S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5041
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 6, 2019
                                ___________
 
 Introduced  by M. of A. CARROLL -- read once and referred to the Commit-
   tee on Ways and Means
 
 AN ACT to amend the tax law, in relation  to  establishing  the  minimum
   taxable income base for business corporations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Subdivision 1 of section 210 of the tax law is  amended  by
 adding a new paragraph (c) to read as follows:
   (C) MINIMUM TAXABLE INCOME BASE. (1) FOR TAXABLE YEARS BEGINNING ON OR
 AFTER  JANUARY  FIRST, TWO THOUSAND TWENTY-ONE, THE AMOUNT PRESCRIBED BY
 THIS PARAGRAPH SHALL BE COMPUTED AT THE RATE OF  THREE  PERCENT  OF  THE
 TAXPAYER'S  MINIMUM TAXABLE INCOME BASE. THE "TAXPAYER'S MINIMUM TAXABLE
 INCOME BASE" SHALL MEAN THE PORTION OF THE  TAXPAYER'S  MINIMUM  TAXABLE
 INCOME ALLOCATED WITHIN THE STATE, SUBJECT TO ANY MODIFICATIONS REQUIRED
 BY SUBPARAGRAPHS TWO AND THREE OF THIS PARAGRAPH.
   (2)  EXCEPT  AS  PROVIDED  IN  CLAUSE  (C)  OF THIS SUBPARAGRAPH OR IN
 SUBPARAGRAPH THREE OF THIS PARAGRAPH, AT THE ELECTION  OF  THE  TAXPAYER
 THERE  SHALL BE DEDUCTED FROM THE PORTION OF ITS ENTIRE NET INCOME ALLO-
 CATED WITHIN THE STATE EITHER OR BOTH OF THE ITEMS SET FORTH IN  CLAUSES
 (A)  AND  (B)  OF  THIS  SUBPARAGRAPH,  EXCEPT  THAT  ONLY  ONE  OF SUCH
 DEDUCTIONS SHALL BE ALLOWED WITH RESPECT TO ANY ONE ITEM OF PROPERTY.
   (A) DEPRECIATION WITH RESPECT TO ANY PROPERTY AS DESCRIBED  IN  CLAUSE
 (C)  OF  THIS SUBPARAGRAPH, NOT EXCEEDING TWICE THE DEPRECIATION ALLOWED
 WITH RESPECT TO THE SAME PROPERTY FOR FEDERAL INCOME TAX PURPOSES.  SUCH
 DEDUCTION SHALL BE ALLOWED ONLY UPON CONDITION THAT ENTIRE NET INCOME BE
 COMPUTED  WITHOUT  ANY DEDUCTION FOR THE DEPRECIATION OR AMORTIZATION OF
 THE SAME PROPERTY, AND THE TOTAL OF ALL DEDUCTIONS ALLOWED IN ANY  TAXA-
 BLE  YEAR OR YEARS WITH RESPECT TO THE DEPRECIATION OF ANY SUCH PROPERTY
 SHALL NOT EXCEED ITS COST OR OTHER BASIS.
   (B) EXPENDITURES PAID OR INCURRED DURING  THE  TAXABLE  YEAR  FOR  THE
 CONSTRUCTION,  RECONSTRUCTION,  ERECTION  OR ACQUISITION OF ANY PROPERTY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD08385-01-9

