S T A T E O F N E W Y O R K
________________________________________________________________________
S. 4177 A. 5009
2017-2018 Regular Sessions
S E N A T E - A S S E M B L Y
February 6, 2017
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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, SCHIMMINGER, STIRPE,
BARCLAY, HAWLEY, RAIA, CROUCH, GJONAJ, CRESPO, BLAKE, COLTON, MAGNAR-
ELLI, WOERNER, CAHILL, BICHOTTE, PICHARDO, MOSLEY, McDONOUGH, RA,
MURRAY, MONTESANO, DiPIETRO, WALTER, LAWRENCE, McKEVITT, JAFFEE, OTIS,
HYNDMAN, SANTABARBARA, PALUMBO -- Multi-Sponsored by -- M. of A. COOK,
ENGLEBRIGHT, FITZPATRICK, HEVESI, MAGEE, McDONALD, McLAUGHLIN -- 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".
§ 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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04194-01-7
S. 4177 2 A. 5009
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 AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHTEEN, 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
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 EIGHTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, 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 NINETEEN, 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;
§ 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 FIFTEEN; 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 SEVENTEEN;
AN AMOUNT EQUAL TO TEN PERCENT OF THE NET ITEMS OF INCOME, GAIN, LOSS
S. 4177 3 A. 5009
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 SEVENTEEN BUT BEFORE
JANUARY FIRST, TWO THOUSAND EIGHTEEN; AN AMOUNT EQUAL TO 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 ON OR AFTER JANUARY
FIRST, TWO THOUSAND EIGHTEEN BUT BEFORE JANUARY FIRST, TWO THOUSAND
NINETEEN; AND AN AMOUNT EQUAL TO TWENTY 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 NINE-
TEEN. 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 PARAGRAPH, 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, DETER-
MINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED THIRTY-
ONE OF THIS ARTICLE AS IF THOSE PROVISIONS AND ANY RELATED PROVISIONS
EXPRESSLY REFERRED TO A COMPUTATION OF FEDERAL GROSS INCOME FROM NEW
YORK SOURCES.
§ 4. This act shall take effect immediately.