NY State Senate Bill S1799

Current Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 15, 2021	referred to budget and revenue

Co-Sponsors

S1799 (ACTIVE) - Details

See Assembly Version of this Bill:: A4871
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§210-B & 606, Tax L
Versions Introduced in 2019-2020 Legislative Session:: S7043, A9049

S1799 (ACTIVE) - Summary

Establishes a first permanent payroll employee tax credit which allows a business to receive a tax credit for the three years following the employment of such business' first permanent payroll employee where such credit equals a portion of the amount it costs to employ such permanent payroll employee.

S1799 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S1799

SPONSOR: BORRELLO
 
TITLE OF BILL:

An act to amend the tax law, in relation to establishing a first perma-
nent payroll employee tax credit

 
PURPOSE:

The purpose of this bill is to establish a first permanent payroll
employee tax credit.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends Section 210-a of the Tax Law by adding a
new subdivision 55. This allows for a business tax credit to be avail-
able for each of the three years succeeding the date a taxpayer employs
their first full time permanent employee. The amount for the credit in
the first year is 25 percent of the total cost to' employ a full-time,
permanent employee; second year, 20 percent and the third year, 10

percent. The maximum aggregate amount of tax credits paid each year
shall be capped at $15 million and be allocated by the Commissioner of
Tax and Finance.

Sections 2 and 3 amend Section 606 of the Tax Law by adding a new
subsection (kkk) and adding a new clause (xlvi) of subparagraph (B) of
paragraph of subsection (i). The total cost to employ shall mean the
base salary, New York state payroll taxes and the value of employment
benefits received.

Section 4 of the bill provides the effective date.

 
JUSTIFICATION:

Small businesses in New York have a difficult time becoming established
in a challenging economic climate burdened with regulatory expenses and
excessive taxes. We need to provide incentives to encourage small busi-
nesses to grow and promote a thriving workforce. According to the Tax
Foundation's State Business Tax Climate Index, New York ranks second
worst among 50 states.  This legislation would provide a state income
tax credit for the first permanent payroll employee hired by an entre-
preneur. Once a sole proprietorship moves to having paid employees,
owners are responsible for workers compensation insurance and added
business costs. The First Employee Tax Credit will help ease the
disproportionate rise in costs that results from adding just one employ-
ee. Providing a tax credit will incentivize small business owners to
grow, allowing New Yorkers to succeed in our state's economy with more
people looking to start their own small businesses.

 
LEGISLATIVE HISTORY:

2020: S7043/A9049 Referred to Budget and Revenue

 
FISCAL IMPLICATIONS:

The tax credit is capped at $15 million per year.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
commencing on and after January 1, 2022.

S1799 (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1799
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 15, 2021
                                ___________
 
 Introduced  by  Sens.  BORRELLO, AKSHAR, GALLIVAN, JORDAN, O'MARA, ORTT,
   RITCHIE, TEDISCO -- 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 a first perma-
   nent payroll employee tax credit