 A. 5041                             2
 
 SUCH AS DESCRIBED IN CLAUSE (C) OF THIS SUBPARAGRAPH WHICH IS USED OR TO
 BE USED FOR PURPOSES OF RESEARCH AND DEVELOPMENT IN THE EXPERIMENTAL  OR
 LABORATORY SENSE. SUCH PURPOSES SHALL NOT BE DEEMED TO INCLUDE THE ORDI-
 NARY TESTING OR INSPECTION OF MATERIALS OR PRODUCTS FOR QUALITY CONTROL,
 EFFICIENCY  SURVEYS,  MANAGEMENT STUDIES, CONSUMER SURVEYS, ADVERTISING,
 PROMOTIONS OR RESEARCH IN CONNECTION WITH LITERARY, HISTORICAL OR  SIMI-
 LAR  PROJECTS.  SUCH  DEDUCTION  SHALL BE ALLOWED ONLY ON CONDITION THAT
 ENTIRE NET INCOME FOR THE TAXABLE YEAR AND ALL SUCCEEDING TAXABLE  YEARS
 BE  COMPUTED  WITHOUT THE DEDUCTION OF ANY SUCH EXPENDITURES AND WITHOUT
 ANY DEDUCTION FOR DEPRECIATION OF  THE  SAME  PROPERTY,  EXCEPT  TO  THE
 EXTENT  THAT  ITS  BASIS  MAY BE ATTRIBUTABLE TO FACTORS OTHER THAN SUCH
 EXPENDITURES, OR IN CASE A  DEDUCTION  IS  ALLOWABLE  PURSUANT  TO  THIS
 CLAUSE  FOR  ONLY  A  PART  OF  SUCH EXPENDITURES, ON CONDITION THAT ANY
 DEDUCTION ALLOWED FOR FEDERAL INCOME TAX PURPOSES  ON  ACCOUNT  OF  SUCH
 EXPENDITURES  OR  ON  ACCOUNT  OF  DEPRECIATION  OF THE SAME PROPERTY BE
 PROPORTIONATELY REDUCED IN COMPUTING ENTIRE NET INCOME FOR  THE  TAXABLE
 YEAR AND ALL SUCCEEDING TAXABLE YEARS. WITH RESPECT TO PROPERTY WHICH IS
 USED  OR TO BE USED FOR RESEARCH AND DEVELOPMENT ONLY IN PART, OR DURING
 ONLY PART OF ITS USEFUL LIFE, A PROPORTIONATE PART OF SUCH  EXPENDITURES
 SHALL BE DEDUCTIBLE. IF ALL OR PART OF SUCH EXPENDITURES WITH RESPECT TO
 ANY PROPERTY SHALL HAVE BEEN DEDUCTED AS PROVIDED HEREIN, AND SUCH PROP-
 ERTY  IS  USED  FOR  PURPOSES  OTHER  THAN RESEARCH AND DEVELOPMENT TO A
 GREATER EXTENT THAN ORIGINALLY REPORTED, THE TAXPAYER SHALL REPORT  SUCH
 USE IN ITS REPORT FOR THE FIRST TAXABLE YEAR DURING WHICH IT OCCURS, AND
 THE  DEPARTMENT  MAY  RECOMPUTE  THE TAX FOR THE YEAR OR YEARS FOR WHICH
 SUCH DEDUCTION WAS ALLOWED, AND MAY ASSESS ANY ADDITIONAL TAX  RESULTING
 FROM  SUCH RECOMPUTATION REGARDLESS OF THE TIME LIMITATIONS SET FORTH IN
 SECTION TEN HUNDRED EIGHTY-THREE OF THIS CHAPTER.
   (C) SUCH DEDUCTIONS SHALL BE ALLOWED ONLY  WITH  RESPECT  TO  TANGIBLE
 PROPERTY WHICH IS DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEV-
 EN  OF  THE INTERNAL REVENUE CODE, HAVING A SITUS IN THIS STATE AND USED
 IN THE TAXPAYER'S TRADE OR BUSINESS, (I) CONSTRUCTED,  RECONSTRUCTED  OR
 ERECTED  AFTER  DECEMBER  THIRTY-FIRST,  NINETEEN  HUNDRED  SIXTY-THREE,
 PURSUANT TO A CONTRACT WHICH WAS, ON OR  BEFORE  DECEMBER  THIRTY-FIRST,
 NINETEEN  HUNDRED  SIXTY-SEVEN,  AND AT ALL TIMES THEREAFTER, BINDING ON
 THE TAXPAYER OR, PROPERTY, THE PHYSICAL CONSTRUCTION, RECONSTRUCTION  OR
 ERECTION  OF  WHICH  BEGAN  ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED SIXTY-SEVEN OR WHICH BEGAN AFTER SUCH DATE PURSUANT TO AN  ORDER
 PLACED ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN,
 AND  THEN  ONLY WITH RESPECT TO THAT PORTION OF THE BASIS THEREOF OR THE
 EXPENDITURES RELATING THERETO WHICH IS  PROPERLY  ATTRIBUTABLE  TO  SUCH
 CONSTRUCTION,  RECONSTRUCTION  OR  ERECTION AFTER DECEMBER THIRTY-FIRST,
 NINETEEN HUNDRED SIXTY-THREE, OR (II) ACQUIRED  AFTER  DECEMBER  THIRTY-
 FIRST,  NINETEEN  HUNDRED SIXTY-THREE, PURSUANT TO A CONTRACT WHICH WAS,
 ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN, AND AT
 ALL TIMES THEREAFTER, BINDING ON THE TAXPAYER OR PURSUANT  TO  AN  ORDER
 PLACED ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN,
 BY  PURCHASE  AS  DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE
 INTERNAL REVENUE CODE, IF THE ORIGINAL USE OF  SUCH  PROPERTY  COMMENCED
 WITH  THE TAXPAYER, COMMENCED IN THIS STATE AND COMMENCED AFTER DECEMBER
 THIRTY-FIRST,  NINETEEN  HUNDRED   SIXTY-THREE,   OR   (III)   ACQUIRED,
 CONSTRUCTED,  RECONSTRUCTED,  OR  ERECTED SUBSEQUENT TO DECEMBER THIRTY-
 FIRST, NINETEEN HUNDRED SIXTY-SEVEN, IF SUCH ACQUISITION,  CONSTRUCTION,
 RECONSTRUCTION  OR  ERECTION IS PURSUANT TO A PLAN OF THE TAXPAYER WHICH
 WAS IN EXISTENCE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN AND
 NOT   THEREAFTER   SUBSTANTIALLY   MODIFIED,   AND   SUCH   ACQUISITION,

