Bill S3562-2013

Phases out the franchise tax on business corporations which are manufacturers over a two-year period

Phases out the franchise tax on business corporations that are manufacturers over a two-year period; defines terms "manufacturer" and "principally engaged".

Details

Actions

  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Feb 5, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S3562

TITLE OF BILL: An act to amend the tax law, in relation to phasing out the franchise tax on business corporations that are manufacturers

PURPOSE OF BILL: This bill would phase out the corporate franchise tax over a two-year period on businesses which are manufacturers.

SUMMARY OF SPECIFIC PROVISIONS: Section 1- Amends section 208 of the Tax Law by adding two new subdivisions 20 and 21 to define the terms "manufacturer" and "principally engaged."

Section 2 -Amends section 209 of the Tax Law by adding a new subdivision 11 to provide that (a) for any taxable year beginning on or after January 1, 2014, a manufacturer shall be exempt from 50% of the corporate franchise tax and (b) for any taxable year beginning on or after January 1, 2015, a manufacturer shall be exempt from all of the corporate franchise tax.

Section 3 - Effective date.

JUSTIFICATION: According to the most recent Economic Census information from the U S Census Bureau , in 2002 there were over 21,000 manufacturers employing more than 541,000 employees in New York State.

The manufacturing industry is an important economic engine that fuels growth in the communities where manufacturers are located and throughout the state. Manufacturing companies make goods which, when sold, return wealth to the communities in which they are located. Recent tax incentive programs and opportunities provided by the State have been focused on attracting new businesses. However, there are tremendous growth opportunities within the existing manufacturing base It is hence imperative to implement incentives and tax reductions to continue to attract, grow, and retain manufacturing business.

This measure would solidify New York State's commitment to its manufacturers that have operated, invented, and employed workers in the State

PRIOR LEGISLATIVE HISTORY: 2011-2012 S.4172

FISCAL IMPLICATIONS: Yet to be determined.

EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable years commencing on or after January 1, 2013, provided however that the commissioner of taxation and finance is authorized to promulgate any and all rules and regulations and take any other measures necessary for the timely implementation of this act on its effective date on or before such date.


Text

STATE OF NEW YORK ________________________________________________________________________ 3562 2013-2014 Regular Sessions IN SENATE February 5, 2013 ___________
Introduced by Sen. O'MARA -- 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 phasing out the franchise tax on business corporations that are manufacturers THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 208 of the tax law is amended by adding two new subdivisions 20 and 21 to read as follows: 20. THE TERM "MANUFACTURER" SHALL MEAN A TAXPAYER WHICH DURING THE TAXABLE YEAR IS PRINCIPALLY ENGAGED IN THE PRODUCTION OF GOODS BY MANU- FACTURING, PROCESSING, ASSEMBLING, REFINING, MINING, EXTRACTING, FARM- ING, AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICULTURE OR COMMERCIAL FISHING. MOREOVER, FOR PURPOSES OF COMPUTING THE CAPITAL BASE IN A COMBINED REPORT, THE GROUP SHALL BE CONSIDERED A "MANUFACTURER" FOR PURPOSES OF THIS ARTICLE ONLY IF THE COMBINED GROUP DURING THE TAXABLE YEAR IS PRINCIPALLY ENGAGED IN THE ACTIVITIES SET FORTH IN THIS SUBDI- VISION, OR ANY COMBINATION THEREOF. 21. THE TERM "PRINCIPALLY ENGAGED" SHALL INCLUDE A TAXPAYER OR A COMBINED GROUP IF, DURING THE TAXABLE YEAR, MORE THAN FIFTY PERCENT OF THE GROSS RECEIPTS OF THE TAXPAYER OR COMBINED GROUP, RESPECTIVELY, ARE DERIVED FROM RECEIPTS FROM THE SALE OF GOODS PRODUCED BY MANUFACTURING. IN COMPUTING A COMBINED GROUP'S GROSS RECEIPTS, INTERCORPORATE RECEIPTS SHALL BE ELIMINATED. S 2. Section 209 of the tax law is amended by adding a new subdivision 11 to read as follows: 11. (A) FOR ANY TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN, A TAXPAYER WHO IS A MANUFACTURER SHALL BE EXEMPT FROM FIFTY PERCENT OF ALL TAXES IMPOSED BY THIS ARTICLE.
(B) FOR ANY TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, A TAXPAYER WHO IS A MANUFACTURER SHALL BE EXEMPT FROM ALL TAXES IMPOSED BY THIS ARTICLE. S 3. This act shall take effect immediately and shall apply to taxable years commencing on or after January 1, 2013; provided, however, that the commissioner of taxation and finance is authorized to promulgate any and all rules and regulations and take any other measures necessary for the timely implementation of this act on its effective date on or before such date.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus