Assembly Bill A7991

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7991
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 16, 2025
                                ___________
 
 Introduced  by M. of A. LUCAS -- read once and referred to the Committee
   on Small Business
 
 AN ACT to amend the  economic  development  law  and  the  tax  law,  in
   relation  to  authorizing  the creation of small business tax-deferred
   savings accounts
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  economic  development law is amended by adding a new
 section 138-a to read as follows:
   § 138-A. SMALL BUSINESS TAX-DEFERRED SAVINGS ACCOUNTS.   1.  A  "SMALL
 BUSINESS  TAXPAYER"  OR  "SMALL BUSINESS" SHALL HAVE THE SAME MEANING AS
 DEFINED IN SECTION ONE HUNDRED THIRTY-ONE OF THIS ARTICLE AND SHALL MEET
 THE REQUIREMENTS OF PARAGRAPH (F) OF  SUBDIVISION  ONE  OF  SECTION  TWO
 HUNDRED TEN OF THE TAX LAW.
   2. ANY SMALL BUSINESS SHALL BE AUTHORIZED TO ESTABLISH WITH ANY FINAN-
 CIAL  ORGANIZATION  A SMALL BUSINESS TAX-DEFERRED SAVINGS ACCOUNT AND TO
 MAKE DEPOSITS INTO AND WITHDRAWALS FROM SUCH ACCOUNT.  FOR  PURPOSES  OF
 THIS  SECTION,  "FINANCIAL  ORGANIZATION"  SHALL  MEAN  AN  ORGANIZATION
 AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW  YORK  AND  (A)  WHICH  IS
 LICENSED  OR  CHARTERED  BY THE DEPARTMENT OF FINANCIAL SERVICES, (B) IS
 CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT, OR (C) IS  SUBJECT  TO
 THE  JURISDICTION  AND REGULATION OF THE SECURITIES AND EXCHANGE COMMIS-
 SION OF THE FEDERAL GOVERNMENT.
   3. THE AMOUNT DEPOSITED INTO SUCH TAX-DEFERRED  SAVINGS  ACCOUNTS  AND
 ANY  INTEREST EARNED ON SUCH DEPOSITS SHALL BE SUBJECT TO THE PROVISIONS
 OF SUBPARAGRAPH TWENTY-FOUR OF PARAGRAPH  (A)  OF  SUBDIVISION  NINE  OF
 SECTION TWO HUNDRED EIGHT AND PARAGRAPH FORTY-EIGHT OF SUBSECTION (C) OF
 SECTION SIX HUNDRED TWELVE OF THE TAX LAW, UNLESS SUCH AMOUNTS ARE WITH-
 DRAWN AND EXPENDED FOR A PURPOSE OTHER THAN A QUALIFYING PURPOSE.
   4.  FOR  THE  PURPOSES OF THIS ACT, A QUALIFYING PURPOSE SHALL INCLUDE
 SMALL BUSINESS TAXPAYER EXPENDITURES (A) FOR TANGIBLE PERSONAL  PROPERTY
 OR     OTHER  TANGIBLE  PROPERTY, INCLUDING BUT NOT LIMITED TO BUILDINGS
 AND STRUCTURAL COMPONENTS OF BUILDINGS, THAT ARE PRINCIPALLY USED IN THE
 ORDINARY COURSE OF THE  TAXPAYER'S  TRADE  OR  BUSINESS  AND  (B)  OTHER
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10229-01-5
 A. 7991                             2
 
