The New York State Senate

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10443
 
                           I N  A S S E M B L Y
 
                               May 18, 2020
                                ___________
 
 Introduced by COMMITTEE ON RULES -- (at request of M. of A. Dinowitz) --
   read once and referred to the Committee on Ways and Means
 
 AN  ACT  to amend the tax law and the administrative code of the city of
   New York, in relation to investment income
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  This act shall be known and may be cited as the "opportu-
 nity zone tax break elimination act".
   § 2. Paragraph (a) of subdivision 6 of section 208 of the tax law,  as
 amended  by  section  5  of part T of chapter 59 of the laws of 2015, is
 amended to read as follows:
   (a) (i) The term "investment income" means income,  including  capital
 gains  in  excess  of  capital  losses,  from investment capital, to the
 extent included in  computing  entire  net  income,  less,  (A)  in  the
 discretion  of  the  commissioner,  any interest deductions allowable in
 computing entire net income which are directly or  indirectly  attribut-
 able  to  investment capital or investment income, (B) ANY CAPITAL GAINS
 DEFERRED OR EXCLUDED UNDER 26 U.S.C. §1400-Z-2, provided, however,  that
 in no case shall investment income exceed entire net income. (ii) If the
 amount  of interest deductions subtracted under subparagraph (i) of this
 paragraph exceeds investment income, the  excess  of  such  amount  over
 investment  income must be added back to entire net income. (iii) If the
 taxpayer's investment income determined without regard to  the  interest
 deductions subtracted under subparagraph (i) of this paragraph comprises
 more  than eight percent of the taxpayer's entire net income, investment
 income determined without regard  to  such  interest  deductions  cannot
 exceed eight percent of the taxpayer's entire net income.
   §  3. Paragraph (a) of subdivision 5 of section 11-652 of the adminis-
 trative 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:
   (a) (i) The term "investment income" means income,  including  capital
 gains  in  excess  of  capital  losses,  from investment capital, to the
 extent included in  computing  entire  net  income,  less,  (A)  in  the
 discretion  of  the  commissioner  of  finance,  any interest deductions
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD09591-06-0

 A. 10443                            2
 
 allowable in computing entire net income which are directly or indirect-
 ly attributable to investment capital  or  investment  income,  (B)  ANY
 CAPITAL  GAINS  DEFERRED OR EXCLUDED UNDER 26 U.S.C §1400-Z-2, provided,
 however,  that  in  no  case  shall  investment income exceed entire net
 income.
   (ii) If the amount of interest deductions  subtracted  under  subpara-
 graph  (i)  of  this  paragraph exceeds investment income, the excess of
 such amount over investment income must be  added  back  to  entire  net
 income.
   (iii) If the taxpayer's investment income determined without regard to
 the  interest deductions subtracted under subparagraph (i) of this para-
 graph comprises more than eight percent of  the  taxpayer's  entire  net
 income,  investment  income  determined  without regard to such interest
 deductions cannot exceed eight percent  of  the  taxpayer's  entire  net
 income.
   § 4. This act shall take effect immediately and shall apply to taxable
 years beginning on and after January 1, 2020.