Tax Committee Albany Update
February 13, 2009

Staff Contact: Ken Pokalsky

PIT Legislation

As mentioned last week, there is growing focus in Albany on an increase in PIT rates for upper income taxpayers as part of the FY 2010 state budget. 

Senator Eric Schneiderman (D-Kings), along with seventeen co-sponsors, has  introduced legislation to raise $6.2 billion in additional personal income tax revenues (S.2021).  This proposal, pushed by the “Working Families Party,” would impose higher rates on taxpayers' income above $250,000.  The new rates are 8.25% on income between $250,000 and $500,000, 8.97% on income between $500,000 and $1 million, and 10.3% on income above $1 million.  The state's current top rate is 6.85% on taxable income over $40,000.  This proposal would give New York the second highest marginal PIT rate of any state (only Montana has a higher top rate of 11%) and would push New York's PIT rates well above most other state (only one other state, California, has a top rate greater than 9%.)

While Assembly Speaker Sheldon Silver has supported the concept of increased PIT rates, to date, the Assembly Majority has not endorsed any specific rates or brackets.

A comparison of current and recent PIT proposals—including S.2021, PIT legislation passed by the Assembly in 2008, and the state's most recent PIT surcharges, adopted in 2003— as well as the text of S.2021, is available on our Tax Committee page here.  Please contact me with any comments or questions on S.2021, or issues related to possible PIT legislation. 

COST Tax Burden Study

The seventh annual COST/Ernst & Young state business tax study is now available here.  As was the case with each of the prior studies, this version ranks each state's business tax burden.  This year's edition also estimates the value of public services provided to businesses in each state, and compares business “benefits” to business tax payments—a comparison that shows that business is “over taxed” in every state.

The COST data shows New York with the second highest total business tax burden (behind only California), and the ninth highest business tax burden as a share of gross state product.  In the business taxes to business benefit, New York ranks 37th best.

Tax Advisory Committee

The next meeting of the Department of Taxation and Finance's Tax Advisory Committee is schedule for Friday, February 27, 9:30am to 12:30 pm, at the Department's offices, Building 9, State Office Campus in Albany.  The Business Council and several Council companies are formal members of the Committee.  This meeting is also open to the public.  The Department has said that agenda items will include current fiscal issues, the Executive Budget process, and expedited completion of Department audits.  We are looking for input from member companies on short– and long-term agenda items for the Advisory Committee.  Please feel free to contact me with any recommendations.