT TO SECTION FORTY-TWO OF THIS CHAPTER, SHALL BE EXEMPT FROM  ALL
TAXES IMPOSED PURSUANT TO THIS ARTICLE FOR ANY CONTRIBUTION TO AND QUAL-
IFIED  DISTRIBUTION  FROM  A  SMALL BUSINESS SAVINGS ACCOUNT ESTABLISHED
PURSUANT TO SECTION FORTY-TWO OF THIS CHAPTER, SUBJECT TO THE LIMITS SET
FORTH IN SUCH SECTION. IF A TAXPAYER FILES FOR AND RECEIVES AN EXEMPTION
FROM THE TAX IMPOSED UNDER THIS SECTION PURSUANT TO  THE  PROVISIONS  OF
THIS  SUBDIVISION  AND  THE FUNDS WITHDRAWN, OR ANY PORTION THEREOF, ARE
NOT EXPENDED FOR A QUALIFYING PURPOSE AS SET FORTH IN SECTION  FORTY-TWO
OF  THIS  CHAPTER,  THEN  THE  AMOUNT  OF  SUCH EXEMPTION CLAIMED BY THE
TAXPAYER SHALL BE ADDED BACK TO TAX IN THE NEXT SUCCEEDING TAXABLE  YEAR
OR IN THE YEAR IN WHICH THE EXEMPTION IS DISALLOWED.
  S 4. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 42 to read as follows:
  (42) ANY QUALIFIED CONTRIBUTION TO AND ANY QUALIFIED DISTRIBUTION FROM
A  SMALL BUSINESS SAVINGS ACCOUNT ESTABLISHED PURSUANT TO SECTION FORTY-
TWO OF THIS CHAPTER. IF A TAXPAYER FILES FOR AND RECEIVES  AN  EXEMPTION
FROM  THE  TAX  IMPOSED UNDER THIS SECTION PURSUANT TO THE PROVISIONS OF
THIS PARAGRAPH AND ARE NOT A QUALIFYING CONTRIBUTION OR DISTRIBUTION  AS
SET  FORTH  IN SECTION FORTY-TWO OF THIS CHAPTER, THEN THE AMOUNT OF ANY
SUCH EXEMPTION CLAIMED BY THE TAXPAYER SHALL BE ADDED BACK TO TAX IN THE
NEXT SUCCEEDING TAXABLE YEAR.
  S 5. This act shall take effect immediately and shall apply to taxable
years beginning after such date.

Co-Sponsors

S4376A (ACTIVE) - Details

See Assembly Version of this Bill:: A6031
Law Section:: Tax Law
Laws Affected:: Add §42, amd §§209 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S3557, A3434
2019-2020: S3163, A6706, A7693
2021-2022: S702, A4824
2023-2024: A2087

S4376A (ACTIVE) - Summary

Relates to small business savings accounts; provides tax incentives for contributions and distributions.

S4376A (ACTIVE) - Sponsor Memo

 BILL NUMBER:  S4376A

 TITLE OF BILL :

An act to amend the tax law, in relation to establishing small
business savings accounts

 PURPOSE :

This bill would allow small businesses to make contributions into a
small business tax-deferred savings account to which the monies in
such account may be withdrawn tax free during times of specified
economic hardship, for the purpose of job retention or creation, or
times where the Governor deems it a natural disaster to warrant
assistance from the federal government.

 SUMMARY OF PROVISIONS :

Tax law is amended by adding a new section 42 requiring the
commissioner to set minimum standards in establishing small business
savings accounts while seeking to minimize fees, minimize risk of loss
of principal, and ensure a range of investment risk options available
to account beneficiaries. This section defines qualified contributions
and qualified distributions from these saving accounts.  The aggregate
amount of contributions for any taxable year shall not exceed an
amount equal to 10% of the gross profits of the business for the

preceding taxable year. Qualified Distributions from a small business
savings account shall not be includible in gross income. Any amounts
distributed out of the small business savings account that are not
qualified distributions shall be included in gross income for the
taxable year of the distribution. Qualified Distributions as defined
by this section are distributed during a specified period of economic
hardship, distributions that are certified by the taxpayer as part of
a plan which provides for the reinvestment of such distribution for
the funding of worker hiring or financial stabilization for the
purposes of job retention or creation, and distributions during a
period where the Governor deems it a natural disaster to warrant
assistance from the federal government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act. In addition this section
states that any amount contributed to a small business savings account
once distributed shall not be treated as a qualified distribution
unless such distribution is made no later than eight years after the
date of contribution.

