NY State Senate Bill S1545

Current Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 13, 2021	referred to budget and revenue

Co-Sponsors

S1545 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§208 & 1503, Tax L; amd §11-652, NYC Ad Cd
Versions Introduced in 2019-2020 Legislative Session:: S7029

S1545 (ACTIVE) - Summary

Relates to additional exclusions for entire net income; includes deductions pursuant to IRC section 163.

S1545 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S1545

SPONSOR: BENJAMIN
 
TITLE OF BILL:

An act to amend the tax law and the administrative code of the city of
New York, in relation to exclusions of the entire net income

 
PURPOSE OF THE BILL:

This legislation would prevent an unintended tax increase on businesses
resulting from the passage of the Federal Tax Cuts and Jobs Act of 2017.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends paragraph (b) of subdivision 9 of section 208 of the
Tax Law by adding two new paragraphs, 25 and 26, which state that entire
net income shall be determined without the exclusion, deduction, or
credit of amounts disallow as a deduction under paragraph 1 of
subsection (j) of section 163 of the internal revenue code and any
amount deduction by reason of a carry forward of disallowed business

interest under paragraph 2 of subsection (j) of section 163 of the
internal revenue code.

Section 2 amends Subparagraph 21 of paragraph (b) of subdivision 8 of
section 11-652 of the Administrative Code of the City of New York by
adding two new paragraphs, 22 and 23, which state that entire net income
shall be determined without the exclusion, deduction, or credit of
amounts disallow as a deduction under paragraph 1 of subsection (j) of
section 163 of the internal revenue code and any amount deduction by
reason of a carry forward of disallowed business interest under para-
graph 2 of subsection (j) of section 163 of the internal revenue code.

Section 3 amends paragraph 1 of subdivision (b) of section 1503 of the
Tax Law by adding a new subparagraph (T) to include the amount disal-
lowed as a deduction pursuant to clause (1) of subsection (j) of section
163 of the internal revenue code.

Section 4 amends paragraph 2 of subdivision (b) of section 1503 of the
Tax Law by adding a new subparagraph (Y) to include any amount deducted
by reason of a carry forward of disallowed business interest pursuant to
section 163(jj)(2) of the internal revenue code.

Section 5 is the effective date.

 
JUSTIFICATION:

As a result of the passage of the Federal Tax Cuts and Jobs Act of 2017,
changes were made to the deductibility of business interest expenses, by
capping the deduction of business interest expenses at 30 percent of
business income in exchange for a five year period where businesses
could expense capital investments. While New York is already decoupled
from Federal bonus depreciation, the interest deduction cap would result
in New York businesses facing a higher tax liability.

If the Federal government had not passed the Tax Cuts and Jobs Act of
2017, then businesses in New York would not be subject to a higher State
tax liability as a result of the interest deduction cap.  The passage of
this bill would prevent an unintended state-level tax increase, and
would prevent New York State from receiving unintended revenues as a
result of Federal tax changes, which is consistent with actions approved
in a bipartisan fashion as part of the passage of the FY 2019 Enacted
Budget.

 
PRIOR LEGISLATIVE HISTORY:

2019-20: S7029/A5961 2017-18: S.9030-A

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

This bill would have no fiscal impact, as it would preserve the New York
tax treatment of business interest that was in effect prior to the
enactment of the Federal Tax Cuts and Jobs Act of 2017.

 
EFFECTIVE DATE:
This bill shall take effect immediately and apply to taxable years
beginning on or after January 1, 2018.

S1545 (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1545
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 13, 2021
                                ___________
 
 Introduced  by Sens. BENJAMIN, KAPLAN -- read twice and ordered printed,
   and when printed to be committed to the Committee on Budget and Reven-
   ue
 
 AN ACT to amend the tax law and the administrative code of the  city  of
   New York, in relation to exclusions of the entire net 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 9 of section 208  of  the  tax
 law  is  amended  by  adding  two new subparagraphs 27 and 28 to read as
 follows:
   (27) THE AMOUNT DISALLOWED AS A DEDUCTION PURSUANT TO PARAGRAPH ONE OF
 SUBSECTION (J) OF SECTION 163 OF THE INTERNAL REVENUE CODE.
   (28) ANY AMOUNT DEDUCTED BY REASON OF A CARRY  FORWARD  OF  DISALLOWED
 BUSINESS INTEREST PURSUANT TO PARAGRAPH TWO OF SUBSECTION (J) OF SECTION
 163 OF THE INTERNAL REVENUE CODE.
   §  2.  Subparagraphs  21  and  22 of paragraph (b) of subdivision 8 of
 section 11-652 of the administrative code  of  the  city  of  New  York,
 subparagraph  21 as added by section 3-a of part KK of chapter 59 of the
 laws of 2018, subparagraph 22 as amended by chapter 121 of the  laws  of
 2020,  are amended and two new subparagraphs 23 and 24 are added to read
 as follows:
   (21) the amount of any federal deduction allowed pursuant  to  section
 250(a)(1)(A) of the internal revenue code[.];
   (22)  For  taxable  years  beginning  in two thousand nineteen and two
 thousand twenty, the amount of the  increase  in  the  federal  interest
 deduction allowed pursuant to section 163(j)(10) of the internal revenue
 code[.];
   (23) THE AMOUNT DISALLOWED AS A DEDUCTION PURSUANT TO PARAGRAPH ONE OF
 SUBSECTION (J) OF SECTION 163 OF THE INTERNAL REVENUE CODE;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04976-02-1

 S. 1545                             2
 
   (24)  ANY  AMOUNT  DEDUCTED BY REASON OF A CARRY FORWARD OF DISALLOWED
 BUSINESS INTEREST PURSUANT TO PARAGRAPH TWO OF SUBSECTION (J) OF SECTION
 163 OF THE INTERNAL REVENUE CODE.
   §  3. Paragraph 1 of subdivision (b) of section 1503 of the tax law is
 amended by adding a new subparagraph (W) to read as follows:
   (W) THE AMOUNT DISALLOWED AS A DEDUCTION PURSUANT TO PARAGRAPH ONE  OF
 SUBSECTION (J) OF SECTION 163 OF THE INTERNAL REVENUE CODE.
   §  4. Paragraph 2 of subdivision (b) of section 1503 of the tax law is
 amended by adding a new subparagraph (Z) to read as follows:
   (Z) ANY AMOUNT DEDUCTED BY REASON OF A  CARRY  FORWARD  OF  DISALLOWED
 BUSINESS INTEREST PURSUANT TO PARAGRAPH TWO OF SUBSECTION (J) OF SECTION
 163 OF THE INTERNAL REVENUE CODE.
   § 5. This act shall take effect immediately and apply to taxable years
 beginning on or after January 1, 2021.

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The New York State Senate

senate Bill S1545

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Current Bill Status - In Senate Committee Budget And Revenue Committee

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Co-Sponsors

S1545 (ACTIVE) - Details

S1545 (ACTIVE) - Summary

S1545 (ACTIVE) - Sponsor Memo

S1545 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S1545

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Sponsored By

Brian A. Benjamin

Current Bill Status - In Senate Committee Budget And Revenue Committee

Your Voice

Actions

Co-Sponsors

Anna M. Kaplan

S1545 (ACTIVE) - Details

S1545 (ACTIVE) - Summary

S1545 (ACTIVE) - Sponsor Memo

S1545 (ACTIVE) - Bill Text download pdf

Comments