The New York State Senate

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

                                  7235

                            I N  S E N A T E

                              April 8, 2016
                               ___________

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

AN ACT to amend the tax law and the administrative code of the  city  of
  New  York, in relation to business income base and certain small busi-
  ness taxpayers

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

  Section  1.  Subparagraph  (iv)  of  paragraph (a) of subdivision 1 of
section 210 of the tax law, as amended by section 12 of part A of  chap-
ter 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  SEVENTEEN,  IF  THE  BUSINESS  INCOME  BASE  IS NOT MORE THAN FOUR
HUNDRED THOUSAND DOLLARS THE AMOUNT SHALL BE FOUR PERCENT OF  THE  BUSI-
NESS  INCOME BASE; IF THE BUSINESS INCOME BASE IS MORE THAN FOUR HUNDRED
THOUSAND DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS  THE  AMOUNT
SHALL  BE  THE SUM OF (1) SIXTEEN THOUSAND DOLLARS, (2) SIX AND ONE-HALF
PERCENT OF THE EXCESS OF THE BUSINESS  INCOME  BASE  OVER  FOUR  HUNDRED
THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE HUNDRED THOUSAND DOLLARS AND (3)
TWENTY PERCENT OF THE EXCESS OF  THE  BUSINESS  INCOME  BASE  OVER  FOUR
HUNDRED  FIFTY  THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE HUNDRED THOUSAND
DOLLARS;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14973-01-6

S. 7235                             2

  (C) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,  TWO  THOU-
SAND EIGHTEEN, IF THE BUSINESS INCOME BASE IS NOT MORE THAN FOUR 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  FOUR
HUNDRED  THOUSAND DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS THE
AMOUNT SHALL BE THE SUM  OF  (1)  TEN  THOUSAND  DOLLARS,  (2)  SIX  AND
ONE-HALF  PERCENT  OF  THE  EXCESS OF THE BUSINESS INCOME BASE OVER FOUR
HUNDRED THOUSAND DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS  AND
(3)  THIRTY-TWO  PERCENT  OF THE EXCESS OF THE BUSINESS INCOME BASE OVER
FOUR HUNDRED FIFTY THOUSAND DOLLARS BUT NOT OVER FIVE  HUNDRED  THOUSAND
DOLLARS.
  S  2. 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)  (A)  In  the  case  of  a  taxpayer who is a small business OR A
TAXPAYER WHO IS A MEMBER, PARTNER, OR SHAREHOLDER OF A LIMITED LIABILITY
COMPANY, PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY, THAT IS A
SMALL BUSINESS, who OR WHICH has business income [and/or farm income] as
defined in the laws of the United States, an  amount  equal  to  [three]
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 after
two thousand [thirteen] SIXTEEN, an amount equal to  [three  and  three-
quarters]  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 after two thousand [fourteen] SEVENTEEN, and  an  amount  equal  to
[five]  FIFTEEN  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 after two thousand fifteen].
  (B) IN THE CASE OF A TAXPAYER WHO IS A FARM BUSINESS OR A TAXPAYER WHO
IS  A  MEMBER,  PARTNER,  OR SHAREHOLDER OF A LIMITED LIABILITY COMPANY,
PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY,  THAT  IS  A  FARM
BUSINESS,  WHO  OR  WHICH  HAS FARM INCOME AS DEFINED BY THE LAWS OF THE
UNITED STATES, AN AMOUNT EQUAL TO TWENTY PERCENT OF  THE  NET  ITEMS  OF
INCOME,  GAIN,  LOSS  AND  DEDUCTION ATTRIBUTABLE TO SUCH FARM. THE TERM
FARM BUSINESS SHALL MEAN A FARM BUSINESS THAT HAS  NET  FARM  INCOME  OF
LESS THAN FIVE HUNDRED THOUSAND DOLLARS.
  (C)  (I)  For  the purposes of this paragraph, the term small business
shall mean: (I) a sole proprietor [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 less than [two hundred fifty] FIVE HUNDRED thou-
sand  dollars;  OR  (II) A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW
YORK S CORPORATION THAT DURING THE TAXABLE YEAR HAS NEW YORK GROSS BUSI-
NESS INCOME ATTRIBUTABLE TO A NON-FARM BUSINESS  THAT  IS  GREATER  THAN
ZERO BUT LESS THAN ONE MILLION FIVE HUNDRED THOUSAND DOLLARS OR NET FARM
INCOME  ATTRIBUTABLE  TO  A  FARM BUSINESS THAT IS GREATER THAN ZERO BUT
LESS THAN FIVE HUNDRED THOUSAND DOLLARS. (II) FOR PURPOSES OF THIS PARA-
GRAPH, THE TERM NEW YORK GROSS BUSINESS INCOME SHALL MEAN:  (I)  IN  THE
CASE  OF  A  LIMITED LIABILITY COMPANY OR A PARTNERSHIP, NEW YORK SOURCE
GROSS INCOME AS DEFINED  IN  SUBPARAGRAPH  (B)  OF  PARAGRAPH  THREE  OF
SUBSECTION  (C) OF SECTION SIX HUNDRED FIFTY-EIGHT OF THIS ARTICLE, AND,
(II) IN THE CASE OF A NEW YORK S CORPORATION, NEW YORK RECEIPTS INCLUDED
IN THE NUMERATOR OF THE APPORTIONMENT FACTOR  DETERMINED  UNDER  SECTION
TWO HUNDRED TEN-A OF THIS CHAPTER FOR THE TAXABLE YEAR.

