S T A T E O F N E W Y O R K
________________________________________________________________________
7863--A
2017-2018 Regular Sessions
I N A S S E M B L Y
May 17, 2017
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Introduced by M. of A. FARRELL -- read once and referred to the Commit-
tee on Ways and Means -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the administrative code of the city of New York, in
relation to the taxation of business corporations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 11-640 of the administrative code of the city of
New York is amended by adding a new subdivision (n) to read as follows:
(N) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT.
(1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
OTHER THAN SUBDIVISION (M) OF THIS SECTION, A CORPORATION THAT WAS IN
EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN AND WAS SUBJECT
TO TAX UNDER SUBCHAPTER TWO OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR
BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN, SHALL CONTINUE
TO BE TAXABLE UNDER SUCH SUBCHAPTER FOR ALL TAXABLE YEARS BEGINNING ON
OR AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN AND BEFORE JANUARY FIRST,
TWO THOUSAND TWENTY. THE PRECEDING SENTENCE SHALL NOT APPLY TO ANY TAXA-
BLE YEAR DURING WHICH SUCH CORPORATION IS A BANKING CORPORATION
DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF SUBDIVISION (A) OF THIS
SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECTION OTHER THAN SUBDIVISION (M) OF THIS SECTION, A BANKING CORPO-
RATION OR CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO
THOUSAND SEVENTEEN AND WAS SUBJECT TO TAX UNDER THIS SUBCHAPTER FOR ITS
LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND SEVEN-
TEEN, SHALL CONTINUE TO BE TAXABLE UNDER THIS SUBCHAPTER FOR ALL TAXABLE
YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN AND
BEFORE JANUARY FIRST, TWO THOUSAND TWENTY ONLY IF THE CORPORATION IS A
BANKING CORPORATION AS DEFINED IN SUBDIVISION (A) OF THIS SECTION OR THE
CORPORATION SATISFIES THE REQUIREMENTS FOR A CORPORATION TO ELECT TO BE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11821-02-7
A. 7863--A 2
TAXABLE UNDER THIS SUBCHAPTER. PROVIDED FURTHER, THAT NOTHING IN THIS
SUBDIVISION SHALL PROHIBIT A CORPORATION THAT ELECTED PURSUANT TO SUBDI-
VISION (D) OF THIS SECTION TO BE TAXABLE UNDER SUBCHAPTER TWO OF THIS
CHAPTER FROM REVOKING THAT ELECTION IN ACCORDANCE WITH SUBDIVISION (D)
OF THIS SECTION.
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER SUBCHAPTER TWO OF THIS CHAPTER FOR A TAXABLE
YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
A COMBINED REPORT FILED PURSUANT TO SUBDIVISION FOUR OF SECTION 11-605
OF THIS CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSID-
ERED TO BE SUBJECT TO TAX UNDER THIS SUBCHAPTER FOR A TAXABLE YEAR IF
SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A
COMBINED REPORT FILED PURSUANT TO SUBDIVISION (F) OR (G) OF SECTION
11-646 OF THIS PART FOR SUCH TAXABLE YEAR. A CORPORATION THAT WAS IN
EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN BUT FIRST BECOMES
A TAXPAYER IN A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND SEVENTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND TWENTY, SHALL
BE CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
UNDER SUBCHAPTER TWO OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN IF SUCH CORPORATION WOULD
HAVE BEEN SUBJECT TO TAX UNDER SUCH SUBCHAPTER FOR SUCH TAXABLE YEAR IF
IT HAD BEEN A TAXPAYER DURING SUCH TAXABLE YEAR. A CORPORATION THAT WAS
IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN BUT FIRST
BECOMES A TAXPAYER IN A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY
FIRST, TWO THOUSAND SEVENTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND
TWENTY, SHALL BE CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN
SUBJECT TO TAX UNDER THIS SUBCHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN IF SUCH CORPORATION WOULD
HAVE BEEN SUBJECT TO TAX UNDER THIS SUBCHAPTER FOR SUCH TAXABLE YEAR IF
IT HAD BEEN A TAXPAYER DURING SUCH TAXABLE YEAR.
(2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
OTHER THAN SUBDIVISION (M) OF THIS SECTION, A CORPORATION FORMED ON OR
AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN AND BEFORE JANUARY FIRST,
TWO THOUSAND TWENTY MAY ELECT TO BE SUBJECT TO TAX UNDER THIS SUBCHAPTER
OR UNDER SUBCHAPTER TWO OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN AND BEFORE
JANUARY FIRST, TWO THOUSAND TWENTY IN WHICH EITHER (I) SIXTY-FIVE
PERCENT OR MORE OF ITS VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR
INDIRECTLY BY A FINANCIAL HOLDING COMPANY, PROVIDED THE CORPORATION
WHOSE VOTING STOCK IS SO OWNED OR CONTROLLED IS PRINCIPALLY ENGAGED IN
ACTIVITIES THAT ARE DESCRIBED IN SECTION 4(K)(4) OR 4(K)(5) OF THE
FEDERAL BANK HOLDING COMPANY ACT OF NINETEEN HUNDRED FIFTY-SIX, AS
AMENDED, AND THE REGULATIONS PROMULGATED PURSUANT TO THE AUTHORITY OF
SUCH SECTION OR (II) IT IS A FINANCIAL SUBSIDIARY. AN ELECTION UNDER
THIS PARAGRAPH MAY NOT BE MADE BY A CORPORATION DESCRIBED IN PARAGRAPHS
ONE THROUGH EIGHT OF SUBDIVISION (A) OF THIS SECTION OR IN SUBDIVISION
(E) OF THIS SECTION. IN ADDITION, AN ELECTION UNDER THIS PARAGRAPH MAY
NOT BE MADE BY A CORPORATION THAT IS A PARTY TO A REORGANIZATION, AS
DEFINED IN SUBSECTION (A) OF SECTION 368 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, OF A CORPORATION DESCRIBED IN PARAGRAPH ONE OF THIS
SUBDIVISION IF BOTH CORPORATIONS WERE SIXTY-FIVE PERCENT OR MORE OWNED
OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTERESTS AT THE TIME
OF THE REORGANIZATION.
