EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07266-01-3
S. 3561 2
this section to be taxable under article nine-A of this chapter from
revoking that election in accordance with such subsection (d).
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under article nine-A of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to section two hundred eleven of this
chapter for such taxable year and a corporation shall be considered to
be subject to tax under this article for a taxable year if such corpo-
ration was not a taxpayer but was properly included in a combined return
filed pursuant to subsection (f) or (g) of section fourteen hundred
sixty-two of this article for such taxable year. A corporation that was
in existence before January first, two thousand [twelve] THIRTEEN but
first becomes a taxpayer in a taxable year beginning on or after January
first, two thousand [twelve] THIRTEEN and before January first, two
thousand [fifteen] SIXTEEN, shall be considered for purposes of this
paragraph to have been subject to tax under article nine-A of this chap-
ter for its last taxable year beginning before January first, two thou-
sand [twelve] THIRTEEN if such corporation would have been subject to
tax under such article for such taxable year if it had been a taxpayer
during such taxable year. A corporation that was in existence before
January first, two thousand [twelve] THIRTEEN but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand [twelve] THIRTEEN and before January first, two thousand
[fifteen] SIXTEEN, shall be considered for purposes of this paragraph to
have been subject to tax under this article for its last taxable year
beginning before January first, two thousand [twelve] THIRTEEN if such
corporation would have been subject to tax under this article for such
taxable year if it had been a taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subsection (n) of this section, a corporation formed on or
after January first, two thousand [twelve] THIRTEEN and before January
first, two thousand [fifteen] SIXTEEN may elect to be subject to tax
under this article or under article nine-A of this chapter for its first
taxable year beginning on or after January first, two thousand [twelve]
THIRTEEN and before January first, two thousand [fifteen] SIXTEEN in
which either (i) sixty-five percent or more of its voting stock is owned
or controlled, directly or indirectly by a financial holding company,
provided the corporation whose voting stock is so owned or controlled is
principally engaged in activities that are described in section 4(k)(4)
or 4(k)(5) of the federal bank holding company act of nineteen hundred
fifty-six, as amended and the regulations promulgated pursuant to the
authority of such section, or (ii) it is a financial subsidiary. An
election under this paragraph may not be made by a corporation described
in paragraphs one through eight of subsection (a) of this section or in
subsection (e) of this section. In addition, an election under this
paragraph may not be made by a corporation that is a party to a reorgan-
ization, as defined in subsection (a) of section 368 of the internal
revenue code of 1986, as amended, of a corporation described in para-
graph one of this subsection if both corporations were sixty-five
percent or more owned or controlled, directly or indirectly, by the same
interests at the time of the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under article nine-A of this chapter shall be made
by the taxpayer by filing the report required pursuant to section two
S. 3561 3
hundred eleven of this chapter and the election to be taxed under this
article shall be made by the taxpayer by filing the return required
pursuant to section fourteen hundred sixty-two of this article. Any
election made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year beginning on or after January
first, two thousand [twelve] THIRTEEN and before January first, two
thousand [fifteen] SIXTEEN, provided that the stock ownership and activ-
ities requirements described in subparagraph (i) of this paragraph are
met or such corporation described in subparagraph (ii) of this paragraph
continues as a financial subsidiary.
S 2. Paragraphs 1 and 2 of subdivision (l) of section 11-640 of the
administrative code of the city of New York, as amended by section 3 of
part R of chapter 59 of the laws of 2012, are amended to read as
follows:
(1) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand [twelve] THIRTEEN and was
subject to tax under subchapter two of this chapter for its last taxable
year beginning before January first, two thousand [twelve] THIRTEEN,
shall continue to be taxable under such subchapter for all taxable years
beginning on or after January first, two thousand [twelve] THIRTEEN and
before January first, two thousand [fifteen] SIXTEEN. The preceding
sentence shall not apply to any taxable year during which such corpo-
ration is a banking corporation described in paragraphs one through
eight of subdivision (a) of this section. Notwithstanding anything to
the contrary contained in this section other than subdivision (m) of
this section, a banking corporation or corporation that was in existence
before January first, two thousand [twelve] THIRTEEN and was subject to
tax under this subchapter for its last taxable year beginning before
January first, two thousand [twelve] THIRTEEN, shall continue to be
taxable under this subchapter for all taxable years beginning on or
after January first, two thousand [twelve] THIRTEEN and before January
first, two thousand [fifteen] SIXTEEN only if the corporation is a bank-
ing corporation as defined in subdivision (a) of this section or the
corporation satisfies the requirements for a corporation to elect to be
taxable under this subchapter. Provided further, that nothing in this
