S T A T E O F N E W Y O R K
________________________________________________________________________
2830
2021-2022 Regular Sessions
I N S E N A T E
January 25, 2021
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Introduced by Sens. RAMOS, GOUNARDES, HOYLMAN, SALAZAR -- read twice and
ordered printed, and when printed to be committed to the Committee on
Budget and Revenue
AN ACT to amend the tax law, in relation to establishing the NYC under 3
act
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known and may be cited as the "NYC under
3 act".
§ 2. The tax law is amended by adding a new article 24-A to read as
follows:
ARTICLE 24-A
NYC UNDER 3 ACT
SECTION 860. DEFINITIONS.
861. IMPOSITION OF TAX AND RATE.
862. PASS THROUGH OF TAX PROHIBITED.
863. EXEMPTION OVERRIDE.
864. PAYMENT OF TAX.
865. DEPOSIT AND DISPOSITION OF REVENUE.
866. PROCEDURAL PROVISIONS.
867. ENFORCEMENT WITH OTHER TAXES.
§ 860. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
(A) EMPLOYER. EMPLOYER MEANS AN EMPLOYER REQUIRED BY SECTION SIX
HUNDRED SEVENTY-ONE OF THIS CHAPTER TO DEDUCT AND WITHHOLD TAX FROM
WAGES, THAT HAS A PAYROLL EXPENSE IN EXCESS OF SIX HUNDRED TWENTY-FIVE
THOUSAND DOLLARS IN ANY CALENDAR QUARTER; OTHER THAN:
(1) ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES;
(2) THE UNITED NATIONS;
(3) AN INTERSTATE AGENCY OR PUBLIC CORPORATION CREATED PURSUANT TO AN
AGREEMENT OR COMPACT WITH ANOTHER STATE OR THE DOMINION OF CANADA; OR
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06656-01-1
S. 2830 2
(4) (I) ANY NON-PROFIT EARLY CHILDHOOD SERVICES PROVIDER WHICH
RECEIVES FUNDING FROM THE FEDERAL OR STATE GOVERNMENT, OR ANY MUNICIPAL,
STATE OR FEDERAL AGENCY, OR POLITICAL SUBDIVISION.
(II) AS USED IN THIS SECTION, THE TERM "EARLY CHILDHOOD SERVICES"
SHALL MEAN SERVICES WHICH INCLUDE, BUT ARE NOT LIMITED TO, REGISTERED,
CERTIFIED OR LICENSED CARE IN FAMILY DAY CARE HOMES; GROUP FAMILY DAY
CARE HOMES; SCHOOL-AGE CHILD CARE PROGRAMS; HEAD START PROGRAMS; DAY
CARE CENTERS; CHILD CARE WHICH MAY BE PROVIDED WITHOUT A PERMIT, CERTIF-
ICATE OR REGISTRATION IN ACCORDANCE WITH THIS STATUTE; EARLY CHILDHOOD
EDUCATION PROGRAMS APPROVED BY THE STATE EDUCATION DEPARTMENT; AND CARE
PROVIDED IN A CHILDREN'S CAMP AS DEFINED IN SECTION FOURTEEN HUNDRED OF
THE PUBLIC HEALTH LAW.
(B) PAYROLL EXPENSE. PAYROLL EXPENSE MEANS WAGES AND COMPENSATION AS
DEFINED IN SECTIONS 3121 AND 3231 OF THE INTERNAL REVENUE CODE (WITHOUT
REGARD TO SECTION 3121(A)(1) AND SECTION 3231(E)(2)(A)(I)), PAID TO ALL
COVERED EMPLOYEES.
(C) COVERED EMPLOYEE. COVERED EMPLOYEE MEANS AN EMPLOYEE WHO IS
EMPLOYED IN A CITY WITH A POPULATION OF ONE MILLION OR MORE.