Section 209 of the tax law is amended by adding a new subdivision 13
claims that for any taxable year beginning on or after January 1 2016
any eligible small business pursuant to section 42 shall be exempt
from imposed taxes for any contribution to and qualified distribution
from a small business savings account. If a taxpayer files and
receives funds that aren't considered qualified then the amount exempt
will be added back to the tax in the next succeeding taxable year.

Subsection c of section 612 of the tax law is amended by adding a new
paragraph 42 stating that if a taxpayer files for and receives
exemptions from the tax imposed under this section that are not
considered to be a qualified contribution to or a qualified
distribution from a small business savings account then the amount of
any such exemption claimed shall be added back to the tax in the next
succeeding taxable year.

 JUSTIFICATION :

More than 170,000 small businesses were lost after the economic
downturn of 2008 and many that survived are still having trouble
obtaining loans and credit to help them stay open. This bill seeks to
serve as a remedy for the challenges that small businesses face
accessing credit to pay their bills by encouraging them to put money
into a special savings account that can be used tax-free in times of
economic hardship, for the purposes of job retention or creation, and
during natural disasters.

 LEGISLATIVE HISTORY :

This is a new bill.

 FISCAL IMPLICATIONS :

To be determined.

 EFFECTIVE DATE :
This act shall take effect immediately and shall apply to taxable
years beginning after such date.

S4376A (ACTIVE) - Bill Text download pdf

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

                                 4376--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             March 17, 2015
                               ___________

Introduced  by  Sens.  MARTINS,  CARLUCCI,  MARCHIONE  -- read twice and
  ordered printed, and when printed to be committed to the Committee  on
  Investigations and Government Operations -- recommitted to the Commit-
  tee  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 establishing small business
  savings accounts

  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 "savings accounts for a variable economy (SAVE) for small businesses
act".
  S 2. The tax law is amended by adding a new  section  42  to  read  as
follows:
  S  42.  SMALL  BUSINESS SAVINGS ACCOUNTS. (A) GENERAL. (1) THE COMMIS-
SIONER SHALL ESTABLISH  A PROGRAM TO ADMINISTER SMALL  BUSINESS  SAVINGS
ACCOUNTS UNDER THIS SECTION.
  (2) THE COMMISSIONER SHALL ESTABLISH MINIMUM STANDARDS FOR SMALL BUSI-
NESS SAVINGS ACCOUNTS AND SHALL ESTABLISH ACCOUNTS, OR ENTER INTO AGREE-
MENTS  THAT  MEET THESE STANDARDS TO ADMINISTER SUCH ACCOUNTS. IN ESTAB-
LISHING SUCH STANDARDS  AND  MAKING  SUCH  AGREEMENTS  THE  COMMISSIONER
SHALL,  TO  THE EXTENT PRACTICABLE, SEEK TO MINIMIZE FEES, MINIMIZE RISK
OF LOSS OF PRINCIPAL, AND ENSURE A  RANGE  OF  INVESTMENT  RISK  OPTIONS
AVAILABLE  TO  ACCOUNT  BENEFICIARIES.  ANY  ELIGIBLE SMALL BUSINESS MAY
ESTABLISH A SMALL BUSINESS SAVINGS ACCOUNT WITH RESPECT TO SUCH BUSINESS
UNDER TERMS WHICH MEET THE REQUIREMENTS OF THIS SECTION.
  (B) DEFINITION. FOR THE PURPOSES OF  THIS  SECTION,  THE  TERM  "SMALL
BUSINESS SAVINGS ACCOUNT" MEANS A TAX PREFERRED SAVINGS ACCOUNT WHICH IS
DESIGNATED  AT THE TIME OF ESTABLISHMENT OF THE PLAN AS A SMALL BUSINESS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09675-02-6

