S T A T E O F N E W Y O R K
________________________________________________________________________
3152
2021-2022 Regular Sessions
I N A S S E M B L Y
January 22, 2021
___________
Introduced by M. of A. KIM, GOTTFRIED, O'DONNELL, COLTON, GLICK, WALKER,
REYES, BARRON, EPSTEIN -- read once and referred to the Committee on
Ways and Means
AN ACT to amend the tax law, in relation to the taxation of investment
income
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature finds that the state of
New York taxes income derived from capital gains at the same rate as
income derived from labor and, like most other states, does not offer
preferential tax rates for income derived from capital gains, as
compared to the tax rates for income derived from labor. Whereas the
federal government currently taxes long term capital gains at a rate
that is substantially lower than the rate of taxation that applies to
income from labor. The people of the state of New York wish to correct
for the imbalance of taxation rates on long term capital gains and labor
at the federal level unless and until the federal government equalizes
these rates. It is the intent of the legislature that this act amends
New York's tax law to provide needed revenue through the taxation of
investment income from wealthy individuals.
§ 2. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 43 to read as follows:
(43) (A) FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWENTY-ONE, THE DEPARTMENT SHALL CONDUCT AN ANNUAL REVIEW TO
DETERMINE THE DISPARITY BETWEEN FEDERAL INCOME TAX RATES ON ORDINARY
INCOME AND FEDERAL INCOME TAX RATES ON CAPITAL GAINS, AS WELL AS THE
TYPES OF INCOME TAXED AT CAPITAL GAINS RATES, AND SHALL PUBLISH ITS
FINDINGS. FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWENTY-TWO, THERE IS IMPOSED A SURCHARGE ON THE SHARE OF A
TAXPAYER'S NEW YORK TAXABLE INCOME THAT IS TAXED AT PREFERENTIAL FEDERAL
CAPITAL GAINS RATES IN AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05954-01-1
A. 3152 2
FEDERAL ORDINARY INCOME TAX RATE AND THE FEDERAL CAPITAL GAINS TAX RATE
FOR SUCH TAXPAYER, BASED ON THE BRACKETS IN SECTION 1 OF THE INTERNAL
REVENUE CODE. THE SURCHARGE SHALL BE IN ADDITION TO ANY OTHER TAX, FEE
OR SURCHARGE FOR WHICH THE TAXPAYER IS LIABLE.
(B) EACH TAXPAYER SUBJECT TO THE SURCHARGE PURSUANT TO SUBPARAGRAPH
(A) OF THIS PARAGRAPH SHALL FILE A RETURN WITH THE DEPARTMENT IN SUCH
FORM AND CONTAINING SUCH INFORMATION AS THE DEPARTMENT MAY PRESCRIBE.
SUCH RETURN SHALL ACCURATELY SET FORTH THE AMOUNT OF THE NET GAIN CALCU-
LATED PURSUANT TO SUBPARAGRAPH (A) OF THIS PARAGRAPH FOR THE PRECEDING
TAXABLE YEAR AND THE AMOUNT OF THE TAXPAYER'S SURCHARGE LIABILITY FOR
SUCH YEAR. A PERSON REQUIRED TO FILE A RETURN SHALL, WITHOUT ASSESS-
MENT, NOTICE OR DEMAND, PAY ANY SURCHARGE DUE THEREON TO THE DEPARTMENT
ON OR BEFORE THE DATE SPECIFIED IN STATE LAW, DETERMINED WITHOUT REGARD
TO ANY EXTENSION OF TIME FOR FILING THE RETURN.
(C) IF ANY PERSON FAILS TO PAY THE AMOUNT OF THE SURCHARGE REPORTED
DUE ON A RETURN WITHIN THE TIME SPECIFIED, THERE SHALL BE IMPOSED A
PENALTY EQUAL TO TWENTY PERCENT OF SUCH AMOUNT DUE AND UNPAID. SUCH
AMOUNT SHALL BEAR INTEREST AT THE RATE OF TWO PERCENT PER MONTH OR FRAC-
TION THEREOF, FROM THE DUE DATE OF SUCH SURCHARGE UNTIL THE DATE OF
PAYMENT.
(D) THE DEPARTMENT MAY ADOPT RULES AND REGULATIONS TO IMPLEMENT THE
PROVISIONS OF THIS SECTION.
(E) AT THE CLOSE OF EACH FISCAL YEAR THE COMPTROLLER IS AUTHORIZED TO
RECORD AS REVENUE FOR SUCH FISCAL YEAR THE AMOUNT OF THE SURCHARGE
IMPOSED UNDER THE PROVISIONS OF THIS PARAGRAPH THAT IS RECEIVED BY THE
DEPARTMENT.
§ 3. This act shall take effect immediately.