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  210-B  of the tax law is amended by adding a new
 subdivision 55 to read as follows:
   55. FIRST PERMANENT PAYROLL EMPLOYEE CREDIT. (A) GENERAL.  A  TAXPAYER
 SHALL  BE  ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVI-
 SION, AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE  FIRST  FULL-TIME,
 PERMANENT  EMPLOYEE SUCH TAXPAYER EMPLOYS, PROVIDED THAT SUCH FULL-TIME,
 PERMANENT EMPLOYEE IS ACCOUNTED FOR ON SUCH TAXPAYER'S EMPLOYER  PAYROLL
 RECORDS.  SUCH  CREDIT  SHALL  BE  AVAILABLE FOR EACH OF THE THREE YEARS
 SUCCEEDING THE DATE A TAXPAYER EMPLOYS THEIR FIRST FULL-TIME,  PERMANENT
 EMPLOYEE.
   (B) AMOUNT OF CREDIT. A CREDIT AUTHORIZED BY THIS SUBDIVISION SHALL BE
 EQUAL TO:
   (1) IN THE FIRST YEAR, TWENTY-FIVE PERCENT OF THE TOTAL COST TO EMPLOY
 A  FULL-TIME, PERMANENT EMPLOYEE, WHEN SUCH EMPLOYEE IS ACCOUNTED FOR ON
 AN EMPLOYER'S PAYROLL RECORDS AND  IS  THE  FIRST  FULL-TIME,  PERMANENT
 EMPLOYEE SUCH TAXPAYER HAS HIRED;
   (2)  IN  THE SECOND YEAR, TWENTY PERCENT OF THE TOTAL COST TO EMPLOY A
 FULL-TIME, PERMANENT EMPLOYEE, WHEN SUCH EMPLOYEE IS ACCOUNTED FOR ON AN
 EMPLOYER'S PAYROLL RECORDS AND IS THE FIRST FULL-TIME, PERMANENT EMPLOY-
 EE SUCH TAXPAYER HAS HIRED; AND
   (3) IN THE THIRD YEAR, TEN PERCENT OF THE TOTAL COST TO EMPLOY A FULL-
 TIME, PERMANENT EMPLOYEE, WHEN SUCH EMPLOYEE  IS  ACCOUNTED  FOR  ON  AN
 EMPLOYER'S PAYROLL RECORDS AND IS THE FIRST FULL-TIME, PERMANENT EMPLOY-
 EE SUCH TAXPAYER HAS HIRED.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04342-01-1

