NY State Senate Bill 2019-S4755

Senate Bill S4755

2019-2020 Legislative Session

Enacts the "Made in New York act" to reduce certain taxes on businesses and establishing the 3-D program

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Archive: Last Bill Status - In Senate Committee Budget And Revenue 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to budget and revenue
Mar 22, 2019	referred to budget and revenue

co-Sponsors

2019-S4755 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §612, Tax L; amd §425, RPT L; add Art 24 §§500 - 502, Ec Dev L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S1438
2017-2018: S4391
2021-2022: S4734

2019-S4755 (ACTIVE) - Summary

Enacts the "Made in New York act"; increases the deduction from the federal gross adjusted income of certain small businesses; grants eligibility for the basic STAR exemption to certain small businesses; and establishes the 3-D program which grants tax benefits to manufacturers which design, develop and manufacture a new product in the state.

2019-S4755 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4755

SPONSOR: GRIFFO
 
TITLE OF BILL:  An act to enact the "Made in New York act"; and to
amend the tax law, in relation to increasing the reduction of federal
adjusted gross income granted to certain small businesses (Part A); to
amend the real property tax law, in relation to extending eligibility
for the school tax relief exemption to certain small businesses (Part
B); and to amend the economic development law, in relation to establish-
ing the 3-D program (Part C)

 
PURPOSE:

To enact the "Made in New York act" to reduce certain taxes on busi-
nesses and establishing the 3-D program.

 
SUMMARY OF PROVISIONS:

Section 1. Sets forth the short title of the "Made in New York act."

Section 2. This act enacts into law major components of legislation

enabling existing businesses to compete, succeed and create jobs.  Each
component is contained in parts A-C as follows:

Part A. - Increases the five percent small business and farm income
deduction to ten percent. Section 1. Paragraph 39 of subsection (c) of
section 612 of the tax law, as added by section 1 of part Y of chapter
59 of the laws of 2013, is amended to allow small businesses and farms
tax deductions of 5 percent of net items of income, gain, loss and
deduction attributable to such business or farm for taxable years begin-
ning after 2014, and ten percent for taxable years beginning after 2015.

Part B. - Establishes a STAR property tax exemption for small busi-
nesses. Section 1. Paragraph (a) of subdivision 2 of section 425 of the
real property tax law, as amended by section 1 of part E of chapter 83
of the laws of 2002, is amended to include small businesses which satis-
fy the criteria set forth for a basic STAR exemption.

Establishes the type of property that may qualify for an exemption to be
a primary place of business of a small business. (a-1) To qualify for an
exemption pursuant to this section, a small business must be a business
entity, other than a sole proprietorship, which employs not less than
two employees, nor more than fifty employees at its primary place of
business. (a-2) For the purpose of this section, "person" or "owner"
shall include a small business.

Part C. Section 1. Amends the economic development law by adding a new
Article 24 to be known as the "3-D Program" which allows Startup NY
benefits to businesses that Dream, Design, and Develop a product in this
state. This section outlines the eligibility criteria for manufacturers
in order to participate in the 3-D program. This section also outlines
the tax benefits associated with the 3-D Program available to partic-
ipating small businesses.

Section 3. Sets forth a severability clause.

Section 4. Sets forth the effective date.

 
JUSTIFICATION:
This legislation is designed to catalyze the innovation, design and
manufacture of new products by creating a more business-friendly climate
in New York with additional tax relief and reform. The Made in New York
plan is designed to encourage through the concept for entrepreneurs of
DREAM IT HERE. DESIGN IT HERE. DEVELOP IT HERE. The goal being for inno-
vators to be able to bring exciting new ideas from the drawing board to
the marketplace under the umbrella of components created in this new tax
relief package and business friendly initiatives. Therefore, simultane-
ously creating the opportunity for job growth and sustainability of our
small business community, which continues to be the backbone of our
economy.

 
LEGISLATIVE HISTORY:

2017 -18 - S. 4391a- Investigations and Government Operations.
2015-16 - S. 1438 - Investigations and Government Operations.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately; provided that the applicable
effective date of Parts A through C of this act shall be as specifically
set forth in the last section of such parts.

