NY State Senate Bill 2017-S6627A

Senate Bill S6627A

2017-2018 Legislative Session

Provides for the computation of the New York city corporate tax on real estate investment trusts and regulated investment companies

download bill text pdf

Archive: Last Bill Status - In Senate Committee Rules 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 20, 2018	committed to rules
Mar 22, 2018	advanced to third reading
Mar 21, 2018	2nd report cal.
Mar 20, 2018	1st report cal.699
Jan 26, 2018	print number 6627a
Jan 26, 2018	amend and recommit to cities
Jan 03, 2018	referred to cities returned to senate died in assembly
Jun 20, 2017	referred to ways and means delivered to assembly passed senate ordered to third reading cal.2079
Jun 07, 2017	referred to rules

Votes

- Jun 20, 2017 - Floor Vote
  S6627A
  
  59
  
  Aye
  
  4
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 20, 2017
      
      aye (59)
      
      Addabbo Jr.
      
      Akshar
      
      Alcantara
      
      Amedore
      
      Avella
      
      Bailey
      
      Benjamin
      
      Bonacic
      
      Boyle
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Comrie
      
      Croci
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Hannon
      
      Helming
      
      Jacobs
      
      Kaminsky
      
      Kennedy
      
      Klein
      
      LaValle
      
      Lanza
      
      Larkin
      
      Latimer
      
      Little
      
      Marcellino
      
      Marchione
      
      Montgomery
      
      Murphy
      
      O'Mara
      
      Ortt
      
      Parker
      
      Peralta
      
      Persaud
      
      Phillips
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Sanders Jr.
      
      Savino
      
      Serino
      
      Serrano
      
      Seward
      
      Stavisky
      
      Stewart-Cousins
      
      Tedisco
      
      Valesky
      
      Young
      
      nay (4)
      
      Hamilton
      
      Hoylman-Sigal
      
      Krueger
      
      Squadron
  Jun 20, 2017 - Rules Committee Vote
  S6627A
  
  20
  
  Aye
  
  2
  
  Nay
  
  3
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 20, 2017
      
      aye (20)
      
      Bonacic
      
      Breslin
      
      Carlucci
      
      DeFrancisco
      
      Dilan
      
      Flanagan
      
      Griffo
      
      Hannon
      
      Kennedy
      
      LaValle
      
      Lanza
      
      Larkin
      
      Little
      
      Marcellino
      
      Montgomery
      
      Ranzenhofer
      
      Robach
      
      Savino
      
      Seward
      
      Valesky
      
      nay (2)
      
      Krueger
      
      Parker
      
      aye wr (3)
      
      Gianaris
      
      Squadron
      
      Stewart-Cousins
  Mar 20, 2018 - Committee Vote
  S6627A
  
  5
  
  Aye
  
  0
  
  Nay
  
  2
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Committee Vote: Mar 20, 2018
      
      aye (5)
      
      Akshar
      
      Avella
      
      Felder
      
      Funke
      
      Jacobs
      
      aye wr (2)
      
      Benjamin
      
      Persaud

Bill Amendments

Original

A (Active)

2017-S6627 - Details

See Assembly Version of this Bill:: A8474
Current Committee:: Senate Rules
Law Section:: New York City Administrative Code
Laws Affected:: Amd §11-654, NYC Ad Cd

2017-S6627 - Summary

Provides for the computation of the New York city corporate tax on real estate investment trusts and regulated investment companies.

2017-S6627 - Sponsor Memo

                                 BILL NUMBER:  S6627

 TITLE OF BILL :  An act to amend the administrative code of the city
of New York, in relation to the computation of the city corporate tax
for real estate investment trusts and regulated investment companies

 PURPOSE OR GENERAL IDEA OF BILL :

To address unintended effects of tax amendments that resulted in
inappropriate treatment and overly burdensome administrative
requirements to certain entities.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1 amends clause (iv) of subparagraph 1 of paragraph (e) of
subdivision 1 of section 11-654 of the administrative code of the city
of New York, as added by section 1 of part D of chapter 60 of the laws
of 2015, to add a separate minimum tax schedule for RICs and REITs.

Section 2 provides that the act shall be deemed to have been in effect
at the same time and manner as part VV of Chapter 59 of the laws of
2017.

 JUSTIFICATION :

New York's recent corporate tax reforms had the unintended consequence

of dramatically increasing the difficulty of determining a Regulated
Investment Company's (RICs)/Real Estate Investment Trust's (REITs)
fixed-dollar minimum tax liability in New York. Recognizing that these
consequences were unintended and that the cost of these changes will
be borne solely by funds' shareholders - including tens of millions of
middle-income individuals, many of whom are New York City residents -
a technical correction is appropriate and necessary.  Corrections have
already occurred on the statewide level, but there remains an issue
with the New York City tax law.These entities are "pass through"
entities that, generally, pay no taxes (though they do pay fees
comparable to those in this bill) in any other jurisdiction.