S. 4376--A                          2

SAVINGS ACCOUNT. SUCH DESIGNATION SHALL BE MADE IN SUCH  MANNER  AS  THE
COMMISSIONER MAY BY REGULATION PRESCRIBE.
  (C) CONTRIBUTIONS. (1) THERE SHALL BE ALLOWED AS A DEDUCTION AN AMOUNT
EQUAL  TO  THE CONTRIBUTIONS TO A SMALL BUSINESS SAVINGS ACCOUNT FOR THE
TAXABLE YEAR.
  (2) THE AGGREGATE AMOUNT OF CONTRIBUTIONS FOR ANY TAXABLE YEAR TO  ALL
SMALL  BUSINESS SAVINGS ACCOUNTS MAINTAINED FOR THE BENEFIT OF AN ELIGI-
BLE SMALL BUSINESS SHALL NOT EXCEED AN AMOUNT EQUAL TO  TEN  PERCENT  OF
THE GROSS PROFITS OF THE BUSINESS FOR THE PRECEDING TAXABLE YEAR.
  (D)  DISTRIBUTIONS.  (1) ANY QUALIFIED DISTRIBUTION FROM A SMALL BUSI-
NESS SAVINGS ACCOUNT SHALL NOT BE INCLUDIBLE IN GROSS INCOME.
  (2) ANY AMOUNTS DISTRIBUTED OUT OF A SMALL  BUSINESS  SAVINGS  ACCOUNT
THAT  ARE  NOT QUALIFIED DISTRIBUTIONS SHALL BE INCLUDED IN GROSS INCOME
FOR THE TAXABLE YEAR OF THE DISTRIBUTION.
  (3) FOR PURPOSES OF THIS SECTION:
  (A) THE TERM "QUALIFIED DISTRIBUTION" MEANS ANY AMOUNT:
  (I) DISTRIBUTED FROM A SMALL BUSINESS SAVINGS ACCOUNT DURING A  SPECI-
FIED PERIOD OF ECONOMIC HARDSHIP; AND
  (II) THE DISTRIBUTION OF WHICH IS CERTIFIED BY THE TAXPAYER AS PART OF
A  PLAN WHICH PROVIDES FOR THE REINVESTMENT OF SUCH DISTRIBUTION FOR THE
FUNDING OF WORKER HIRING OR FINANCIAL STABILIZATION FOR THE PURPOSES  OF
JOB RETENTION OR CREATION.
  (B) THE TERM "SPECIFIED PERIOD OF ECONOMIC HARDSHIP" MEANS:
  (I) ANY ONE-YEAR PERIOD BEGINNING IMMEDIATELY AFTER THE END OF ANY TWO
CONSECUTIVE QUARTERS DURING WHICH THE ANNUAL RATE OF REAL GROSS DOMESTIC
PRODUCT (AS DETERMINED BY THE BUREAU OF ECONOMIC ANALYSIS OF THE DEPART-
MENT OF COMMERCE) DECREASES, OR
  (II)  ANY  PERIOD, IN NO EVENT SHORTER THAN ONE YEAR, SPECIFIED BY THE
COMMISSIONER FOR PURPOSES OF THIS SECTION.