2019-S4755 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4755
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 22, 2019
                                ___________
 
 Introduced  by  Sens.  GRIFFO,  ORTT,  SEWARD  -- read twice and ordered
   printed, and when printed to be committed to the Committee  on  Budget
   and Revenue
 
 AN ACT to enact the "Made in New York act"; and to amend the tax law, in
   relation  to increasing the reduction of federal adjusted gross income
   granted to certain small businesses (Part A); to amend the real  prop-
   erty  tax law, in relation to extending eligibility for the school tax
   relief exemption to certain small businesses (Part B);  and  to  amend
   the  economic  development  law,  in  relation to establishing the 3-D
   program (Part C)
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Short  title. This act shall be known as the "Made in New
 York act".
   § 2. This act enacts into law major components of legislation enabling
 existing businesses in the state to  compete,  succeed  and  create  new
 jobs.  Each  component  is  wholly contained within a Part identified as
 Parts A through C. The effective  date  for  each  particular  provision
 contained  within  such  Part  is  set forth in the last section of such
 Part. Any provision in any section contained within  a  Part,  including
 the  effective  date of the Part, which makes reference to a section "of
 this act", when used in connection with that particular component, shall
 be deemed to mean and refer to the corresponding section of the Part  in
 which  it  is  found.  Section  four  of this act sets forth the general
 effective date of this act.
 
                                  PART A
 
   Section 1. Paragraph 39 of subsection (c) of section 612  of  the  tax
 law,  as added by section 1 of part Y of chapter 59 of the laws of 2013,
 is amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10843-01-9

 S. 4755                             2
 
   (39) In the case of a taxpayer who is a small business who  has  busi-
 ness  income  and/or  farm  income  as defined in the laws of the United
 States, an amount equal to three percent of the  net  items  of  income,
 gain,  loss and deduction attributable to such business or farm entering
 into  federal adjusted gross income, but not less than zero, for taxable
 years beginning after two thousand thirteen, an amount equal  to  [three
 and  three-quarters] FIVE percent of the net items of income, gain, loss
 and deduction attributable to such business or farm entering into feder-
 al adjusted gross income, but not less  than  zero,  for  taxable  years
 beginning after two thousand fourteen, and an amount equal to [five] TEN
 percent  of  the net items of income, gain, loss and deduction attribut-
 able to such business or  farm  entering  into  federal  adjusted  gross
 income,  but  not  less than zero, for taxable years beginning after two
 thousand fifteen. For the purposes of this  paragraph,  the  term  small
 business shall mean a sole proprietor or a farm business who employs one
 or  more persons during the taxable year and who has net business income
 or net farm income of less than two hundred fifty thousand dollars.
   § 2. This act shall take effect immediately.
 