subdivision shall prohibit a corporation that elected pursuant to subdi-
vision (d) of this section to be taxable under subchapter two of this
chapter from revoking that election in accordance with subdivision (d)
of this section. For purposes of this paragraph, a corporation shall be
considered to be subject to tax under subchapter two of this chapter for
a taxable year if such corporation was not a taxpayer but was properly
included in a combined report filed pursuant to subdivision four of
section 11-605 of this chapter for such taxable year and a corporation
shall be considered to be subject to tax under this subchapter for a
taxable year if such corporation was not a taxpayer but was properly
included in a combined report filed pursuant to subdivision (f) or (g)
of section 11-646 of this part for such taxable year. A corporation that
was in existence before January first, two thousand [twelve] THIRTEEN
but first becomes a taxpayer in a taxable year beginning on or after
January first, two thousand [twelve] THIRTEEN and before January first,
two thousand [fifteen] SIXTEEN, shall be considered for purposes of this
paragraph to have been subject to tax under subchapter two of this chap-
ter for its last taxable year beginning before January first, two thou-
sand [twelve] THIRTEEN if such corporation would have been subject to
tax under such subchapter for such taxable year if it had been a taxpay-
S. 3561 4
er during such taxable year. A corporation that was in existence before
January first, two thousand [twelve] THIRTEEN but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand [twelve] THIRTEEN and before January first, two thousand
[fifteen] SIXTEEN, shall be considered for purposes of this paragraph to
have been subject to tax under this subchapter for its last taxable year
beginning before January first, two thousand [twelve] THIRTEEN if such
corporation would have been subject to tax under this subchapter for
such taxable year if it had been a taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand [twelve] THIRTEEN and before January
first, two thousand [fifteen] SIXTEEN may elect to be subject to tax
under this subchapter or under subchapter two of this chapter for its
first taxable year beginning on or after January first, two thousand
[twelve] THIRTEEN and before January first, two thousand [fifteen]
SIXTEEN in which either (i) sixty-five percent or more of its voting
stock is owned or controlled, directly or indirectly by a financial
holding company, provided the corporation whose voting stock is so owned
or controlled is principally engaged in activities that are described in
section 4(k)(4) or 4(k)(5) of the federal bank holding company act of
nineteen hundred fifty-six, as amended and the regulations promulgated
pursuant to the authority of such section or (ii) it is a financial
subsidiary. An election under this paragraph may not be made by a corpo-
ration described in paragraphs one through eight of subdivision (a) of
this section or in subdivision (e) of this section. In addition, an
election under this paragraph may not be made by a corporation that is a
party to a reorganization, as defined in subsection (a) of section 368
of the internal revenue code of 1986, as amended, of a corporation
described in paragraph one of this subdivision if both corporations were
sixty-five percent or more owned or controlled, directly or indirectly
by the same interests at the time of the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this part. Any
election made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year beginning on or after January
first, two thousand [twelve] THIRTEEN and before January first, two
thousand [fifteen] SIXTEEN, provided that the stock ownership and activ-
ities requirements described in subparagraph (i) of this paragraph are
met or such corporation described in subparagraph (ii) of this paragraph
continues as a financial subsidiary.
S 3. Subparagraph (iv) of paragraph 2 of subdivision (f) of section
1462 of the tax law, as amended by section 2 of part R of chapter 59 of
the laws of 2012, is amended to read as follows:
(iv) (A) Notwithstanding any provision of this paragraph, any bank
holding company exercising its corporate franchise or doing business in
the state may make a return on a combined basis without seeking the
permission of the commissioner with any banking corporation exercising
its corporate franchise or doing business in the state in a corporate or
organized capacity sixty-five percent or more of whose voting stock is
S. 3561 5
owned or controlled, directly or indirectly, by such bank holding compa-
ny, for the first taxable year beginning on or after January first, two
thousand and before January first, two thousand [fifteen] SIXTEEN during
which such bank holding company registers for the first time under the
federal bank holding company act, as amended, and also elects to be a
financial holding company. In addition, for each subsequent taxable year
beginning after January first, two thousand and before January first,
two thousand [fifteen] SIXTEEN, any such bank holding company may file
on a combined basis without seeking the permission of the commissioner
with any banking corporation that is exercising its corporate franchise
or doing business in the state and sixty-five percent or more of whose
voting stock is owned or controlled, directly or indirectly, by such
bank holding company if either such banking corporation is exercising
its corporate franchise or doing business in the state in a corporate or
organized capacity for the first time during such subsequent taxable
year, or sixty-five percent or more of the voting stock of such banking
corporation is owned or controlled, directly or indirectly, by such bank
holding company for the first time during such subsequent taxable year.
