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Legislative Memo

Ken Pokalsky
Vice President
T 518.465.7511
www.bcnys.org

BILL:

S.6409/A.9009 (Budget), Part Y

Support

SUBJECT:

Estate Tax Domicile Criteria

 

DATE:

February 5, 2016

 

We support the Executive Budget proposal (S.6409/A.9009, Part Y) that would prohibit the consideration of contributions to New York State charitable organizations in determining domicile under the Estate Tax.  While there are other major issues to be addressed in the Estate Tax, such as addressing the significant tax “cliff” for estates valued just above the exemption level, this current proposal is a limited change with little or no fiscal impact to the state, but will clarify an issue of concern for a number of taxpayers.

A similar prohibition was adopted under the state’s personal income tax law more than twenty years ago.See Tax Law, § 605(c)).

The personal income tax provision and the current proposal are both intended to eliminate a potential disincentive against continued financial support of New York charities and organizations by New Yorkers’ that have relocated out of state.

We have heard from tax practitioners that this issue has come up in estate tax cases, even though consideration of charitable contributions is contrary to Tax Department policy.

This proposed statutory amendment would eliminate any ambiguity, and would avoid the chance of unintended disincentives against the support of New York State charities.

For these reasons, we support adoption of S.6409/A.9009, Part Y.