S T A T E   O F   N E W   Y O R K
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     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
                                ___________
 
 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.