                                  PART B
 
   Section 1. Paragraph (a) of subdivision 2 of section 425 of  the  real
 property tax law, as amended by section 1 of part E of chapter 83 of the
 laws of 2002, is amended to read as follows:
   (a)  Overview.  There shall be two variations of the exemption author-
 ized by this section: an exemption for property  owned  by  persons  who
 satisfy  OR  A  SMALL BUSINESS WHICH SATISFIES the criteria set forth in
 subdivision three of this section, which shall be known as  the  "basic"
 STAR  exemption,  and an exemption for property owned by senior citizens
 who satisfy the criteria set forth in both subdivisions three  and  four
 of  this section, which shall be known as the "enhanced" STAR exemption.
 The exempt amount for each assessing unit shall be  determined  annually
 as  set  forth  in this subdivision, by multiplying the "base figure" by
 the locally-applicable "sales price differential factor," if any, multi-
 plying the product by the  appropriate  "equalization  factor"  for  the
 assessing  unit,  and,  if necessary, increasing the result to equal the
 applicable "floor." The result is then rounded to the  nearest  multiple
 of ten dollars.
   §  2. Paragraphs (a), (b) and (b-1) of subdivision 3 of section 425 of
 the real property tax law, paragraph (a) as amended by  chapter  264  of
 the laws of 2000, paragraph (b) as added by section 1 of part B of chap-
 ter 389 of the laws of 1997 and paragraph (b-1) as added by section 1 of
 part  FF  of  chapter  57 of the laws of 2010, are amended and three new
 paragraphs (a-1), (a-2) and (b-2) are added to read as follows:
   (a) Property use. To qualify for exemption pursuant to  this  section,
 the property must be a one, two or three family residence, a farm dwell-
 ing  [or],  residential property held in condominium or cooperative form
 of ownership OR THE PRIMARY PLACE OF BUSINESS OF A SMALL BUSINESS.    If
 the  property  is not an eligible type of property, but a portion of the
 property is partially used by the owner as  a  primary  residence,  that
 portion  which is so used shall be entitled to the exemption provided by
 this section; provided that in no event shall the exemption  exceed  the
 assessed value attributable to that portion.
   (A-1)  SMALL  BUSINESS.  TO  QUALIFY FOR AN EXEMPTION PURSUANT TO THIS
 SECTION, A SMALL BUSINESS MUST BE A BUSINESS ENTITY, OTHER THAN  A  SOLE

 S. 4755                             3
 
 PROPRIETORSHIP, WHICH EMPLOYS NOT LESS THAN TWO EMPLOYEES, NOR MORE THAN
 FIFTY EMPLOYEES AT ITS PRIMARY PLACE OF BUSINESS.
   (A-2)  PERSON.  FOR  THE PURPOSES OF THIS SECTION, "PERSON" OR "OWNER"
 SHALL INCLUDE A SMALL BUSINESS.
   (b) Primary residence. The property must serve as  the  primary  resi-
 dence  of  one or more of the owners thereof, OR AS THE PRIMARY PLACE OF
 BUSINESS OF A SMALL BUSINESS.
   (b-1) Income. For final assessment rolls to be used for  the  levy  of
 taxes  for  the  two thousand eleven-two thousand twelve school year and
 thereafter, [the] A RESIDENTIAL parcel's affiliated  income  may  be  no
 greater than five hundred thousand dollars, as determined by the commis-
 sioner  of taxation and finance pursuant to section one hundred seventy-
 one-u of the tax law, in order to be eligible for  the  basic  exemption
 authorized by this section. As used herein, the term "affiliated income"
 shall  mean  the  combined income of all of the owners of the parcel who
 resided primarily thereon on the applicable taxable status date, and  of
 any  owners' spouses residing primarily thereon. For exemptions on final
 assessment rolls to be used for the levy of taxes for the  two  thousand
 eleven-two  thousand  twelve  school  year,  affiliated  income shall be
 determined based upon the parties'  incomes  for  the  income  tax  year
 ending  in two thousand nine. In each subsequent school year, the appli-
 cable income tax year shall be advanced by one year. The  term  "income"
 as  used  herein  shall  have the same meaning as in subdivision four of
 this section.
   (B-2) PRIMARY PLACE OF BUSINESS. FOR SMALL  BUSINESSES,  THE  PROPERTY
 SHALL  BE PROPERTY AT A SINGLE LOCATION WITHIN THE STATE, UPON WHICH THE
 SMALL BUSINESS CARRIES ON ITS BUSINESS ENTERPRISE.
   § 3. Paragraph (a) of subdivision 5 of section 425 of the real proper-
 ty tax law, as amended by section 5 of part E of chapter 83 of the  laws
 of 2002, is amended to read as follows:
   (a)  Generally.  Every  school  district  shall notify, or cause to be
 notified, each person owning residential real property  AND  EACH  SMALL
 BUSINESS  OWNING  REAL PROPERTY in the school district of the provisions
 of this section. The provisions of this subdivision  may  be  met  by  a
 notice  sent to such persons in substantially the following form: "Resi-
 dential AND SMALL BUSINESS real  property  may  qualify  for  a  partial
 exemption from school district taxes under the New York state school tax
 relief  (STAR)  program. To receive such exemption, owners of qualifying
 property must file an application with their local assessor on or before
 the applicable taxable status date.   For  further  information,  please
 contact your local assessor."
   § 4. Paragraph (a) of subdivision 6 of section 425 of the real proper-
 ty  tax law, as amended by section 1 of part A of chapter 60 of the laws
 of 2016, is amended to read as follows:
   (a) Generally. All owners of the property who primarily reside thereon
 and who are not subject to the provisions of subdivision sixteen of this
 section must jointly OR, IN THE CASE OF A SMALL BUSINESS, THE  OWNER  OR
 OWNERS  THEREOF MUST file an application for exemption with the assessor
 on or before the appropriate taxable status date. Such  application  may
 be  filed  by  mail  if  it  is enclosed in a postpaid envelope properly
 addressed to the appropriate assessor, deposited in  a  post  office  or
 official depository under the exclusive care of the United States postal
 service, and postmarked by the United States postal service on or before
 the  applicable taxable status date. Each such application shall be made
 on a form prescribed by the commissioner, which shall require the appli-
 cant or applicants to agree to notify  the  assessor  if  their  primary

