NY State Senate Bill 2017-S7561A

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 14, 2018	referred to ways and means delivered to assembly passed senate ordered to third reading cal.1796 committee discharged and committed to rules
Feb 13, 2018	print number 7561a
Feb 13, 2018	amend and recommit to investigations and government operations
Jan 25, 2018	referred to investigations and government operations

Votes

- Jun 14, 2018 - Floor Vote
  S7561A
  
  55
  
  Aye
  
  4
  
  Nay
  
  0
  
  Absent
  
  4
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 14, 2018
      
      aye (55)
      
      Addabbo Jr.
      
      Akshar
      
      Alcantara
      
      Amedore
      
      Avella
      
      Bailey
      
      Benjamin
      
      Bonacic
      
      Boyle
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Comrie
      
      DeFrancisco
      
      Dilan
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Hamilton
      
      Hannon
      
      Helming
      
      Jacobs
      
      Kaminsky
      
      Kennedy
      
      Klein
      
      Lanza
      
      Larkin
      
      Little
      
      Marcellino
      
      Marchione
      
      Mayer
      
      Montgomery
      
      Murphy
      
      O'Mara
      
      Ortt
      
      Parker
      
      Peralta
      
      Persaud
      
      Phillips
      
      Ranzenhofer
      
      Ritchie
      
      Robach
      
      Sanders Jr.
      
      Savino
      
      Serino
      
      Seward
      
      Stavisky
      
      Stewart-Cousins
      
      Tedisco
      
      Valesky
      
      Young
      
      nay (4)
      
      Hoylman-Sigal
      
      Kavanagh
      
      Krueger
      
      Rivera
      
      excused (4)
      
      Croci
      
      LaValle
      
      Sepúlveda
      
      Serrano
  Jun 14, 2018 - Rules Committee Vote
  S7561A
  
  19
  
  Aye
  
  2
  
  Nay
  
  4
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 14, 2018
      
      aye (19)
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Flanagan
      
      Gianaris
      
      Griffo
      
      Hannon
      
      Klein
      
      Lanza
      
      Larkin
      
      Little
      
      Marcellino
      
      Ranzenhofer
      
      Robach
      
      Savino
      
      Seward
      
      Stewart-Cousins
      
      Valesky
      
      Young
      
      nay (2)
      
      Krueger
      
      Parker
      
      aye wr (4)
      
      Dilan
      
      Kennedy
      
      Montgomery
      
      Rivera

Bill Amendments

Original

A (Active)

co-Sponsors

View additional co-sponsors

2017-S7561 - Details

See Assembly Version of this Bill:: A10121
Current Committee:: Assembly Ways And Means
Law Section:: Tax Law
Laws Affected:: Amd §§612 & 606, Tax L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S1596, A636
2021-2022: A3734
2023-2024: A4168

2017-S7561 - Summary

Relates to tax credits for qualified pass-through manufacturers; provides a definition for qualified pass-through manufacturers.

2017-S7561 - Sponsor Memo

                                
 
BILL NUMBER: S7561

SPONSOR: O'MARA
 
TITLE OF BILL:  An act to amend the tax law, in relation to tax cred-
its for qualified pass-through manufacturers

 
PURPOSE OR GENERAL IDEA OF BILL:

To extend the corporate franchise tax zero percent rate to all manufac-
turers located in New York State.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one - amends subsection (b) of section 612 of the tax law by
adding a new paragraph 43 to extend the corporate franchise tax zero
percent rate to qualified pass-through manufacturers

Section two - amends 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, by adding a new paragraph 44 to define qualified pass-through
manufacturer

Section three - amends paragraph 2 of subsection (a) of section 606 of
the tax law by adding a new subparagraph (B-1) to disallow duplicity of
certain tax deductions and credits

Section four - contains the effective date

 
JUSTIFICATION:

In 2014, a zero percent corporate franchise tax rate was enacted for
manufacturers organized as C corps. This accounted for only 25% of
manufacturers in New York State. While this was a significant help to
those manufacturers, it left 75% of manufactures still paying the higher
rate, putting them at a competitive disadvantage with manufacturers
located in states with no income tax.

This legislation would extend the zero percent Corporate Franchise Tax
rate to all manufacturers in New York State regardless of how they are
organized. The proposed changes lower the income tax rate to zero for NY
pass-through manufacturers by: creating a "NY modification" that
subtracts the income, or adds back a loss (if any); disallowing any
Investment Tax Credits for affected entities/taxpayers; disallowing the
existing 5% subtraction modification for small businesses (for affected
entities/taxpayers); and disallowing a resident credit for taxes payable
to another state (not applicable if NY tax is zero).

According to a study conducted by The Beacon Hill Institute in November
2017, "the elimination of the PIT for pass-through manufacturers would
increase private sector jobs by 3,455 the first full-year and by 4,850
in 2022. The increase in economic activity sparked by extending the
zero-percent tax rate to income from pass-through manufacturers would
mitigate the loss of revenue to New York State and boost local tax
collections.