§ 861. IMPOSITION OF TAX AND RATE. FOR THE PURPOSE OF PROVIDING AN
ADDITIONAL STABLE AND RELIABLE DEDICATED FUNDING SOURCE TO ADDRESS CHILD
CARE AFFORDABILITY, ACCESSIBILITY, AND QUALITY FOR FAMILIES WITH CHIL-
DREN UNDER THREE YEARS OF AGE IN A CITY WITH A POPULATION OF ONE MILLION
OR MORE, A TAX IS HEREBY IMPOSED ON EMPLOYERS AND INDIVIDUALS AS
FOLLOWS: FOR EMPLOYERS WHO ENGAGE IN BUSINESS IN A CITY WITH A POPU-
LATION OF ONE MILLION OR MORE, THE TAX IS IMPOSED AT A RATE OF (A)
FIFTEEN HUNDREDTHS (.15) PERCENT OF THE PAYROLL EXPENSE FOR EMPLOYERS
WITH PAYROLL EXPENSE IN EXCESS OF SIX HUNDRED TWENTY-FIVE THOUSAND
DOLLARS AND NOT MORE THAN ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
PER CALENDAR QUARTER, (B) EIGHTEEN HUNDREDTHS (.18) PERCENT OF THE
PAYROLL EXPENSE FOR EMPLOYERS WITH PAYROLL EXPENSE IN EXCESS OF ONE
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS AND NOT MORE THAN TWO MILLION
FIVE HUNDRED THOUSAND DOLLARS PER CALENDAR QUARTER, AND (C) TWENTY-TWO
HUNDREDTHS (.22) PERCENT OF THE PAYROLL EXPENSE FOR EMPLOYERS WITH
PAYROLL EXPENSE IN EXCESS OF TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
PER CALENDAR QUARTER. IF THE EMPLOYER IS A PROFESSIONAL EMPLOYER ORGAN-
IZATION, AS DEFINED IN SECTION NINE HUNDRED SIXTEEN OF THE LABOR LAW,
THE EMPLOYER'S TAX SHALL BE CALCULATED BY DETERMINING THE PAYROLL
EXPENSE ATTRIBUTABLE TO EACH CLIENT WHO HAS ENTERED INTO A PROFESSIONAL
EMPLOYER AGREEMENT WITH SUCH ORGANIZATION AND THE PAYROLL EXPENSE
ATTRIBUTABLE TO SUCH ORGANIZATION ITSELF, MULTIPLYING EACH OF THOSE
PAYROLL EXPENSE AMOUNTS BY THE APPLICABLE RATE SET FORTH IN THIS PARA-
GRAPH AND ADDING THOSE PRODUCTS TOGETHER.
§ 862. PASS THROUGH OF TAX PROHIBITED. AN EMPLOYER CANNOT DEDUCT FROM
THE WAGES OR COMPENSATION OF AN EMPLOYEE ANY AMOUNT THAT REPRESENTS ALL
OR ANY PORTION OF THE TAX IMPOSED ON THE EMPLOYER UNDER THIS ARTICLE.
§ 863. EXEMPTION OVERRIDE. (A) EXCEPT AS PROVIDED IN SUBSECTION (B) OF
THIS SECTION, ANY EXEMPTION FROM TAX SPECIFIED IN ANY OTHER NEW YORK
STATE LAW WILL NOT APPLY TO THE TAX IMPOSED BY THIS ARTICLE.
(B) IF A TAX-FREE NY AREA APPROVED PURSUANT TO THE PROVISIONS OF ARTI-
CLE TWENTY-ONE OF THE ECONOMIC DEVELOPMENT LAW IS LOCATED WITHIN A CITY
WITH A POPULATION OF ONE MILLION OR MORE, THE PAYROLL EXPENSE IN SUCH
TAX-FREE NY AREA OF ANY EMPLOYER THAT IS LOCATED IN SUCH AREA AND
ACCEPTED INTO THE START-UP NY PROGRAM SHALL BE EXEMPT FROM THE TAX
IMPOSED UNDER THIS ARTICLE.
§ 864. PAYMENT OF TAX. EMPLOYERS WITH PAYROLL EXPENSE. THE TAX IMPOSED
ON THE PAYROLL EXPENSE OF EMPLOYERS UNDER SECTION EIGHT HUNDRED SIXTY-
S. 2830 3
ONE OF THIS ARTICLE MUST BE PAID AT THE SAME TIME THE EMPLOYER IS
REQUIRED TO REMIT PAYMENTS UNDER SECTION SIX HUNDRED SEVENTY-FOUR OF
THIS CHAPTER; PROVIDED HOWEVER, THAT EMPLOYERS SUBJECT TO THE PROVISIONS
IN SECTION NINE OF THIS CHAPTER MUST PAY THE TAX ON THE PAYROLL EXPENSE
AT THE SAME TIME AS THE WITHHOLDING TAX REMITTED UNDER THE ELECTRONIC
PAYMENT REPORTING SYSTEM AND THE ELECTRONIC FUNDS TRANSFER SYSTEM
AUTHORIZED BY SECTION NINE OF THIS CHAPTER.
