Senate Bill S1487

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1487
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 10, 2025
                                ___________
 
 Introduced  by  Sens.  O'MARA,  BORRELLO,  OBERACKER  --  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 and the administrative code of the city of
   New York, in relation to business income base and certain small  busi-
   ness taxpayers

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph (iv) of paragraph  (a)  of  subdivision  1  of
 section  210 of the tax law, as amended by section 12 of part A of chap-
 ter 59 of the laws of 2014, is amended to read as follows:
   (iv) (A) for taxable years beginning before January first,  two  thou-
 sand  sixteen,  if the business income base is not more than two hundred
 ninety thousand dollars the amount shall be six and one-half percent  of
 the  business  income base; if the business income base is more than two
 hundred ninety thousand dollars but not over three hundred ninety  thou-
 sand  dollars the amount shall be the sum of (1) eighteen thousand eight
 hundred fifty dollars, (2) seven and one-tenth percent of the excess  of
 the  business  income  base over two hundred ninety thousand dollars but
 not over three hundred ninety thousand dollars and (3) four and  thirty-
 five  hundredths  percent of the excess of the business income base over
 three hundred fifty thousand dollars but not over three  hundred  ninety
 thousand dollars;
   (B)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
 SAND TWENTY-SEVEN, IF THE BUSINESS INCOME BASE IS  NOT  MORE  THAN  FOUR
 HUNDRED  THOUSAND  DOLLARS THE AMOUNT SHALL BE FOUR PERCENT OF THE BUSI-
 NESS INCOME BASE; IF THE BUSINESS INCOME BASE IS MORE THAN FOUR  HUNDRED
 THOUSAND  DOLLARS  BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS THE AMOUNT
 SHALL BE THE SUM OF (1) SIXTEEN THOUSAND DOLLARS, (2) SIX  AND  ONE-HALF
 PERCENT  OF  THE  EXCESS  OF  THE BUSINESS INCOME BASE OVER FOUR HUNDRED
 THOUSAND DOLLARS BUT NOT OVER FIVE  HUNDRED  THOUSAND  DOLLARS  AND  (3)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04461-01-5
              

 S. 1487                             2
 
 TWENTY  PERCENT  OF  THE  EXCESS  OF  THE BUSINESS INCOME BASE OVER FOUR
 HUNDRED FIFTY THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE  HUNDRED  THOUSAND
 DOLLARS;
   (C)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
 SAND TWENTY-EIGHT, IF THE BUSINESS INCOME BASE IS  NOT  MORE  THAN  FOUR
 HUNDRED THOUSAND DOLLARS THE AMOUNT SHALL BE TWO AND ONE-HALF PERCENT OF
 THE  BUSINESS INCOME BASE; IF THE BUSINESS INCOME BASE IS MORE THAN FOUR
 HUNDRED THOUSAND DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS  THE
 AMOUNT  SHALL  BE  THE SUM OF (1) TEN THOUSAND DOLLARS, (2) SIX AND ONE-
 HALF PERCENT OF THE EXCESS OF THE BUSINESS INCOME BASE OVER FOUR HUNDRED
 THOUSAND DOLLARS BUT NOT OVER FIVE  HUNDRED  THOUSAND  DOLLARS  AND  (3)
 THIRTY-TWO  PERCENT  OF THE EXCESS OF THE BUSINESS INCOME BASE OVER FOUR
 HUNDRED FIFTY THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE  HUNDRED  THOUSAND
 DOLLARS.
   §  2. Paragraph 39 of subsection (c) of section 612 of the tax law, as
 amended by section 1 of part C of chapter 59 of the  laws  of  2022,  is
 amended to read as follows:
   (39)  (A)  In  the  case  of  a  taxpayer who is a small business or a
 taxpayer who is a member, partner, or shareholder of a limited liability
 company, partnership, or New York S corporation, respectively, that is a
 small business, who or which has business income and/or farm  income  as
 defined  in  the  laws  of the United States, an amount equal to fifteen
 percent of the net items of income, gain, loss and  deduction  attribut-
 able  to  such  business  or  farm  entering into federal adjusted gross
 income, but not less than zero.
   (B) (i) For the purposes of this paragraph, the  term  small  business
 shall  mean:  (I)  a  sole  proprietor  [who employs one or more persons
 during the taxable year and] who has net business income  [or  net  farm
 income]  of  greater  than zero but less than [two] FIVE hundred [fifty]
 thousand dollars;
   (II) a limited liability company, partnership, or New  York  S  corpo-
 ration  that  during  the taxable year [employs one or more persons and]
 has net farm income attributable to a farm business that is greater than
 zero but less than [two] FIVE hundred [fifty] thousand dollars; or
   (III) a limited liability company, partnership, or New York  S  corpo-
 ration  that  during  the taxable year [employs one or more persons and]
 has New York gross business income attributable to a  non-farm  business
 that  is  greater than zero but less than one million five hundred thou-
 sand dollars.
   (ii) For purposes of this paragraph, the term New York gross  business
 income  shall  mean: (I) in the case of a limited liability company or a
 partnership, New York source gross income as defined in subparagraph (B)
 of paragraph three of subsection (c) of section six hundred  fifty-eight
 of  this  article; and (II) in the case of a New York S corporation, New
 York receipts included in the  numerator  of  the  apportionment  factor
 determined under section two hundred ten-A of this chapter for the taxa-
 ble year.
   (C)  To  qualify for this modification in relation to a non-farm small
 business that is a limited liability company, partnership, or New York S
 corporation, the taxpayer's income  attributable  to  the  net  business
 income from its ownership interests in non-farm limited liability compa-
 nies,  partnerships,  or New York S corporations must be less than [two]
 FIVE hundred [fifty] thousand dollars.
   § 3. Paragraph 35 of subdivision (c) of section 11-1712 of the  admin-
 istrative  code of the city of New York, as amended by section 2 of part
 C of chapter 59 of the laws of 2022, is amended to read as follows:
 S. 1487                             3
 
   (35) (A) In the case of a taxpayer  who  is  a  small  business  or  a
 taxpayer who is a member, partner, or shareholder of a limited liability
 company, partnership, or New York S corporation, respectively, that is a
 small  business,  who or which has business income and/or farm income as
 defined  in  the  laws  of the United States, an amount equal to fifteen
 percent of the net items of income, gain, loss and  deduction  attribut-
 able  to  such  business  or  farm  entering into federal adjusted gross
 income, but not less than zero.
   (B) (i) For the purposes of this paragraph, the  term  small  business
 shall  mean:  (I)  a  sole  proprietor  [who employs one or more persons
 during the taxable year and] who has net business income  [or  net  farm
 income]  of  greater  than zero but less than [two] FIVE hundred [fifty]
 thousand dollars;
   (II) a limited liability company, partnership, or New  York  S  corpo-
 ration  that  during  the taxable year [employs one or more persons and]
 has net farm income that is greater than zero but less than  [two]  FIVE
 hundred [fifty] thousand dollars; or
   (III)  a  limited liability company, partnership, or New York S corpo-
 ration that during the taxable year [employs one or  more  persons  and]
 has  New  York gross business income attributable to a non-farm business
 that is greater than zero but less than one million five  hundred  thou-
 sand dollars.
   (ii)  For purposes of this paragraph, the term New York gross business
 income shall mean: (I) in the case of a limited liability company  or  a
 partnership, New York source gross income as defined in subparagraph (b)
 or  paragraph three of subsection (c) of section six hundred fifty-eight
 of the tax law, and, (II) in the case of a New York S  corporation,  New
 York  receipts  included  in  the  numerator of the apportionment factor
 determined under section two hundred ten-A of the tax law for the  taxa-
 ble year.
   (C)  To  qualify for this modification in relation to a non-farm small
 business that is a limited liability company, partnership, or New York S
 corporation, the taxpayer's income  attributable  to  the  net  business
 income from its ownership interests in non-farm limited liability compa-
 nies,  partnerships,  or New York S corporations must be less than [two]
 FIVE hundred [fifty] thousand dollars.
   § 4. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2027.