 S. 4755                             4
 
 residence  OR  PRIMARY PLACE OF BUSINESS changes while their property is
 receiving the exemption. The assessor may request that proof of residen-
 cy be submitted with  the  application.  If  the  applicant  requests  a
 receipt from the assessor as proof of submission of the application, the
 assessor  shall  provide  such receipt. If such request is made by other
 than personal request, the applicant shall provide the assessor  with  a
 self-addressed postpaid envelope in which to mail the receipt.
   §  5.  Subdivision  10 of section 425 of the real property tax law, as
 added by section 1 of part B of chapter 389 of the laws of  1997,  para-
 graph  (a)  as further amended by subdivision (b) of section 1 of part W
 of chapter 56 of the laws of 2010, is amended to read as follows:
   10. Proof of residency. (a) Requests. From time to time, the  assessor
 may  request  proof  of  residency OR PROOF OF PRIMARY PLACE OF BUSINESS
 from the owner or owners of any property which  is  exempt  pursuant  to
 this section. In addition, the assessor shall request proof of residency
 OR  PRIMARY  PLACE  OF  BUSINESS  from  any  such  owner  or owners when
 requested to do so by the commissioner.
   (b) Timing. A request for proof of residency OR PRIMARY PLACE OF BUSI-
 NESS shall be mailed at least sixty days prior to  the  ensuing  taxable
 status  date.  The owner or owners shall submit proof of their residency
 OR PRIMARY PLACE OF BUSINESS to the assessor on or  before  the  ensuing
 taxable status date.
   (c)  Review  of submission. The burden shall be on the owner or owners
 to establish that the property is their  primary  residence  OR  PRIMARY
 PLACE  OF BUSINESS.   If they submit proof of residency OR PRIMARY PLACE
 OF BUSINESS on or before  the  ensuing  taxable  status  date,  and  the
 submission demonstrates to the assessor's satisfaction that the property
 is  the primary residence OR PRIMARY PLACE OF BUSINESS of one or more of
 the owners thereof, and if the requirements of this section  are  other-
 wise  satisfied,  the  exemption shall continue in effect on the ensuing
 tentative assessment roll.   Otherwise, the assessor  shall  discontinue
 the  exemption on the next ensuing tentative assessment roll as provided
 [herein] IN THIS SECTION,  and,  where  appropriate,  shall  proceed  as
 further provided [herein] IN THIS SECTION.
   §  6.  Subparagraph  (i) of paragraph (a) of subdivision 11 of section
 425 of the real property tax law, as added by section 1  of  part  B  of
 chapter 389 of the laws of 1997, is amended to read as follows:
   (i)  the property may not be the primary residence OR PRIMARY PLACE OF
 BUSINESS of the owner or owners who applied for the exemption,
   § 7. Subparagraph (iii) of paragraph (b) of subdivision 14 of  section
 425  of  the  real  property tax law, as added by section 1 of part J of
 chapter 57 of the laws of 2013, is amended to read as follows:
   (iii) the property does not serve as  the  primary  residence  OR  THE
 PRIMARY PLACE OF BUSINESS of any of its owners;
   § 8. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2020.
 
