Financial Services Overview
SFY 2009-10 Executive Budget Revenue Measures
Staff Contact: Ken Pokalsky
December 29, 2008
Governor Paterson's proposed SFY 2008-09 Deficit Reduction Bill and the SFY 2009-10 Executive Budget contain tax increases which may be of interest to you. The Business Council's Financial Services Committee has identified the following budget proposals as problematic for businesses.
SFY 2008-09 Deficit Reduction Bill
According to the Division of Budget implementation of this bill is necessary to achieve a balanced budget for SFY 2008-09. This bill contains many of the same proposals presented to the Legislature at the November 2008 special emergency session. The ramifications of not implementing this bill before March 31, 2009 are unclear.
- Shifts the funding for Timothy's Law and various Dept. of Health programs to the Insurance Department. The shift in funding represents a tax increase of $280 million. This proposal seems not to account for retaliatory taxes imposed by other states which are an added tax on New York businesses.
SFY 2009-10 Executive Budget proposes $4.2 billion in new taxes.
- Raise tax rates on life and health insurance to 2 percent of premiums. According to the Division of Budget the new tax rates would raise a minimum of $62 million. This proposal seems not to account for retaliatory taxes imposed by other states which are an added tax on New York businesses.
- Require overcapitalized captive insurance companies to file combined returns with their affiliates. This proposal would raise $31 million.
- Require banks to report annually on accounts of registered sales tax vendors. The cost to implement this proposal by the banking industry is undetermined.
- Recertification of all QEZE's. In order to remain eligible for Empire Zone benefits a 20:1 ratio of wages, benefits and investments against zone credits. An estimated fifty percent of QEZE's would be decertified. New QEZE certifications would be restricted on financial services, manufacturers and others. This “savings” or cost to businesses no longer eligible is $272 million.
- Changes the resident individual definition in New York for tax liability. This proposal would raise $5 million.
- Repeal private label credit card law. This proposal would raise $8-10 million.