Establishes a tax table benefit recapture for joint returns over $250,000, individual returns over $150,000 and head of household returns over $180,000; makes changes to the New York city personal income tax rates.

- Same as: A1000-2015
- Versions S3554-2015
- Sponsor:ESPAILLAT
- Committee: CITIES
- Law Section: New York City Administrative Code
- Law: Amd §11-1701, NYC Ad Cd; amd §1304, Tax L

- Feb 12, 2015: REFERRED TO CITIES

BILL NUMBER:S3554

TITLE OF BILL:

An act to amend the administrative code of the city of New York and the tax law, in relation to establishing a tax table benefit recapture; and in relation to New York city personal income tax rates

PURPOSE:

To provide a tax benefit to lower income and middle class residents of the city of New York.

SUMMARY OF PROVISIONS:

Section 1- Amends section 11-1701 of the Administrative Code of the city of New York by adding a subdivision that implements a new supplemental tax. The sum of the tax shall be calculated by the tax table benefit multiplied by a fraction which is dependent upon income and filing status. Only the following types of filers who make income above the specified amounts below would be taxed.

-Families with a taxable income of 250,000 or more, would receive a tax table benefit of $333 dollars. They would be taxed at rate determined by their tax table benefit multiplied by a numerator of the lesser of $50,000 dollars or the taxable income of the filer that exceeds $250,000 dollars and a denominator of $50,000 dollars.

-Resident unmarried individuals and resident married individuals filling separate returns with a taxable income of 150,000 or more would receive a tax table benefit of $185 dollars. They would be taxed at rate determined by their tax table benefit multiplied by a numerator of the lesser of $50,000 dollars or the taxable income of the filer that exceeds $150,000 dollars and a denominator of $50,000 dollars.

-Resident head of household with a taxable income of 180,000 or more would receive a tax table benefit of $222 dollars. They would be taxed at rate determined by their tax table benefit multiplied by a numerator of the lesser of $50,000 dollars or the taxable income of the filer that exceeds $180,000 dollars and a denominator of $50,000 dollars.

Section 2- Amends paragraph 1 of subdivision (a) of section 11-1701 of the administrative code of the City of New York by adding subparagraph (c) to set new tax brackets for New York City's Personal Income Tax.

Section 3- Amends paragraph 2 of subdivision (a) of section 11-1701 of the administrative code of the City of New York by adding subparagraph (c) to set new tax brackets for New York City's Personal Income Tax.

Section 4- Amends paragraph 3 of subdivision (a) of section 11-1701 of the administrative code of the City of New York by adding subparagraph (c) to set new tax brackets for New York City's Personal Income Tax.

Section 5- Amends Paragraph 1 of subsection (a) of section tax law by adding subparagraph (c) to set new tax brackets City's Personal Income Tax.

Section 6- Amends paragraph 2 of subsection (a) of section 1304 of the tax law by adding subparagraph (c) to set new tax brackets for New York City's Personal Income Tax.

Section 7- Amends paragraph 3 of subsection (a) of subsection (a) of section 1304 of the tax law by adding subparagraph (c) to set new tax brackets for New York City's Personal Income Tax.

JUSTIFICATION:

Residents of New York City are contending with skyrocketing prices of goods and services, pushing their cost of living ever higher, while wages remain stagnant. Half of rental households in New York City devoted more than 30% of their incomes toward rent and utilities in 2010, with one in four households spending more than 50% on these expenses. Over 1.8 million New York City residents are recipients of food stamps-an increase of 50% over the past three years alone.

While the working class struggles to make ends meet, a small number of people are amassing more and more wealth. New York City is home to some of the worst poverty and income inequality in the United States. The top 20 percent of income earners in Manhattan make nearly 38 times as much as the bottom 20 percent- the greatest differential in the country. And the Bronx, with a child poverty rate of 50 percent, is the poorest urban county in America. Reducing the tax burden on low and middle class families will assist those most in need while benefiting New York City's economy.

"The Middle Class Tax Cut Act" addresses the at risk middle class who are finding it increasingly difficult to stay in the five boroughs. Currently, New York City has only five tax brackets with individuals earning $50,000 a year paying the same tax rate as individuals earning $500,000. In line with Governor Cuomo's bipartisan reform of the State's income tax system earlier this year, the Middle Class Tax Cut Act will cut the tax rate for all families earning less than $300,000 and all individual filers earning less than $200,000. That means that 95% of New York City residents will receive a tax cut. This cut will provide families with up to $333 in tax relief-a small, but meaningful sum for people living paycheck to paycheck. At the same time, tax increases are limited to people making more than $1 million per year.

New York City's economy is dependent on middle class New Yorkers who are in turn dependent on the implementation of a fair tax structure. "The Middle Class Tax-Cut Act" is a comprehensive progressive reform to NYC's Personal Income Tax that will bring fairness to the system and will put more money in the pockets of middle class New Yorkers who live in one of the most expensive cities in the world.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

This act shall take effect immediately.