Provided however, for each subsequent taxable year beginning after Janu-
ary first, two thousand and before January first, two thousand [fifteen]
SIXTEEN, a banking corporation described in either of the two preceding
sentences which filed on a combined basis with any such bank holding
company in a previous taxable year, must continue to file on a combined
basis with such bank holding company if such banking corporation, during
such subsequent taxable year, continues to exercise its corporate fran-
chise or do business in the state in a corporate or organized capacity
and sixty-five percent or more of such banking corporation's voting
stock continues to be owned or controlled, directly or indirectly, by
such bank holding company, unless the permission of the commissioner has
been obtained to file on a separate basis for such subsequent taxable
year. Provided further, however, for each subsequent taxable year begin-
ning after January first, two thousand and before January first, two
thousand [fifteen] SIXTEEN, a banking corporation described in either of
the first two sentences of this clause which did not file on a combined
basis with any such bank holding company in a previous taxable year, may
not file on a combined basis with such bank holding company during any
such subsequent taxable year unless the permission of the commissioner
has been obtained to file on a combined basis for such subsequent taxa-
ble year.
(B) Notwithstanding any provision of this paragraph other than clause
(A) of this subparagraph, the commissioner may not require a bank hold-
ing company which, during a taxable year beginning on or after January
first, two thousand and before January first, two thousand [fifteen]
SIXTEEN, registers for the first time during such taxable year under the
federal bank holding company act, as amended, and also elects to be a
financial holding company, to make a return on a combined basis for any
taxable year beginning on or after January first, two thousand and
before January first, two thousand [fifteen] SIXTEEN with a banking
corporation sixty-five percent or more of whose voting stock is owned or
controlled, directly or indirectly, by such bank holding company.
S 4. Subparagraph (iv) of paragraph 2 of subdivision (f) of section
11-646 of the administrative code of the city of New York, as amended by
section 4 of part R of chapter 59 of the laws of 2012, is amended to
read as follows:
(iv) (A) Notwithstanding any provision of this paragraph, any bank
holding company exercising its corporate franchise or doing business in
S. 3561 6
the city may make a return on a combined basis without seeking the
permission of the commissioner with any banking corporation exercising
its corporate franchise or doing business in the city in a corporate or
organized capacity sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by such bank holding compa-
ny, for the first taxable year beginning on or after January first, two
thousand and before January first, two thousand [fifteen] SIXTEEN during
which such bank holding company registers for the first time under the
federal bank holding company act, as amended, and also elects to be a
financial holding company. In addition, for each subsequent taxable year
beginning after January first, two thousand and before January first,
two thousand [fifteen] SIXTEEN, any such bank holding company may file
on a combined basis without seeking the permission of the commissioner
with any banking corporation that is exercising its corporate franchise
or doing business in the city and sixty-five percent or more of whose
voting stock is owned or controlled, directly or indirectly, by such
bank holding company if either such banking corporation is exercising
its corporate franchise or doing business in the city in a corporate or
organized capacity for the first time during such subsequent taxable
year, or sixty-five percent or more of the voting stock of such banking
corporation is owned or controlled, directly or indirectly, by such bank
holding company for the first time during such subsequent taxable year.
Provided however, for each subsequent taxable year beginning after Janu-
ary first, two thousand and before January first, two thousand [fifteen]
SIXTEEN, a banking corporation described in either of the two preceding
sentences which filed on a combined basis with any such bank holding
company in a previous taxable year, must continue to file on a combined
basis with such bank holding company if such banking corporation, during
such subsequent taxable year, continues to exercise its corporate fran-
chise or do business in the city in a corporate or organized capacity
and sixty-five percent or more of such banking corporation's voting
stock continues to be owned or controlled, directly or indirectly, by
such bank holding company, unless the permission of the commissioner has
been obtained to file on a separate basis for such subsequent taxable
year. Provided further, however, for each subsequent taxable year begin-
ning after January first, two thousand and before January first, two
thousand [fifteen] SIXTEEN, a banking corporation described in either of
the first two sentences of this clause which did not file on a combined
basis with any such bank holding company in a previous taxable year, may
not file on a combined basis with such bank holding company during any
such subsequent taxable year unless the permission of the commissioner
has been obtained to file on a combined basis for such subsequent taxa-
ble year.
(B) Notwithstanding any provision of this paragraph other than clause
(A) of this subparagraph, the commissioner may not require a bank hold-
ing company which, during a taxable year beginning on or after January
first, two thousand and before January first, two thousand [fifteen]
SIXTEEN, registers for the first time during such taxable year under the
federal bank holding company act, as amended, and also elects to be a
financial holding company, to make a return on a combined basis for any
taxable year beginning on or after January first, two thousand and
before January first, two thousand [fifteen] SIXTEEN with a banking
corporation sixty-five percent or more of whose voting stock is owned or
controlled, directly or indirectly, by such bank holding company.
S 5. This act shall take effect immediately.