Senate Bill S4879

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4879
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 28, 2019
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 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
 a  net  operating  loss carryback pursuant to section sixty-four hundred

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

                                                            LBD10705-01-9

 S. 4879                             2

 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
 which would be allowable if a claim had been filed on the date the cred-

 S. 4879                             3
 
 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.