The calculation of a RIC's/REITs fixed-dollar minimum tax liability
under the new rules requires them to undertake a complex review of its
assets in order to determine its New York-sourced gross receipts.
RICs/REITs have reported that some of the information necessary to
complete this review may not be commercially available or, where
available, may be difficult to retrieve systematically.

Systemic difficulties in sourcing these entities very large number of
assets and transactions makes determining the fixed-dollar minimum tax
liability unduly burdensome on them and their shareholders. The high
costs associated with performing these administrative tasks far weighs
any fixed-dollar minimum tax that may actually be collected by New
York City.

Providing fixed-dollar minimum rate schedule similar to that of NY
State will ease the administrative burden for RICs/REITs, create
certainty, and ensure that the City receives appropriate tax revenues.

 PRIOR LEGISLATIVE HISTORY :

New Bill.

 FISCAL IMPLICATIONS :

None to the state. Increased revenue for New York City.

 EFFECTIVE DATE :
The act shall be deemed to have been in effect at the same time and
manner as part VV of Chapter 59 of the law of 2017.

2017-S6627 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6627
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               June 7, 2017
                                ___________
 
 Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the administrative code of the  city  of  New  York,  in
   relation  to the computation of the city corporate tax for real estate
   investment trusts and regulated investment companies

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Clause (iv) of subparagraph 1 of paragraph (e) of subdivi-
 sion 1 of section 11-654 of the administrative code of the city  of  New
 York, as added by section 1 of part D of chapter 60 of the laws of 2015,
 is amended to read as follows:
   (iv) If New York city receipts are:                  Fixed dollar
                                                        minimum tax is:
 Not more than $100,000                                 $25
 More than $100,000 but not over $250,000               $75
 More than $250,000 but not over $500,000               $175
 More than $500,000 but not over $1,000,000             $500
 More than $1,000,000 but not over $5,000,000           $1,500
 More than $5,000,000 but not over $25,000,000          $3,500
 More than $25,000,000 but not over $50,000,000         $5,000
 More than $50,000,000 but not over $100,000,000        $10,000
 More than $100,000,000 but not over $250,000,000       $20,000
 More than $250,000,000 but not over $500,000,000       $50,000
 More than $500,000,000 but not over $1,000,000,000     $100,000
 Over $1,000,000,000                                    $200,000
   For  purposes  of this clause, New York city receipts are the receipts
 computed in accordance with section 11-654.2 of this subchapter for  the
 taxable year. If the taxable year is less than twelve months, the amount
 prescribed by this clause shall be reduced by twenty-five percent if the
 period  for which the taxpayer is subject to tax is more than six months
 but not more than nine months and by fifty percent  if  the  period  for

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

                                                            LBD13057-01-7

 S. 6627                             2
 
 which the taxpayer is subject to tax is not more than six months. If the
 taxable  year  is  less  than twelve months, the amount of New York city
 receipts for purposes of this  clause  is  determined  by  dividing  the
 amount  of  the receipts for the taxable year by the number of months in
 the taxable year and multiplying the result by twelve. PROVIDED,  HOWEV-
 ER,  IN  THE CASE OF A REIT OR RIC, AS DEFINED IN SECTION 11-601 OF THIS
 CHAPTER, THAT IS NOT A CAPTIVE  REIT  OR  CAPTIVE  RIC,  AS  DEFINED  IN
 SECTION 11-601 OF THIS CHAPTER, THE FOLLOWING SCHEDULE SHALL APPLY:
   IF NEW YORK CITY RECEIPTS ARE:                       FIXED DOLLAR
                                                        MINIMUM TAX IS:
 NOT MORE THAN $100,000                                 $25
 MORE THAN $100,000 BUT NOT OVER $250,000               $75
 MORE THAN $250,000 BUT NOT OVER $500,000               $175
 MORE THAN $500,000                                     $500
   §  2.  This  act  shall take effect immediately and shall be deemed to
 have been in full force and effect on and  after  April  10,  2017,  and
 shall apply to taxable years beginning on and after January 1, 2018.

2017-S6627A (ACTIVE) - Details

See Assembly Version of this Bill:: A8474
Current Committee:: Senate Rules
Law Section:: New York City Administrative Code
Laws Affected:: Amd §11-654, NYC Ad Cd

2017-S6627A (ACTIVE) - Summary

Provides for the computation of the New York city corporate tax on real estate investment trusts and regulated investment companies.

2017-S6627A (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6627A

SPONSOR: YOUNG
 
TITLE OF BILL:

An act to amend the administrative code of the city of New York, in
relation to the computation of the city corporate tax for real estate
investment trusts and regulated investment companies

 
PURPOSE OR GENERAL IDEA OF BILL:

To address unintended effects of tax amendments that resulted in inap-
propriate treatment and overly burdensome administrative requirements to
certain entities.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends clause (iv) of subparagraph 1 of paragraph (e) of
subdivision 1 of section 11-654 of the administrative code of the city
of New York, as added by section 1 of part D of chapter 60 of the laws
of 2015, to add a separate minimum tax schedule for RICs and REITs.

