NY State Senate Bill 2023-S2782

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to budget and revenue
Jan 24, 2023	referred to budget and revenue

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2023-S2782 (ACTIVE) - Details

See Assembly Version of this Bill:: A3193
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd Tax L, generally
Versions Introduced in Other Legislative Sessions:: 2021-2022: S3462, A4643
2025-2026: S914, A2049

2023-S2782 (ACTIVE) - Summary

Relates to creating a separate tax on inheritance income, creating a separate tax on gift income, the computation of the estate tax, and creating a gift tax.

2023-S2782 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2782

SPONSOR: BRISPORT
 
TITLE OF BILL:

An act to amend the tax law, in relation to establishing separate taxes
on inheritance income and on gift income, amending the estate tax, and
establishing a gift tax

 
SUMMARY OF PROVISIONS:

This act amends the tax law to reform the system for taxing inherited
wealth by changing the estate tax rates and brackets, introducing a gift
tax, and introducing a tax on inherited income, both as a source of
funding for general governmental purposes and in order to help reduce
racial and economic inequality, the continued growth of which poses an
increasingly serious challenge to the maintenance of a stable democratic
society.

Section 1 of the bill adds a new sections 604 and 604-a to the tax law
to create a separate tax within the personal income tax on inheritance
income received from an estate, and adds a new section 604-A to the tax
law to create a separate tax within the personal income tax on gift

income. Subsection (a) of the proposed section 604 defines "inheritance
income" and "family member," and subsection (b) imposes a tax on inheri-
tance income. Subsection (c) of proposed section 604 provides that the
following will not be considered inheritance income for purposes of the
separate tax on inheritance income: inheritances that provide for the
payment of certain educational or medical expenses, that are received
from the estate of a spouse, or that consist of certain retirement
accounts. In addition, such subsection provides that some of the value
of certain primary residences and residential homes, and certain family
farms and farm equipment, will not be considered inheritance income for
purposes of the separate tax on inheritance income. Subsection (d) of
such section also provides that payment of the separate tax on inheri-
tance income may be deferred until disposition of inherited property
consisting of certain primary residences or of certain family-owned
businesses. Subsection (a) of proposed section 604-A defines "gift
income" and "family member," and subsection (b) imposes a tax on gift
income. Subsection (c) of proposed section 604-A of the tax law provides
that the following gifts will not be considered gift income for purposes
of the separate tax on gift income: gifts for the payment of certain
educational and medical expenses, gifts from a spouse, and gifts
consisting of certain retirement accounts.  Subsection (d) of such
section provides that, for gift income consisting of equity interests in
certain family businesses, the payment of the separate tax on gift
income may be deferred until the taxpayer sells such equity interests.

Sections 2 and 4 of the bill add sections 620-B and 640, respectively,
to the tax law to allow for a credit against the separate tax on inheri-
tance income in the amount of the New York estate tax, or any estate or
inheritance tax imposed by another state, a political subdivision of a
state, or the District of Columbia, on any inheritance income received
by a taxpayer. Proposed section 620-B allows such credit for residents,
and proposed section 640 allows such credit for nonresidents and part-
year residents.

Sections 3 and 4 of the bill add new sections 624-A and 637-A to the tax
law to provide for the computation of the separate tax on inheritance
income received by residents, nonresidents and part-year residents, and
add new sections 624-B and 637-B to provide for the computation of the
separate tax on gift income received by residents and part-year resi-
dents. Proposed sections 624-A and 637-A of the tax law provide for
inheritance income to be taxed at the following rates:

No tax on the first $250,000 of an inheritance income;

5% on the amount of inheritance income in excess of $250,000 and up to
$500,000;

15% on the amount of inheritance income in excess of $500,000 and up to
$1,000,000;

30% on the amount of inheritance income in excess of $1,000,000 and up
to $2,000,000;

40% on the amount of inheritance income in excess of $2,000,000 and up
to $10,000,000; and

50% on the amount of inheritance income in excess of $10,000,000.

Proposed sections 624-B and 637-B provide for gift income to be taxed at
the following rates:

No tax on the first $50,000 of gift income.

5% on the amount of gift income in excess of $50,000 and up to $100,000;

15% on the amount of gift income in excess of $100,000 and up to
$200,000;

30% on the amount of gift income in excess of $200,000 and up to
$400,000;

40% on the amount of gift income in excess of $400,000 and up to
$2,000,000; and

50% on the amount of gift income in excess of $2,000,000.

Section 5 of the bill amends section 951-a of the tax law to define the
term "New York taxable gifts."

Section 6 of the bill amends section 952 of the tax law to provide for
new estate tax rates for decedents dying after April 1, 2021, phase out
the applicable credit amount for the estate tax for decedents dying
after April 1, 2021, and provide for a credit against the estate tax for
the lifetime amount of gift taxes paid. The proposed paragraph (2) of
subsection (b) of section 952 provides that for estates of decedents
dying after April 1, 2021, estate tax will be determined based on the
taxable estate plus the lifetime amount of New York taxable gifts, at
the following rates:

No tax on the first $750,000 of taxable estate and the lifetime amount
of New York taxable gifts;

5% on the estate and gifts in excess of $750,000 and up to $1,500,000;

15% on the estate and gifts in excess of $1,500,000 and up to
$3,000,000;

30% on the estate and gifts in excess of $3,000,000 and up to
$6,000,000;

40% on the estate and gifts in excess of $6,000,000 and up to
$30,000,000; and

50% on the estate and gifts in excess of $30,000,000.

Section 7 of the bill amends section 954 of the tax law to provide that
the New York gross estate will be reduced by the amount of certain
transfers related to educational and medical expenses, and by transfers
of property consisting of certain retirement accounts. The proposed
amendments to section 954 also provide that the New York gross estate
will be reduced by a portion of the value of certain primary residences,
residential homes, and family farms and farm equipment.

Section 8 of the bill amends section 955 of the tax law to provide that
the New York taxable estate will be reduced by the amount of federal
estate tax imposed on the estate of a resident. The proposed amendments
to section 955 also provide that, with respect to the estate of a dece-
dent who was a nonresident of New York on the date of death, the New
York taxable estate will be reduced by the amount of federal estate tax
allocable to the portion of the estate that is subject to the tax
imposed by section 960 of the tax law.

Section 9 of the bill adds an article 26-A of the tax law to create a
gift tax. Proposed section 1000 of the proposed article 26-A defines the
terms "taxable gifts" and "New York taxable gifts." Proposed section
1001 of the proposed article 26-A imposes a tax on the transfer of prop-
erty by gift. Proposed section 1002 of the proposed article 26-A
provides that the gift tax will be imposed on the aggregate amount of
gifts made by a donor during all calendar years commencing on January 1,
2022, but that a credit will be allowed against the tax for the amount
of gift tax previously paid to the state by the donor. Such section
provides that New York taxable gifts will be taxed at the following
rates:

No tax on the first $750,000 of New York taxable gifts;

5% on New York taxable gifts in excess of $750,000 and up to $1,500,000;

15% on New York taxable gifts in excess of $1,500,000 and up to
$3,000,000;

30% on New York taxable gifts in excess of $3,000,000 and up to
$6,000,000;

40% on New York taxable gifts in excess of $6,000,000 and up to
$30,000,000; and

50% on New York taxable gifts in excess of $30,000,000.

Proposed section 1003 of the proposed article 26-A provides that the
commissioner of taxation and finance shall promulgate rules and regu-

lations necessary and appropriate to effectuate the provisions of the
proposed article.

Section 10 of the bill provides that this act shall take effect imme-
diately..

 
JUSTIFICATION:

New York is an exceptionally wealthy state. Treated as a separate coun-
try, it would have one of the world's largest economies. With such a
strong economy, all New Yorkers should have fundamental economic rights:
high-quality education, healthcare, guaranteed housing, and basic social
services and social insurance. New York must also finance investments in
green energy, green jobs, and green infrastructure in order to mitigate
the catastrophic risks of climate change.

Unfortunately, New York is also the most unequal state in the nation.
In part this is because the tax system has not kept pace with changes in
the economy, leaving the many high-earning professionals and wealthy
families in this state undertaxed. The benefits of economic growth from
recent decades has overwhelmingly been hoarded by a small segment of
elites, while inflation- adjusted wages have stagnated for the vast
majority of working people since the 1970s. The state government, lack-
ing adequate tax revenues, has been unable to afford essential public
investment and social spending, including upgrading our infrastructure,
repairing public housing, protecting public education, and financing
Medicaid.