S. 7235                             3

  (D)  TO  QUALIFY FOR THIS MODIFICATION IN RELATION TO A NON-FARM SMALL
BUSINESS THAT IS A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW YORK  S
CORPORATION,  THE  TAXPAYER'S  INCOME  ATTRIBUTABLE  TO THE NET BUSINESS
INCOME FROM ITS OWNERSHIP INTERESTS IN NON-FARM LIMITED LIABILITY COMPA-
NIES,  PARTNERSHIPS  OR  NEW  YORK S CORPORATIONS MUST BE LESS THAN FIVE
HUNDRED THOUSAND DOLLARS.
  S 3. Paragraph 35 of subdivision (c) of section 11-1712 of the  admin-
istrative  code of the city of New York, as added by section 2 of part Y
of chapter 59 of the laws of 2013, is amended to read as follows:
  (35) (A) In the case of a taxpayer  who  is  a  small  business  OR  A
TAXPAYER WHO IS A MEMBER, PARTNER, OR SHAREHOLDER OF A LIMITED LIABILITY
COMPANY, PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY, THAT IS A
SMALL BUSINESS, who OR WHICH has business income [and/or farm income] as
defined  in  the  laws  of the United States, an amount equal to [three]
FIFTEEN 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 after
two thousand thirteen, an  amount  equal  to  three  and  three-quarters
percent  of  the net items of income, gain, loss and deduction attribut-
able to such business or  farm  entering  into  federal  adjusted  gross
income,  but  not  less than zero, for taxable years beginning after two
thousand fourteen, and 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 after two thousand fifteen].
  (B) IN THE CASE OF A TAXPAYER WHO IS A FARM BUSINESS OR A TAXPAYER WHO
IS  A  MEMBER,  PARTNER,  OR SHAREHOLDER OF A LIMITED LIABILITY COMPANY,
PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY,  THAT  IS  A  FARM
BUSINESS,  WHO  OR  WHICH  HAS FARM INCOME AS DEFINED BY THE LAWS OF THE
UNITED STATES, AN AMOUNT EQUAL TO TWENTY PERCENT OF  THE  NET  ITEMS  OF
INCOME,  GAIN,  LOSS  AND  DEDUCTION ATTRIBUTABLE TO SUCH FARM. THE TERM
FARM BUSINESS SHALL MEAN A FARM BUSINESS THAT HAS  NET  FARM  INCOME  OF
LESS THAN FIVE HUNDRED THOUSAND DOLLARS.
  (C)  (I)  For  the purposes of this paragraph, the term small business
shall mean: (I) a sole proprietor [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 less than [two hundred fifty] FIVE HUNDRED thou-
sand  dollars;  OR  (II) A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW
YORK S CORPORATION THAT DURING THE TAXABLE YEAR HAS NEW YORK GROSS BUSI-
NESS INCOME ATTRIBUTABLE TO A NON-FARM BUSINESS  THAT  IS  GREATER  THAN
ZERO BUT LESS THAN ONE MILLION FIVE HUNDRED THOUSAND DOLLARS OR NET FARM
INCOME  ATTRIBUTABLE  TO  A  FARM BUSINESS THAT IS GREATER THAN ZERO BUT
LESS THAN FIVE HUNDRED THOUSAND DOLLARS. (II) FOR PURPOSES OF THIS PARA-
GRAPH, THE TERM NEW YORK GROSS BUSINESS INCOME SHALL MEAN:  (I)  IN  THE
CASE  OF  A  LIMITED LIABILITY COMPANY OR A PARTNERSHIP, NEW YORK SOURCE
GROSS INCOME AS DEFINED  IN  SUBPARAGRAPH  (B)  OF  PARAGRAPH  THREE  OF
SUBSECTION  (C)  OF SECTION SIX HUNDRED FIFTY-EIGHT OF THE TAX LAW, AND,
(II) IN THE CASE OF A NEW YORK S CORPORATION, NEW YORK RECEIPTS INCLUDED
IN THE NUMERATOR OF THE APPORTIONMENT FACTOR  DETERMINED  UNDER  SECTION
TWO HUNDRED TEN-A OF THE TAX LAW FOR THE TAXABLE YEAR.
  (D)  TO  QUALIFY FOR THIS MODIFICATION IN RELATION TO A NON-FARM SMALL
BUSINESS THAT IS A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW YORK  S
CORPORATION,  THE  TAXPAYER'S  INCOME  ATTRIBUTABLE  TO THE NET BUSINESS
INCOME FROM ITS OWNERSHIP INTERESTS IN NON-FARM LIMITED LIABILITY COMPA-
NIES, PARTNERSHIPS OR NEW YORK S CORPORATIONS MUST  BE  LESS  THAN  FIVE
HUNDRED THOUSAND DOLLARS.

S. 7235                             4

  S 4. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2017.