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Memo

BILL NUMBER:S2648             REVISED MEMO 04/26/13

TITLE  OF  BILL:    An  act  to  amend the tax law, in relation to the metropolitan commuter transportation mobility tax  rates  on  earnings from self-employment

PURPOSE::

This  legislation  would  repeal  the  imposition  of the metropolitan commuter transportation tax on earnings from self-employment.

SUMMARY OF PROVISIONS::

Amends section 801 of the tax law  in  relation  to  the  metropolitan commuter  transportation  mobility  tax  rates  on  earnings from self employment.

Provides that self employed individuals whose earnings:

a. exceed two hundred and fifty thousand dollars for the tax year, the tax rate is imposed at a rate of eleven hundredths  (.11)  percent  of the  net earnings from self employment but do not exceed three hundred thousand dollars;

b. exceed three hundred thousand dollars for the  tax  year,  the  tax rate  is imposed at a rate of twenty-three hundredths (.23) percent of the net earnings from self employment but do not exceed three  hundred fifty thousand dollars; and

c.  exceed  three  hundred  thousand dollars for the tax year, the tax rate is imposed at a rate of thirty-four hundredths (.34)  percent  of the net earnings from self employment greater than three hundred fifty thousand dollars.

JUSTIFICATION::

In 2011, the metropolitan commuter transportation tax was repealed for approximately  289,000  businesses  with  annual  payrolls below $1.25 million. More than 6,000 businesses with payrolls  between  $1.25  and $1.75 had their payroll tax cut by as much as two-thirds.

Under the current law, self-employed individuals who earn over $50,000 a year are still paying the metropolitan commuter transportation tax.

This  legislation will repeal the metropolitan commuter transportation tax  for  self-employed  individuals  who  earn  less  than   $250,000 annually.

This  legislation  will  also  reduce  the  amount  that self-employed individuals who earn from $250,000 to $300,000  to  .11  percent,  and self  employed  individuals  who earn from $300,000 to $350,000 to .23 percent.

LEGISLATIVE HISTORY::

2011 S.7165 Passed

 FISCAL IMPLICATIONS::

Approximately $21 million fiscal cost to the State.

EFFECTIVE DATE::

This  act  shall  take effect on the first of July next succeeding the date on which it shall have become law.

Text

STATE OF NEW YORK
________________________________________________________________________

2648

2013-2014 Regular Sessions

IN SENATE

January 23, 2013
___________

Introduced  by  Sen.  BALL  --  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  the  metropolitan  commuter
  transportation mobility tax rates on earnings from self-employment

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 2 of subsection (a) of section  801  of  the  tax
law,  as  amended  by  section  1 of part N of chapter 59 of the laws of
2012, is amended to read as follows:
  (2) For individuals[, the tax is imposed  at  a  rate  of  thirty-four
hundredths (.34) percent of the] WITH net earnings THAT ARE ATTRIBUTABLE
TO  THE  MCTD from self-employment of individuals [that are attributable
to the MCTD] if such  earnings  attributable  to  the  MCTD  exceed  TWO
HUNDRED fifty thousand dollars for the tax year, THE TAX IS IMPOSED AT A
RATE  OF  (A)  ELEVEN  HUNDREDTHS (.11) PERCENT OF THE NET EARNINGS FROM
SELF-EMPLOYMENT IF SUCH EARNINGS ATTRIBUTABLE TO THE  MCTD  ARE  GREATER
THAN  TWO HUNDRED FIFTY THOUSAND DOLLARS BUT DO NOT EXCEED THREE HUNDRED
THOUSAND DOLLARS IN ANY TAX  YEAR,  (B)  TWENTY-THREE  HUNDREDTHS  (.23)
PERCENT  OF  THE  NET  EARNINGS  FROM  SELF-EMPLOYMENT  IF SUCH EARNINGS
ATTRIBUTABLE TO THE MCTD ARE GREATER THAN THREE HUNDRED THOUSAND DOLLARS
BUT DO NOT EXCEED THREE HUNDRED FIFTY THOUSAND DOLLARS IN ANY TAX  YEAR,
AND  (C)  THIRTY-FOUR  HUNDREDTHS (.34) PERCENT OF THE NET EARNINGS FROM
SELF-EMPLOYMENT IF SUCH EARNINGS ATTRIBUTABLE TO THE  MCTD  ARE  GREATER
THAN THREE HUNDRED FIFTY THOUSAND DOLLARS IN ANY TAX YEAR.
  S  2.  This act shall take effect on the first of July next succeeding
the date on which it shall have become a law.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07360-01-3