State tax policy must focus on mitigating economic inequality.  Inter-
generational wealth accumulation is one of the main sources of long-term
inequality and must therefore be directly addressed by the tax law. New
York currently has an estate tax, which imposes a tax on the total
assets of a deceased person. However, the current estate tax rate is
very low, ranging from 5% to 16%, and it only applies to estates worth
more than $5.85 million. This is one of the highest estate tax
exemptions in the country, having steadily skyrocketed from $300,000
prior to 2000.

An effective inheritance tax is particularly critical for addressing the
racial wealth gap. Nationwide, the wealth of the median white household
is nearly ten times that of the median Black household, and nearly all
of the wealthiest households in the country are white.  Without a fair
tax on inherited wealth, intergenerational inequality will continue
unabated and the racial wealth gap will only worsen.

In order to effectively tax intergenerational wealth transfers, we need
a comprehensive system of taxes on estates, inheritances, and gifts.
This bill lowers the estate tax threshold, with progressive marginal tax
rates (as specified in the above summary) applying to estates worth more
than $750,000. It would also impose a gift tax, modeled on the federal
gift tax, on individuals who give gifts in excess of the lifetime
exemption limit, which is equal to the zero-rate bracket for the estate
tax ($750,000). Lifetime gifts are treated as part of the estate when
estate tax liability is determined, as in the federal estate tax. The
gift tax imposed on giftors, however, would not include in taxable gifts
any gifts that are subject to tax on the giftee, as discussed below.


In addition to amending the estate tax and imposing a gift tax, this
bill amends the income tax to treat inheritances and gifts as income to
the recipient. Inheritance income would be taxed under the rates speci-
fied above, with a credit available for estate tax already paid on the
same amount of property. The inheritance tax is imposed on inheritances
of more than $250,000. Per the Federal Reserve Board 2019 Survey of
Consumer Finances, such a tax only applies to the top 1% of inheritanc-
es. The gift tax would be imposed on an annual basis, at the rates spec-
ified above, on the receipt of gifts worth more than $50,000.

Numerous exceptions are provided to ensure that working people are not
overly burdened by these reforms: Spousal transfers are exempt from all
of the above taxes. Money used to pay for certain educational or medical
expenses is not subject to any of the above taxes. Retirement accounts
and pensions are also exempt from the above taxes. In the case of a
residence which has been the primary residence of the decedent for ten
years prior to death, or is the primary residence of the inheritor for
five years after receipt, an additional $1,750,000 is excludible from
the taxable value of the property. An exemption from all of the above
taxes is also provided for estates or inheritances with a total value of
up to $5 million, at least 50% of which is attributable to farmland or
farming equipment. Finally, for inheritances that include equity inter-
ests in family businesses or primary residences and are worth up to $5
million, tax can be deferred until sale of the inherited assets,
provided that the business interests or primary residence makes up over
50% of the total value of the inheritance.

The inheritance and gift tax remedies a serious defect in the way we tax
income. Currently, income from working is taxed at the highest rates,
income from investing is taxed at lower rates, and income from inheri-
tance is not taxed at all. In addition to the obvious unfairness of this
system, it puts the economic burdens in all the wrong places. Those who
earn wage income are most burdened by taxes on their income; heirs, who
need not work for their inheritance, are best able to bear the burden of
taxation, and yet pay no income tax on their inherited income. Moreover,
there is virtually no economic downside to taxing inherited income, as
the economic benefits for state spending vastly outweigh any minimal
disincentive created by taxing heirs.

An inheritance tax is also necessary to counteract avoidance problems
with the estate tax. Estate taxes can incentivize wealthy individuals,
in their old age, to move out of state to avoid the tax.  The inheritors
of such wealth, by contrast, typically have families, often with kids in
school, and are less likely to relocate solely for tax reasons. There-
fore, an inheritance is less likely to be avoided.  An inheritance tax
also creates an incentive for wealthy individuals to spread their wealth
among more beneficiaries, thereby benefiting more people and reducing
the intergenerational accumulation of wealth.

Reforming wealth transfer taxes is especially important as a means of
offsetting the tax benefit of basis step-up, one of the largest federal
tax handouts to the wealthy. When a decedent passes on appreciated
assets, which would otherwise produce taxable capital gains if they were
sold, all of that taxable gain is eliminated by "stepping up" the basis
of the asset to its fair market value. The heirs to these appreciated
assets, who would otherwise pay substantial tax on their capital gains,
end up paying no tax at all.  An inheritance tax, by imposing a tax on

these inherited assets, offsets some of the benefit of the federal step-
up rules.

Finally, the inheritance tax helps mitigate the anti-democratic effects
of massive intergenerational wealth accumulation. The wealthy use their
resources to exert tremendous influence over the political system,
stripping away protections for poor and working people, distorting the
tax laws, and undermining the very basis of representative democracy. It
is imperative that we minimize the power of wealth to unduly influence
our political system.

 
PRIOR LEGISLATIVE HISTORY:

2021-22: S3462

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

This act is projected to raise approximately $8 billion dollars annually
in new revenue.

 
EFFECTIVE DATE:
This bill is effective immediately.

2023-S2782 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2782
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 24, 2023
                                ___________
 
 Introduced  by Sens. BRISPORT, BRESLIN, BROUK, COMRIE, COONEY, GIANARIS,
   HOYLMAN-SIGAL, JACKSON, LIU, MAY, MYRIE, PARKER, RAMOS, RIVERA,  SALA-
   ZAR,  SANDERS,  SEPULVEDA,  SERRANO, SKOUFIS -- 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 separate taxes
   on inheritance income and on gift income, amending the estate tax, and
   establishing a gift tax
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The tax law is amended by adding two new sections 604 and
 604-a to read as follows:
   § 604. SEPARATE TAX ON INHERITANCE INCOME. (A)  DEFINITIONS.  FOR  THE
 PURPOSES  OF  THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
 MEANINGS:
   (1) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (C)  OF  THIS  SECTION,
 "INHERITANCE  INCOME" MEANS ANY INCOME EXCLUDED FOR FEDERAL TAX PURPOSES
 FROM FEDERAL ADJUSTED GROSS INCOME PURSUANT TO SUBSECTION (A) OF SECTION
 ONE HUNDRED TWO OF THE INTERNAL REVENUE CODE THAT IS RECEIVED  FROM  ANY
 ESTATE,  REGARDLESS  OF  THE  RESIDENCE  OF THE DECEDENT OF SUCH ESTATE,
 AFTER THE FEDERAL ESTATE TAX HAS BEEN PAID ON SUCH INCOME.
   (2) "FAMILY MEMBER" MEANS "MEMBER OF  THE  FAMILY"  AS  SUCH  TERM  IS
 DEFINED IN PARAGRAPH (2) OF SUBSECTION (E) OF SECTION TWO THOUSAND THIR-
 TY-TWO-A OF THE INTERNAL REVENUE CODE.
   (B)  IMPOSITION  OF  SEPARATE  TAX.  (1)  IN ADDITION TO ANY OTHER TAX
 IMPOSED BY THIS ARTICLE, THERE IS HEREBY IMPOSED FOR EACH TAXABLE YEAR A
 SEPARATE TAX ON THE TOTAL AMOUNT OF INHERITANCE INCOME RECEIVED FROM ANY
 ESTATE OF A DECEDENT DURING SUCH TAXABLE YEAR BY ANY INDIVIDUAL WHO  WAS
 A NEW YORK STATE RESIDENT ON THE DATE OF DEATH OF SUCH DECEDENT.
   (2)  THE  TAX IMPOSED BY THIS SUBSECTION SHALL BE COMPUTED AS PROVIDED
 IN SECTION SIX HUNDRED TWENTY-FOUR-A OF THIS  ARTICLE  WITH  RESPECT  TO
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03717-01-3