STATE OF NEW YORK ________________________________________________________________________ 3554 2015-2016 Regular Sessions IN SENATE February 12, 2015 ___________Introduced by Sen. ESPAILLAT -- read twice and ordered printed, and when printed to be committed to the Committee on Cities AN ACT to amend the administrative code of the city of New York and the tax law, in relation to establishing a tax table benefit recapture; and in relation to New York city personal income tax rates THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 11-1701 of the administrative code of the city of New York is amended by adding a new subdivision (i) to read as follows: (I) TAX TABLE BENEFIT RECAPTURE. FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN, THERE IS HEREBY IMPOSED A SUPPLEMENTAL TAX, IN ADDI- TION TO THE TAX IMPOSED UNDER THE OPENING PARAGRAPH OF THIS SECTION, FOR THE PURPOSE OF RECAPTURING THE BENEFIT OF THE TAX TABLES CONTAINED IN SUBDIVISION (A) OF THIS SECTION. THE SUPPLEMENTAL TAX SHALL BE AN AMOUNT EQUAL TO THE SUM OF THE TAX TABLE BENEFITS IN PARAGRAPHS ONE, TWO AND THREE OF THIS SUBDIVISION MULTIPLIED BY THEIR RESPECTIVE FRACTIONS IN SUCH PARAGRAPHS. (1) RESIDENT MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES. SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH APPLY ONLY TO FILERS WHOSE TAXABLE INCOME EXCEEDS $250,000. (A) THE TAX TABLE BENEFIT IS $333. (B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE LESSER OF FIFTY THOUSAND DOLLARS OR THE EXCESS OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER TWO HUNDRED FIFTY THOUSAND DOLLARS AND THE DENOMINATOR IS FIFTY THOUSAND DOLLARS. (2) RESIDENT UNMARRIED INDIVIDUALS AND RESIDENT MARRIED INDIVIDUALS FILING SEPARATE RETURNS. SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH APPLY ONLY TO FILERS WHOSE TAXABLE INCOME EXCEEDS $150,000. (A) THE TAX TABLE BENEFIT IS $185. (B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE LESSER OF FIFTY THOUSAND DOLLARS OR THE EXCESS OF NEW YORK ADJUSTED GROSSEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00649-01-5 S. 3554 2

INCOME FOR THE TAXABLE YEAR OVER ONE HUNDRED FIFTY THOUSAND DOLLARS AND THE DENOMINATOR IS FIFTY THOUSAND DOLLARS. (3) RESIDENT HEAD OF HOUSEHOLD. SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH APPLY ONLY TO FILERS WHOSE TAXABLE INCOME EXCEEDS $180,000. (A) THE TAX TABLE BENEFIT IS $222. (B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE LESSER OF FIFTY THOUSAND DOLLARS OR THE EXCESS OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER ONE HUNDRED EIGHTY THOUSAND DOLLARS AND THE DENOMINATOR IS FIFTY THOUSAND DOLLARS. S 2. Paragraph 1 of subdivision (a) of section 11-1701 of the admin- istrative code of the city of New York is amended by adding a new subparagraph (C) to read as follows: (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF THE CITY TAXABLE INCOME IS: THE TAX IS: NOT OVER $21,600 2.168% OF THE CITY TAXABLE INCOME OVER $21,600 BUT NOT $468 PLUS 2.635% OF EXCESS OVER $45,000 OVER $21,600 OVER $45,000 BUT NOT $1,085 PLUS 2.993% OF EXCESS OVER $90,000 OVER $45,000 OVER $90,000 BUT NOT $2,432 PLUS 3.15% OF EXCESS OVER $150,000 OVER $90,000 OVER $150,000 BUT NOT $4,322 PLUS 3.2% OF EXCESS OVER $500,000 OVER $150,000 OVER $500,000 BUT NOT $15,522 PLUS 3.4% OF EXCESS OVER $1,000,000 OVER $500,000 OVER $1,000,000 BUT NOT $32,522 PLUS 3.7% OF EXCESS OVER $2,000,000 OVER $1,000,000 OVER $2,000,000 $69,522 PLUS 3.8% OF EXCESS OVER $2,000,000 S 3. Paragraph 2 of subdivision (a) of section 11-1701 of the adminis- trative code of the city of New York is amended by adding a new subpara- graph (C) to read as follows: (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF THE CITY TAXABLE INCOME IS: THE TAX IS: NOT OVER $14,400 2.168% OF THE CITY TAXABLE INCOME OVER $14,400 BUT NOT $312 PLUS 2.635% OF EXCESS OVER $30,000 OVER $14,400 OVER $30,000 BUT NOT $723 PLUS 2.993% OF EXCESS OVER $60,000 OVER $30,000 OVER $60,000 BUT NOT $1,621 PLUS 3.15% OF EXCESS OVER $100,000 OVER $60,000 OVER $100,000 BUT NOT $2,881 PLUS 3.2% OF EXCESS OVER $500,000 OVER $100,000 OVER $500,000 BUT NOT $15,681 PLUS 3.4% OF EXCESS OVER $1,000,000 OVER $500,000 OVER $1,000,000 BUT NOT $32,681 PLUS 3.7% OF EXCESS OVER $2,000,000 OVER $1,000,000 OVER $2,000,000 $69,681 PLUS 3.8% OF EXCESS OVER $2,000,000 S 4. Paragraph 3 of subdivision (a) of section 11-1701 of the adminis- trative code of the city of New York is amended by adding a new subpara- graph (C) to read as follows:S. 3554 3