 A. 5041                             3
 
 CONSTRUCTION,  RECONSTRUCTION  OR ERECTION WOULD QUALIFY UNDER THE RULES
 IN PARAGRAPHS FOUR, FIVE OR SIX OF SUBSECTION (H) OF SECTION FORTY-EIGHT
 OF THE INTERNAL REVENUE CODE PROVIDED ALL REFERENCES IN SUCH  PARAGRAPHS
 FOUR,  FIVE  AND  SIX TO THE DATES OCTOBER NINE, NINETEEN HUNDRED SIXTY-
 SIX, AND OCTOBER TEN, NINETEEN  HUNDRED  SIXTY-SIX,  SHALL  BE  READ  AS
 DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN. A TAXPAYER SHALL BE
 ALLOWED  A  DEDUCTION UNDER ITEMS (I), (II) OR (III) OF THIS CLAUSE ONLY
 IF THE TANGIBLE PROPERTY SHALL BE DELIVERED OR THE CONSTRUCTION,  RECON-
 STRUCTION  OR  ERECTION SHALL BE COMPLETED ON OR BEFORE DECEMBER THIRTY-
 FIRST, NINETEEN HUNDRED SIXTY-NINE, EXCEPT IN THE CASE OF TANGIBLE PROP-
 ERTY WHICH IS ACQUIRED, CONSTRUCTED, RECONSTRUCTED OR  ERECTED  PURSUANT
 TO  A  CONTRACT  WHICH WAS, ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED SIXTY-SEVEN, AND AT ALL TIMES THEREAFTER, BINDING ON THE TAXPAY-
 ER. PROVIDED, HOWEVER, FOR ANY TAXABLE YEAR BEGINNING ON OR AFTER  JANU-
 ARY FIRST, NINETEEN HUNDRED SIXTY-EIGHT, A TAXPAYER SHALL NOT BE ALLOWED
 A DEDUCTION UNDER THIS PARAGRAPH WITH RESPECT TO TANGIBLE PERSONAL PROP-
 ERTY  LEASED  BY  IT TO ANY OTHER PERSON OR CORPORATION. FOR PURPOSES OF
 THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE  OR  RENT  OR
 FOR  A  LICENSE  TO  USE SUCH PROPERTY SHALL BE CONSIDERED A LEASE. WITH
 RESPECT TO PROPERTY WHICH THE TAXPAYER USES ITSELF  FOR  PURPOSES  OTHER
 THAN LEASING FOR PART OF A TAXABLE YEAR AND LEASES FOR A PART OF A TAXA-
 BLE YEAR, THE TAXPAYER SHALL BE ALLOWED A DEDUCTION UNDER THIS PARAGRAPH
 IN PROPORTION TO THE PART OF THE YEAR IT USES SUCH PROPERTY.
   (D) IF THE DEDUCTIONS ALLOWABLE FOR ANY TAXABLE YEAR, PURSUANT TO THIS
 SUBDIVISION,  EXCEED  THE  PORTION  OF  THE TAXPAYER'S ENTIRE NET INCOME
 ALLOCATED TO THIS STATE FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO
 THE FOLLOWING TAXABLE YEAR OR YEARS AND MAY BE DEDUCTED FROM THE PORTION
 OF THE TAXPAYER'S ENTIRE NET INCOME ALLOCATED TO  THIS  STATE  FOR  SUCH
 YEAR  OR  YEARS;  PROVIDED, HOWEVER, THAT IN NO EVENT SHALL SUCH EXCESS,
 INSOFAR AS IT REFLECTS DEDUCTIONS TAKEN WITH RESPECT TO ITEMS SET  FORTH
 IN  CLAUSE  (B)  OF  THIS SUBPARAGRAPH, BE CARRIED OVER TO TAXABLE YEARS
 COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE.
   (E) IN ANY TAXABLE YEAR WHEN PROPERTY IS SOLD  OR  OTHERWISE  DISPOSED
 OF,  WITH  RESPECT  TO  WHICH  A  DEDUCTION HAS BEEN ALLOWED PURSUANT TO
 CLAUSE (A) OR (B) OF THIS SUBPARAGRAPH, THE GAIN OR LOSS THEREON  ENTER-
 ING  INTO THE COMPUTATION OF FEDERAL TAXABLE INCOME SHALL BE DISREGARDED
 IN COMPUTING  ENTIRE  NET  INCOME,  AND  THERE  SHALL  BE  ADDED  TO  OR
 SUBTRACTED  FROM  THE  PORTION OF ENTIRE NET INCOME ALLOCATED WITHIN THE
 STATE THE GAIN OR LOSS UPON SUCH SALE OR OTHER DISPOSITION. IN COMPUTING
 SUCH GAIN OR LOSS THE BASIS OF THE PROPERTY SOLD OR DISPOSED OF SHALL BE
 ADJUSTED TO REFLECT THE DEDUCTION ALLOWED WITH RESPECT TO SUCH  PROPERTY
 PURSUANT  TO  CLAUSE (A) OR (B) OF THIS SUBPARAGRAPH. PROVIDED, HOWEVER,
 THAT NO LOSS SHALL BE RECOGNIZED FOR THE PURPOSES OF  THIS  CLAUSE  WITH
 RESPECT  TO  A  SALE  OR OTHER DISPOSITION OF PROPERTY TO A PERSON WHOSE
 ACQUISITION THEREOF IS NOT A PURCHASE AS DEFINED IN SECTION ONE  HUNDRED
 SEVENTY-NINE (D) OF THE INTERNAL REVENUE CODE.
   (3)  AT  THE ELECTION OF THE TAXPAYER THERE SHALL BE DEDUCTED FROM THE
 PORTION OF ITS ENTIRE NET INCOME ALLOCATED WITHIN THE  STATE  EITHER  OR
 BOTH  OF  THE ITEMS SET FORTH IN CLAUSE (A) OR (B) OF THIS SUBPARAGRAPH,
 EXCEPT THAT ONLY ONE OF SUCH DEDUCTIONS SHALL BE ALLOWED WITH RESPECT TO
 ANY ONE ITEM OF PROPERTY, AND EXCEPT THAT A DEDUCTION OF  THE  ITEM  SET
 FORTH  IN  CLAUSE  (B)  MAY  NOT  BE TAKEN WITH RESPECT TO TAXABLE YEARS
 COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE.
   (A) DEPRECIATION WITH RESPECT TO ANY PROPERTY  SUCH  AS  DESCRIBED  IN
 CLAUSES (C) AND (D) OF THIS SUBPARAGRAPH, NOT EXCEEDING TWICE THE DEPRE-
 CIATION ALLOWED WITH RESPECT TO THE SAME PROPERTY FOR FEDERAL INCOME TAX