§ 865. DEPOSIT AND DISPOSITION OF REVENUE. (A) THE TAXES, INTEREST,
AND PENALTIES IMPOSED BY THIS ARTICLE AND COLLECTED OR RECEIVED BY THE
COMMISSIONER SHALL BE DEPOSITED DAILY WITH SUCH RESPONSIBLE BANKS, BANK-
ING HOUSES OR TRUST COMPANIES, AS MAY BE DESIGNATED BY THE COMPTROLLER
OF THE CITY OF NEW YORK, TO THE CREDIT OF SUCH COMPTROLLER IN TRUST FOR
THE CITY OF NEW YORK. SUCH DEPOSITS SHALL BE KEPT SEPARATE AND APART
FROM ALL OTHER MONEY IN THE POSSESSION OF THE COMPTROLLER OF THE CITY OF
NEW YORK. THE COMPTROLLER OF THE CITY OF NEW YORK SHALL REQUIRE ADEQUATE
SECURITY FROM ALL SUCH DEPOSITORIES. OF THE TOTAL REVENUE COLLECTED OR
RECEIVED UNDER THIS ARTICLE, THE COMPTROLLER OF THE CITY OF NEW YORK
SHALL RETAIN SUCH AMOUNT AS THE COMMISSIONER MAY DETERMINE TO BE NECES-
SARY FOR REFUNDS UNDER THIS ARTICLE. THE COMPTROLLER OF THE CITY OF NEW
YORK IS AUTHORIZED AND DIRECTED TO DEDUCT FROM THE AMOUNTS IT RECEIVES
UNDER THIS ARTICLE, BEFORE DEPOSIT INTO THE TRUST ACCOUNTS DESIGNATED BY
SUCH COMPTROLLER, A REASONABLE AMOUNT NECESSARY TO EFFECTUATE REFUNDS OF
THE DEPARTMENT TO REIMBURSE THE DEPARTMENT FOR THE COSTS INCURRED TO
ADMINISTER, COLLECT AND DISTRIBUTE THE TAXES IMPOSED BY THIS ARTICLE.
(B) AFTER RESERVING SUCH AMOUNT FOR SUCH REFUNDS AND DEDUCTING SUCH
AMOUNTS FOR SUCH COSTS, AS PROVIDED FOR IN SUBSECTION (A) OF THIS
SECTION, THE COMMISSIONER SHALL CERTIFY TO THE COMPTROLLER OF THE CITY
OF NEW YORK THE AMOUNT OF ALL REVENUES SO RECEIVED DURING THE PRIOR
MONTH AS A RESULT OF THE TAXES, INTEREST AND PENALTIES SO IMPOSED. THE
AMOUNT OF REVENUES SO CERTIFIED SHALL BE PAID OVER BY THE FIFTEENTH AND
THE FINAL BUSINESS DAY OF EACH SUCCEEDING MONTH FROM SUCH ACCOUNT WITH-
OUT APPROPRIATION INTO THE GENERAL FUND OF THE CITY OF NEW YORK.
§ 866. PROCEDURAL PROVISIONS. (A) GENERAL. ALL PROVISIONS OF ARTICLE
TWENTY-TWO OF THIS CHAPTER SHALL APPLY TO THE PROVISIONS OF THIS ARTICLE
IN THE SAME MANNER AND WITH THE SAME FORCE AND EFFECT AS IF THE LANGUAGE
OF ARTICLE TWENTY-TWO OF THIS CHAPTER HAD BEEN INCORPORATED IN FULL INTO
THIS ARTICLE AND HAD BEEN SPECIFICALLY ADJUSTED FOR AND EXPRESSLY
REFERRED TO THE TAX IMPOSED BY THIS ARTICLE, EXCEPT TO THE EXTENT THAT
ANY PROVISION IS EITHER INCONSISTENT WITH A PROVISION OF THIS ARTICLE OR
IS NOT RELEVANT TO THIS ARTICLE. NOTWITHSTANDING THE PRECEDING SENTENCE,
NO CREDIT AGAINST TAX IN ARTICLE TWENTY-TWO OF THIS CHAPTER CAN BE USED
TO OFFSET THE TAX DUE UNDER THIS ARTICLE.
(B) COMBINED FILINGS. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS
ARTICLE:
(1) THE COMMISSIONER MAY REQUIRE THE FILING OF A COMBINED RETURN WHICH
MAY ALSO INCLUDE ANY OF THE RETURNS REQUIRED TO BE FILED BY A TAXPAYER
PURSUANT TO THE PROVISIONS OF SECTION SIX HUNDRED FIFTY-ONE OF THIS
CHAPTER AND WHICH MAY BE REQUIRED TO BE FILED BY SUCH TAXPAYER PURSUANT
TO ANY LOCAL LAW ENACTED PURSUANT TO THE AUTHORITY OF ARTICLE THIRTY,
THIRTY-A OR THIRTY-B OF THIS CHAPTER.
