This bill has been amended

Bill S1906-2013

Establishes a small business tax credit

Establishes a small business tax credit.

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  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S1906

TITLE OF BILL: An act to amend the tax law, in relation to establishing a small business tax credit

PURPOSE: To create a small business personal income tax credit and reduce corporate franchise taxes for small businesses to encourage growth among this state's small businesses to help spur job creation.

SUMMARY OF PROVISIONS: 20% TAX CUT FOR SMALL BUSINESSES: This bill would provide small businesses with a corporate tax rate cut from 6.5 percent to 5.2 percent - a 20 percent reduction. The corporate tax rate for small business applies to those businesses with entire net income base of not more than 5290,000. It would also virtually eliminate the fixed dollar minimum for small businesses (those businesses with New York receipts of not more than $1 million). This reduction will save small businesses S20 million in SFY 2012-13 and $49 million on an annual basis.

SMALL BUSINESS JOBS CREDIT: Provides a credit of 10% of business income for about 800,000 small businesses that have at least one employee, have business income of less than $250,000, and that file under the personal income tax. This tax credit would save small businesses $80 million annually.

JUSTIFICATION: This bill will deliver tax relief to small businesses to make New York State more economically competitive to encourage our small businesses to stay and expand.

LEGISLATIVE HISTORY: 2012: S.7650 Passed Senate

FISCAL IMPLICATIONS: This bill will save New York businesses $20 million this year.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 1906 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sen. SKELOS -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to establishing a small busi- ness tax credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 606 of the tax law is amended by adding a new subsection (vv) to read as follows: (VV) SMALL BUSINESS TAX CREDIT. (1) GENERAL. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE EQUAL TO SIX AND SIXTY-FIVE HUNDREDTHS PERCENT OF QUALIFIED BUSINESS INCOME. (2) DEFINITIONS. FOR THE PURPOSES OF THIS SUBSECTION, THE TERM: (A) "QUALIFIED TAXPAYER" SHALL MEAN A SOLE PROPRIETOR WHO EMPLOYS ONE OR MORE PERSONS AND WHO HAS NET BUSINESS INCOME OF LESS THAN TWO HUNDRED FIFTY THOUSAND DOLLARS. (B) "QUALIFIED BUSINESS INCOME" SHALL MEAN TEN PERCENT OF THE BUSINESS INCOME OF THE TAXPAYER AS DEFINED IN THE LAWS OF THE UNITED STATES. (3) IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, NO INTEREST SHALL BE PAID THEREON. S 2. Subparagraph (iv) of paragraph (a) of subdivision 1 of section 210 of the tax law, as amended by section 2 of part N of chapter 60 of the laws of 2007, is amended to read as follows: (iv) for taxable years beginning on or after January first, two thou- sand seven AND ENDING BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN, if the entire net income base is not more than two hundred ninety thousand dollars the amount shall be six and one-half percent of the entire net
income base; if the entire net income base is more than two hundred ninety thousand dollars but not over three hundred ninety thousand dollars the amount shall be the sum of (1) eighteen thousand eight hundred fifty dollars, (2) seven and one-tenth percent of the excess of the entire net income base over two hundred ninety thousand dollars but not over three hundred ninety thousand dollars and (3) four and thirty- five hundredths percent of the excess of the entire net income base over three hundred fifty thousand dollars but not over three hundred ninety thousand dollars; S 3. Paragraph (a) of subdivision 1 of section 210 of the tax law is amended by adding a new subparagraph (vii) to read as follows: (VII) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU- SAND FOURTEEN, IF THE ENTIRE NET INCOME BASE IS NOT MORE THAN TWO HUNDRED NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE FIVE AND TWO-TENTHS PERCENT OF THE ENTIRE NET INCOME BASE; IF THE ENTIRE NET INCOME BASE IS MORE THAN TWO HUNDRED NINETY THOUSAND DOLLARS BUT NOT OVER THREE HUNDRED NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE THE SUM OF (1) FIFTEEN THOU- SAND EIGHTY DOLLARS, (2) NINE AND SEVENTY-FIVE ONE-HUNDREDTHS PERCENT OF THE EXCESS OF THE ENTIRE NET INCOME BASE OVER TWO HUNDRED NINETY THOU- SAND DOLLARS BUT NOT OVER THREE HUNDRED NINETY THOUSAND DOLLARS AND (3) SEVEN AND ONE-TENTHS PERCENT OF THE EXCESS OF THE ENTIRE NET INCOME BASE OVER THREE HUNDRED FIFTY THOUSAND DOLLARS BUT NOT OVER THREE HUNDRED NINETY THOUSAND DOLLARS; S 4. The opening paragraph of subparagraph 4 of paragraph (d) of subdivision 1 of section 210 of the tax law, as added by section 2 of part AA-1 of chapter 57 of the laws of 2008, is amended to read as follows: Notwithstanding subparagraphs one and two of this paragraph, for taxa- ble years beginning on or after January first, two thousand eight AND ENDING BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN, the amount prescribed by this paragraph for New York S corporations will be deter- mined in accordance with the following table: S 5. Subparagraph 5 of paragraph (d) of subdivision 1 of section 210 of the tax law is renumbered subparagraph 6. S 6. Paragraph (d) of subdivision 1 of section 210 of the tax law is amended by adding a new subparagraph 5 to read as follows: (5) NOTWITHSTANDING SUBPARAGRAPHS ONE AND TWO OF THIS PARAGRAPH, FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FOUR- TEEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH FOR NEW YORK S CORPO- RATIONS WILL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLE: IF NEW YORK RECEIPTS ARE: THE FIXED DOLLAR MINIMUM TAX IS: NOT MORE THAN $100,000 $1 MORE THAN $100,000 BUT NOT OVER $250,000 $1 MORE THAN $250,000 BUT NOT OVER $500,000 $1 MORE THAN $500,000 BUT NOT OVER $1,000,000 $1 MORE THAN $1,000,000 BUT NOT OVER $5,000,000 $1,000 MORE THAN $5,000,000 BUT NOT OVER $25,000,000 $3,000 OVER $25,000,000 $4,500 OTHERWISE THE AMOUNT PRESCRIBED BY THIS PARAGRAPH WILL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLE: IF NEW YORK RECEIPTS ARE: THE FIXED DOLLAR MINIMUM TAX IS: NOT MORE THAN $100,000 $1 MORE THAN $100,000 BUT NOT OVER $250,000 $1 MORE THAN $250,000 BUT NOT OVER $500,000 $1 MORE THAN $500,000 BUT NOT OVER $1,000,000 $1 MORE THAN $1,000,000 BUT NOT OVER $5,000,000 $1,500
MORE THAN $5,000,000 BUT NOT OVER $25,000,000 $3,500 OVER $25,000,000 $5,000 FOR PURPOSES OF THIS PARAGRAPH, NEW YORK RECEIPTS ARE THE RECEIPTS COMPUTED IN ACCORDANCE WITH SUBPARAGRAPH TWO OF PARAGRAPH (A) OF SUBDI- VISION THREE OF THIS SECTION FOR THE TAXABLE YEAR. S 7. Subparagraph 6 of paragraph (d) of subdivision 1 of section 210 of the tax law, as added by section 3 of part C of chapter 56 of the laws of 2011 and as renumbered by section five of this act, is amended to read as follows: (6) For taxable years beginning on or after January first, two thou- sand twelve and before January first, two thousand fifteen, the amounts prescribed in subparagraphs one and [four] FIVE of this paragraph as the fixed dollar minimum tax for an eligible qualified New York manufacturer shall be one-half of the amounts stated in those subparagraphs. For purposes of this subparagraph, the term "eligible qualified New York manufacturer" shall have the same meaning as in subparagraph (vi) of paragraph (a) of this subdivision. S 8. This act shall take effect immediately; provided that sections one and seven of this act shall apply to taxable years beginning on or after January 1, 2014.

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