 S. 2782                             2
 
 RESIDENTS  AND  SECTION  SIX HUNDRED THIRTY-SEVEN-A OF THIS ARTICLE WITH
 RESPECT TO NONRESIDENTS AND PART-YEAR RESIDENTS.
   (C)  EXCLUSIONS  FROM  INHERITANCE  INCOME. (1) EDUCATIONAL OR MEDICAL
 EXPENSES. A QUALIFIED TRANSFER, AS SUCH TERM IS DEFINED IN PARAGRAPH (2)
 OF SUBSECTION (E) OF SECTION TWO THOUSAND  FIVE  HUNDRED  THREE  OF  THE
 INTERNAL  REVENUE  CODE,  SHALL NOT BE CONSIDERED INHERITANCE INCOME FOR
 PURPOSES OF THIS SECTION.
   (2) SPOUSAL TRANSFERS. TRANSFERS OF PROPERTY FROM A SPOUSE  SHALL  NOT
 BE CONSIDERED INHERITANCE INCOME FOR PURPOSES OF THIS SECTION.
   (3) RETIREMENT ACCOUNTS. TRANSFERS OF PROPERTY CONSISTING OF PENSIONS,
 HEALTH  SAVINGS ACCOUNTS, OR RETIREMENT ACCOUNTS ESTABLISHED PURSUANT TO
 SECTIONS FOUR HUNDRED ONE, FOUR HUNDRED THREE, FOUR HUNDRED EIGHT,  FOUR
 HUNDRED  EIGHT-A,  OR  FOUR  HUNDRED FIFTY-SEVEN OF THE INTERNAL REVENUE
 CODE SHALL NOT BE CONSIDERED INHERITANCE INCOME  FOR  PURPOSES  OF  THIS
 SECTION.
   (4)  CERTAIN  RESIDENCES.  AN INDIVIDUAL SUBJECT TO THE TAX IMPOSED BY
 THIS SECTION MAY CLAIM NOT MORE THAN ONE  OF  THE  FOLLOWING  EXCLUSIONS
 FROM  INHERITANCE  INCOME,  AND  MAY NOT CLAIM EITHER SUCH EXCLUSION FOR
 MORE THAN ONE TRANSFER OF REAL PROPERTY:
   (A) PRIMARY RESIDENCES. FOR REAL PROPERTY TRANSFERRED TO  A  RESIDENT,
 NONRESIDENT  OR  PART-YEAR  RESIDENT  INDIVIDUAL  THAT (I) SERVES AS THE
 PRIMARY RESIDENCE OF THE TRANSFEROR OF SUCH PROPERTY OR OF THE RESIDENT,
 NONRESIDENT, OR PART-YEAR RESIDENT TRANSFEREE FOR  THE  TEN  CONSECUTIVE
 YEARS PRECEDING SUCH TRANSFER OR (II) SERVES AS THE PRIMARY RESIDENCE OF
 SUCH  TRANSFEREE FOR THE FIVE CONSECUTIVE YEARS FOLLOWING SUCH TRANSFER,
 UP TO ONE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS OF THE  VALUE  OF
 SUCH PROPERTY SHALL NOT BE CONSIDERED INHERITANCE INCOME FOR PURPOSES OF
 THIS SECTION.
   (B)  RESIDENTIAL HOMES PURCHASED WITH A FEDERAL HOUSING ADMINISTRATION
 INSURED MORTGAGE. FOR A RESIDENTIAL  HOME  TRANSFERRED  TO  A  RESIDENT,
 NONRESIDENT  OR  PART-YEAR RESIDENT INDIVIDUAL THAT WAS PURCHASED WITH A
 FEDERAL HOUSING ADMINISTRATION INSURED MORTGAGE,  UP  TO  SEVEN  HUNDRED
 FIFTY THOUSAND DOLLARS OF THE VALUE OF SUCH HOME SHALL NOT BE CONSIDERED
 INHERITANCE INCOME FOR PURPOSES OF THIS SECTION.
   (5)  FAMILY  FARMS. A TRANSFER TO A RESIDENT, NONRESIDENT OR PART-YEAR
 RESIDENT INDIVIDUAL FROM THE ESTATE OF A DECEDENT WHO IS A FAMILY MEMBER
 OF SUCH INDIVIDUAL OF FARMLAND AND FARM EQUIPMENT SHALL NOT  BE  CONSID-
 ERED  INHERITANCE  INCOME FOR PURPOSES OF THIS SECTION PROVIDED THAT THE
 TOTAL VALUE OF INHERITANCE INCOME (INCLUDING THE VALUE OF SUCH  FARMLAND
 AND  FARM  EQUIPMENT)  RECEIVED BY SUCH INDIVIDUAL FROM SUCH ESTATE DOES
 NOT EXCEED FIVE MILLION DOLLARS, AND PROVIDED FURTHER THAT THE VALUE  OF
 SUCH  FARMLAND AND EQUIPMENT CONSTITUTES OVER FIFTY PERCENT OF THE TOTAL
 VALUE OF SUCH INHERITANCE INCOME RECEIVED FROM SUCH ESTATE.
   (D) DEFERRALS. (1) PRIMARY RESIDENCE LIQUIDITY DEFERRAL.  A  RESIDENT,
 NONRESIDENT  OR  PART-YEAR  RESIDENT  INDIVIDUAL  WHO  IN A TAXABLE YEAR
 RECEIVES FROM A SINGLE ESTATE INHERITANCE INCOME TOTALING LESS THAN FIVE
 MILLION DOLLARS, OVER FIFTY PERCENT OF THE TOTAL VALUE OF WHICH CONSISTS
 OF REAL PROPERTY THAT WILL SERVE AS THE PRIMARY RESIDENCE OF SUCH  INDI-
 VIDUAL,  MAY  ELECT  TO DEFER PAYMENT OF THE TAX IMPOSED BY THIS SECTION
 UNTIL THE TIME AT WHICH SUCH INDIVIDUAL  SELLS  SUCH  REAL  PROPERTY  OR
 CEASES USING SUCH PROPERTY AS A PRIMARY RESIDENCE.
   (2) FAMILY-OWNED BUSINESS LIQUIDITY DEFERRAL. (A) A RESIDENT, NONRESI-
 DENT  OR  PART-YEAR  RESIDENT  INDIVIDUAL WHO IN A TAXABLE YEAR RECEIVES
 FROM THE ESTATE OF A DECEDENT WHO IS A FAMILY MEMBER OF SUCH  INDIVIDUAL
 INHERITANCE  INCOME  TOTALING LESS THAN FIVE MILLION DOLLARS, OVER FIFTY
 PERCENT OF THE TOTAL VALUE OF WHICH CONSISTS OF EQUITY  INTERESTS  IN  A
 S. 2782                             3

