S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3424
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 23, 2017
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 
 AN ACT to amend the tax law, in relation to  eliminating  net  operating
   loss carryback deductions; and to repeal certain provisions of the tax
   law relating thereto

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 659 of the tax law, as amended by section 8 of part
 J of chapter 59 of the laws of 2014, is amended to read as follows:
   § 659. Report of federal changes, corrections or disallowances. If the
 amount of a taxpayer's federal taxable income, total taxable  amount  or
 ordinary income portion of a lump sum distribution or includible gain of
 a  trust reported on his federal income tax return for any taxable year,
 or the amount of a taxpayer's earned income credit or credit for employ-
 ment-related expenses set forth on such return, or  the  amount  of  any
 federal  foreign  tax credit affecting the calculation of the credit for
 Canadian provincial taxes  under  section  six  hundred  twenty  or  six
 hundred  twenty-A  of  this article, or the amount of any claim of right
 adjustment, is changed or corrected by the United States internal reven-
 ue service or other competent authority or as the result of a  renegoti-
 ation of a contract or subcontract with the United States, or the amount
 an  employer  is  required to deduct and withhold from wages for federal
 income tax withholding purposes is changed or corrected by such  service
 or  authority  or  if a taxpayer's claim for credit or refund of federal
 income tax is disallowed in whole or in part, the taxpayer  or  employer
 shall  report  such  change  or correction or disallowance within ninety
 days after the final determination of such change, correction, renegoti-
 ation or disallowance, or as otherwise required by the commissioner, and
 shall concede the accuracy of such determination or state wherein it  is
 erroneous. [The allowance of a tentative carryback adjustment based upon

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

                                                            LBD06624-01-7

 S. 3424                             2

 a  net  operating  loss carryback pursuant to section sixty-four hundred
 eleven of the internal revenue code shall be treated as a final determi-
 nation for purposes of this section.] Any  taxpayer  filing  an  amended
 federal  income  tax  return  and any employer filing an amended federal
 return of income tax withheld shall also file within ninety days  there-
 after an amended return under this article, and shall give such informa-
 tion as the commissioner may require. The commissioner may by regulation
 prescribe  such  exceptions to the requirements of this section as he or
 she deems appropriate. For  purposes  of  this  section,  (i)  the  term
 "taxpayer"  shall  include  a  partnership  having a resident partner or
 having any income derived from New York sources, and a corporation  with
 respect  to which the taxable year of such change, correction, disallow-
 ance or amendment is a year with respect to which the election  provided
 for in subsection (a) of section six hundred sixty of this article is in
 effect,  and (ii) the term "federal income tax return" shall include the
 returns of income required under sections six  thousand  thirty-one  and
 six  thousand  thirty-seven of the internal revenue code. In the case of
 such a corporation,  such  report  shall  also  include  any  change  or
 correction  of  the  taxes  described  in  paragraphs  two  and three of
 subsection (f) of section thirteen hundred  sixty-six  of  the  internal
 revenue code. Reports made under this section by a partnership or corpo-
 ration  shall indicate the portion of the change in each item of income,
 gain, loss or deduction (and, in the case  of  a  corporation,  of  each
 change  in,  or  disallowance  of a claim for credit or refund of, a tax
 referred to in the preceding sentence)  allocable  to  each  partner  or
 shareholder  and  shall  set  forth  such  identifying  information with
 respect to such partner or shareholder  as  may  be  prescribed  by  the
 commissioner.
   §  2.  Subsection  (a)  of  section 1087 of the tax law, as amended by
 section 9 of part H of chapter 1 of the laws of 2003, is amended to read
 as follows:
   (a) General.--Claim for credit or refund  of  an  overpayment  of  tax
 under  article  nine or nine-A shall be filed by the taxpayer within (i)
 three years from the time the return was filed, (ii) two years from  the
 time  the  tax  was paid or (iii) in the case of any overpayment arising
 from an erroneous denial by the department of environmental conservation
 of a certification of completion pursuant  to  section  27-1419  of  the
 environmental conservation law, two years from the time a final determi-
 nation  to  the  effect that such denial was erroneous is made and is no
 longer subject to judicial review, whichever of such periods expires the
 latest, or if no return was filed, within two years from  the  time  the
 tax  was  paid.  If the claim is filed within the three year period, the
 amount of the credit or refund shall not exceed the portion of  the  tax
 paid  within  the  three  years  immediately preceding the filing of the
 claim plus the period of any extension of time for filing the return. If
 the claim is not filed within the three year period, but is filed within
 the two year period, the amount of the credit or refund shall not exceed
 the portion of the tax paid during the two years  immediately  preceding
 the  filing  of  the  claim. In the case of a claim for credit or refund
 filed  within  the  period  prescribed  in  paragraph  (iii)   of   this
 subsection, the amount of the credit or refund may exceed the portion of
 the  tax  paid  within  the applicable period specified in the two imme-
 diately preceding sentences, but only to the extent of the amount of the
 overpayment attributable to  the  denial  described  in  such  paragraph
 (iii).  Except  as  otherwise  provided  in this section, if no claim is
 filed, the amount of a credit or refund  shall  not  exceed  the  amount