  (C) THE COMMISSIONER MAY SPECIFY A PERIOD UNDER CLAUSE (II) OF SUBPAR-
AGRAPH (B) OF THIS PARAGRAPH WITH RESPECT TO A  SPECIFIED  AREA  IN  THE
CASE  OF  AN  AREA DETERMINED BY THE GOVERNOR TO WARRANT ASSISTANCE FROM
THE FEDERAL GOVERNMENT UNDER THE ROBERT T. STAFFORD DISASTER RELIEF  AND
EMERGENCY ASSISTANCE ACT.
  (D)  THE  COMMISSIONER  SHALL,  FOR  EACH SPECIFIED PERIOD OF ECONOMIC
HARDSHIP ESTABLISH A DISTRIBUTION LIMITATION FOR QUALIFIED DISTRIBUTIONS
FROM ELIGIBLE SMALL BUSINESS ACCOUNTS WITH RESPECT TO SUCH  PERIOD.  THE
AGGREGATE  QUALIFIED DISTRIBUTIONS FOR ANY SUCH PERIOD FROM ALL ACCOUNTS
WITH RESPECT TO AN ELIGIBLE SMALL BUSINESS SHALL NOT EXCEED SUCH LIMITA-
TION.
  (E) ANY DISTRIBUTION NOT USED IN THE MANNER CERTIFIED  UNDER  SUBPARA-
GRAPH  (A)  OF  THIS  PARAGRAPH SHALL BE TREATED AS A DISTRIBUTION OTHER
THAN A QUALIFIED DISTRIBUTION IN THE TAXABLE YEAR OF SUCH DISTRIBUTION.
  (F) ANY AMOUNT CONTRIBUTED TO A SMALL BUSINESS  SAVINGS  ACCOUNT  (AND
ANY  EARNINGS  ATTRIBUTABLE  THERETO),  ONCE  DISTRIBUTED,  SHALL NOT BE
TREATED AS A QUALIFIED DISTRIBUTION UNLESS SUCH DISTRIBUTION IS MADE NOT
LATER THAN EIGHT YEARS AFTER THE DATE OF SUCH CONTRIBUTION. FOR PURPOSES
OF THIS SUBPARAGRAPH, AMOUNTS (AND THE  EARNINGS  ATTRIBUTABLE  THERETO)
SHALL BE TREATED AS DISTRIBUTED ON A FIRST-IN FIRST-OUT BASIS.
  (E) ELIGIBLE SMALL BUSINESS. FOR PURPOSES OF THIS SECTION:
  (1)  THE  TERM  "ELIGIBLE  SMALL  BUSINESS" MEANS, WITH RESPECT TO ANY
CALENDAR YEAR, ANY PERSON IF THE  ANNUAL  AVERAGE  NUMBER  OF  FULL-TIME
EMPLOYEES EMPLOYED BY SUCH PERSON DURING THE PRECEDING CALENDAR YEAR WAS
FIFTY  OR  FEWER.  FOR  PURPOSES OF THIS PARAGRAPH, A PRECEDING CALENDAR
YEAR MAY BE TAKEN INTO ACCOUNT ONLY  IF  THE  PERSON  WAS  IN  EXISTENCE
THROUGHOUT THE YEAR.