 S. 1799                             2
 
   (C)  CARRYOVERS.  THE  CREDIT  ALLOWED  UNDER  THIS SUBDIVISION MAY BE
 CLAIMED AND IF NOT FULLY USED IN THE INITIAL YEAR FOR WHICH  THE  CREDIT
 IS  CLAIMED MAY BE CARRIED OVER, IN ORDER, TO EACH OF THE TWO SUCCEEDING
 TAXABLE YEARS. THE CREDIT AUTHORIZED BY THIS SUBDIVISION MAY NOT BE USED
 TO REDUCE THE TAX LIABILITY OF THE CREDIT CLAIMANT BELOW ZERO.
   (D) DEFINITIONS. FOR PURPOSES OF THIS SUBDIVISION, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (1)  "TOTAL  COST  TO  EMPLOY"  SHALL MEAN BASE SALARY, NEW YORK STATE
 PAYROLL TAXES AND THE VALUE OF EMPLOYMENT BENEFITS RECEIVED.
   (2) "NEW YORK STATE PAYROLL TAXES" SHALL MEAN ALL STATE TAXES PAID  BY
 AN  EMPLOYER  FROM  SUCH  EMPLOYER'S  OWN  FUNDS AND DIRECTLY RELATED TO
 EMPLOYING AN EMPLOYEE.
   (E) AGGREGATE AMOUNT. THE AGGREGATE  AMOUNT  OF  TAX  CREDITS  ALLOWED
 PURSUANT  TO  THE  AUTHORITY OF THIS SUBDIVISION AND SUBSECTION (KKK) OF
 SECTION SIX HUNDRED SIX OF THIS CHAPTER SHALL BE FIFTEEN MILLION DOLLARS
 EACH YEAR. SUCH AGGREGATE AMOUNTS OF CREDITS SHALL BE ALLOCATED  BY  THE
 COMMISSIONER.  IF  THE  TOTAL AMOUNT OF ALLOCATED CREDITS APPLIED FOR IN
 ANY PARTICULAR YEAR EXCEEDS THE AGGREGATE AMOUNT OF TAX CREDITS  ALLOWED
 FOR SUCH YEAR UNDER THIS SECTION, SUCH EXCESS SHALL BE TREATED AS HAVING
 BEEN APPLIED FOR ON THE FIRST DAY OF THE SUBSEQUENT YEAR.
   (F)  CLAIM  OF  CREDIT.  (1) TAXPAYERS SHALL BE ELIGIBLE TO CLAIM SUCH
 CREDIT BEGINNING IN THE FIRST  TAXABLE  YEAR  AFTER  SUCH  TAXPAYER  HAS
 EMPLOYED  THEIR FIRST FULL-TIME, PERMANENT EMPLOYEE, AS VERIFIED ON SUCH
 TAXPAYER'S PAYROLL RECORDS.
   (2) A TAXPAYER SHALL NOT BE ALLOWED TO CLAIM THIS CREDIT TO THE EXTENT
 THE BASIS OF THE CALCULATION OF THIS CREDIT HAS BEEN CLAIMED FOR ANOTHER
 TAX CREDIT UNDER THIS CHAPTER.
   § 2. Section 606 of the tax law is amended by adding a new  subsection
 (kkk) to read as follows:
   (KKK) FIRST PERMANENT PAYROLL EMPLOYEE CREDIT. (1) GENERAL. A TAXPAYER
 SHALL  BE  ALLOWED  A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN  THIS
 SUBSECTION, AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE FIRST  FULL-
 TIME, PERMANENT EMPLOYEE SUCH TAXPAYER EMPLOYS, PROVIDED THAT SUCH FULL-
 TIME,  PERMANENT  EMPLOYEE  IS ACCOUNTED FOR ON SUCH TAXPAYER'S EMPLOYER
 PAYROLL RECORDS. SUCH CREDIT SHALL BE AVAILABLE FOR EACH  OF  THE  THREE
 YEARS  SUCCEEDING  THE  DATE  A  TAXPAYER EMPLOYS THEIR FIRST FULL-TIME,
 PERMANENT EMPLOYEE.
   (2) AMOUNT OF CREDIT. A CREDIT AUTHORIZED BY THIS SUBSECTION SHALL  BE
 EQUAL TO:
   (A) IN THE FIRST YEAR, TWENTY-FIVE PERCENT OF THE TOTAL COST TO EMPLOY
 A  FULL-TIME, PERMANENT EMPLOYEE, WHEN SUCH EMPLOYEE IS ACCOUNTED FOR ON
 AN EMPLOYER'S PAYROLL RECORDS AND  IS  THE  FIRST  FULL-TIME,  PERMANENT
 EMPLOYEE SUCH TAXPAYER HAS HIRED;
   (B)  IN  THE SECOND YEAR, TWENTY PERCENT OF THE TOTAL COST TO EMPLOY A
 FULL-TIME, PERMANENT EMPLOYEE, WHEN SUCH EMPLOYEE IS ACCOUNTED FOR ON AN
 EMPLOYER'S PAYROLL RECORDS AND IS THE FIRST FULL-TIME, PERMANENT EMPLOY-
 EE SUCH TAXPAYER HAS HIRED; AND
   (C) IN THE THIRD YEAR, TEN PERCENT OF THE TOTAL COST TO EMPLOY A FULL-
 TIME, PERMANENT EMPLOYEE, WHEN SUCH EMPLOYEE  IS  ACCOUNTED  FOR  ON  AN
 EMPLOYER'S PAYROLL RECORDS AND IS THE FIRST FULL-TIME, PERMANENT EMPLOY-
 EE SUCH TAXPAYER HAS HIRED.
   (3)  CARRYOVERS.  THE  CREDIT  ALLOWED  UNDER  THIS  SUBSECTION MAY BE
 CLAIMED AND IF NOT FULLY USED IN THE INITIAL YEAR FOR WHICH  THE  CREDIT
 IS  CLAIMED MAY BE CARRIED OVER, IN ORDER, TO EACH OF THE TWO SUCCEEDING
 TAXABLE YEARS. THE CREDIT AUTHORIZED BY THIS SUBSECTION MAY NOT BE  USED
 TO REDUCE THE TAX LIABILITY OF THE CREDIT CLAIMANT BELOW ZERO.

