S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6542
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               June 15, 2019
                                ___________
 
 Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the tax law, in relation to exempting from tax a portion
   of global intangible low-taxed income
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Paragraph (b) of subdivision 6-a of section 208 of the tax
 law, as amended by section 1 of part KK of chapter 59  of  the  laws  of
 2018, is amended to read as follows:
   (b)  "Exempt  CFC  income" means (i) except to the extent described in
 subparagraph (ii) of this paragraph, the income required to be  included
 in  the  taxpayer's  federal  gross income pursuant to subsection (a) of
 section 951 of the internal revenue code, received  from  a  corporation
 that  is  conducting  a  unitary  business  with the taxpayer but is not
 included in a combined report with the taxpayer, [and] (ii) such  income
 required  to be included in the taxpayer's federal gross income pursuant
 to subsection (a) of such section 951 of the internal  revenue  code  by
 reason of subsection (a) of section 965 of the internal revenue code, as
 adjusted  by subsection (b) of section 965 of the internal revenue code,
 and without regard to subsection (c) of such section,  received  from  a
 corporation that is not included in a combined report with the taxpayer,
 AND  (III)  NINETY-FIVE PERCENT OF THE INCOME REQUIRED TO BE INCLUDED IN
 THE TAXPAYER'S FEDERAL  GROSS  INCOME  PURSUANT  TO  SUBSECTION  (A)  OF
 SECTION  951A  OF  THE  INTERNAL  REVENUE  CODE,  WITHOUT  REGARD TO THE
 DEDUCTION UNDER SECTION 250 OF THE INTERNAL REVENUE CODE, RECEIVED  FROM
 A CORPORATION THAT IS NOT INCLUDED IN A COMBINED REPORT WITH THE TAXPAY-
 ER, less, [(iii)] (IV) in the discretion of the commissioner, any inter-
 est  deductions  directly  or indirectly attributable to that income. In
 lieu of subtracting from its exempt  CFC  income  the  amount  of  those
 interest  deductions,  the  taxpayer  may  make  a revocable election to
 reduce its total exempt CFC income by forty  percent.  If  the  taxpayer
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13370-02-9

 S. 6542                             2
 
 makes  this election, the taxpayer must also make the elections provided
 for in paragraph (b) of subdivision six of this  section  and  paragraph
 (c)  of  this  subdivision.  If  the  taxpayer subsequently revokes this
 election,  the  taxpayer must revoke the elections provided for in para-
 graph (b) of subdivision six of this section and paragraph (c)  of  this
 subdivision. A taxpayer which does not make this election because it has
 no  exempt  CFC  income  will  not  be precluded from making those other
 elections. The income described in [subparagraph] SUBPARAGRAPHS (ii) AND
 (III) of this paragraph shall not constitute  investment  income.    THE
 INCOME  DESCRIBED  IN  SUBPARAGRAPH  (III)  OF  THIS PARAGRAPH SHALL NOT
 CONSTITUTE EXEMPT UNITARY CORPORATION DIVIDENDS.
   § 2. Paragraph (b) of subdivision 9 of section 208 of the tax  law  is
 amended by adding a new subparagraph 25 to read as follows:
   (25)  THE  AMOUNT OF ANY FEDERAL DEDUCTION ALLOWED PURSUANT TO SECTION
 250(A)(1)(B)(I) OF THE INTERNAL REVENUE CODE.
   § 3. Subdivision 5-a of section 210-A of the  tax  law,  as  added  by
 section  1  of  part  C of chapter 59 of the laws of 2019, is amended to
 read as follows:
   5-a. [Net global] GLOBAL intangible  low-taxed  income.  (A)  Notwith-
 standing  any  other  provision of this section, [net] global intangible
 low-taxed income shall be included  in  the  apportionment  fraction  as
 provided in this subdivision. [Receipts constituting net]
   (B)  FOR  NEW  YORK C CORPORATIONS, global intangible low-taxed income
 shall not be included in the numerator of  the  apportionment  fraction.
 [Receipts  constituting net] FIVE PERCENT of global intangible low-taxed
 income shall be included in the denominator of the  apportionment  frac-
 tion.
   (C)  FOR  NEW  YORK S CORPORATIONS, GLOBAL INTANGIBLE LOW-TAXED INCOME
 SHALL NOT BE INCLUDED IN THE NUMERATOR OF  THE  APPORTIONMENT  FRACTION.
 GLOBAL  INTANGIBLE LOW-TAXED INCOME SHALL BE INCLUDED IN THE DENOMINATOR
 OF THE APPORTIONMENT FRACTION.
   (D) For purposes of this subdivision, the term "[net] global  intangi-
 ble  low-taxed  income"  means the amount required to be included in the
 taxpayer's federal gross income pursuant to subsection  (a)  of  section
 951A  of  the  internal  revenue  code [less the amount of the deduction
 allowed under clause (i) of section 250(a)(1)(B) of such code].
   § 4. Paragraph 1 of subdivision (b) of section 1503 of the tax law  is
 amended by adding two new subparagraphs (U) and (V) to read as follows:
   (U)  TO  THE  EXTENT NOT EXCLUDED FROM INCOME PURSUANT TO SUBPARAGRAPH
 (A) OF THIS PARAGRAPH, NINETY-FIVE PERCENT OF THE INCOME REQUIRED TO  BE
 INCLUDED  IN  THE TAXPAYER'S FEDERAL GROSS INCOME PURSUANT TO SUBSECTION
 (A) OF SECTION 951A OF THE INTERNAL REVENUE CODE, WITHOUT REGARD TO  THE
 DEDUCTION UNDER SECTION 250 OF THE INTERNAL REVENUE CODE, THAT IS GENER-
 ATED BY A CORPORATION THAT IS NOT INCLUDED IN A COMBINED REPORT WITH THE
 TAXPAYER.
   (V)  TO  THE  EXTENT NOT EXCLUDED FROM INCOME PURSUANT TO SUBPARAGRAPH
 (A) OR (B) OF THIS PARAGRAPH, ANY AMOUNT TREATED AS A DIVIDEND  RECEIVED
 BY  THE  TAXPAYER  UNDER SECTION 78 OF THE INTERNAL REVENUE CODE THAT IS
 ATTRIBUTABLE TO THE INCOME REQUIRED TO BE  INCLUDED  IN  THE  TAXPAYER'S
 FEDERAL  GROSS INCOME PURSUANT TO SUBSECTION (A) OF SECTION 951A OF SUCH
 CODE.
   § 5. Paragraph 2 of subdivision (b) of section 1503 of the tax law  is
 amended by adding a new subparagraph (Y) to read as follows:
   (Y)  THE  AMOUNT  OF THE FEDERAL DEDUCTION ALLOWED PURSUANT TO SECTION
 250(A)(1)(B) OF THE INTERNAL REVENUE CODE.

 S. 6542                             3
 
   § 6. Subparagraph (H) of paragraph 2 of  subdivision  (b)  of  section
 1503  of the tax law, as amended by section 4-e of part KK of chapter 59
 of the laws of 2018, is amended to read as follows:
   (H)  in  the  discretion  of  the commissioner, any amount of interest
 directly or indirectly and any other amount directly attributable  as  a
 carrying  charge  or otherwise to subsidiary capital or to income, gains
 or losses from  subsidiary  capital,  or  to  the  income  described  in
 [subparagraph]  SUBPARAGRAPHS  (S), (U) AND (V) of paragraph one of this
 subdivision;
   § 7. This act shall take effect immediately and apply to taxable years
 beginning on or after January 1, 2019.