S3754-2011 Actions

• Jan 9, 2012: RECOMMIT, ENACTING CLAUSE STRICKEN
• Jan 4, 2012: REFERRED TO BANKS
• Mar 9, 2011: REPORTED AND COMMITTED TO FINANCE
• Mar 3, 2011: REFERRED TO BANKS

S3754-2011 Meetings

S3754-2011 Votes

S3754-2011 Memo

BILL NUMBER:S3754

TITLE OF BILL:

An act
to amend chapter 298 of the laws of 1985, amending the tax law relating
to the franchise tax on banking corporations imposed by the tax law,
authorized to be imposed by any city having a population of one million
or more by chapter 772 of the laws of 1966 and imposed by the
administrative code of the city of New York and relating to other
provisions of the tax law, chapter 883 of the laws of 1975 and the
administrative code of the city of New York which relates to such
franchise tax, to amend chapter 817 of the laws of 1987, amending the
tax law and the environmental conservation law, constituting the
business tax reform and rate reduction act of 1987, and to amend
chapter 525 of the laws of 1988, amending the tax law and the
administrative code of the city of New York relating to the imposition
of taxes in the city of New York, in relation to the effectiveness of
certain provisions of such chapters

PURPOSE:

This bill would make permanent the current bank tax statute. The
provisions of the current bank tax are scheduled to expire for
taxable years beginning on or after January 1, 2011. This bill would
extend them permanently.

SUMMARY OF PROVISIONS:

This bill would amend Section 51 of Chapter 298 of the Laws of 1985 by
deleting the sunset provisions which were contained in that law's
effective date. The law currently provides that the amendments
enacted by Chapter 298 shall not apply to taxable years beginning on
or after January 1, 2011.

The bill also amend Section 110 of Chapter 817 of the Laws of 1987 by
deleting the sunset provisions relating to certain amendments
regarding the bad debt deduction for commercial banks. The law
currently provides that the amendments enacted by Chapter 817 shall
not apply to taxable years beginning on or after January 1, 2011.

JUSTIFICATION:

The State tax on the banking industry was significantly restructured
by Chapter 298 of the Laws of 1985. The intent of this law was to
make the franchise tax on banking corporations more similar to the
franchise tax on general business corporations. It also sought to
treat commercial banks and thrift institutions in a more similar
manner. Another purpose was to make it easier to more accurately
calculate the amount of the required tax.

Because of the extensive changes made in the Tax Law, and the
uncertain impact of these amendments, the provisions of Chapter 298
were only temporarily authorized. The impermanent nature of the Bank
Tax has, however, caused uncertainty in the industry about the future
tax liability of banking corporations. This has complicated tax


calculation, record keeping and efforts to plan for the future. The
current Bank Tax has been in effect for fifteen taxable years. This
has provided sufficient time to analyze and evaluate the impact of
Chapter 298 of the Laws of 1985. The 1985 law resolved many of the
problems that had existed regarding the taxation of banks. The
provisions of Chapter 298 of 1985 and Chapter 67 of 2010 should
therefore be made permanent.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget as it preserves current revenue.

EFFECTIVE DATE:

This bill takes effect immediately.

S3754-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         3754
 2011-2012 Regular Sessions
 I N  SENATE
 March 3, 2011
 
 Introduced  by  Sens.  GRIFFO, FARLEY -- read twice and ordered printed,
 and when printed to be committed to the Committee on Banks
 

AN ACT to amend chapter 298 of the laws of 1985, amending  the  tax  law
 relating  to  the franchise tax on banking corporations imposed by the
 tax law, authorized to be imposed by any city having a  population  of
 one  million or more by chapter 772 of the laws of 1966 and imposed by
 the administrative code of the city of New York and relating to  other
 provisions  of  the  tax  law, chapter 883 of the laws of 1975 and the
 administrative code of the city of New  York  which  relates  to  such
 franchise  tax, to amend chapter 817 of the laws of 1987, amending the
 tax law and the environmental conservation law, constituting the busi
 ness tax reform and rate reduction act of 1987, and to  amend  chapter
 of  the laws of 1988, amending the tax law and the administrative
 code of the city of New York relating to the imposition  of  taxes  in
 the  city  of  New  York,  in relation to the effectiveness of certain
 provisions of such chapters
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1.

Section 51 of chapter 298 of the laws of 1985, amending the
 tax law relating to the franchise tax on banking corporations imposed by
 the tax law, authorized to be imposed by any city having a population of
 one  million  or  more by chapter 772 of the laws of 1966 and imposed by
 the administrative code of the city of New York and  relating  to  other
 provisions  of  the  tax  law,  chapter  883 of the laws of 1975 and the
 administrative code of the city of New York which relates to such  fran
 chise  tax,  as amended by chapter 67 of the laws of 2010, is amended to
 read as follows:

 

S 51. This act shall take effect immediately and shall apply to  taxa
 ble years beginning on or after January 1, 1985[, except that:
 (a) sections one through eight shall not apply to taxable years begin-
 ning on or after January 1, 2011;
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD09960-02-1
 
       S. 3754                             2
 (b)  sections  nine,  twelve,  the  amendment  made  to paragraph 9 of
 subsection (a) of section 1452 of  the  tax  law  by  section  thirteen,
 sections  fifteen,  sixteen,  eighteen,  nineteen, twenty, twenty-three,
 twenty-seven, thirty and thirty-two, the amendment made to  paragraph  9
 of  subdivision  (a) of section 11-640 of the administrative code of the
 city of New York by section thirty-three, sections thirty-five,  thirty-
 six, thirty-eight, thirty-nine, forty, and forty-five shall not apply to
 corporations  other than savings banks and savings and loan associations
 for taxable years beginning on or after January 1, 2011.
 (c)  sections  twenty-one,  twenty-two,  twenty-four,  forty-one   and
 forty-two  shall  not apply to corporations other than savings banks and
 savings and loan associations for taxable years beginning  on  or  after
 January 1, 2011, provided, however, that the provisions of such sections
 which  relate  to the alternative minimum tax measured by taxable assets
 shall continue to apply to all taxpayers for taxable years beginning  on
 or after January 1, 2011;
 (d)  the amendment to the section heading and the opening paragraph of
 section 11-643.3 of the administrative code of the city of New York made
 by section forty-three  shall  not  apply  to  corporations  other  than
 savings banks and savings and loan associations for taxable years begin-
 ning  on  or  after  January 1, 2011 with respect to those provisions of
 such section 11-643.3 which relate to the basic tax measured  by  entire
 net income; and
 (e)  section twenty-eight, and the addition of new section 11-643.5 of
 the administrative code of the city of New York made by  section  forty-
 four  shall  not  apply  to  corporations  other  than savings banks and
 savings and loan associations for taxable years beginning  on  or  after
 January 1, 2011, provided, however, that the provisions of such sections
 which relate to the alternative minimum taxes measured by assets, issued
 capital  stock  and  one  hundred  twenty-five dollars shall continue to
 apply to all taxpayers for taxable years beginning on or  after  January
 1, 2011].
 

S  2.  Subdivisions  (d)  and (f) of section 110 of chapter 817 of the
 laws of 1987, amending the tax law and  the  environmental  conservation
 law,  constituting  the  business  tax  reform and rate reduction act of
 1987, as amended by chapter 67 of the laws of 2010, are amended to  read
 as follows:

 (d)  The  provisions of section sixty-seven of this act except insofar
 as it amends paragraph 10 of subsection (b) of section 1453 of  the  tax
 law, seventy-one and seventy-four shall apply to taxable years beginning
 after  December 31, 1986[, provided, however, that new paragraphs 11 and
 12 of subsection (b) of section 1453 of the tax law as added by  section
 sixty-seven  of  this act, the amendments made by section seventy-one of
 this act, and new subsection (i) of section 1453 of the tax law as added
 by section seventy-four of this act shall not  apply  to  taxable  years
 beginning on or after January 1, 2011];
 (f) The provisions of section one hundred four of this act shall apply
 to taxable years beginning after December 31, 1986[, and shall not apply
 to  corporations  other  than savings banks and savings and loan associ-
 ations for  taxable  years  beginning  on  or  after  January  1,  2011,
 provided,  however,  that the provisions of such section which relate to
 the alternative minimum tax measured by taxable assets shall continue to
 apply to all taxpayers for taxable years beginning on or  after  January
 1, 2011].
 

S 3. Subdivisions (c) and (d) of section 68 of chapter 525 of the laws
 of 1988, amending the tax law and the administrative code of the city of
 
       S. 3754                             3
 New York relating to the imposition of taxes in the city of New York, as
 amended  by  chapter  67  of  the  laws  of 2010, are amended to read as
 follows:

 (c)  The  provisions  of sections one, thirty-one, thirty-two, thirty
 three, thirty-six, thirty-seven, forty through  forty-five,  forty-seven
 and forty-eight of this act shall apply to taxable years beginning after
 December  31,  1986[,  provided,  however,  that  the amendments made by
 sections thirty-six and forty-one of this act, and new  subdivision  (i)
 of  section 11-641 of the administrative code of the city of New York as
 added by section forty-four of this act shall not apply to taxable years
 beginning on or after January 1, 2011];
 (d) The provisions of section forty-six of this  act  shall  apply  to
 taxable years beginning after December 31, 1986[, and shall not apply to
 corporations  other than savings banks and savings and loan associations
 for taxable years beginning on  or  after  January  1,  2011,  provided,
 however,  that the provisions of such section which relate to the alter-
 native minimum tax measured by taxable assets shall continue to apply to
 all taxpayers for taxable years beginning on or after January 1, 2011];
 

S 4. This act shall take effect immediately.

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