Tax Committee Update
January 18, 2018
Staff Contact: Ken Pokalsky
DTF Reform / Conformity Report
The NYS Department of Taxation and finance has issued its report on options for the state to respond to recent federal tax reforms. It includes a brief discussion of a charitable contributions option, provides a number of approaches for adopting an employer payroll tax for employee income tax swap, and lists a number of conformity issues under both the personal income tax and state business taxes.
We welcome your input on this report. Key questions:
- What is your business’ reaction to suggested payroll tax options? Which of these options would you support, if any, and under what circumstances?
- How would CFC income be treated under the state’s existing corporate franchise tax? What CFT amendments are necessary to avoid excess tax liability to New York State?
- What other business or personal income tax conformity issues are of concern to you?
Please feel free to contact me by direct dial (518-694-4460) or email (email@example.com).
Budget Hearings Scheduled
The schedule of Joint Senate Finance and Assembly Ways and Means committee hearings on the NYS budget is available here. The Business Council will be testifying at the Tax hearing on Thursday, February 8.
Executive Budget Tax Provisions
Governor Cuomo has issued his Executive Budget for FY 2019. All Executive Budget documents issued to date are available here on the Division of Budget web site. This includes all draft legislation and memos in support (Note, the legislative bills have yet to be introduced). The Executive Budget includes nearly $1 billion in new revenue measures (when fully implemented). Significant tax-related proposals are summarized below. Again, please feel free to contact me with questions on comments on these or other provisions of the Executive Budget.
FY 2019 Budget Summary - Taxation
|CFT and PIT Restructuring & Conformity||The Executive Budget includes no proposed changes to Articles 9A or 22 in response to federal reforms. Department of Taxation and Finance to issue a report on options to mitigate limits on federal SALT deductions.|
|Business Tax Credit Deferral||
For taxpayers’ with more than $2 million in NYS tax credits in 2019 and 2020 tax years, defers realization of such credits; applies to most business credits under Articles 9, 9A, 22 and 33 including the ITC, EZ and QEZE, brownfield, alternative energy, Tax Free NY, manufacturing RPT and other credit program; major exclusion is the film production credit. Deferred nonrefundable credits would be claimed and carried forward in tax years starting 2021; 50% of deferred refundable credits could be claimed in 2021, 75% of remaining deferred credits claimed in 2022; remainder claimed in 2023.Article VII Revenue Bill, Part S
|“Health Insurance Windfall Profit Fee”||
Amends the Insurance Tax to impose a 14% surcharge on the “net underwriting gains from the sale of health insurance” to New York customers.Article VII Revenue Bill, Part DD
|Tax Tribunal Appeals||
Authorizes the Tax Commissioner to appeal decisions of the Tax Tribunal.Article VII Revenue Bill, Part N
|Telecom Property Assessments||
Extends the assessment ceiling program for telecommunications property to 1/1/23 (current law expires 1/1/19); allows assessment ceilings to deviate from 2014 assessments by 25% in 2018, 50% in 2019 and 75% in 2020.Article VII Revenue Bill, Part G
|“Carried Interest Fairness Fee”||
Imposes a 17% surcharge on certain newly defined “investment management services;” provisions becomes effective when adopted by Connecticut, New Jersey, Massachusetts and Pennsylvania. Similar to S.1991 (Klein)/A.3554 (Aubry)Article VII Revenue Bill, Part M
|ESCO Sales Tax Exemption||
Repeals the sales tax exemption for gas and electric service associated with gas and electricity purchased from an energy service company (ESCO).Article VII Revenue Bill, Part V
|“Marketplace Providers”||Requires “marketplace providers” to collect sales tax on sales of tangible personal property it facilitates; marketplace provider defined as providing the sales forum and collects receipts on behalf of a seller, with $100 million in annual facilitated sales.|
|Statute of Limitations||
Extend the statute of limitations for assessing additional tax to 3 years after filing of an amended return, under Articles 9, 9-A, 22, and 33 and NYC PIT.Article VII Revenue Bill, Part H
|MTA RPT Assessment||
Authorizes the Metropolitan Transit Authority to designate areas that benefited from its capital projects, and impose an assessment on property in the designated areas up to 75% of the incremental increase in real property taxes levied on such property.TED Article VII Bill, Part L
|“Opioid Epidemic Surcharge”||
Imposes a new 2 cent per milligram tax on the initial sale of opioids and similar products, with proceeds to be used to support for opioid treatment, recovery and prevention and education services.Article VII Revenue Bill, Part CC
Changes DTF wage and withholding requirements from annual to quarterly, to be consistent with current NYS DOL reporting timetable.Article VII Revenue Bill, Part I
|Sale for Resale Exemption||
Provides an explicit sale for resale sales tax exemption for restaurants, cafeterias, caterers and other vendors when purchasing prepared food for resale.
Article VII Revenue Bill, Part J
Amends NYS and NYC PIT laws to provide that a person present in the jurisdiction for more than 183 days in a year is a statutory regardless of their domicileArticle VII Revenue Bill, Part O
|Youth Jobs Credit||
Increases the maximum amount of the youth jobs credit, adds additional documentation and reporting requirements.Article VII Revenue Bill, Part R
|Sales Tax Liability||
Provide relief from sales tax liability to minority members of limited partnerships LLCs.Article VII Revenue Bill, Part X
Extends for two years the existing suspension of the annual transfer of $1.5 million in Tax Law Section 186-f surcharges on wireless services to the Emergency Services Revolving Loan FundPPGG Article VII Bill, Part M
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