 A. 5041                             4
 
 PURPOSES.  SUCH  DEDUCTION  SHALL  BE  ALLOWED  ONLY UPON CONDITION THAT
 ENTIRE NET INCOME BE COMPUTED WITHOUT ANY DEDUCTION FOR THE DEPRECIATION
 OR AMORTIZATION OF THE SAME PROPERTY, AND THE TOTAL  OF  ALL  DEDUCTIONS
 ALLOWED IN ANY TAXABLE YEAR OR YEARS WITH RESPECT TO THE DEPRECIATION OF
 ANY SUCH PROPERTY SHALL NOT EXCEED ITS COST OR OTHER BASIS MULTIPLIED BY
 THE  TAXPAYER'S  BUSINESS  ALLOCATION  PERCENTAGE  DETERMINED UNDER THIS
 PARAGRAPH FOR THE FIRST YEAR IT DEDUCTS  SUCH  DEPRECIATION  UNDER  THIS
 SUBPARAGRAPH.
   (B)  EXPENDITURES  PAID  OR  INCURRED  DURING THE TAXABLE YEAR FOR THE
 CONSTRUCTION, RECONSTRUCTION, ERECTION OR ACQUISITION  OF  ANY  PROPERTY
 SUCH AS DESCRIBED IN CLAUSE (C) OF THIS SUBPARAGRAPH WHICH IS USED OR TO
 BE  USED FOR PURPOSES OF RESEARCH AND DEVELOPMENT IN THE EXPERIMENTAL OR
 LABORATORY SENSE. SUCH PURPOSES SHALL NOT BE DEEMED TO INCLUDE THE ORDI-
 NARY TESTING OR INSPECTION OF MATERIALS OR PRODUCTS FOR QUALITY CONTROL,
 EFFICIENCY SURVEYS, MANAGEMENT STUDIES, CONSUMER  SURVEYS,  ADVERTISING,
 PROMOTIONS  OR RESEARCH IN CONNECTION WITH LITERARY, HISTORICAL OR SIMI-
 LAR PROJECTS. SUCH DEDUCTION SHALL BE ALLOWED ONLY ON CONDITION THAT  IT
 DOES NOT EXCEED THE AMOUNT OF THE EXPENDITURES MULTIPLIED BY THE TAXPAY-
 ER'S  BUSINESS ALLOCATION PERCENTAGE DETERMINED UNDER THIS PARAGRAPH FOR
 THE YEAR THE EXPENDITURES ARE PAID  OR  INCURRED  AND  THAT  ENTIRE  NET
 INCOME FOR THE TAXABLE YEAR AND ALL SUCCEEDING TAXABLE YEARS BE COMPUTED
 WITHOUT THE DEDUCTION OF ANY SUCH EXPENDITURES AND WITHOUT ANY DEDUCTION
 FOR  DEPRECIATION  OF  THE  SAME PROPERTY, EXCEPT TO THE EXTENT THAT ITS
 BASIS MAY BE ATTRIBUTABLE TO FACTORS OTHER THAN SUCH EXPENDITURES, OR IN
 CASE A DEDUCTION IS ALLOWABLE PURSUANT TO THIS CLAUSE FOR ONLY A PART OF
 SUCH EXPENDITURES, ON CONDITION THAT ANY DEDUCTION ALLOWED  FOR  FEDERAL
 INCOME  TAX  PURPOSES  ON  ACCOUNT OF SUCH EXPENDITURES OR ON ACCOUNT OF
 DEPRECIATION OF THE SAME PROPERTY BE PROPORTIONATELY REDUCED IN  COMPUT-
 ING  ENTIRE  NET  INCOME FOR THE TAXABLE YEAR AND ALL SUCCEEDING TAXABLE
 YEARS. WITH RESPECT TO PROPERTY WHICH IS USED OR TO BE USED FOR RESEARCH
 AND DEVELOPMENT ONLY IN PART, OR DURING ONLY PART OF ITS USEFUL LIFE,  A
 PROPORTIONATE  PART  OF SUCH EXPENDITURES SHALL BE DEDUCTIBLE. IF ALL OR
 PART OF SUCH EXPENDITURES WITH RESPECT TO ANY PROPERTY SHALL  HAVE  BEEN
 DEDUCTED  AS  PROVIDED  HEREIN,  AND  SUCH PROPERTY IS USED FOR PURPOSES
 OTHER THAN RESEARCH AND DEVELOPMENT TO A GREATER EXTENT THAN  ORIGINALLY
 REPORTED, THE TAXPAYER SHALL REPORT SUCH USE IN ITS REPORT FOR THE FIRST
 TAXABLE  YEAR  DURING WHICH IT OCCURS, AND THE TAX COMMISSION MAY RECOM-
 PUTE THE TAX FOR THE YEAR OR YEARS FOR WHICH SUCH DEDUCTION WAS ALLOWED,
 AND MAY ASSESS ANY ADDITIONAL  TAX  RESULTING  FROM  SUCH  RECOMPUTATION
 REGARDLESS  OF  THE  TIME  LIMITATIONS  SET FORTH IN SECTION TEN HUNDRED
 EIGHTY-THREE OF THIS CHAPTER.
   (C) SUCH DEDUCTIONS SHALL BE ALLOWED ONLY  WITH  RESPECT  TO  TANGIBLE
 PROPERTY WHICH IS DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEV-
 EN  OF  THE INTERNAL REVENUE CODE, HAVING A SITUS IN THIS STATE AND USED
 IN THE TAXPAYER'S TRADE OR BUSINESS.  THE  DEDUCTIONS  PROVIDED  FOR  IN
 CLAUSE  (A)  OF THIS SUBPARAGRAPH SHALL (I) BE ALLOWED ONLY WITH RESPECT
 TO TANGIBLE PROPERTY WHICH IS (I) CONSTRUCTED, RECONSTRUCTED OR  ERECTED
 AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN, PURSUANT TO A
 CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
 SIXTY-EIGHT,  AND  AT  ALL TIMES THEREAFTER, BINDING ON THE TAXPAYER OR,
 PROPERTY, THE PHYSICAL CONSTRUCTION, RECONSTRUCTION OR ERECTION OF WHICH
 BEGAN ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN  HUNDRED  SIXTY-EIGHT
 OR  WHICH BEGAN AFTER SUCH DATE PURSUANT TO AN ORDER PLACED ON OR BEFORE
 DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-EIGHT, AND THEN ONLY  WITH
 RESPECT  TO THAT PORTION OF THE BASIS THEREOF OR THE EXPENDITURES RELAT-
 ING THERETO WHICH IS PROPERLY ATTRIBUTABLE TO SUCH CONSTRUCTION,  RECON-

