The New York State Senate

 
                     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.