Senate Bill S6539

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6539
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              March 17, 2025
                                ___________
 
 Introduced  by  Sens.  SANDERS,  HELMING, HINCHEY, MAY -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Commerce, Economic Development and 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10229-01-5
 S. 6539                             2
              

 
   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
 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
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 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.