 A. 5041                             5
 
 STRUCTION  OR  ERECTION  AFTER  DECEMBER  THIRTY-FIRST, NINETEEN HUNDRED
 SIXTY-THREE OR  (II)  ACQUIRED  AFTER  DECEMBER  THIRTY-FIRST,  NINETEEN
 HUNDRED  SIXTY-SEVEN,  PURSUANT  TO  A  CONTRACT WHICH WAS, ON OR BEFORE
 DECEMBER  THIRTY-FIRST,  NINETEEN  HUNDRED SIXTY-EIGHT, AND AT ALL TIMES
 THEREAFTER, BINDING ON THE TAXPAYER OR PURSUANT TO AN ORDER PLACED ON OR
 BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-EIGHT, BY  PURCHASE
 AS  DEFINED  IN  SECTION  ONE  HUNDRED  SEVENTY-NINE (D) OF THE INTERNAL
 REVENUE CODE, IF THE ORIGINAL USE OF SUCH PROPERTY  COMMENCED  WITH  THE
 TAXPAYER,  COMMENCED  IN THIS STATE AND COMMENCED AFTER DECEMBER THIRTY-
 FIRST, NINETEEN HUNDRED SIXTY-SEVEN,  OR  (III)  ACQUIRED,  CONSTRUCTED,
 RECONSTRUCTED,  OR ERECTED SUBSEQUENT TO DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED SIXTY-EIGHT, IF SUCH ACQUISITION,  CONSTRUCTION,  RECONSTRUCTION
 OR ERECTION IS PURSUANT TO A PLAN OF THE TAXPAYER WHICH WAS IN EXISTENCE
 DECEMBER  THIRTY-FIRST, NINETEEN HUNDRED SIXTY-EIGHT, AND NOT THEREAFTER
 SUBSTANTIALLY  MODIFIED,  AND  SUCH  ACQUISITION,  CONSTRUCTION,  RECON-
 STRUCTION  OR  ERECTION WOULD QUALIFY UNDER THE RULES IN PARAGRAPH FOUR,
 FIVE OR SIX OF SUBSECTION (H) OF SECTION  FORTY-EIGHT  OF  THE  INTERNAL
 REVENUE  CODE  PROVIDED ALL REFERENCES IN SUCH PARAGRAPHS FOUR, FIVE AND
 SIX TO THE DATES OCTOBER NINE, NINETEEN HUNDRED SIXTY-SIX,  AND  OCTOBER
 TEN, NINETEEN HUNDRED SIXTY-SIX, SHALL BE READ AS DECEMBER THIRTY-FIRST,
 NINETEEN  HUNDRED  SIXTY-EIGHT.  A TAXPAYER SHALL BE ALLOWED A DEDUCTION
 UNDER ITEMS (I), (II) OR (III) OF THIS CLAUSE ONLY IF THE TANGIBLE PROP-
 ERTY SHALL BE DELIVERED OR THE CONSTRUCTION, RECONSTRUCTION OR  ERECTION
 SHALL  BE COMPLETED ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
 SEVENTY, EXCEPT IN THE CASE OF  TANGIBLE  PROPERTY  WHICH  IS  ACQUIRED,
 CONSTRUCTED,  RECONSTRUCTED OR ERECTED PURSUANT TO A CONTRACT WHICH WAS,
 ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-EIGHT, AND AT
 ALL TIMES  THEREAFTER  BINDING  ON  THE  TAXPAYER.  (II)  THE  DEDUCTION
 PROVIDED  FOR  IN  CLAUSE (B) OF THIS SUBPARAGRAPH SHALL BE ALLOWED ONLY
 WITH RESPECT TO TANGIBLE PROPERTY (I) THE  CONSTRUCTION,  RECONSTRUCTION
 OR  ERECTION OF WHICH IS COMPLETED AFTER DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED SIXTY-SEVEN, AND THEN ONLY WITH RESPECT TO THAT PORTION  OF  THE
 BASIS  THEREOF  OR  THE  EXPENDITURES RELATING THERETO WHICH IS PROPERLY
 ATTRIBUTABLE TO SUCH  CONSTRUCTION,  RECONSTRUCTION  OR  ERECTION  AFTER
 DECEMBER  THIRTY-FIRST,  NINETEEN  HUNDRED SIXTY-THREE, OR (II) ACQUIRED
 AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN BY PURCHASE AS
 DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE INTERNAL  REVENUE
 CODE,  IF THE ORIGINAL USE OF SUCH PROPERTY COMMENCED WITH THE TAXPAYER,
 COMMENCED IN THIS STATE AND COMMENCED AFTER DECEMBER THIRTY-FIRST, NINE-
 TEEN HUNDRED SIXTY-THREE.   PROVIDED,  HOWEVER,  FOR  ANY  TAXABLE  YEAR
 BEGINNING  ON  OR  AFTER  JANUARY FIRST, NINETEEN HUNDRED SIXTY-EIGHT, A
 TAXPAYER SHALL NOT BE ALLOWED A DEDUCTION UNDER THIS  SUBPARAGRAPH  WITH
 RESPECT  TO  TANGIBLE PERSONAL PROPERTY LEASED BY IT TO ANY OTHER PERSON
 OR CORPORATION. FOR PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT  OR
 AGREEMENT  TO  LEASE OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL
 BE CONSIDERED A LEASE. WITH RESPECT TO PROPERTY WHICH THE TAXPAYER  USES
 ITSELF  FOR  PURPOSES  OTHER THAN LEASING FOR PART OF A TAXABLE YEAR AND
 LEASES FOR A PART OF A TAXABLE YEAR, THE TAXPAYER  SHALL  BE  ALLOWED  A
 DEDUCTION  UNDER THIS SUBPARAGRAPH IN PROPORTION TO THE PART OF THE YEAR
 IT USES SUCH PROPERTY.
   (D) A DEDUCTION UNDER CLAUSE (A) OF THIS SUBPARAGRAPH SHALL BE ALLOWED
 WITH RESPECT TO TANGIBLE PROPERTY DESCRIBED IN CLAUSE (C) ONLY  IF  SUCH
 PROPERTY  IS PRINCIPALLY USED BY THE TAXPAYER IN THE PRODUCTION OF GOODS
 BY MANUFACTURING; PROCESSING; ASSEMBLING; REFINING; MINING;  EXTRACTING;
 FARMING;   AGRICULTURE;   HORTICULTURE;  FLORICULTURE;  VITICULTURE;  OR
 COMMERCIAL FISHING. FOR PURPOSES OF  THIS  CLAUSE,  MANUFACTURING  SHALL

