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.