 EXPENDITURES  DEEMED  APPROPRIATE  BY THE DEPARTMENT, WHICH WILL IMPROVE
 THE COMPETITIVENESS AND PRODUCTIVITY OF A SMALL BUSINESS AND RESULTS  IN
 THE CREATION OR RETENTION OF FULL-TIME JOBS.
   5. THE MONIES DEPOSITED INTO SUCH TAX-DEFERRED SAVINGS ACCOUNTS DURING
 ANY TAXABLE YEAR MAY NOT EXCEED FIVE THOUSAND DOLLARS.
   6.  ON  OR  BEFORE APRIL FIRST, TWO THOUSAND TWENTY-SEVEN AND ANNUALLY
 THEREAFTER, THE DEPARTMENT, IN CONSULTATION WITH THE DEPARTMENT OF TAXA-
 TION AND FINANCE, SHALL REPORT ON THE NUMBER OF SMALL BUSINESS TAXPAYERS
 UTILIZING THIS PROGRAM, THE AGGREGATE AMOUNT DEPOSITED FOR WHICH  A  TAX
 CREDIT  WAS  CLAIMED,  THE  AVERAGE AGGREGATE AMOUNT ON DEPOSIT IN SMALL
 BUSINESS SAVINGS ACCOUNTS, THE AMOUNT OF QUALIFYING  AND  NON-QUALIFYING
 WITHDRAWALS, AND ANY OTHER SUCH DATA DEEMED NECESSARY AND APPROPRIATE BY
 THE DEPARTMENT.
   §  2.  Paragraph (a) of subdivision 9 of section 208 of the tax law is
 amended by adding a new subparagraph 24 to read as follows:
   (24) ANY AMOUNT DEPOSITED INTO A SMALL BUSINESS  TAX-DEFERRED  SAVINGS
 ACCOUNT  CREATED   PURSUANT TO SECTION ONE HUNDRED THIRTY-EIGHT-A OF THE
 ECONOMIC DEVELOPMENT LAW, AND ANY  INTEREST  EARNED  ON  SUCH  DEPOSITS,
 PROVIDED THAT ANY AMOUNT WITHDRAWN FOR A NON-QUALIFYING PURPOSE SHALL BE
 INCLUDED  IN  THE  ENTIRE NET INCOME FOR THE TAX YEAR IN WHICH THE WITH-
 DRAWAL WAS MADE.
   § 3. Subsection (c) of section 612 of the tax law is amended by adding
 a new paragraph 48 to read as follows:
   (48) ANY AMOUNT DEPOSITED INTO A SMALL BUSINESS  TAX-DEFERRED  SAVINGS
 ACCOUNT  CREATED   PURSUANT TO SECTION ONE HUNDRED THIRTY-EIGHT-A OF THE
 ECONOMIC DEVELOPMENT LAW, AND ANY  INTEREST  EARNED  ON  SUCH  DEPOSITS,
 PROVIDED THAT ANY AMOUNT WITHDRAWN FOR A NON-QUALIFYING PURPOSE SHALL BE
 INCLUDED  IN  THE  ENTIRE NET INCOME FOR THE TAX YEAR IN WHICH THE WITH-
 DRAWAL WAS MADE.
   § 4. The department of taxation and finance, in consultation with  the
 department of economic development, shall review and analyze all statis-
 tical  data  available for such purposes of determining the economic and
 revenue impact associated with this act. Such data shall be included  in
 an  annual  report  that  shall also include, but not be limited to, the
 number of small business taxpayers utilizing this program,  the  average
 aggregate amount on deposit, the qualifying expenses claimed, any quali-
 fying  expenses  deemed  inappropriate  and  any  other such data deemed
 necessary and appropriate by the department. Such annual report shall be
 posted on the websites of the department of taxation and finance and the
 department of economic development, and transmitted to the governor, the
 temporary president of the  senate,  the  senate  minority  leader,  the
 speaker of the assembly and the assembly minority leader.
   §  5. Rules and regulations. The department of taxation and finance in
 consultation with the department  of  economic  development,  is  hereby
 authorized  to  promulgate  rules and regulations in accordance with the
 state administrative procedure act that are  necessary  to  fulfill  the
 purposes  of this act. Such regulations shall include but not be limited
 to deadlines for establishing a  small  business  tax  deferred  savings
 account,  standard  procedures  and forms to be utilized in the program,
 and any other such regulations deemed  necessary  to  promote  the  full
 utilization  of  this  program.  Such  rules  and  regulations  shall be
 completed within 180 days after the effective date of this act.
   § 6. This act shall take effect on the first of April next  succeeding
 the date on which it shall have become a law.