 A. 5041                             6
 
 MEAN THE PROCESS OF WORKING RAW MATERIALS INTO WARES SUITABLE FOR USE OR
 WHICH  GIVES  NEW  SHAPES,  NEW  QUALITIES OR NEW COMBINATIONS TO MATTER
 WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL PROCESS  BY  THE  USE  OF
 MACHINERY,  TOOLS, APPLIANCES AND OTHER SIMILAR EQUIPMENT. PROPERTY USED
 IN THE PRODUCTION OF GOODS SHALL INCLUDE MACHINERY, EQUIPMENT  OR  OTHER
 TANGIBLE PROPERTY WHICH IS PRINCIPALLY USED IN THE REPAIR AND SERVICE OF
 OTHER  MACHINERY,  EQUIPMENT OR OTHER TANGIBLE PROPERTY USED PRINCIPALLY
 IN THE PRODUCTION OF GOODS AND SHALL INCLUDE ALL FACILITIES USED IN  THE
 MANUFACTURING  OPERATION,  INCLUDING  STORAGE  OF MATERIAL TO BE USED IN
 MANUFACTURING AND OF THE PRODUCTS THAT ARE MANUFACTURED.
   (E) SUBJECT TO THE LIMITATION IMPOSED BY CLAUSES (A) AND (B)  OF  THIS
 SUBPARAGRAPH, IF THE DEDUCTIONS ALLOWABLE FOR ANY TAXABLE YEAR, PURSUANT
 TO  THIS  PARAGRAPH,  EXCEED  THE  PORTION  OF THE TAXPAYER'S ENTIRE NET
 INCOME ALLOCATED TO THIS STATE FOR SUCH YEAR, THE EXCESS MAY BE  CARRIED
 OVER TO THE FOLLOWING TAXABLE YEAR OR YEARS AND MAY BE DEDUCTED FROM THE
 PORTION  OF THE TAXPAYER'S ENTIRE NET INCOME ALLOCATED TO THIS STATE FOR
 SUCH YEAR OR YEARS; PROVIDED, HOWEVER,  THAT  IN  NO  EVENT  SHALL  SUCH
 EXCESS,  INSOFAR  AS  IT REFLECTS DEDUCTIONS TAKEN WITH RESPECT TO ITEMS
 SET FORTH IN CLAUSE (B) OF THIS SUBPARAGRAPH, BE CARRIED OVER TO TAXABLE
 YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE.
   (F) IN ANY TAXABLE YEAR WHEN PROPERTY IS SOLD  OR  OTHERWISE  DISPOSED
 OF,  WITH  RESPECT  TO  WHICH  A  DEDUCTION HAS BEEN ALLOWED PURSUANT TO
 CLAUSE (A) OR (B) OF THIS SUBPARAGRAPH, THE GAIN OR LOSS THEREON  ENTER-
 ING  INTO THE COMPUTATION OF FEDERAL TAXABLE INCOME SHALL BE DISREGARDED
 IN COMPUTING  ENTIRE  NET  INCOME,  AND  THERE  SHALL  BE  ADDED  TO  OR
 SUBTRACTED  FROM  THE  PORTION OF ENTIRE NET INCOME ALLOCATED WITHIN THE
 STATE THE GAIN OR LOSS UPON SUCH SALE OR OTHER DISPOSITION. IN COMPUTING
 SUCH GAIN OR LOSS THE BASIS OF THE PROPERTY SOLD OR DISPOSED OF SHALL BE
 ADJUSTED TO REFLECT THE DEDUCTION ALLOWED WITH RESPECT TO SUCH  PROPERTY
 PURSUANT  TO  CLAUSE (A) OR (B) OF THIS SUBPARAGRAPH. PROVIDED, HOWEVER,
 THAT NO LOSS SHALL BE RECOGNIZED FOR THE PURPOSES OF  THIS  CLAUSE  WITH
 RESPECT  TO  A  SALE  OR OTHER DISPOSITION OF PROPERTY TO A PERSON WHOSE
 ACQUISITION THEREOF IS NOT A PURCHASE AS DEFINED IN SECTION ONE  HUNDRED
 SEVENTY-NINE (D) OF THE INTERNAL REVENUE CODE.
   § 2. Section 208 of the tax law is amended by adding a new subdivision
 8-B to read as follows:
   8-B.  (A)  THE TERM "MINIMUM TAXABLE INCOME" SHALL MEAN THE ENTIRE NET
 INCOME OF THE TAXPAYER FOR THE TAXABLE YEAR:
   (1) INCREASED BY THE AMOUNT OF THE FEDERAL ITEMS OF TAX PREFERENCE SET
 FORTH IN SECTION FIFTY-SEVEN OF THE  INTERNAL  REVENUE  CODE  (WITH  THE
 MODIFICATIONS  SET  FORTH  IN  PARAGRAPH (B) OF THIS SUBDIVISION), WHICH
 ITEMS OF TAX PREFERENCE SHALL HAVE THE SAME MEANING AND BE  COMPUTED  IN
 THE  SAME  MANNER  AS  UNDER SECTION FIFTY-SEVEN OF THE INTERNAL REVENUE
 CODE;
   (2) DETERMINED WITH THE FEDERAL ADJUSTMENTS DESCRIBED IN PARAGRAPH (C)
 OF THIS SUBDIVISION, WHICH ADJUSTMENTS SHALL HAVE THE SAME  MEANING  AND
 BE  COMPUTED  IN  THE SAME MANNER AS UNDER SECTIONS FIFTY-SIX AND FIFTY-
 EIGHT OF THE INTERNAL REVENUE CODE;
   (3) INCREASED BY THE NET OPERATING LOSS DEDUCTION; AND
   (4) REDUCED, FOR TAXABLE YEARS BEGINNING AFTER  TWO  THOUSAND  TWENTY-
 ONE,  BY  THE  ALTERNATIVE  NET  OPERATING LOSS DEDUCTION, AS DEFINED IN
 PARAGRAPH (D) OF THIS SUBDIVISION.
   (B) THE FEDERAL ITEMS OF TAX PREFERENCE REFERRED TO HEREINABOVE  SHALL
 BE MODIFIED BY DEDUCTING "TAX-EXEMPT INTEREST" AND "ACCELERATED DEPRECI-
 ATION OR AMORTIZATION ON CERTAIN PROPERTY PLACED IN SERVICE BEFORE JANU-

