Government Affairs Council Update
Staff Contact: Ken Pokalsky
February 23, 2018
Government Affairs Council - The next meeting of The Business Council’s Government Affairs Committee has been scheduled for Monday, March 19 from 10 to 11:30 a.m. in the President’s Room at the Fort Orange Club. The agenda will focus on the Senate and Assembly budget proposals, with updates on key Executive Budget issues. Please register on line here. Staff contact: Meghan Kayser
InternShop - We will be holding two additional informational webinars on InternShop, our intern matching program supported by SUNY and our private university members. Please be sure to register for the appropriate webinar for your organization! Staff contact: Amber L. Mooney
Webinar for Businesses
Join us Thursday, March 1 to learn how your business can benefit!
Thursday, March 1
Webinar for Colleges & Univeresities
Join us Thursday, March 29 to learn how your college or university can benefit!
Thursday, March 29
Budget Timetable - With legislative hearings now complete (The Business Council’s testimony is available here), and 30-day amendments released, the Senate and Assembly have issued their “agreed to” timetable for finalizing the new state budget. Key dates include: March 1 – Adoption of consensus revenue estimates for FY 2019; March 14 – Action on Senate & Assembly One House Budget bills, and start of legislative conference committees; March 22 – End of conference committee process; March 27-29 – Legislative action on budget bills.
Payroll Tax Proposal - Governor Cuomo introduced his payroll tax proposal (the “employer compensation expense tax,” or ECET) as part of his Executive Budget 30 day amendments. The bill text is available here. The Division of Budget director issued a press release on Monday outlining the proposal. Our overview of the proposal is here. Key provisions include the following:
- participation is voluntary for employers, who have an annual opt-in (by October 1 for the 2019 tax year);
- the program is effective starting with for the 2019 tax year;
- the new tax applies “covered employees,” defined as those earning $40,000 or more;
- it applies a flat ECET rate to payroll expenses in excess of $40,000 per covered employee;
- the rate will be 1.5% in 2019, 3% in 2020 and 5% in 2021 and thereafter;
- it provides a PIT tax credit to employees based on the payroll tax paid their employer paid on their wages;
- it specifies that the ECET cannot be deducted from employee paychecks (but does not preclude employers from making pre-tax changes to wages);
- it requires employers to remit the payroll tax to the state in a similar manner as for PIT withholdings; and
- it imposes joint and several liability for remittance of the payroll tax to the state, applicable to “responsible” business officers, managers and employees.
30 Day Amendments - In addition to the payroll tax provisions mentioned above, the Governor proposed several other significant tax-related 30 day amendments to the Executive Budget (available on line here):
- limited changes to the corporate franchise tax clarifying language related to “exempt CFC income,” and eliminating the potential for “double deductions” of certain business expenses;
- modifications to the Executive Budget proposal for “windfall profit” tax on health plans, which extends the tax surcharge to income from state Medicaid managed care programs, and gives most administrative functions to the Tax Commissioner rather than DFS superintendent (Revenue Article VII, Part DD);
- several personal income tax “decoupling” provisions that address the federal cap on SALT deductions, the ability to itemize at the state level, and application of the state standard deduction for single filers; (Revenue Article VII, Part DD); and
- creates new “charitable trust” mechanisms at the state and municipality levels, as another measure to mitigate the impact of federal SALT deductibility caps (Revenue Article VII bill, Part LL).
MWBE Program Extension - The state’s minority/women business enterprise program for state contracts is set to expire at the end of 2018. The Executive Budget (S.7508-A/A.9508-A, Part Q) proposes a three year extension, with significant amendments. However, the Executive Budget proposal has raised major concerns among our members that do business with the state, who see some of its provisions as unworkable, and/or adding unnecessary hurdles to the government procurement process. We have summarized the proposal, and major concerns, here. We welcome additional feedback from member companies. Staff contact: Johnny Evers
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