 FAMILY-OWNED  BUSINESS, MAY ELECT TO DEFER PAYMENT OF THE TAX IMPOSED BY
 THIS SECTION UNTIL THE TIME AT WHICH SUCH INDIVIDUAL  SELLS  SUCH  BUSI-
 NESS,  PROVIDED THAT DURING THE TIME OF DEFERRAL INTEREST WILL ACCRUE ON
 THE AMOUNT OF SUCH TAX AT A RATE EQUAL TO THE FEDERAL SHORT-TERM RATE AS
 PROVIDED  UNDER PARAGRAPH THREE OF SUBSECTION (J) OF SECTION SIX HUNDRED
 NINETY-SEVEN OF THIS ARTICLE.
   (B) FOR THE PURPOSES OF THIS PARAGRAPH, "FAMILY-OWNED BUSINESS"  MEANS
 A  BUSINESS  FOR WHICH, AT THE TIME OWNERSHIP OF SUCH BUSINESS IS TRANS-
 FERRED TO A RESIDENT, NONRESIDENT OR PART-YEAR RESIDENT INDIVIDUAL,  THE
 TRANSFEROR OF SUCH BUSINESS OR FAMILY MEMBERS OF SUCH TRANSFEROR COLLEC-
 TIVELY HAVE RETAINED MAJORITY OWNERSHIP AND HAVE MATERIALLY PARTICIPATED
 IN THE OPERATION OF SUCH BUSINESS FOR THE TEN CONSECUTIVE YEARS PROCEED-
 ING SUCH TRANSFER.
   §  604-A.  SEPARATE  TAX  ON  GIFT  INCOME.  (A)  DEFINITIONS. FOR THE
 PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE  THE  FOLLOWING
 MEANINGS:
   (1)  "GIFT  INCOME" MEANS THE VALUE OF ANY TAXABLE GIFTS, AS SUCH TERM
 IS DEFINED IN SECTION ONE THOUSAND OF THIS CHAPTER, RECEIVED BY AN INDI-
 VIDUAL WHO IS A NEW YORK STATE RESIDENT AT THE TIME  OF  RECEIVING  SUCH
 GIFTS.
   (2)  "FAMILY  MEMBER"  MEANS  "MEMBER  OF  THE FAMILY" AS SUCH TERM IS
 DEFINED IN PARAGRAPH (2) OF SUBSECTION (E) OF SECTION TWO THOUSAND THIR-
 TY-TWO-A OF THE INTERNAL REVENUE CODE.
   (B) IMPOSITION OF SEPARATE TAX. (1)  IN  ADDITION  TO  ANY  OTHER  TAX
 IMPOSED BY THIS ARTICLE, THERE IS HEREBY IMPOSED FOR EACH TAXABLE YEAR A
 SEPARATE  TAX  ON  GIFT  INCOME RECEIVED DURING SUCH TAXABLE YEAR BY ANY
 RESIDENT OR PART-YEAR RESIDENT INDIVIDUAL.
   (2) THE TAX IMPOSED BY THIS SECTION SHALL BE COMPUTED AS  PROVIDED  IN
 SECTION  SIX HUNDRED TWENTY-FOUR-B OF THIS ARTICLE WITH RESPECT TO RESI-
 DENTS AND SECTION  SIX  HUNDRED  THIRTY-SEVEN-B  OF  THIS  ARTICLE  WITH
 RESPECT TO PART-YEAR RESIDENTS.
   (C)  EXCLUSIONS FROM GIFT INCOME. (1) EDUCATIONAL OR MEDICAL EXPENSES.
 A QUALIFIED TRANSFER, AS SUCH  TERM  IS  DEFINED  IN  PARAGRAPH  (2)  OF
 SUBSECTION  (E)  OF  SECTION  TWO THOUSAND THREE OF THE INTERNAL REVENUE
 CODE, SHALL NOT BE CONSIDERED GIFT INCOME FOR PURPOSES OF THIS SECTION.
   (2) SPOUSAL TRANSFERS. TRANSFERS OF PROPERTY FROM A SPOUSE  SHALL  NOT
 BE CONSIDERED GIFT INCOME FOR PURPOSES OF THIS SECTION.
   (3) RETIREMENT ACCOUNTS. TRANSFERS OF PROPERTY CONSISTING OF PENSIONS,
 HEALTH  SAVINGS ACCOUNTS, OR RETIREMENT ACCOUNTS ESTABLISHED PURSUANT TO
 SECTIONS FOUR HUNDRED ONE, FOUR HUNDRED THREE, FOUR HUNDRED EIGHT,  FOUR
 HUNDRED  EIGHT-A,  OR  FOUR  HUNDRED FIFTY-SEVEN OF THE INTERNAL REVENUE
 CODE SHALL NOT BE CONSIDERED GIFT INCOME FOR PURPOSES OF THIS SECTION.
   (4) FAMILY FARMS. A TRANSFER TO A RESIDENT OR PART-YEAR RESIDENT INDI-
 VIDUAL FROM A DONOR WHO IS A FAMILY MEMBER OF SUCH INDIVIDUAL  OF  FARM-
 LAND AND FARM EQUIPMENT SHALL NOT BE CONSIDERED GIFT INCOME FOR PURPOSES
 OF  THIS SECTION PROVIDED THAT THE TOTAL VALUE OF GIFT INCOME (INCLUDING
 THE VALUE OF SUCH FARMLAND AND FARM EQUIPMENT) RECEIVED BY SUCH INDIVID-
 UAL FROM SUCH DONOR DOES NOT EXCEED ONE MILLION DOLLARS.
   (D) FAMILY-OWNED BUSINESS LIQUIDITY DEFERRAL. (1) A RESIDENT OR  PART-
 YEAR RESIDENT INDIVIDUAL WHO IN A TAXABLE YEAR RECEIVES FROM A DONOR WHO
 IS  A  FAMILY  MEMBER  OF SUCH INDIVIDUAL GIFT INCOME TOTALING LESS THAN
 FIVE MILLION DOLLARS, OVER FIFTY PERCENT OF THE  TOTAL  VALUE  OF  WHICH
 CONSISTS  OF  EQUITY  INTERESTS IN A FAMILY-OWNED BUSINESS, MAY ELECT TO
 DEFER PAYMENT OF THE TAX IMPOSED BY THIS SECTION UNTIL THE TIME AT WHICH
 SUCH INDIVIDUAL SELLS SUCH EQUITY INTERESTS, PROVIDED  THAT  DURING  THE
 TIME  OF  DEFERRAL  INTEREST  WILL ACCRUE ON THE AMOUNT OF SUCH TAX AT A
 S. 2782                             4
 
 RATE EQUAL TO THE FEDERAL SHORT-TERM RATE AS  PROVIDED  UNDER  PARAGRAPH
 THREE  OF  SUBSECTION  (J)  OF  SECTION SIX HUNDRED NINETY-SEVEN OF THIS
 ARTICLE.
   (2) FOR THE PURPOSES OF THIS SUBSECTION, "FAMILY-OWNED BUSINESS" MEANS
 A  BUSINESS  FOR WHICH, AT THE TIME OWNERSHIP OF SUCH BUSINESS IS TRANS-
 FERRED TO A RESIDENT OR PART-YEAR RESIDENT INDIVIDUAL, THE TRANSFEROR OF
 SUCH BUSINESS OR FAMILY MEMBERS OF  SUCH  TRANSFEROR  COLLECTIVELY  HAVE
 RETAINED  MAJORITY  OWNERSHIP  AND  HAVE  MATERIALLY PARTICIPATED IN THE
 OPERATION OF SUCH BUSINESS FOR THE TEN CONSECUTIVE YEARS PROCEEDING SUCH
 TRANSFER.
   § 2. The tax law is amended by adding a new section 620-b to  read  as
 follows:
   § 620-B. CREDIT AGAINST SEPARATE TAX ON INHERITANCE INCOME. A RESIDENT
 SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY SECTION SIX HUNDRED
 FOUR  OF THIS ARTICLE IN THE AMOUNT OF THE ESTATE TAX IMPOSED BY ARTICLE
 TWENTY-SIX OF THIS CHAPTER OR ANY ESTATE OR INHERITANCE TAX  IMPOSED  BY
 ANOTHER  STATE  OF  THE  UNITED  STATES, A POLITICAL SUBDIVISION OF SUCH
 STATE, OR THE DISTRICT OF COLUMBIA, UPON ANY INHERITANCE INCOME, AS SUCH
 TERM IS DEFINED IN SUCH SECTION, RECEIVED BY SUCH RESIDENT IN A  TAXABLE
 YEAR.  SUCH RESIDENT MAY ELECT TO CALCULATE THE AMOUNT OF SUCH CREDIT IN
 ACCORDANCE WITH EITHER SUBSECTION (A) OR SUBSECTION (B) OF THIS SECTION.
   (A) THE AMOUNT OF CREDIT ALLOWED  PURSUANT  TO  THIS  SECTION  MAY  BE
 CALCULATED  BY MULTIPLYING THE TOTAL AMOUNT OF ESTATE OR INHERITANCE TAX
 IMPOSED BY THIS STATE, ANOTHER STATE OF THE UNITED STATES,  A  POLITICAL
 SUBDIVISION  OF  SUCH  STATE,  OR THE DISTRICT OF COLUMBIA ON THE ESTATE
 FROM WHICH SUCH RESIDENT HAS RECEIVED INHERITANCE INCOME BY A  FRACTION,
 THE  NUMERATOR  OF WHICH IS THE AMOUNT OF INHERITANCE INCOME RECEIVED BY
 SUCH RESIDENT FROM SUCH ESTATE AND THE DENOMINATOR OF WHICH IS THE TOTAL
 VALUE OF SUCH ESTATE AFTER THE FEDERAL ESTATE  TAX  HAS  BEEN  PAID  BUT
 BEFORE  THE  ESTATE  TAX OF THIS STATE, OR ANY ESTATE OR INHERITANCE TAX
 IMPOSED BY ANOTHER STATE OF THE UNITED STATES, A  POLITICAL  SUBDIVISION
 OF  SUCH  STATE, OR THE DISTRICT OF COLUMBIA, HAS BEEN PAID. IN ORDER TO
 CALCULATE SUCH CREDIT IN ACCORDANCE WITH THIS SUBSECTION, SUCH  RESIDENT
 MUST  KNOW THE TOTAL AMOUNT OF ESTATE OR INHERITANCE TAX IMPOSED ON SUCH
 ESTATE BY THIS STATE, ANOTHER STATE OF THE UNITED  STATES,  A  POLITICAL
 SUBDIVISION  OF  SUCH  STATE,  OR THE DISTRICT OF COLUMBIA AND THE TOTAL
 VALUE OF SUCH ESTATE AFTER THE FEDERAL ESTATE  TAX  HAS  BEEN  PAID  BUT
 BEFORE THE ESTATE OR INHERITANCE TAX OF THIS STATE, ANOTHER STATE OF THE
 UNITED STATES, A POLITICAL SUBDIVISION OF SUCH STATE, OR THE DISTRICT OF
 COLUMBIA, HAS BEEN PAID.
   (B)  THE  AMOUNT  OF  CREDIT  ALLOWED  PURSUANT TO THIS SECTION MAY BE
 CALCULATED AS EQUAL TO THE AMOUNT OF ESTATE TAX OR  INHERITANCE  TAX  OF
 THIS  STATE, ANOTHER STATE OF THE UNITED STATES, A POLITICAL SUBDIVISION
 OF SUCH STATE, OR THE DISTRICT OF COLUMBIA, THAT WOULD BE IMPOSED ON THE
 ESTATE FROM WHICH SUCH RESIDENT RECEIVES INHERITANCE INCOME AS  IF  SUCH
 INHERITANCE INCOME WERE EQUAL TO THE TOTAL VALUE OF SUCH ESTATE.
   § 3. The tax law is amended by adding two new sections 624-a and 624-b
 to read as follows:
   § 624-A. COMPUTATION OF SEPARATE TAX ON INHERITANCE INCOME RECEIVED BY
 A  RESIDENT  INDIVIDUAL.  THE  AMOUNT  OF  TAX IMPOSED UNDER SECTION SIX
 HUNDRED FOUR OF THIS ARTICLE FOR  ANY  TAXABLE  YEAR,  WITH  RESPECT  TO
 INHERITANCE  INCOME  RECEIVED  BY A RESIDENT INDIVIDUAL, SHALL BE DETER-
 MINED IN ACCORDANCE WITH THE FOLLOWING TABLE:
   FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND TWENTY-TWO:
 IF THE INHERITANCE INCOME IS:        THE TAX IS:
 NOT OVER $250,000                    0% OF INHERITANCE INCOME
 S. 2782                             5
 