 A. 5041                             7
 
 ARY  1,  1987",  AS  DETERMINED  UNDER  PARAGRAPHS  FIVE  AND  SEVEN  OF
 SUBSECTION (A) OF SECTION FIFTY-SEVEN OF THE INTERNAL REVENUE CODE.
   (C) THE ADJUSTMENTS REFERRED TO HEREINABOVE SHALL BE:
   (1) "DEPRECIATION" AS DETERMINED UNDER PARAGRAPH ONE OF SUBSECTION (A)
 OF  SECTION FIFTY-SIX OF THE INTERNAL REVENUE CODE. FOR PURPOSES OF THIS
 SUBPARAGRAPH, THE DEPRECIATION ITEM  OF  ADJUSTMENT  PROVIDED  FOR  HERE
 SHALL  NOT INCLUDE ANY AMOUNT ATTRIBUTABLE TO PROPERTY FOR WHICH THE TAX
 BENEFITS OF THE ACCELERATED COST RECOVERY SYSTEM ARE NOT AVAILABLE UNDER
 THIS ARTICLE BY REASON OF SUBPARAGRAPH TEN OF PARAGRAPH (B) OF  SUBDIVI-
 SION NINE OF THIS SECTION;
   (2)  "MINING  EXPLORATION  AND  DEVELOPMENT COSTS" AS DETERMINED UNDER
 PARAGRAPH TWO OF SUBSECTION (A) OF SECTION  FIFTY-SIX  OF  THE  INTERNAL
 REVENUE CODE;
   (3)  "TREATMENT  OF  CERTAIN  LONG-TERM CONTRACTS" AS DETERMINED UNDER
 PARAGRAPH THREE OF SUBSECTION (A) OF SECTION FIFTY-SIX OF  THE  INTERNAL
 REVENUE CODE;
   (4)  "INSTALLMENT SALES OF CERTAIN PROPERTY" AS DETERMINED UNDER PARA-
 GRAPH SIX OF SUBSECTION (A) OF SECTION FIFTY-SIX OF THE INTERNAL REVENUE
 CODE;
   (5) "CIRCULATION EXPENDITURES OF PERSONAL HOLDING COMPANIES" AS DETER-
 MINED UNDER SUBPARAGRAPH (C) OF  PARAGRAPH  TWO  OF  SUBSECTION  (B)  OF
 SECTION FIFTY-SIX OF THE INTERNAL REVENUE CODE;
   (6)  "MERCHANT  MARINE CAPITAL CONSTRUCTION FUNDS" AS DETERMINED UNDER
 PARAGRAPH TWO OF SUBSECTION (C) OF SECTION  FIFTY-SIX  OF  THE  INTERNAL
 REVENUE CODE;
   (7)  "DISALLOWANCE  OF  PASSIVE  ACTIVITY  LOSS"  AS  DETERMINED UNDER
 SUBSECTION (B) OF SECTION FIFTY-EIGHT OF THE INTERNAL REVENUE CODE; AND
   (8) "ADJUSTED BASIS", AS IT APPEARS IN PARAGRAPH SEVEN  OF  SUBSECTION
 (A)  OF  SECTION  FIFTY-SIX  OF  THE  INTERNAL REVENUE CODE, BUT WITHOUT
 TAKING  INTO  ACCOUNT  THE  REFERENCES  THEREIN  TO  PARAGRAPH  FIVE  OF
 SUBSECTION (A) OF SECTION FIFTY-SIX OF THE INTERNAL REVENUE CODE.
   (D)  THE TERM "ALTERNATIVE NET OPERATING LOSS DEDUCTION" MEANS THE NET
 OPERATING LOSS  DEDUCTION  ALLOWED  FOR  THE  TAXABLE  YEAR,  EXCEPT  AS
 PROVIDED HEREIN.
   (1)(A)  THE  NET  OPERATING LOSS FOR ANY YEAR BEGINNING AFTER NINETEEN
 HUNDRED EIGHTY-NINE WHICH IS  INCLUDED  IN  DETERMINING  SUCH  DEDUCTION