Enacting this proposal could catapult New York's ranking as a manufac-
turing friendly state from 49th to one of the top-ranked states, estab-
lishing New York as a safe haven for manufacturers. This would allow
existing manufacturers to continue to invest in their operations and
workforce in New York as well as attract manufacturers from across the
country and worldwide.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

Approximately $140 million to the State

 
EFFECTIVE DATE:
This act shall take effect immediately

2017-S7561 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7561
 
                             I N  S E N A T E
 
                             January 25, 2018
                                ___________
 
 Introduced  by  Sen.  O'MARA -- 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 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD14466-01-8

 S. 7561                             2
 
 OF  THIS  PARAGRAPH,  THE TERM SMALL BUSINESS SHALL EXCLUDE ANY BUSINESS
 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 INCLUDE WAGES OF 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.

co-Sponsors

View additional co-sponsors

2017-S7561A (ACTIVE) - Details

See Assembly Version of this Bill:: A10121
Current Committee:: Assembly Ways And Means
Law Section:: Tax Law
Laws Affected:: Amd §§612 & 606, Tax L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S1596, A636
2021-2022: A3734
2023-2024: A4168

2017-S7561A (ACTIVE) - Summary

Relates to tax credits for qualified pass-through manufacturers; provides a definition for qualified pass-through manufacturers.

2017-S7561A (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7561A

SPONSOR: O'MARA
 
TITLE OF BILL:

An act to amend the tax law, in relation to tax credits for qualified
pass-through manufacturers

 
PURPOSE OR GENERAL IDEA OF BILL:

To extend the corporate franchise tax zero percent rate to all manufac-
turers located in New York State.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one - amends subsection (b) of section 612 of the tax law by
adding a new paragraph 43 to extend the corporate franchise tax zero
percent rate to qualified pass-through manufacturers

Section two - amends 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, by adding a new paragraph 44 to define qualified pass-through
manufacturer

Section three - amends paragraph 2 of subsection (a) of section 606 of
the tax law by adding a new subparagraph (B-1) to disallow duplicity of
certain tax deductions and credits

Section four - contains the effective date

 
JUSTIFICATION:

In 2014, a zero percent corporate franchise tax rate was enacted for
manufacturers organized as C corps. This accounted for only 25% of
manufacturers in New York State. While this was a significant help to
those manufacturers, it left 75% of manufactures still paying the higher
rate, putting them at a competitive disadvantage with manufacturers
located in states with no income tax.

This legislation would extend the zero percent Corporate Franchise Tax
rate to all manufacturers in New York State regardless of how they are
organized. The proposed changes lower the income tax rate to zero for NY
pass-through manufacturers by: creating a "NY modification" that
subtracts the income, or adds back a loss (if any); disallowing any
Investment Tax Credits for affected entities/taxpayers; disallowing the
existing 5% subtraction modification for small businesses (for affected
entities/taxpayers); and disallowing a resident credit for taxes payable
to another state (not applicable if NY tax is zero).

According to a study conducted by The Beacon Hill Institute in November
2017, "the elimination of the PIT for pass-through manufacturers would
increase private sector jobs by 3,455 the first full-year and by 4,850
in 2022. The increase in economic activity sparked by extending the
zero-percent tax rate to income from pass-through manufacturers would
mitigate the loss of revenue to New York State and boost local tax
collections.

Enacting this proposal could catapult New York's ranking as a manufac-
turing friendly state from 49th to one of the top-ranked states, estab-
lishing New York as a safe haven for manufacturers. This would allow
existing manufacturers to continue to invest in their operations and
workforce in New York as well as attract manufacturers from across the
country and worldwide.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

Approximately $140 million to the State

 
EFFECTIVE DATE:
This act shall take effect immediately

2017-S7561A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7561--A
 
                             I N  S E N A T E
 
                             January 25, 2018
                                ___________
 
 Introduced  by Sens. O'MARA, RITCHIE, AKSHAR, AMEDORE, CROCI, DeFRANCIS-
   CO, GOLDEN, HELMING, JACOBS, LARKIN, MARCHIONE, ORTT, SEWARD,  VALESKY
   -- read twice and ordered printed, and when printed to be committed to
   the Committee on Investigations and Government Operations -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee

 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD14466-02-8

 S. 7561--A                          2
 
 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
 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.

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Senate Bill S7561A

Sponsored By

Archive: Last Bill Status - In Assembly Committee

Jun 14, 2018 - Floor Vote

Floor Vote: Jun 14, 2018

Jun 14, 2018 - Rules Committee Vote

Rules Committee Vote: Jun 14, 2018

Bill Amendments

co-Sponsors

2017-S7561 - Details

2017-S7561 - Summary

2017-S7561 - Sponsor Memo

2017-S7561 - Bill Text download pdf

co-Sponsors

2017-S7561A (ACTIVE) - Details

2017-S7561A (ACTIVE) - Summary

2017-S7561A (ACTIVE) - Sponsor Memo

2017-S7561A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7561A

Share this bill

Sponsored By

Archive: Last Bill Status - In Assembly Committee

Bill Amendments

co-Sponsors

2017-S7561 - Details

2017-S7561 - Summary

2017-S7561 - Sponsor Memo

2017-S7561 - Bill Text download pdf

co-Sponsors

2017-S7561A (ACTIVE) - Details

2017-S7561A (ACTIVE) - Summary

2017-S7561A (ACTIVE) - Sponsor Memo

2017-S7561A (ACTIVE) - Bill Text download pdf

Comments