 OVER $250,000 BUT NOT OVER $500,000  $0 PLUS 5% OF EXCESS OVER $250,000
 OVER $500,000 BUT NOT OVER           $12,500 PLUS 15% OF EXCESS OVER
 $1,000,000                           $500,000
 OVER $1,000,000 BUT NOT OVER         $87,500 PLUS 30% OF EXCESS OVER
 $2,000,000                           $1,000,000
 OVER $2,000,000 BUT NOT OVER         $387,000 PLUS 40% OF EXCESS OVER
 $10,000,000                          $2,000,000
 OVER $10,000,000                     $3,587,500 PLUS 50% OF EXCESS OVER
                                      $10,000,000
   §  624-B.  COMPUTATION  OF  SEPARATE  TAX ON GIFT INCOME RECEIVED BY A
 RESIDENT INDIVIDUAL. THE AMOUNT OF TAX IMPOSED UNDER SECTION SIX HUNDRED
 FOUR-A OF THIS PART FOR ANY TAXABLE YEAR, WITH RESPECT  TO  GIFT  INCOME
 RECEIVED  BY  A  RESIDENT  INDIVIDUAL, SHALL BE DETERMINED IN ACCORDANCE
 WITH THE FOLLOWING TABLE:
 IF THE GIFT INCOME IS:               THE TAX IS:
 NOT OVER $50,000                     0% OF GIFT INCOME
 OVER $50,000 BUT NOT OVER $100,000   $0 PLUS 5% OF EXCESS OVER $50,000
 OVER $100,000 BUT NOT OVER           $2,500 PLUS 15% OF EXCESS OVER
 $200,000                             $100,000
 OVER $200,000 BUT NOT OVER           $17,500 PLUS 30% OF EXCESS OVER
 $400,000                             $200,000
 OVER $400,000 BUT NOT OVER           $77,500 PLUS 40% OF EXCESS OVER
 $2,000,000                           $400,000
 OVER $2,000,000                      $717,500 PLUS 50% OF EXCESS OVER
                                      $2,000,000
   § 4. The tax law is amended by adding three new sections 637-a,  637-b
 and 640 to read as follows:
   § 637-A. COMPUTATION OF SEPARATE TAX ON INHERITANCE INCOME RECEIVED BY
 NONRESIDENT OR PART-YEAR RESIDENT INDIVIDUALS. THE AMOUNT OF TAX IMPOSED
 UNDER  SECTION  SIX  HUNDRED  FOUR OF THIS ARTICLE FOR ANY TAXABLE YEAR,
 WITH RESPECT TO INHERITANCE INCOME RECEIVED BY A  NONRESIDENT  OR  PART-
 YEAR  RESIDENT  INDIVIDUAL,  SHALL  BE DETERMINED IN ACCORDANCE WITH THE
 FOLLOWING TABLE:
   (A) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND TWENTY-TWO:
 IF THE INHERITANCE INCOME IS:        THE TAX IS:
 NOT OVER $250,000                    0% OF INHERITANCE INCOME
 OVER $250,000 BUT NOT OVER $500,000  $0 PLUS 5% OF EXCESS OVER $250,000
 OVER $500,000 BUT NOT OVER           $12,500 PLUS 15% OF EXCESS OVER
 $1,000,000                           $500,000
 OVER $1,000,000 BUT NOT OVER         $87,500 PLUS 30% OF EXCESS OVER
 $2,000,000                           $1,000,000
 OVER $2,000,000 BUT NOT OVER         $387,000 PLUS 40% OF EXCESS
 $10,000,000                          OVER $2,000,000
 OVER $10,000,000                     $3,587,500 PLUS 50% OF EXCESS OVER
                                      $10,000,000
   § 637-B. COMPUTATION OF SEPARATE TAX ON GIFT INCOME RECEIVED BY  PART-
 YEAR  RESIDENT  INDIVIDUALS. THE AMOUNT OF TAX IMPOSED UNDER SECTION SIX
 HUNDRED FOUR-A OF THIS ARTICLE FOR ANY TAXABLE  YEAR,  WITH  RESPECT  TO
 GIFT INCOME RECEIVED BY A PART-YEAR RESIDENT INDIVIDUAL, SHALL BE DETER-
 MINED IN ACCORDANCE WITH THE FOLLOWING TABLE:
 IF THE GIFT INCOME IS:               THE TAX IS:
 NOT OVER $50,000                     0% OF GIFT INCOME
 OVER $50,000 BUT NOT OVER $100,000   $0 PLUS 5% OF EXCESS OVER $50,000
 OVER $100,000 BUT NOT OVER $200,000  $2,500 PLUS 15% OF EXCESS OVER
                                      $100,000
 OVER $200,000 BUT NOT OVER           $17,500 PLUS 30% OF EXCESS OVER
 S. 2782                             6
 
