Government Affairs Albany UpdateMarch 17, 2000
- Budget Resolutions
- Schimminger GRT Bill
- Whistleblower Bill Needs Your Action
- Assembly Speaker Offers Budget Tax Proposals
- Implementation of Sales Tax on Unbundled Electricity and Natural Gas
- Wisconsin Acts to Adopt 100% Sales Factor Apportionment Formula
Both houses adopted budget resolutions this week that indicate their proposed changes to the Executive Budget. A summary of the Senate and Assembly resolutions is attached for your review.
Last week, Assembly Schimminger,
chair of the Assembly Commerce Committee, announced that he was introducing
a gross receipts tax phase-out bill. The bill, which would phase-out the
tax after two years, is still in draft form and will be in print early
next week. As of last count, 35 members of the Assembly have joined Schimminger
as co-sponsors. They include: Higgins, Robach, M. Cohen, Tokasz, John,
Sweeney, Hill Hopper, Gromack, Hoyt, Luster, Weprin, Ortiz, Sidikman,
Connelly, Millman, McEneny, Morrelle, Mazzarelli, Lafayette, Canastrari,
Tocci, Galef, Seddio, Destito, Christensen, Cahill, Matasow, Rivera, Abbate,
Gunther, Vann, Cymbrowitz, Towns, Magnarelli, and Colton. We hope that
you continue to urge you local Assembly representatives to support this
Staff Contact: Ken Pokalsky
S.1453a (Spano), a bill which would expand whistleblower protections for employees, is now on third reading in the Senate. This bill was reported out of the Senate Labor Committee in February. The original version would have increased protections for employees in the healthcare industry exclusively, but its scope was broadened to include all employers. Your state Senators need to hear from you regarding this bill.
Assembly Speaker Sheldon Silver has issued his tax reduction proposals for the FY2001 State Budget. Highlights of the tax cut plan include the following:
- Alteration of the manner in which financial-services firms allocate receipts for tax purposes, from where the firm's employees perform the work to the address of the customer.
- Enhancement of the telecommunications Sales Tax exemption to include equipment necessary to carry transmit audio, video, and data.
- $150 million in tax credits to insurance companies that contribute to venture capital pools that invest in businesses statewide. Under the Assembly plan, one-third of those credits would be allocated to the State's economic development zones (re-designated as "Empire Zones"); businesses expanding or locating into an Empire Zone would receive the following additional tax benefits:
- Sales Tax exemption on the purchase of all tangible personal property or services used or consumed in the Empire Zone;
- State-funded 25 percent reduction in the cost of electricity for qualified businesses located in the Empire Zone; and
- a refundable credit against corporate income taxation equal to 5 percent of the cost of new construction, rehabilitation, and technological improvements completed in the Empire Zone.
- A reduction, from four to two percent, in the State Sales Tax on energy used by commercial customers.
- Creation of an Article 9-A refundable tax credit (valued at $30 million) for industrial and manufacturing businesses equal to the amount of Section 186, 186-a, and 189 taxes those businesses paid on utilities used in the State.
- Targeted tax relief to encourage brownfield remediation.
- Suspension of the State's Sales Tax on gasoline from July 1 through September 4, 2000.
- An increase of the earned income tax credit from 25 percent to 30 percent of the Federal credit.
- An increase in the Personal Income Tax standard deduction from $13,000 to $15,000 for married couples filing jointly and from $10,500 to $13,000 for heads-of-household.
- Enhancement of the child and dependent care credit.
- Creation of a homeowner $500 income tax credit for replacing residential fuel oil storage tanks.
- A refundable tax credit of up to $500 for full-time college students.
Business Council members should know that an energy tax that has been suspended since January 1999 is scheduled to take effect in April. This tax could lead to significant increases in energy costs for many employers. The Business Council has lobbied against this tax, and is encouraging its members to do the same. Beginning April 1, certain customers receiving gas or electricity through an alternative energy supplier will see their cost rise by as much as 8 percent due to an advisory opinion issued by the State Department of Tax and Finance. The entire charge for the product and its distribution and transmission was not subject to sales tax as interpreted by Tax and Finance in January 1997. The Department of Tax and Finance issued a Taxpayer Service Bureau Memorandum (TSBM) that stated that, effective January 1, 1999, a 4 percent state sales tax would be imposed on the transmission and distribution of unbundled electricity and natural gas. The tax would not be imposed on residential, manufacturing, and certain non-profits. Tax and Finance stated that the transportation of electricity and natural gas, sold by an energy service in a competitive market, was then subject to sale tax. This applies almost exclusively to commercial facilities.
AB735, by Rep Michael Lehman (R-58) and Sen. Kevin Shibilski (D-24), passed the Committee on Ways and Means on February 29 and is expected to be put to Assembly vote early next week. The single sales factor would replace the current 50% sales factor formula. Adoption of a 100% sales factor apportionment formula in New York is The Business Council's number 1 Article 9-A job incentive legislative proposal.