S. 4376--A                          3

  (2)(A)  THE TERM "FULL-TIME EMPLOYEE" MEANS, WITH RESPECT TO ANY YEAR,
AN EMPLOYEE WHO IS EMPLOYED ON AVERAGE AT LEAST FORTY HOURS  OF  SERVICE
PER WEEK.
  (B)  THE  COMMISSIONER  SHALL  PRESCRIBE  SUCH REGULATIONS, RULES, AND
GUIDANCE AS MAY BE NECESSARY TO DETERMINE THE HOURS  OF  SERVICE  OF  AN
EMPLOYEE,  INCLUDING  RULES  FOR  THE APPLICATION OF THIS SUBDIVISION TO
EMPLOYEES WHO ARE NOT COMPENSATED ON AN HOURLY BASIS.
  (F) EFFECT OF PLEDGING ACCOUNT AS SECURITY.  IF,  DURING  ANY  TAXABLE
YEAR  OF  THE  ELIGIBLE  SMALL  BUSINESS FOR WHOSE BENEFIT AN ACCOUNT IS
ESTABLISHED, THE ACCOUNT OR ANY PORTION THEREOF IS PLEDGED  AS  SECURITY
FOR  A LOAN, THE PORTION SO PLEDGED SHALL BE TREATED AS DISTRIBUTED IN A
DISTRIBUTION OTHER THAN A QUALIFIED DISTRIBUTION.
  S 3. 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 ELIGIBLE SMALL BUSINESS, AS SUCH TERM IS DEFINED
PURSUANT TO SECTION FORTY-TWO OF THIS CHAPTER, SHALL BE EXEMPT FROM  ALL
TAXES IMPOSED PURSUANT TO THIS ARTICLE FOR ANY CONTRIBUTION TO AND QUAL-
IFIED  DISTRIBUTION  FROM  A  SMALL BUSINESS SAVINGS ACCOUNT ESTABLISHED
PURSUANT TO SECTION FORTY-TWO OF THIS CHAPTER, SUBJECT TO THE LIMITS SET
FORTH IN SUCH SECTION. IF A TAXPAYER FILES FOR AND RECEIVES AN EXEMPTION
FROM THE TAX IMPOSED UNDER THIS SECTION PURSUANT TO  THE  PROVISIONS  OF
THIS  SUBDIVISION  AND  THE FUNDS WITHDRAWN, OR ANY PORTION THEREOF, ARE
NOT EXPENDED FOR A QUALIFYING PURPOSE AS SET FORTH IN SECTION  FORTY-TWO
OF  THIS  CHAPTER,  THEN  THE  AMOUNT  OF  SUCH EXEMPTION CLAIMED BY THE
TAXPAYER SHALL BE ADDED BACK TO TAX IN THE NEXT SUCCEEDING TAXABLE  YEAR
OR IN THE YEAR IN WHICH THE EXEMPTION IS DISALLOWED.
  S 4. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 44 to read as follows:
  (44) ANY QUALIFIED CONTRIBUTION TO AND ANY QUALIFIED DISTRIBUTION FROM
A  SMALL BUSINESS SAVINGS ACCOUNT ESTABLISHED PURSUANT TO SECTION FORTY-
TWO OF THIS CHAPTER. IF A TAXPAYER FILES FOR AND RECEIVES  AN  EXEMPTION
FROM  THE  TAX  IMPOSED UNDER THIS SECTION PURSUANT TO THE PROVISIONS OF
THIS PARAGRAPH AND ARE NOT A QUALIFYING CONTRIBUTION OR DISTRIBUTION  AS
SET  FORTH  IN SECTION FORTY-TWO OF THIS CHAPTER, THEN THE AMOUNT OF ANY
SUCH EXEMPTION CLAIMED BY THE TAXPAYER SHALL BE ADDED BACK TO TAX IN THE
NEXT SUCCEEDING TAXABLE YEAR.
  S 5. This act shall take effect immediately and shall apply to taxable
years beginning after such date.

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The New York State Senate

senate Bill S4376A

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Archive: Last Bill Status - Passed Senate

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Votes

May 24, 2016 - floor Vote

Floor Vote: May 24, 2016

May 23, 2016 - Rules committee Vote

Rules Committee Vote: May 23, 2016

Jun 11, 2015 - floor Vote

Floor Vote: Jun 11, 2015

Jun 11, 2015 - Rules committee Vote

Committee Vote: Jun 11, 2015

Bill Amendments

Co-Sponsors

S4376 - Details

S4376 - Summary

S4376 - Sponsor Memo

S4376 - Bill Text download pdf

Co-Sponsors

S4376A (ACTIVE) - Details

S4376A (ACTIVE) - Summary

S4376A (ACTIVE) - Sponsor Memo

S4376A (ACTIVE) - Bill Text download pdf

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senate Bill S4376A

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Sponsored By

Jack M. Martins

Archive: Last Bill Status - Passed Senate

Your Voice

Actions

Votes

May 24, 2016 - floor Vote

Floor Vote: May 24, 2016

May 23, 2016 - Rules committee Vote

Rules Committee Vote: May 23, 2016

Jun 11, 2015 - floor Vote

Floor Vote: Jun 11, 2015

Jun 11, 2015 - Rules committee Vote

Committee Vote: Jun 11, 2015

Bill Amendments

Co-Sponsors

David Carlucci

Kathleen A. Marchione

S4376 - Details

S4376 - Summary

S4376 - Sponsor Memo

S4376 - Bill Text download pdf

Co-Sponsors

David Carlucci

Kathleen A. Marchione

S4376A (ACTIVE) - Details

S4376A (ACTIVE) - Summary

S4376A (ACTIVE) - Sponsor Memo

S4376A (ACTIVE) - Bill Text download pdf

Comments