 $400,000                             $200,000
 OVER $400,000 BUT NOT OVER           $77,500 PLUS 40% OF EXCESS OVER
 $2,000,000                           $400,000
 OVER $2,000,000                      $717,500 PLUS 50% OF EXCESS OVER
                                      $2,000,000
   §  640. CREDITS AGAINST SEPARATE TAX ON INHERITANCE INCOME. A NONRESI-
 DENT OR PART-YEAR RESIDENT INDIVIDUAL SHALL BE ALLOWED A CREDIT  AGAINST
 THE  TAX  IMPOSED  BY  SECTION  SIX  HUNDRED FOUR OF THIS ARTICLE IN THE
 AMOUNT OF THE ESTATE TAX IMPOSED BY ARTICLE TWENTY-SIX OF THIS  CHAPTER,
 OR  OF  ANY  ESTATE  OR  INHERITANCE TAX IMPOSED BY ANOTHER STATE OF THE
 UNITED STATES, A POLITICAL SUBDIVISION OF SUCH STATE, OR THE DISTRICT OF
 COLUMBIA, UPON ANY INHERITANCE INCOME, AS SUCH TERM IS DEFINED  IN  SUCH
 SECTION,  RECEIVED BY SUCH INDIVIDUAL IN A TAXABLE YEAR. SUCH INDIVIDUAL
 MAY ELECT TO CALCULATE THE AMOUNT OF  SUCH  CREDIT  IN  ACCORDANCE  WITH
 EITHER SUBSECTION (A) OR SUBSECTION (B) OF THIS SECTION.
   (A)  THE  AMOUNT  OF  CREDIT  ALLOWED  PURSUANT TO THIS SECTION MAY BE
 CALCULATED BY MULTIPLYING THE TOTAL AMOUNT OF ESTATE OR INHERITANCE  TAX
 IMPOSED  BY  THIS STATE, ANOTHER STATE OF THE UNITED STATES, A POLITICAL
 SUBDIVISION OF SUCH STATE, OR THE DISTRICT OF  COLUMBIA  ON  THE  ESTATE
 FROM  WHICH  SUCH  INDIVIDUAL HAS RECEIVED INHERITANCE INCOME BY A FRAC-
 TION, THE NUMERATOR  OF  WHICH  IS  THE  AMOUNT  OF  INHERITANCE  INCOME
 RECEIVED  BY  SUCH  INDIVIDUAL  FROM  SUCH ESTATE AND THE DENOMINATOR OF
 WHICH IS THE TOTAL VALUE OF SUCH ESTATE AFTER THE FEDERAL ESTATE TAX HAS
 BEEN PAID BUT BEFORE THE ESTATE TAX OF THIS  STATE,  OR  ANY  ESTATE  OR
 INHERITANCE  TAX  IMPOSED BY ANOTHER STATE OF THE UNITED STATES, A POLI-
 TICAL SUBDIVISION OF SUCH STATE, OR THE DISTRICT OF COLUMBIA,  HAS  BEEN
 PAID.  IN  ORDER  TO  CALCULATE  SUCH  CREDIT  IN  ACCORDANCE  WITH THIS
 SUBSECTION, SUCH INDIVIDUAL MUST KNOW THE  TOTAL  AMOUNT  OF  ESTATE  OR
 INHERITANCE  TAX  IMPOSED ON SUCH ESTATE BY THIS STATE, ANOTHER STATE OF
 THE UNITED STATES,  A  POLITICAL  SUBDIVISION  OF  SUCH  STATE,  OR  THE
 DISTRICT OF COLUMBIA AND THE TOTAL VALUE OF SUCH ESTATE AFTER THE FEDER-
 AL  ESTATE TAX HAS BEEN PAID BUT BEFORE THE ESTATE OR INHERITANCE TAX OF
 THIS STATE, ANOTHER STATE OF THE UNITED STATES, A POLITICAL  SUBDIVISION
 OF SUCH STATE, OR THE DISTRICT OF COLUMBIA, HAS BEEN PAID.
   (B)  THE  AMOUNT  OF  CREDIT  ALLOWED  PURSUANT TO THIS SECTION MAY BE
 CALCULATED AS EQUAL TO THE AMOUNT OF ESTATE TAX OR  INHERITANCE  TAX  OF
 THIS  STATE, ANOTHER STATE OF THE UNITED STATES, A POLITICAL SUBDIVISION
 OF SUCH STATE, OR THE DISTRICT OF COLUMBIA THAT WOULD BE IMPOSED ON  THE
 ESTATE FROM WHICH SUCH INDIVIDUAL RECEIVES INHERITANCE INCOME AS IF SUCH
 INHERITANCE INCOME WERE EQUAL TO THE TOTAL VALUE OF SUCH ESTATE.
   §  5.  Section  951-a  of  the  tax  law  is  amended  by adding a new
 subsection (g) to read as follows:
   (G) THE TERM "NEW YORK TAXABLE GIFTS" HAS THE SAME MEANING AS PROVIDED
 IN SECTION ONE THOUSAND OF THIS CHAPTER.
   § 6. Section 952 of the tax law, as amended by section 2 of part X  of
 chapter  59  of the laws of 2014, subsection (b) as amended by section 1
 of part BB of chapter 59 of the laws of 2015,  is  amended  to  read  as
 follows:
   § 952. Tax imposed. (a) A tax is hereby imposed on the transfer of the
 New York estate by every deceased individual who at his or her death was
 a resident of New York state.
   (b)  Computation  of  tax.  The  tax  imposed by this section shall be
 computed on the deceased resident's New York taxable estate as follows:
   (1) IN THE CASE OF DECEDENTS DYING BEFORE APRIL 1, 2023:
 S. 2782                             7

 If the New York taxable estate is:      The tax is:
 Not over $500,000                       3.06% of taxable estate
 Over $500,000 but not over $1,000,000   $15,300 plus 5.0% of excess over
                                         $500,000
 Over $1,000,000 but not over $1,500,000 $40,300 plus 5.5% of excess over
                                         $1,000,000
 Over $1,500,000 but not over $2,100,000 $67,800 plus 6.5% of excess over
                                         $1,500,000
 Over $2,100,000 but not over $2,600,000 $106,800 plus 8.0% of excess
                                         over $2,100,000
 Over $2,600,000 but not over $3,100,000 $146,800 plus 8.8% of excess over
                                         $2,600,000
 Over $3,100,000 but not over $3,600,000 $190,800 plus 9.6% of excess over
                                         $3,100,000
 Over $3,600,000 but not over $4,100,000 $238,800 plus 10.4% of excess
                                         over $3,600,000
 Over $4,100,000 but not over $5,100,000 $290,800 plus 11.2% of excess
                                         over $4,100,000
 Over $5,100,000 but not over $6,100,000 $402,800 plus 12.0% of excess
                                         over $5,100,000
 Over $6,100,000 but not over $7,100,000 $522,800 plus 12.8% of excess
                                         over $6,100,000
 Over $7,100,000 but not over $8,100,000 $650,800 plus 13.6% of excess
                                         over $7,100,000
 Over $8,100,000 but not over $9,100,000 $786,800 plus 14.4% of excess
                                         over $8,100,000
 Over $9,100,000 but not over            $930,800 plus 15.2% of excess over
 $10,100,000                             $9,100,000
 Over $10,100,000                        $1,082,800 plus 16.0% of excess
                                         over $10,100,000
   (2) IN THE CASE OF DECEDENTS DYING ON OR AFTER APRIL 1, 2023:
 IF THE NEW YORK TAXABLE ESTATE PLUS  THE TAX IS:
 THE LIFETIME AMOUNT OF NEW YORK
 TAXABLE GIFTS IS:
 NOT OVER $750,000                    0% OF TAXABLE ESTATE
 OVER $750,000 BUT NOT OVER           $0 PLUS 5% OF EXCESS OVER $750,000
 $1,500,000
 OVER $1,500,000 BUT NOT OVER         $37,500 PLUS 15% OF EXCESS OVER
 $3,000,000                           $1,500,000
 OVER $3,000,000 BUT NOT OVER         $262,500 PLUS 30% OF EXCESS OVER
 $6,000,000                           $3,000,000
 OVER $6,000,000 BUT NOT OVER         $1,162,500 PLUS 40% OF EXCESS
 $30,000,000                          OVER $6,000,000
 OVER $30,000,000                     $10,762,500 PLUS 50% OF EXCESS OVER
                                      $30,000,000
   (c)  Applicable  credit  amount.  (1)  [A] IN THE CASE OF ANY DECEDENT
 DYING BEFORE APRIL FIRST, TWO THOUSAND TWENTY-THREE,  A  credit  of  the
 applicable  credit  amount  shall  be allowed against the tax imposed by
 this section as provided in this subsection. In the case of SUCH a dece-
 dent whose New York taxable estate is less than or equal  to  the  basic
 exclusion  amount,  the  applicable credit amount shall be the amount of
 tax that would be due under subsection  (b)  of  this  section  on  such
 decedent's New York taxable estate. In the case of SUCH a decedent whose
 New  York taxable estate exceeds the basic exclusion amount by an amount
 that is less than or equal to five percent of such amount, the  applica-
 ble  credit  amount  shall  be the amount of tax that would be due under
 S. 2782                             8
 