AN ELECTION UNDER THIS PARAGRAPH MUSH BE MADE BY THE TAXPAYER ON OR
BEFORE THE DUE DATE FOR FILING ITS RETURN (DETERMINED WITH REGARD TO
EXTENSIONS OF TIME FOR FILING) FOR THE APPLICABLE TAXABLE YEAR. THE
A. 7863--A 3
ELECTION TO BE TAXED UNDER SUBCHAPTER TWO OF THIS CHAPTER SHALL BE MADE
BY THE TAXPAYER BY FILING THE RETURN REQUIRED PURSUANT TO SUBDIVISION
ONE OF SECTION 11-605 OF THIS CHAPTER AND THE ELECTION TO BE TAXED UNDER
THIS SUBCHAPTER SHALL BE MADE BY THE TAXPAYER BY FILING THE RETURN
REQUIRED PURSUANT TO SUBDIVISION (A) OF SECTION 11-646 OF THIS PART. ANY
ELECTION MADE PURSUANT TO THIS PARAGRAPH SHALL BE IRREVOCABLE AND SHALL
APPLY TO EACH SUBSEQUENT TAXABLE YEAR BEGINNING ON OR AFTER JANUARY
FIRST, TWO THOUSAND SEVENTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND
TWENTY, PROVIDED THAT THE STOCK OWNERSHIP AND ACTIVITIES REQUIREMENTS
DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE MET OR SUCH CORPO-
RATION DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH CONTINUES AS A
FINANCIAL SUBSIDIARY.
(3) FOR PURPOSES OF THIS SUBDIVISION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBDIVISION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
ACT. FOR PURPOSES OF THIS SUBCHAPTER, THE TERM "BANKING CORPORATION"
SHALL INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS SUBCHAPTER
PURSUANT TO PARAGRAPH TWO OF THIS SUBDIVISION FOR SO LONG AS SUCH
ELECTION SHALL BE IN EFFECT.
§ 2. Subparagraph (iv) of paragraph 2 of subdivision (f) of section
11-646 of the administrative code of the city of New York, as amended by
section 111 of part A of chapter 59 of the laws of 2014, is amended to
read as follows:
(iv) (A) Notwithstanding any provision of this paragraph, any bank
holding company exercising its corporate franchise or doing business in
the city may make a return on a combined basis without seeking the
permission of the commissioner with any banking corporation exercising
its corporate franchise or doing business in the city in a corporate or
organized capacity sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by such bank holding compa-
ny, for the first taxable year beginning on or after January first, two
thousand and before January first, two thousand [seventeen] TWENTY
during which such bank holding company registers for the first time
under the federal bank holding company act, as amended, and also elects
to be a financial holding company. In addition, for each subsequent
taxable year beginning after January first, two thousand and before
January first, two thousand [seventeen] TWENTY, any such bank holding
company may file on a combined basis without seeking the permission of
the commissioner with any banking corporation that is exercising its
corporate franchise or doing business in the city and sixty-five percent
or more of whose voting stock is owned or controlled, directly or indi-
rectly, by such bank holding company if either such banking corporation
is exercising its corporate franchise or doing business in the city in a
corporate or organized capacity for the first time during such subse-
quent taxable year, or sixty-five percent or more of the voting stock of
such banking corporation is owned or controlled, directly or indirectly,
by such bank holding company for the first time during such subsequent
taxable year. Provided however, for each subsequent taxable year begin-
ning after January first, two thousand and before January first, two
thousand [seventeen] TWENTY, a banking corporation described in either
of the two preceding sentences which filed on a combined basis with any
such bank holding company in a previous taxable year, must continue to
file on a combined basis with such bank holding company if such banking
A. 7863--A 4
corporation, during such subsequent taxable year, continues to exercise
its corporate franchise or do business in the city in a corporate or
organized capacity and sixty-five percent or more of such banking corpo-
ration's voting stock continues to be owned or controlled, directly or
indirectly, by such bank holding company, unless the permission of the
commissioner has been obtained to file on a separate basis for such
subsequent taxable year. Provided further, however, for each subsequent
taxable year beginning after January first, two thousand and before
January first, two thousand [seventeen] TWENTY, a banking corporation
described in either of the first two sentences of this clause which did
not file on a combined basis with any such bank holding company in a
previous taxable year, may not file on a combined basis with such bank
holding company during any such subsequent taxable year unless the
permission of the commissioner has been obtained to file on a combined
basis for such subsequent taxable year.
(B) Notwithstanding any provision of this paragraph other than clause
(A) of this subparagraph, the commissioner may not require a bank hold-
ing company which, during a taxable year beginning on or after January
first, two thousand and before January first, two thousand [seventeen]
TWENTY, registers for the first time during such taxable year under the
federal bank holding company act, as amended, and also elects to be a
financial holding company, to make a return on a combined basis for any
taxable year beginning on or after January first, two thousand and
before January first, two thousand [seventeen] TWENTY with a banking
corporation sixty-five percent or more of whose voting stock is owned or
controlled, directly or indirectly, by such bank holding company.
§ 3. This act shall take effect immediately.