(2) WHERE A COMBINED RETURN IS REQUIRED, AND WITH RESPECT TO THE
PAYMENT OF ESTIMATED TAX, THE COMMISSIONER MAY ALSO REQUIRE THE PAYMENT
TO IT OF A SINGLE AMOUNT WHICH SHALL EQUAL THE TOTAL OF THE AMOUNTS
(TOTAL TAXES LESS ANY CREDITS OR REFUNDS) WHICH WOULD HAVE BEEN REQUIRED
TO BE PAID WITH THE RETURNS OR IN PAYMENT OF ESTIMATED TAX PURSUANT TO
THE PROVISIONS OF THIS ARTICLE, THE PROVISIONS OF ARTICLE TWENTY-TWO OF
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THIS CHAPTER, AND THE PROVISIONS OF LOCAL LAWS ENACTED UNDER THE AUTHOR-
ITY OF ARTICLE THIRTY, THIRTY-A OR THIRTY-B OF THIS CHAPTER.
(3) NOTWITHSTANDING ANY OTHER LAW TO THE CONTRARY, THE COMMISSIONER
MAY REQUIRE THAT ALL FILINGS OF FORMS OR RETURNS UNDER THIS ARTICLE
SHALL BE FILED ELECTRONICALLY AND ALL PAYMENTS OF TAX MUST BE PAID ELEC-
TRONICALLY.
§ 867. ENFORCEMENT WITH OTHER TAXES. (A) JOINT ASSESSMENT. IF THERE IS
ASSESSED A TAX UNDER THIS ARTICLE AND THERE IS ALSO ASSESSED A TAX
AGAINST THE SAME TAXPAYER PURSUANT TO ARTICLE TWENTY-TWO OF THIS CHAPTER
OR UNDER A LOCAL LAW ENACTED PURSUANT TO THE AUTHORITY OF ARTICLE THIR-
TY, THIRTY-A, OR THIRTY-B OF THIS CHAPTER, AND PAYMENT OF A SINGLE
AMOUNT IS REQUIRED UNDER THE PROVISIONS OF THIS ARTICLE, SUCH PAYMENT
SHALL BE DEEMED TO HAVE BEEN MADE WITH RESPECT TO THE TAXES SO ASSESSED
IN PROPORTION TO THE AMOUNTS OF SUCH TAXES DUE, INCLUDING TAX, PENAL-
TIES, INTEREST AND ADDITIONS TO TAX.
(B) JOINT ACTION. IF THE COMMISSIONER TAKES ACTION UNDER SUCH ARTICLE
TWENTY-TWO OR UNDER A LOCAL LAW ENACTED PURSUANT TO THE AUTHORITY OF
ARTICLE THIRTY, THIRTY-A, OR THIRTY-B OF THIS CHAPTER WITH RESPECT TO
THE ENFORCEMENT AND COLLECTION OF THE TAX OR TAXES ASSESSED UNDER SUCH
ARTICLES, THE COMMISSIONER SHALL, WHENEVER POSSIBLE AND NECESSARY,
ACCOMPANY SUCH ACTION WITH A SIMILAR ACTION UNDER SIMILAR ENFORCEMENT
AND COLLECTION PROVISIONS OF THE TAX IMPOSED BY THIS ARTICLE.
(C) APPORTIONMENT OF MONEYS COLLECTED BY JOINT ACTION. ANY MONEYS
COLLECTED AS A RESULT OF SUCH JOINT ACTION SHALL BE DEEMED TO HAVE BEEN
COLLECTED IN PROPORTION TO THE AMOUNTS DUE, INCLUDING TAX, PENALTIES,
INTEREST AND ADDITIONS TO TAX, UNDER ARTICLE TWENTY-TWO OF THIS CHAPTER
OR UNDER A LOCAL LAW ENACTED PURSUANT TO THE AUTHORITY OF ARTICLE THIR-
TY, THIRTY-A, OR THIRTY-B OF THIS CHAPTER AND THE TAX IMPOSED BY THIS
ARTICLE.
(D) JOINT DEFICIENCY ACTION. WHENEVER THE COMMISSIONER TAKES ANY
ACTION WITH RESPECT TO A DEFICIENCY OF INCOME TAX UNDER ARTICLE TWENTY-
TWO OF THIS CHAPTER OR UNDER A LOCAL LAW ENACTED PURSUANT TO THE AUTHOR-
ITY OF ARTICLE THIRTY, THIRTY-A, OR THIRTY-B OF THIS CHAPTER, OTHER THAN
THE ACTION SET FORTH IN SUBSECTION (A) OF THIS SECTION, THE COMMISSIONER
MAY IN HIS OR HER DISCRETION ACCOMPANY SUCH ACTION WITH A SIMILAR ACTION
UNDER THIS ARTICLE.
§ 3. This act shall take effect immediately.