 subsection (b) of this section if the amount on which the tax is  to  be
 computed  were  equal  to  the  basic exclusion amount multiplied by one
 minus a fraction, the numerator of which  is  the  decedent's  New  York
 taxable  estate minus the basic exclusion amount, and the denominator of
 which is five percent of the basic exclusion amount. Provided,  however,
 that  the  credit  allowed  by  this subsection shall not exceed the tax
 imposed by this section, and no credit shall be allowed to the estate of
 any decedent whose New York taxable  estate  exceeds  one  hundred  five
 percent of the basic exclusion amount.
   (2) (A) For purposes of this section, the basic exclusion amount shall
 be as follows:
 In  the  case of decedents dying on or after: The basic exclusion amount
 is:
 April 1, 2014 and before April 1, 2015       $ 2,062,500
 April 1, 2015 and before April 1, 2016       3,125,000
 April 1, 2016 and before April 1, 2017       4,187,500
 April 1, 2017 and before January 1, 2019     5,250,000
   (B) In the case of any decedent dying [in a calendar  year  beginning]
 on or after January first, two thousand nineteen AND BEFORE APRIL FIRST,
 TWO THOUSAND TWENTY-THREE, the basic exclusion amount shall be equal to:
   (i) five million dollars, multiplied by
   (ii)  one  plus  the  cost-of-living  adjustment,  which  shall be the
 percentage by which the consumer price index for the preceding  calendar
 year  exceeds  the  consumer  price index for calendar year two thousand
 ten.
   (C) (i) For purposes of this paragraph, "consumer price  index"  means
 the  most  recent consumer price index for all-urban consumers published
 by the United States department of labor.
   (ii) For purposes of clause (ii) of subparagraph  (B)  of  this  para-
 graph, the consumer price index for any calendar year shall be the aver-
 age  of  the  consumer  price  index as of the close of the twelve-month
 period ending on August thirty-first of such calendar year.
   (iii) If any amount adjusted under this paragraph is not a multiple of
 ten thousand dollars, such amount shall be rounded to the nearest multi-
 ple of ten thousand dollars.
   (D) CREDIT FOR LIFETIME GIFT TAXES PAID. IN THE  CASE  OF  A  DECEDENT
 DYING ON OR AFTER APRIL FIRST, TWO THOUSAND TWENTY-THREE, A CREDIT SHALL
 BE  ALLOWED  AGAINST  THE TAX IMPOSED BY THIS SECTION EQUAL TO THE TOTAL
 AMOUNT OF GIFT TAX IMPOSED BY SECTION ONE THOUSAND ONE OF  THIS  CHAPTER
 PAID BY SUCH DECEDENT DURING THE LIFETIME OF SUCH DECEDENT.
   § 7. Subsection (a) of section 954 of the tax law is amended by adding
 six new paragraphs 5, 6, 7, 8, 9 and 10 to read as follows:
   (5)  REDUCED  BY THE AMOUNT OF ANY QUALIFIED TRANSFER, AS SUCH TERM IS
 DEFINED IN PARAGRAPH (2) OF SUBSECTION (E) OF SECTION TWO THOUSAND  FIVE
 HUNDRED  THREE OF THE INTERNAL REVENUE CODE, TO THE EXTENT THE AMOUNT OF
 SUCH TRANSFER IS INCLUDED IN THE DECEDENT'S FEDERAL GROSS ESTATE.
   (6) REDUCED BY THE VALUE OF ANY TRANSFERS OF  PROPERTY  CONSISTING  OF
 PENSIONS,  HEALTH  SAVINGS  ACCOUNTS, OR RETIREMENT ACCOUNTS ESTABLISHED
 PURSUANT TO SECTIONS FOUR HUNDRED ONE, FOUR HUNDRED THREE, FOUR  HUNDRED
 EIGHT, FOUR HUNDRED EIGHT-A, OR FOUR HUNDRED FIFTY-SEVEN OF THE INTERNAL
 REVENUE  CODE  TO THE EXTENT THE AMOUNT OF ANY SUCH TRANSFER IS INCLUDED
 IN THE DECEDENT'S FEDERAL GROSS ESTATE.
   (7) REDUCED BY ONE OF THE FOLLOWING, BUT NOT BOTH, WITH RESPECT TO NOT
 MORE THAN ONE TRANSFER OF REAL PROPERTY:
   (A) UP TO ONE MILLION SEVEN HUNDRED  FIFTY  THOUSAND  DOLLARS  OF  THE
 VALUE  OF  REAL PROPERTY TRANSFERRED TO AN INDIVIDUAL THAT (I) SERVED AS
 S. 2782                             9

 THE PRIMARY RESIDENCE OF THE DECEDENT OR OF SUCH INDIVIDUAL FOR THE  TEN
 CONSECUTIVE  YEARS PRECEDING SUCH TRANSFER OR (II) SERVES AS THE PRIMARY
 RESIDENCE OF SUCH INDIVIDUAL FOR THE FIVE  CONSECUTIVE  YEARS  FOLLOWING
 SUCH  TRANSFER TO THE EXTENT THE VALUE OF SUCH REAL PROPERTY IS INCLUDED
 IN THE DECEDENT'S FEDERAL GROSS ESTATE; OR
   (B) UP TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS OF THE VALUE OF A RESI-
 DENTIAL HOME THAT WAS PURCHASED WITH A  FEDERAL  HOUSING  ADMINISTRATION
 INSURED  MORTGAGE  TO  THE  EXTENT THE VALUE OF SUCH RESIDENTIAL HOME IS
 INCLUDED IN THE DECEDENT'S FEDERAL GROSS ESTATE.
   (8) REDUCED BY THE VALUE OF FARMLAND AND FARM EQUIPMENT TRANSFERRED TO
 AN INDIVIDUAL FROM THE ESTATE OF A FAMILY MEMBER OF SUCH  INDIVIDUAL  TO
 THE  EXTENT  THE VALUE OF SUCH FARMLAND AND EQUIPMENT IS INCLUDED IN THE
 DECEDENT'S FEDERAL GROSS ESTATE, PROVIDED THAT THE TOTAL  VALUE  OF  ALL
 TRANSFERS  FROM SUCH ESTATE TO SUCH INDIVIDUAL IS LESS THAN FIVE MILLION
 DOLLARS, AND PROVIDED FURTHER THAT THE VALUE OF SUCH FARMLAND AND EQUIP-
 MENT CONSTITUTES OVER FIFTY PERCENT OF THE TOTAL VALUE  OF  SUCH  TRANS-
 FERS.  FOR  THE PURPOSES OF THIS PARAGRAPH, "FAMILY MEMBER" HAS THE SAME
 MEANING AS PROVIDED IN SECTION SIX HUNDRED FOUR OF THIS CHAPTER.
   (9) REDUCED BY THE VALUE OF REAL PROPERTY TRANSFERRED BY THE ESTATE OF
 THE DECEDENT TO AN INDIVIDUAL WHO WAS A RESIDENT OF THIS  STATE  ON  THE
 DATE  OF DEATH OF SUCH DECEDENT THAT WILL SERVE AS THE PRIMARY RESIDENCE
 OF SUCH INDIVIDUAL, PROVIDED THAT THE TOTAL VALUE OF ALL TRANSFERS  FROM
 SUCH  ESTATE  TO  SUCH  INDIVIDUAL IS LESS THAN FIVE MILLION DOLLARS AND
 PROVIDED THAT THE VALUE OF SUCH REAL  PROPERTY  CONSTITUTES  OVER  FIFTY
 PERCENT  OF THE TOTAL VALUE OF SUCH TRANSFERS; AND PROVIDED FURTHER THAT
 SUCH ESTATE AND SUCH INDIVIDUAL AGREE IN WRITING AT THE TIME OF TRANSFER
 THAT SUCH INDIVIDUAL WILL BE LIABLE FOR ANY INHERITANCE TAX  IMPOSED  BY
 SECTION SIX HUNDRED FOUR OF THIS CHAPTER ON THE TRANSFER OF SUCH PROPER-
 TY  THAT  MAY  BE DEFERRED AND PAID UPON DISPOSITION OF SUCH PROPERTY AS
 PROVIDED IN PARAGRAPH ONE OF SUBSECTION (D) OF SUCH SECTION.
   (10) REDUCED BY THE VALUE OF A FAMILY-OWNED  BUSINESS  TRANSFERRED  BY
 THE  ESTATE  OF THE DECEDENT TO AN INDIVIDUAL WHO WAS A RESIDENT OF THIS
 STATE ON THE DATE OF DEATH OF SUCH DECEDENT,  PROVIDED  THAT  THE  TOTAL
 VALUE  OF ALL TRANSFERS FROM SUCH ESTATE TO SUCH INDIVIDUAL IS LESS THAN
 FIVE MILLION DOLLARS AND PROVIDED THAT THE VALUE  OF  SUCH  FAMILY-OWNED
 BUSINESS  CONSTITUTES  OVER  FIFTY  PERCENT  OF  THE TOTAL VALUE OF SUCH
 TRANSFERS; AND PROVIDED FURTHER THAT SUCH  ESTATE  AND  SUCH  INDIVIDUAL
 AGREE  IN  WRITING  AT THE TIME OF TRANSFER THAT SUCH INDIVIDUAL WILL BE
 LIABLE FOR ANY INHERITANCE TAX IMPOSED BY SECTION SIX  HUNDRED  FOUR  OF
 THIS  CHAPTER  ON THE TRANSFER OF SUCH FAMILY-OWNED BUSINESS THAT MAY BE
 DEFERRED AND PAID UPON DISPOSITION OF SUCH BUSINESS AS PROVIDED IN PARA-
 GRAPH TWO OF SUBSECTION (D) OF SUCH SECTION. FOR THE  PURPOSES  OF  THIS
 PARAGRAPH,  THE  TERM  "FAMILY-OWNED  BUSINESS"  HAS THE SAME MEANING AS
 PROVIDED IN SUBPARAGRAPH (B) OF  PARAGRAPH  TWO  OF  SUBSECTION  (D)  OF
 SECTION SIX HUNDRED FOUR OF THIS CHAPTER.
   § 8. Subsection (a) of section 955 of the tax law, as added by section
 4  of  part  X  of chapter 59 of the laws of 2014, is amended to read as
 follows:
   (a) General.--The taxable estate of a New York resident shall  be  his
 or  her New York gross estate, minus the deductions allowable for deter-
 mining his or her federal taxable estate under the internal revenue code
 (whether or not a federal estate tax return is required  to  be  filed),
 except  to  the  extent  that such deductions relate to real or tangible
 personal property sitused outside New York state, REDUCED BY THE  AMOUNT
 OF  FEDERAL  ESTATE TAX IMPOSED ON THE ESTATE OF SUCH RESIDENT, PROVIDED
 THAT WITH RESPECT TO THE ESTATE OF A DECEDENT WHO ON THE  DATE  OF  SUCH
 S. 2782                            10
 