 S. 1799                             3
 
   (4)  DEFINITIONS. FOR PURPOSES OF THIS SUBSECTION, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (A)  "TOTAL  COST  TO  EMPLOY"  SHALL MEAN BASE SALARY, NEW YORK STATE
 PAYROLL TAXES AND THE VALUE OF EMPLOYMENT BENEFITS RECEIVED.
   (B) "NEW YORK STATE PAYROLL TAXES" SHALL MEAN ALL STATE TAXES PAID  BY
 AN  EMPLOYER  FROM  SUCH  EMPLOYER'S  OWN  FUNDS AND DIRECTLY RELATED TO
 EMPLOYING AN EMPLOYEE.
   (5) AGGREGATE AMOUNT. THE AGGREGATE  AMOUNT  OF  TAX  CREDITS  ALLOWED
 PURSUANT  TO THE AUTHORITY OF THIS SUBSECTION AND SUBDIVISION FIFTY-FIVE
 OF SECTION TWO HUNDRED TEN-B OF THIS CHAPTER SHALL  BE  FIFTEEN  MILLION
 DOLLARS  EACH YEAR. SUCH AGGREGATE AMOUNTS OF CREDITS SHALL BE ALLOCATED
 BY THE COMMISSIONER. IF THE TOTAL AMOUNT OF  ALLOCATED  CREDITS  APPLIED
 FOR  IN  ANY PARTICULAR YEAR EXCEEDS THE AGGREGATE AMOUNT OF TAX CREDITS
 ALLOWED FOR SUCH YEAR UNDER THIS SECTION, SUCH EXCESS SHALL  BE  TREATED
 AS HAVING BEEN APPLIED FOR ON THE FIRST DAY OF THE SUBSEQUENT YEAR.
   (6)  CLAIM  OF  CREDIT.  (A) TAXPAYERS SHALL BE ELIGIBLE TO CLAIM SUCH
 CREDIT BEGINNING IN THE FIRST  TAXABLE  YEAR  AFTER  SUCH  TAXPAYER  HAS
 EMPLOYED  THEIR FIRST FULL-TIME, PERMANENT EMPLOYEE, AS VERIFIED ON SUCH
 TAXPAYER'S PAYROLL RECORDS.
   (B) A TAXPAYER SHALL NOT BE ALLOWED TO CLAIM THIS CREDIT TO THE EXTENT
 THE BASIS OF THE CALCULATION OF THIS CREDIT HAS BEEN CLAIMED FOR ANOTHER
 TAX CREDIT UNDER THIS CHAPTER.
   § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of  the  tax  law  is  amended  by adding a new clause (xlvi) to read as
 follows:
 
 (XLVI) FIRST PERMANENT PAYROLL       AMOUNT OF CREDIT  UNDER SUBDIVISION
 EMPLOYEE CREDIT UNDER SUBSECTION     FIFTY-FIVE OF SECTION TWO HUNDRED
 (KKK)                                TEN-B
 
   § 4. This act shall take effect immediately and shall apply to taxable
 years commencing on and after January 1, 2022.

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The New York State Senate

senate Bill S1799

Sponsored By

Current Bill Status - In Senate Committee Budget And Revenue Committee

Your Voice

Actions

Co-Sponsors

S1799 (ACTIVE) - Details

S1799 (ACTIVE) - Summary

S1799 (ACTIVE) - Sponsor Memo

S1799 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S1799

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Sponsored By

Current Bill Status - In Senate Committee Budget And Revenue Committee

Your Voice

Actions

Co-Sponsors

S1799 (ACTIVE) - Details

S1799 (ACTIVE) - Summary

S1799 (ACTIVE) - Sponsor Memo

S1799 (ACTIVE) - Bill Text download pdf

Comments