Government Affairs Albany UpdateFebruary 9, 2001
Senator Dean Skelos's bill to implement Single Sales Factor Apportionment for Article 9-A taxpayers (S.2064 introduced February 1)
Senator Skelos's bill is The Business Council's top tax priority issue for 2001 and would remove the hidden tax increase in the current apportionment formula that occurs when employers locate jobs in New York. Correspondingly, S.2064 removes the hidden tax decrease that occurs when corporations place jobs in other states or remove jobs from New York. Both the tax increase on New York employers and the tax decrease for out-of-State employers occur because New York's current apportionment formula contains property and payroll factors. The more one employs and invests in New York, the more one is taxed; the more one locates employment and investment outside New York, the less one is taxed.
The inclusion of property and payroll in the current apportionment formula costs New York employers $250 million annually which is used to fund a $100 million annual tax reduction for out-of-State employers; the difference of $150 million remains in the State treasury. Even if the goal of tax policy was the perverse provision of a tax incentive to encourage location of jobs outside New York, the current apportionment formula is an inefficient way to do so as it requires in-State employers to pay an additional $2.50 for every $1 of tax break given to out-of-State employers.
The Business Council provided testimony this week to a joint legislative budget hearing regarding the Governor's superfund reform and refinancing proposal. In addressing the Senate Finance and Assembly Ways and Means Committee, Ken Pokalsky, the Council's Director of Environmental Programs, described as "myths" the perception that business is not paying its "fair share" for cleanups, or that reform measures would leave contaminated sites "dirty". He said that while The Business Council supports some components of the Governor's bill – specifically the approach for soil cleanups and the "brownfield" development incentives – important amendments were necessary with regard to groundwater, liability releases and other factors necessary to make the program more effective and efficient.
Our press release, and the full text of our testimony, is here.