 DECEDENT'S  DEATH  WAS  A NOT A RESIDENT OF NEW YORK, THE NEW YORK GROSS
 ESTATE SHALL BE REDUCED ONLY BY AN AMOUNT EQUAL TO THE TOTAL  AMOUNT  OF
 FEDERAL  ESTATE  TAX IMPOSED ON SUCH ESTATE MULTIPLIED BY A FRACTION THE
 NUMERATOR  OF  WHICH  IS  THE VALUE OF PROPERTY CONTAINED IN SUCH ESTATE
 THAT IS SUBJECT TO THE TAX IMPOSED BY SECTION NINE HUNDRED SIXTY OF THIS
 PART AND THE DENOMINATOR OF WHICH IS THE TOTAL VALUE OF SUCH ESTATE.
   § 9. The tax law is amended by adding a new article 26-A  to  read  as
 follows:
                               ARTICLE 26-A
                                 GIFT TAX
 SECTION 1000. DEFINITIONS.
         1001. TAX IMPOSED.
         1002. RATE OF TAX.
         1003. ADMINISTRATION.
   §  1000.  DEFINITIONS. (A) "TAXABLE GIFTS" MEANS THE TRANSFERS BY GIFT
 WHICH ARE INCLUDED IN TAXABLE GIFTS FOR FEDERAL GIFT TAX PURPOSES  UNDER
 SECTION  2503 AND SECTIONS 2511 TO 2514, INCLUSIVE, AND SECTIONS 2516 TO
 2519, INCLUSIVE, OF THE  INTERNAL  REVENUE  CODE,  LESS  THE  DEDUCTIONS
 ALLOWED IN SECTIONS 2522 TO 2524, INCLUSIVE, OF SUCH CODE.
   (B)  (1)  EXCEPT  AS  OTHERWISE  PROVIDED  IN  PARAGRAPH  TWO  OF THIS
 SUBSECTION, "NEW YORK TAXABLE GIFTS" MEANS TAXABLE GIFTS MADE  DURING  A
 TAXABLE  YEAR COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-
 FOUR, THAT ARE (I)  FOR  RESIDENTS,  TAXABLE  GIFTS,  WHEREVER  LOCATED,
 EXCEPT  FOR  GIFTS  OF REAL ESTATE OR TANGIBLE PERSONAL PROPERTY LOCATED
 OUTSIDE NEW YORK AND (II) FOR NONRESIDENTS OF THIS STATE, GIFTS OF  REAL
 ESTATE OR TANGIBLE PERSONAL PROPERTY LOCATED WITHIN NEW YORK.
   (2) GIFTS MADE TO ANY PERSON BY THE DONOR DURING THE CALENDAR YEAR FOR
 WHICH  A  TAX  IS IMPOSED ON SUCH PERSON FOR THE RECEIPT OF SUCH GIFT BY
 THIS STATE, ANOTHER STATE OF THE UNITED STATES, A POLITICAL  SUBDIVISION
 OF SUCH STATE, OR THE DISTRICT OF COLUMBIA, INCLUDING THE TAX IMPOSED BY
 SECTION  SIX  HUNDRED FOUR-A OF THIS CHAPTER, SHALL NOT FOR THE PURPOSES
 OF PARAGRAPH ONE OF THIS SUBSECTION BE INCLUDED IN THE TOTAL  AMOUNT  OF
 NEW YORK TAXABLE GIFTS MADE DURING SUCH YEAR.
   (C)  IN  THE ADMINISTRATION OF THE TAX UNDER THIS ARTICLE, THE COMMIS-
 SIONER SHALL APPLY THE PROVISIONS OF SECTIONS 2701 TO  2704,  INCLUSIVE,
 OF  THE  INTERNAL REVENUE CODE, AND THE TERM "SECRETARY OR HIS DELEGATE"
 AS USED IN SUCH SECTIONS MEANS THE COMMISSIONER.
   § 1001. TAX IMPOSED. FOR  THE  CALENDAR  YEAR  COMMENCING  ON  JANUARY
 FIRST,  TWO  THOUSAND  TWENTY-FOUR,  AND FOR EACH YEAR THEREAFTER, A TAX
 COMPUTED AS PROVIDED IN SECTION ONE THOUSAND  TWO  OF  THIS  ARTICLE  IS
 HEREBY IMPOSED ON THE TRANSFER OF PROPERTY BY GIFT DURING A TAXABLE YEAR
 BY ANY RESIDENT OR NONRESIDENT INDIVIDUAL.
   §  1002.  RATE  OF  TAX.  WITH  RESPECT  TO NEW YORK TAXABLE GIFTS, AS
 DEFINED IN SECTION ONE THOUSAND OF THIS ARTICLE, MADE BY A DONOR  DURING
 A CALENDAR YEAR COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWEN-
 TY-FOUR,  INCLUDING  THE  AGGREGATE AMOUNT OF ALL NEW YORK TAXABLE GIFTS
 MADE BY THE DONOR DURING ALL CALENDAR YEARS COMMENCING ON OR AFTER JANU-
 ARY FIRST, TWO THOUSAND TWENTY-FOUR, THE  TAX  IMPOSED  BY  SECTION  ONE
 THOUSAND  ONE OF THIS ARTICLE FOR THE CALENDAR YEAR SHALL BE AT THE RATE
 SET FORTH IN THE FOLLOWING SCHEDULE, WITH A CREDIT ALLOWED AGAINST  SUCH
 TAX  FOR ANY TAX PREVIOUSLY PAID TO THIS STATE PURSUANT TO THIS SECTION,
 PROVIDED SUCH CREDIT SHALL NOT EXCEED THE AMOUNT OF TAX IMPOSED BY  THIS
 SECTION:
 IF THE AMOUNT OF NEW YORK
 TAXABLE GIFTS IS:                    THE TAX IS:
 NOT OVER $750,000                    0% OF TAXABLE GIFTS
 S. 2782                            11
 
 OVER $750,000 BUT NOT OVER           $0 PLUS 5% OF EXCESS OVER $750,000
 $1,500,000
 OVER $1,500,000 BUT NOT OVER         $37,500 PLUS 15% OF EXCESS OVER
 $3,000,000                           $1,500,000
 OVER $3,000,000 BUT NOT OVER         $262,500 PLUS 30% OF EXCESS OVER
 $6,000,000                           $3,000,000
 OVER $6,000,000 BUT NOT OVER         $1,162,500 PLUS 40% OF EXCESS
 $30,000,000                          OVER $6,000,000
 OVER $30,000,000                     $10,762,500 PLUS 50% OF EXCESS OVER
                                      $30,000,000
   §  1003.  ADMINISTRATION.  THE COMMISSIONER SHALL PROMULGATE RULES AND
 REGULATIONS NECESSARY AND APPROPRIATE TO EFFECTUATE  THE  PROVISIONS  OF
 THIS  ARTICLE,  INCLUDING  THE ESTABLISHMENT OF DEADLINES AND PROCEDURES
 FOR THE FILING OF GIFT TAX RETURNS BY ANY  RESIDENT  OR  NONRESIDENT  OF
 THIS STATE WHO GAVE NEW YORK TAXABLE GIFTS DURING A TAXABLE YEAR.
   § 10. This act shall take effect immediately.

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Senate Bill S2782

Sponsored By

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

2023-S2782 (ACTIVE) - Details

2023-S2782 (ACTIVE) - Summary

2023-S2782 (ACTIVE) - Sponsor Memo

2023-S2782 (ACTIVE) - Bill Text download pdf

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Senate Bill S2782

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Sponsored By

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

2023-S2782 (ACTIVE) - Details

2023-S2782 (ACTIVE) - Summary

2023-S2782 (ACTIVE) - Sponsor Memo

2023-S2782 (ACTIVE) - Bill Text download pdf

Comments