 S. 3424                             3
 
 which would be allowable if a claim had been filed on the date the cred-
 it  or  refund  is allowed. For special restriction in a proceeding on a
 claim for refund of tax paid pursuant to an assessment made as a  result
 of  (i)  [a  net  operating loss carryback or capital loss carryback, or
 (ii)] an increase or decrease in federal taxable income or federal  tax,
 or  [(iii)]  (II)  a  federal  change or correction or renegotiation, or
 computation or recomputation of tax, which is treated in the same manner
 as if it were a deficiency for federal income tax  purposes,  see  para-
 graph  [(7)]  SEVEN  of  subsection  (c) of section one thousand eighty-
 three.
   § 3. Subsection (b) of section 1089 of the  tax  law,  as  amended  by
 chapter 55 of the laws of 1982, is amended to read as follows:
   (b)  Petition  for  redetermination  of  a deficiency.---Within ninety
 days, or one hundred fifty days if the notice is addressed to a taxpayer
 whose last known address is outside of  the  United  States,  after  the
 mailing  of  the notice of deficiency authorized by section one thousand
 eighty-one, the taxpayer may file a petition with the tax commission for
 a redetermination of the deficiency. Such petition  may  also  assert  a
 claim  for  refund  for  the  same taxable year or years, subject to the
 limitations of subsection (g) of section one thousand eighty-seven.  For
 special restriction where the notice of deficiency relates to a proposed
 assessment  made  as  a result of (i) [a net operating loss carryback or
 capital loss carryback, (ii)] an increase or decrease in federal taxable
 income or federal tax, or [(iii)] (II) a federal change or correction or
 renegotiation, or computation or recomputation of tax, which is  treated
 in  the  same  manner  as if it were a deficiency for federal income tax
 purposes, see paragraph [(7)] SEVEN of subsection  (c)  of  section  one
 thousand eighty-three.
   § 4. Subdivision 3 of section 211 of the tax law is REPEALED.
   § 5. Subdivision (e) of section 213-b of the tax law is REPEALED.
   §  6.  Paragraph 3 of subdivision (a) of section 292 of the tax law is
 REPEALED.
   § 7. Paragraph 4 of subsection (b) of section 631 of the  tax  law  is
 REPEALED.
   § 8. Subsection (b) of section 633 of the tax law is REPEALED.
   §  9.  Paragraph  4 of subsection (c) of section 683 of the tax law is
 REPEALED.
   § 10. Subsection (e) of section 684 of the tax law is REPEALED.
   § 11. Subsection (d) of section 687 of the tax law is REPEALED.
   § 12. Paragraph 4 of subsection (c) of section 1083 of the tax law  is
 REPEALED.
   § 13. Subsection (e) of section 1084 of the tax law is REPEALED.
   § 14. Subsection (d) of section 1088 of the tax law is REPEALED.
   § 15. Paragraph 4 of subdivision (b) of section 1503 of the tax law is
 REPEALED.
   § 16. Paragraph 1 of subdivision (e) of section 1515 of the tax law is
 REPEALED.
   §  17.  This  act  shall  take effect on the one hundred eightieth day
 after it shall have become a law.