                                  PART C
 
   Section  1.  The  economic  development law is amended by adding a new
 article 24 to read as follows:
 
                                ARTICLE 24
                                3-D PROGRAM
 
 SECTION 500. SHORT TITLE.

 S. 4755                             5
 
         501. ELIGIBILITY CRITERIA FOR MANUFACTURERS.
         502. TAX BENEFITS.
   §  500.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
 THE "DREAMED IN NEW YORK, DESIGNED IN NEW YORK AND DEVELOPED IN NEW YORK
 PROGRAM" OR THE "3-D PROGRAM".
   § 501. ELIGIBILITY CRITERIA FOR MANUFACTURERS. 1. IN ORDER TO  PARTIC-
 IPATE  IN THE 3-D PROGRAM, A BUSINESS THAT MANUFACTURES A PRODUCT WITHIN
 THE STATE SHALL SATISFY ALL OF THE FOLLOWING CRITERIA:
   (A) THE MANUFACTURER DESIGNED AND DEVELOPED A NEW PRODUCT  WITHIN  THE
 STATE;
   (B) THE MANUFACTURER MANUFACTURES SUCH NEW PRODUCT IN THIS STATE;
   (C)  THE  MANUFACTURER'S PRIMARY PLACE FOR THE MANUFACTURE OF SUCH NEW
 PRODUCT IS IN THE STATE; AND
   (D) THE COMMISSIONER SHALL HAVE CERTIFIED THAT SUCH  MANUFACTURER  HAS
 SATISFIED THE REQUIREMENTS OF PARAGRAPHS (A), (B) AND (C) OF THIS SUBDI-
 VISION,  AND  SHALL  HAVE CERTIFIED THE LOCATION OR LOCATIONS WITHIN THE
 STATE AT WHICH THE NEW PRODUCT IS MANUFACTURED.
   2. AN ELIGIBLE BUSINESS MAY BE ORGANIZED AS A CORPORATION, A  PARTNER-
 SHIP, A LIMITED LIABILITY COMPANY OR A SOLE PROPRIETORSHIP.
   3.  A  BUSINESS  MUST  BE IN COMPLIANCE WITH ALL WORKER PROTECTION AND
 ENVIRONMENTAL LAWS AND REGULATIONS. IN ADDITION, A  BUSINESS  SHALL  NOT
 OWE ANY PAST DUE FEDERAL, STATE OR MUNICIPAL TAXES.
   §  502. TAX BENEFITS. A BUSINESS THAT IS CERTIFIED BY THE COMMISSIONER
 TO BE ELIGIBLE TO PARTICIPATE IN THE 3-D PROGRAM AND ITS EMPLOYEES SHALL
 BE ENTITLED TO ALL BENEFITS GRANTED TO PARTICIPANTS IN THE  START-UP  NY
 PROGRAM  PURSUANT  TO  ARTICLE  TWENTY-ONE OF THIS CHAPTER AND ANY OTHER
 PROVISION OF LAW RELATED THERETO.
   § 2. This act shall take effect immediately and shall apply  to  taxes
 imposed on or after January 1, 2020.
   § 3. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion,  section  or  part  of  this act shall be adjudged by any court of
 competent jurisdiction to be invalid, such judgment  shall  not  affect,
 impair,  or  invalidate  the remainder thereof, but shall be confined in
 its operation to the clause, sentence, paragraph,  subdivision,  section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of
 the  legislature  that  this  act  would  have been enacted even if such
 invalid provisions had not been included herein.
   § 4. This act shall take effect immediately; provided,  however,  that
 the  applicable effective date of Parts A through C of this act shall be
 as specifically set forth in the last section of such Parts.

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Senate Bill S4755

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Sponsored By

Joseph A. Griffo