NY State Senate Bill 2023-S432

Current 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 04, 2023	referred to budget and revenue

co-Sponsors

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2023-S432 (ACTIVE) - Details

See Assembly Version of this Bill:: A1755
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§210-B & 606, Tax L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7043, A9049
2021-2022: S1799, A4871

2023-S432 (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.

2023-S432 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S432

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-B 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 1 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:

2022: S1799/A4871 Referred to Budget and Revenue

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.

2023-S432 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    432
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2023
                                ___________
 
 Introduced by Sens. BORRELLO, GALLIVAN, O'MARA -- 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 59 to read as follows:
   59.  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

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01984-01-3

 S. 432                              2
 
 EMPLOYER'S PAYROLL RECORDS AND IS THE FIRST FULL-TIME, PERMANENT EMPLOY-
 EE SUCH TAXPAYER HAS HIRED.
   (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  (OOO)  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
 (ooo) to read as follows:
   (OOO) 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
 S. 432                              3
 
 TAXABLE  YEARS. THE CREDIT AUTHORIZED BY THIS SUBSECTION MAY NOT BE USED
 TO REDUCE THE TAX LIABILITY OF THE CREDIT CLAIMANT BELOW ZERO.
   (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-NINE
 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 (l) to read as follows:
 
 (L) FIRST PERMANENT PAYROLL          AMOUNT OF CREDIT  UNDER SUBDIVISION
 EMPLOYEE CREDIT UNDER SUBSECTION     FIFTY-NINE OF SECTION TWO HUNDRED
 (OOO)                                TEN-B
 
   § 4. This act shall take effect immediately and shall apply to taxable
 years commencing on and after January 1, 2024.

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Senate Bill S432

Sponsored By

Current Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

2023-S432 (ACTIVE) - Details

2023-S432 (ACTIVE) - Summary

2023-S432 (ACTIVE) - Sponsor Memo

2023-S432 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S432

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Sponsored By

George M. Borrello

Current Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

Patrick M. Gallivan

Peter Oberacker

Thomas F. O'Mara

Robert G. Ortt

2023-S432 (ACTIVE) - Details

2023-S432 (ACTIVE) - Summary

2023-S432 (ACTIVE) - Sponsor Memo

2023-S432 (ACTIVE) - Bill Text download pdf

Comments