Assembly Bill A6629

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6629
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               March 6, 2025
                                ___________
 
 Introduced  by  M.  of  A. LASHER, BURDICK, R. CARROLL, COLTON, EPSTEIN,
   LEVENBERG,  MAMDANI,  SCHIAVONI,  SEPTIMO,  TAPIA  --  read  once  and
   referred to the Committee on Ways and Means
 
 AN  ACT  to  amend  the tax law, in relation to enacting the MEGA corpo-
   rations act mandating worldwide combined reporting  for  large  corpo-
   rations

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the  "multinational earnings and global accountability for (MEGA) corpo-
 rations act".
   § 2. Legislative intent.  The  legislature  finds  that  multinational
 corporations who profit from sales in New York often engage in practices
 that shift profits outside the United States to reduce their tax liabil-
 ity.  To ensure a level playing field with New York-based businesses and
 that multinationals pay their fair share, this  act  mandates  worldwide
 combined  reporting  for  multinational corporations with gross receipts
 exceeding one billion dollars, requiring them  to  report  all  profits,
 international  and  domestic,  against which the corporate franchise tax
 can be levied based on the portion of sales made in New York.
   § 3. Paragraphs (b) and (c) of subdivision 2 of section 210-C  of  the
 tax  law,  as added by section 18 of part A of chapter 59 of the laws of
 2014, are amended to read as follows:
   (b) A corporation required to make a combined report within the  mean-
 ing  of this section shall also include (i) a captive REIT and a captive
 RIC if the captive REIT or captive RIC is not required to be included in
 a combined report under article thirty-three of  this  chapter;  (ii)  a
 combinable  captive  insurance  company;  and (iii) an alien corporation
 that satisfies the conditions in paragraph (a) of  this  subdivision  if
 (I)  under  any provision of the internal revenue code, that corporation
 is treated as a "domestic corporation" as defined in section seven thou-

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04124-04-5
              

 A. 6629                             2
 
 sand seven hundred one of the internal revenue code, [or]  (II)  it  has
 effectively  connected  income  for  the taxable year pursuant to clause
 (iv) of the opening paragraph of subdivision nine of section two hundred
 eight of this article, OR (III) IT IS ENGAGED IN A UNITARY BUSINESS WITH
 ANY TAXPAYER AND THE COMBINED ANNUAL GROSS RECEIPTS OF THE UNITARY BUSI-
 NESS  INCLUDING  BOTH  TAXPAYERS  AND  NONTAXPAYERS  EXCEEDS ONE BILLION
 DOLLARS.
   (c) A corporation required or permitted  to  make  a  combined  report
 under  this  section  does not include (i) a corporation that is taxable
 under a franchise tax imposed by article nine or article thirty-three of
 this chapter or would be taxable under a franchise tax imposed by  arti-
 cle  nine or thirty-three of this chapter if subject to tax; (ii) a REIT
 that is not a captive REIT, and a RIC that is not a captive RIC; (iii) a
 New York S corporation; or (iv) an  alien  corporation  that  under  any
 provision  of  the  internal  revenue code is not treated as a "domestic
 corporation" as defined in section seven thousand seven hundred  one  of
 such  code,  IS NOT ENGAGED WITH ANY TAXPAYER IN A UNITARY BUSINESS WITH
 COMBINED ANNUAL GROSS RECEIPTS INCLUDING BOTH TAXPAYERS AND NONTAXPAYERS
 IN EXCESS OF ONE BILLION  DOLLARS,  and  has  no  effectively  connected
 income for the taxable year pursuant to clause (iv) of the opening para-
 graph  of subdivision nine of section two hundred eight of this article.
 If a corporation is subject to tax under this article solely as a result
 of its ownership of a limited partner interest in a limited  partnership
 that  is  doing business, employing capital, owning or leasing property,
 maintaining an office in this state, or deriving receipts from  activity
 in  this  state,  and none of the corporation's related corporations are
 subject to tax  under  this  article,  such  corporation  shall  not  be
 required  or permitted to file a combined report under this section with
 such related corporations.
   § 4.  Paragraph (iv) of the opening  paragraph  of  subdivision  9  of
 section 208 of the tax law, as amended by section 4 of part A of chapter
 59  of  the laws of 2014, is amended and a new paragraph (v) is added to
 read as follows:
   (iv) EXCEPT AS PROVIDED IN PARAGRAPH (V) OF  THIS  PARAGRAPH,  in  the
 case  of  an  alien corporation that under any provision of the internal
 revenue code is not treated as a "domestic corporation"  as  defined  in
 section  seven  thousand  seven  hundred one of such code is effectively
 connected with the conduct of a trade  or  business  within  the  United
 States  as determined under section 882 of the Internal Revenue Code[.];
 OR
   (V) IN THE CASE OF AN ALIEN CORPORATION REQUIRED TO BE INCLUDED  IN  A
 COMBINED  REPORT PURSUANT TO PARAGRAPH (B) OF SUBDIVISION TWO OF SECTION
 TWO HUNDRED TEN-C OF THIS ARTICLE, THE  CORPORATION'S  WORLDWIDE  INCOME
 COMPUTED AS IF SUCH CORPORATION WERE SUBJECT TO TAX.
   § 5. Paragraph (a) of subdivision 5-a of section 210-A of the tax law,
 as  amended by section 3 of part I of chapter 39 of the laws of 2019, is
 amended to read as follows:
   (a) Notwithstanding any other provision of this section, global intan-
 gible low-taxed income shall be included in the  apportionment  fraction
 as  provided  in  this subdivision, EXCEPT FOR A CORPORATION REQUIRED TO
 FILE A COMBINED REPORT WITHIN THE MEANING OF SUBPARAGRAPH (III) OF PARA-
 GRAPH (B) OF SUBDIVISION TWO OF SECTION TWO HUNDRED TEN-C OF THIS  ARTI-
 CLE,  BECAUSE  THEY  ARE ENGAGED IN A UNITARY BUSINESS WITH ANY TAXPAYER
 AND THE COMBINED ANNUAL GROSS RECEIPTS OF THE UNITARY BUSINESS INCLUDING
 BOTH TAXPAYERS AND NONTAXPAYERS EXCEEDS ONE BILLION DOLLARS, WHICH SHALL
 A. 6629                             3
 
 NOT INCLUDE GLOBAL INTANGIBLE LOW-TAXED INCOME IN THE DENOMINATOR OF THE
 APPORTIONMENT FRACTION.
   §  6. The commissioner of taxation and finance is authorized to repeal
 or make any necessary additions or amendments to any applicable rules or
 regulations in order to administer the provisions of this  act,  includ-
 ing,  but not limited to, those necessary to prevent the double-taxation
 of income.
   § 7. This act shall take effect immediately and shall apply to taxable
 years commencing on or after January 1, 2026.