Section 2 provides that the act shall be deemed to have been in full
force and effect on and after April 10, 2018, and shall apply to taxable
years beginning on and after January 1, 2019.

 
JUSTIFICATION:

New York's recent corporate tax reforms had the unintended consequence
of dramatically increasing the difficulty of determining a Regulated
Investment Company's (RICs)/Real Estate Investment Trust's (REITs)
fixed-dollar minimum tax liability in New York. Recognizing that these
consequences were unintended and that the cost of these changes will be
borne solely by funds' shareholders - including tens of millions of
middle-income individuals, many of whom are New York City residents - a
technical correction is appropriate and necessary. Corrections have
already occurred on the statewide level, but there remains an issue with
the New York City tax law.These entities are "pass through" entities
that, generally, pay no taxes (though they do pay fees comparable to
those in this bill) in any other jurisdiction.

The calculation of a RIC's/REITs fixed-dollar minimum tax liability
under the new rules requires them to undertake a complex review of its
assets in order to determine its New York-sourced gross receipts.
RICs/REITs have reported that some of the information necessary to
complete this review may not be commercially available or, where avail-
able, may be difficult to retrieve systematically.

Systemic difficulties in sourcing these entities very large number of
assets and transactions makes determining the fixed-dollar minimum tax
liability unduly burdensome on them and their shareholders. The high
costs associated with performing these administrative tasks far weighs
any fixed-dollar minimum tax that may actually be collected by New York
City.

Providing fixed-dollar minimum rate schedule similar to that of NY State
will ease the administrative burden for RICs/REITs, create certainty,
and ensure that the City receives appropriate tax revenues.

 
PRIOR LEGISLATIVE HISTORY:

2017: S.6627/A.8474 Passed Senate

 
FISCAL IMPLICATIONS:

None to the state. Increased revenue for New York City.

 
EFFECTIVE DATE:
The act shall be deemed to have been in full force and effect on and
after April 10, 2018, and shall apply to taxable years beginning on and
after January 1, 2019.

2017-S6627A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6627--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               June 7, 2017
                                ___________
 
 Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules  --  recommitted  to
   the  Committee  on  Cities in accordance with Senate Rule 6, sec. 8 --
   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 computation of the city corporate tax for real  estate
   investment trusts and regulated investment companies
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Clause (iv) of subparagraph 1 of paragraph (e) of  subdivi-
 sion  1  of section 11-654 of the administrative code of the city of New
 York, as added by section 1 of part D of chapter 60 of the laws of 2015,
 is amended to read as follows:
   (iv) If New York city receipts are:                  Fixed dollar
                                                        minimum tax is:
 Not more than $100,000                                 $25
 More than $100,000 but not over $250,000               $75
 More than $250,000 but not over $500,000               $175
 More than $500,000 but not over $1,000,000             $500
 More than $1,000,000 but not over $5,000,000           $1,500
 More than $5,000,000 but not over $25,000,000          $3,500
 More than $25,000,000 but not over $50,000,000         $5,000
 More than $50,000,000 but not over $100,000,000        $10,000
 More than $100,000,000 but not over $250,000,000       $20,000
 More than $250,000,000 but not over $500,000,000       $50,000
 More than $500,000,000 but not over $1,000,000,000     $100,000
 Over $1,000,000,000                                    $200,000
   For purposes of this clause, New York city receipts are  the  receipts
 computed  in accordance with section 11-654.2 of this subchapter for the
 taxable year. If the taxable year is less than twelve months, the amount

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

                                                            LBD13057-02-8

 S. 6627--A                          2
 
 prescribed by this clause shall be reduced by twenty-five percent if the
 period for which the taxpayer is subject to tax is more than six  months
 but  not  more  than  nine months and by fifty percent if the period for
 which the taxpayer is subject to tax is not more than six months. If the
 taxable  year  is  less  than twelve months, the amount of New York city
 receipts for purposes of this  clause  is  determined  by  dividing  the
 amount  of  the receipts for the taxable year by the number of months in
 the taxable year and multiplying the result by twelve. PROVIDED,  HOWEV-
 ER,  IN  THE CASE OF A REIT OR RIC, AS DEFINED IN SECTION 11-601 OF THIS
 CHAPTER, THAT IS NOT A CAPTIVE  REIT  OR  CAPTIVE  RIC,  AS  DEFINED  IN
 SECTION 11-601 OF THIS CHAPTER, THE FOLLOWING SCHEDULE SHALL APPLY:
   IF NEW YORK CITY RECEIPTS ARE:                       FIXED DOLLAR
                                                        MINIMUM TAX IS:
 NOT MORE THAN $100,000                                 $25
 MORE THAN $100,000 BUT NOT OVER $250,000               $75
 MORE THAN $250,000 BUT NOT OVER $500,000               $175
 MORE THAN $500,000                                     $500
   §  2.  This  act  shall take effect immediately and shall be deemed to
 have been in full force and effect on and  after  April  10,  2018,  and
 shall apply to taxable years beginning on and after January 1, 2019.

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