Government Affairs Albany UpdateJanuary 28, 2005
- Senate and Assembly Fiscal Staff Analysis of the Budget
- Part Q of Executive Budget Revenue Bill on Tax Shelters
- Assembly to hold Economic Development Power Hearing
The Senate Finance staff and Assembly Ways and Means staff
have produced reports analyzing the Governor's proposed budget
For the Senate report: Click Here
For the Assembly report: Click Here
Part Q of Governor Pataki's Executive Budget revenue bill S.995 (Budget)/A.1925 – contains tax shelter provisions that go beyond Federal tax shelter provisions. Part Q is found on pages 49 - 67 of the bill, whose address is: http://publications.budget.state.ny.us/fy0506artVIIbills/s995.htm.
Generally, Part Q requires disclosure of information relating to transactions that present the "potential" for tax "avoidance", imposes penalties for non-disclosure and the underpayment of taxes due to participation in such transactions, extends the statute of limitations for assessments relating to these transactions, and creates a voluntary compliance initiative for taxpayers to report and pay under-reported tax liabilities and interest with the waiver of penalties. The language was written to parallel California's recent law relating to tax shelters.
Part Q defines as follows: "A New York reportable transaction is a transaction that has the potential to be a tax avoidance transaction as determined by the commissioner.
(3) The commissioner may in his discretion prescribe, by regulation, New York reportable transactions.
(4) Provided the commissioner has prescribed regulations pursuant to paragraph three of this subdivision the commissioner is authorized to designate specific transactions that are the same as, or substantially similar to, transactions that the commissioner has determined to be tax avoidance transactions. The provisions of article two of the state administrative procedure act shall not apply to the designation of a specific transaction as a tax avoidance transaction; provided, however, that the commissioner shall designate any such transaction by notice or other form of published guidance.
(b)(1) Every person required to make and file a statement
or return pursuant to section six thousand one hundred eleven
of the internal revenue code must file a duplicate of such
statement or return, includ-
ing all documentation submitted to the internal revenue service in connection with such statement or return, with the commissioner "
Members should refer Part Q to their firm's tax/accounting personnel for analysis and comment.
Staff Contact: Ken
The Legislature will be dealing with legislation affecting the Replacement Power, Economic Development Power, and the Power for Jobs program this year. The Assembly Energy Committee will be conducting a hearing on the broad range of economic development power programs currently being offered by NYPA, LIPA, local utilities and others. The hearing will also focus on those budget issues relating to NYPA's funding of the various programs. A date has not yet been set, but it is anticipated that it will be sometime in February. We will be contacting Business Council members for their input on economic development power programs, the potential restructuring of these existing programs, and related topics.