S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10121
 
                           I N  A S S E M B L Y
 
                              March 16, 2018
                                ___________
 
 Introduced by M. of A. STIRPE -- read once and referred to the Committee
   on Ways and Means
 
 AN  ACT  to  amend the tax law, in relation to tax credits for qualified
   pass-through manufacturers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subsection (b) of section 612 of the tax law is amended by
 adding a new paragraph 43 to read as follows:
   (43) ANY INCOME, GAIN,  LOSS  AND  DEDUCTION,  TO  THE  EXTENT  IT  IS
 INCLUDED  IN  FEDERAL  ADJUSTED GROSS INCOME AND IS, COMBINED, LESS THAN
 ZERO, OF AN INDIVIDUAL OR TRUST FROM A QUALIFIED  PASS-THROUGH  MANUFAC-
 TURER,  AS  DEFINED  IN  PARAGRAPH  FORTY-FOUR OF SUBSECTION (C) OF THIS
 SECTION.
   § 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 and a new paragraph 44 is added 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  after  two thousand thirteen, 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 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.
 For the purposes of this paragraph, the term small business shall mean 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 thousand dollars. FOR THE PURPOSES
 OF THIS PARAGRAPH, THE TERM SMALL BUSINESS SHALL  EXCLUDE  ANY  BUSINESS
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD14466-03-8

 A. 10121                            2
 
 THAT  IS  A QUALIFIED PASS-THROUGH MANUFACTURER, AS DEFINED IN PARAGRAPH
 FORTY-FOUR OF THIS SUBSECTION FOR THE CURRENT TAX YEAR.
   (44)  (A) ANY INCOME, GAIN, LOSS AND DEDUCTION, TO THE EXTENT INCLUDED
 FEDERAL ADJUSTED GROSS INCOME AND IS, COMBINED, GREATER THAN ZERO, OF AN
 INDIVIDUAL OR TRUST FROM A QUALIFIED PASS-THROUGH  MANUFACTURER.  INCOME
 FROM  A  QUALIFIED PASS-THROUGH MANUFACTURER SHALL NOT INCLUDE AN AMOUNT
 REPRESENTING REASONABLE COMPENSATION FOR AN INDIVIDUAL  CONTROLLING  TEN
 PERCENT OR MORE OF THE QUALIFIED BUSINESS OR ENTITY.
   (B) THE QUALIFIED PASS-THROUGH MANUFACTURER MAY BE ORGANIZED AS A SOLE
 PROPRIETORSHIP,  A  PARTNERSHIP, A LIMITED LIABILITY COMPANY ELECTING TO
 BE TREATED AS A PARTNERSHIP OR SOLE PROPRIETORSHIP, OR AN S CORPORATION.
   (C) FOR THE PURPOSES OF THIS  SUBSECTION,  THE  TERM  QUALIFIED  PASS-
 THROUGH  MANUFACTURER SHALL MEAN A BUSINESS THAT IS A QUALIFIED NEW YORK
 MANUFACTURER, AS DEFINED BY SUBPARAGRAPH (VI) OF PARAGRAPH (A) OF SUBDI-
 VISION ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER, EXCEPT  THAT  THE
 TERM "GROSS RECEIPTS" SHALL BE REPLACED BY "BUSINESS RECEIPTS" IN DETER-
 MINING WHETHER THE BUSINESS IS "PRINCIPALLY ENGAGED" IN MANUFACTURING. A
 QUALIFIED PASS-THROUGH MANUFACTURER SHALL NOT INCLUDE A BUSINESS THAT IS
 CURRENTLY PARTICIPATING IN THE START-UP NY PROGRAM.
   §  3.  Paragraph  2 of subsection (a) of section 606 of the tax law is
 amended by adding a new subparagraph (B-1) to read as follows:
   (B-1) PROPERTY PLACED IN SERVICE DURING THE TAX YEAR THAT IS OTHERWISE
 ELIGIBLE FOR THE INVESTMENT TAX CREDIT DESCRIBED IN SUBPARAGRAPH (A)  OF
 THIS  PARAGRAPH,  WILL  NOT BE ELIGIBLE FOR THE INVESTMENT TAX CREDIT IF
 THE USE OF THE PROPERTY IS BY A QUALIFIED PASS-THROUGH MANUFACTURER,  AS
 DEFINED IN PARAGRAPH FORTY-FOUR OF SUBSECTION (C) OF SECTION SIX HUNDRED
 TWELVE OF THIS ARTICLE FOR THE CURRENT TAX YEAR.
   § 4. This act shall take effect immediately.