(C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF THE CITY TAXABLE INCOME IS: THE TAX IS: NOT OVER $12,000 2.168% OF THE CITY TAXABLE INCOME OVER $12,000 BUT NOT $260 PLUS 2.635% OF EXCESS OVER $25,000 OVER $12,000 OVER $25,000 BUT NOT $603 PLUS 2.993% OF EXCESS OVER $50,000 OVER $25,000 OVER $50,000 BUT NOT $1,351 PLUS 3.15% OF EXCESS OVER $83,000 OVER $50,000 OVER $83,000 BUT NOT $2,400 PLUS 3.2% OF EXCESS OVER $500,000 OVER $83,000 OVER $500,000 BUT NOT $15,734 PLUS 3.4% OF EXCESS OVER $1,000,000 OVER $500,000 OVER $1,000,000 BUT NOT $32,734 PLUS 3.7% OF EXCESS OVER $2,000,000 OVER $1,000,000 OVER $2,000,000 $69,734 PLUS 3.8% OF EXCESS OVER $2,000,000 S 5. Paragraph 1 of subsection (a) of section 1304 of the tax law is amended by adding a new subparagraph (C) to read as follows: (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF THE CITY TAXABLE INCOME IS: THE TAX IS: NOT OVER $21,600 2.168% OF THE CITY TAXABLE INCOME OVER $21,600 BUT NOT $468 PLUS 2.635% OF EXCESS OVER $45,000 OVER $21,600 OVER $45,000 BUT NOT $1,085 PLUS 2.993% OF EXCESS OVER $90,000 OVER $45,000 OVER $90,000 BUT NOT $2,432 PLUS 3.15% OF EXCESS OVER $150,000 OVER $90,000 OVER $150,000 BUT NOT $4,322 PLUS 3.2% OF EXCESS OVER $500,000 OVER $150,000 OVER $500,000 BUT NOT $15,522 PLUS 3.4% OF EXCESS OVER $1,000,000 OVER $500,000 OVER $1,000,000 BUT NOT $32,522 PLUS 3.7% OF EXCESS OVER $2,000,000 OVER $1,000,000 OVER $2,000,000 $69,522 PLUS 3.8% OF EXCESS OVER $2,000,000 S 6. Paragraph 2 of subsection (a) of section 1304 of the tax law is amended by adding a new subparagraph (C) to read as follows: (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF THE CITY TAXABLE INCOME IS: THE TAX IS: NOT OVER $14,400 2.168% OF THE CITY TAXABLE INCOME OVER $14,400 BUT NOT $312 PLUS 2.635% OF EXCESS OVER $30,000 OVER $14,400 OVER $30,000 BUT NOT $723 PLUS 3.15% OF EXCESS OVER $60,000 OVER $30,000 OVER $60,000 BUT NOT $1,621 PLUS 3.15% OF EXCESS OVER $100,000 OVER $60,000 OVER $100,000 BUT NOT $2,881 PLUS 3.2% OF EXCESS OVER $500,000 OVER $100,000 OVER $500,000 BUT NOT $15,681 PLUS 3.4% OF EXCESS OVER $1,000,000 OVER $500,000S. 3554 4

OVER $1,000,000 BUT NOT $32,681 PLUS 3.7% OF EXCESS OVER $2,000,000 OVER $1,000,000 OVER $2,000,000 $69,681 PLUS 3.8% OF EXCESS OVER $2,000,000 S 7. Paragraph 3 of subsection (a) of section 1304 of the tax law is amended by adding a new subparagraph (C) to read as follows: (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF THE CITY TAXABLE INCOME IS: THE TAX IS: NOT OVER $12,000 2.168% OF THE CITY TAXABLE INCOME OVER $12,000 BUT NOT $260 PLUS 2.635% OF EXCESS OVER $25,000 OVER $12,000 OVER $25,000 BUT NOT $603 PLUS 2.993% OF EXCESS OVER $50,000 OVER $25,000 OVER $50,000 BUT NOT $1,351 PLUS 3.15% OF EXCESS OVER $83,000 OVER $50,000 OVER $83,000 BUT NOT $2,400 PLUS 3.2% OF EXCESS OVER $500,000 OVER $83,000 OVER $500,000 BUT NOT $15,734 PLUS 3.4% OF EXCESS OVER $1,000,000 OVER $500,000 OVER $1,000,000 BUT NOT $32,734 PLUS 3.7% OF EXCESS OVER $2,000,000 OVER $1,000,000 OVER $2,000,000 $69,734 PLUS 3.8% OF EXCESS OVER $2,000,000 S 8. The commissioner of taxation and finance shall take steps to publicize the necessary adjustments to estimated tax and, to the extent reasonably possible, to inform the taxpayer of the tax liability changes made by this act. S 9. This act shall take effect immediately.

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