 SHALL BE DETERMINED WITH THE ADJUSTMENTS PROVIDED IN SUBPARAGRAPH TWO OF
 PARAGRAPH  (A) OF THIS SUBDIVISION, AND SHALL BE REDUCED BY THE ITEMS OF
 TAX PREFERENCE DETERMINED UNDER SUBPARAGRAPH ONE  OF  PARAGRAPH  (A)  OF
 THIS  SUBDIVISION,  ATTRIBUTABLE TO SUCH YEAR. AN ITEM OF TAX PREFERENCE
 SHALL BE TAKEN INTO ACCOUNT ONLY TO THE EXTENT SUCH ITEM  INCREASED  THE
 AMOUNT OF THE NET OPERATING LOSS FOR THE TAXABLE YEAR.
   (B)  IN  THE  CASE OF LOSS YEARS BEGINNING BEFORE TWO THOUSAND TWENTY-
 TWO, THE AMOUNT OF THE NET OPERATING LOSS WHICH MAY BE CARRIED  OVER  TO
 TAXABLE  YEARS BEGINNING AFTER TWO THOUSAND TWENTY-ONE SHALL BE EQUAL TO
 AN AMOUNT WHICH MAY BE CARRIED FROM THE LOSS YEAR TO THE  FIRST  TAXABLE
 YEAR OF THE TAXPAYER BEGINNING AFTER TWO THOUSAND TWENTY-ONE.
   (2)  IN  DETERMINING  THE AMOUNT OF SUCH DEDUCTION, LOSS CARRYFORWARDS
 AND CARRYBACKS SHALL BE COMPUTED IN THE MANNER SET  FORTH  IN  PARAGRAPH
 TWO OF SUBSECTION (B) OF SECTION ONE HUNDRED SEVENTY-TWO OF THE INTERNAL
 REVENUE  CODE, EXCEPT THAT, FOR THE REFERENCE THEREIN TO TAXABLE INCOME,
 THERE SHALL BE SUBSTITUTED THE PHRASE "NINETY PERCENT OF MINIMUM TAXABLE
 INCOME DETERMINED WITHOUT REGARD TO THE ALTERNATIVE NET  OPERATING  LOSS
 DEDUCTION".
   (3)  THE  AMOUNT  OF SUCH DEDUCTION SHALL NOT EXCEED NINETY PERCENT OF
 MINIMUM TAXABLE INCOME DETERMINED  WITHOUT  REGARD  TO  SUCH  DEDUCTION,

 A. 5041                             8
 
 PROVIDED,  HOWEVER,  THE  TERM "NINETY PERCENT" SHALL BE READ AS "FORTY-
 FIVE PERCENT" WITH RESPECT TO TAXABLE YEARS BEGINNING  IN  TWO  THOUSAND
 TWENTY-ONE.
   (E)  THE  DEPARTMENT  MAY,  WHENEVER  NECESSARY  IN  ORDER TO PROPERLY
 REFLECT THE MINIMUM TAXABLE INCOME OF ANY TAXPAYER, DETERMINE  THE  YEAR
 OR  PERIOD  IN  WHICH ANY ITEM OF INCOME OR DEDUCTION SHALL BE INCLUDED,
 WITHOUT REGARD TO THE METHOD OF ACCOUNTING EMPLOYED BY THE TAXPAYER.
   (F) IF THE PERIOD COVERED BY A REPORT UNDER THIS ARTICLE IS OTHER THAN
 THE PERIOD COVERED BY THE REPORT TO THE UNITED STATES  TREASURY  DEPART-
 MENT,  THE MINIMUM TAXABLE INCOME SHALL BE APPROPRIATELY MODIFIED PURSU-
 ANT TO REGULATIONS PROMULGATED BY THE UNITED STATES TREASURY DEPARTMENT.
   § 3. This act shall take effect January 1, 2021  and  shall  apply  to
 taxable years commencing on or after such date.