Bill S3754-2011

Extends the provisions relating to the franchise tax on banking

Extends the provisions relating to the franchise tax on banking.

Details

  • Versions
  • Sponsor:
  • Multi-sponsor(s):
  • Co-sponsor(s):
  • Committee:
  • Law Section:
  • Law:

Actions

  • Jan 9, 2012: RECOMMIT, ENACTING CLAUSE STRICKEN
  • Jan 4, 2012: REFERRED TO BANKS
  • Mar 9, 2011: REPORTED AND COMMITTED TO FINANCE
  • Mar 3, 2011: REFERRED TO BANKS

Meetings

Votes

VOTE: COMMITTEE VOTE: - Banks - Mar 9, 2011
Ayes (17): Griffo, Farley, Bonacic, DeFrancisco, Gallivan, Golden, Johnson, O'Mara, Marcellino, Ranzenhofer, Smith, Breslin, Rivera, Serrano, Carlucci, Savino, Valesky
Ayes W/R (2): Diaz, Kruger

Memo

BILL NUMBER:S3754

TITLE OF BILL:

An act to amend chapter 298 of the laws of 1985, amending the tax law relating to the franchise tax on banking corporations imposed by the tax law, authorized to be imposed by any city having a population of one million or more by chapter 772 of the laws of 1966 and imposed by the administrative code of the city of New York and relating to other provisions of the tax law, chapter 883 of the laws of 1975 and the administrative code of the city of New York which relates to such franchise tax, to amend chapter 817 of the laws of 1987, amending the tax law and the environmental conservation law, constituting the business tax reform and rate reduction act of 1987, and to amend chapter 525 of the laws of 1988, amending the tax law and the administrative code of the city of New York relating to the imposition of taxes in the city of New York, in relation to the effectiveness of certain provisions of such chapters

PURPOSE:

This bill would make permanent the current bank tax statute. The provisions of the current bank tax are scheduled to expire for taxable years beginning on or after January 1, 2011. This bill would extend them permanently.

SUMMARY OF PROVISIONS:

This bill would amend Section 51 of Chapter 298 of the Laws of 1985 by deleting the sunset provisions which were contained in that law's effective date. The law currently provides that the amendments enacted by Chapter 298 shall not apply to taxable years beginning on or after January 1, 2011.

The bill also amend Section 110 of Chapter 817 of the Laws of 1987 by deleting the sunset provisions relating to certain amendments regarding the bad debt deduction for commercial banks. The law currently provides that the amendments enacted by Chapter 817 shall not apply to taxable years beginning on or after January 1, 2011.

JUSTIFICATION:

The State tax on the banking industry was significantly restructured by Chapter 298 of the Laws of 1985. The intent of this law was to make the franchise tax on banking corporations more similar to the franchise tax on general business corporations. It also sought to treat commercial banks and thrift institutions in a more similar manner. Another purpose was to make it easier to more accurately calculate the amount of the required tax.

Because of the extensive changes made in the Tax Law, and the uncertain impact of these amendments, the provisions of Chapter 298 were only temporarily authorized. The impermanent nature of the Bank Tax has, however, caused uncertainty in the industry about the future tax liability of banking corporations. This has complicated tax

calculation, record keeping and efforts to plan for the future. The current Bank Tax has been in effect for fifteen taxable years. This has provided sufficient time to analyze and evaluate the impact of Chapter 298 of the Laws of 1985. The 1985 law resolved many of the problems that had existed regarding the taxation of banks. The provisions of Chapter 298 of 1985 and Chapter 67 of 2010 should therefore be made permanent.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

Enactment of this bill is necessary to implement the 2011-2012 Executive Budget as it preserves current revenue.

EFFECTIVE DATE:

This bill takes effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 3754 2011-2012 Regular Sessions IN SENATE March 3, 2011 ___________
Introduced by Sens. GRIFFO, FARLEY -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend chapter 298 of the laws of 1985, amending the tax law relating to the franchise tax on banking corporations imposed by the tax law, authorized to be imposed by any city having a population of one million or more by chapter 772 of the laws of 1966 and imposed by the administrative code of the city of New York and relating to other provisions of the tax law, chapter 883 of the laws of 1975 and the administrative code of the city of New York which relates to such franchise tax, to amend chapter 817 of the laws of 1987, amending the tax law and the environmental conservation law, constituting the busi- ness tax reform and rate reduction act of 1987, and to amend chapter 525 of the laws of 1988, amending the tax law and the administrative code of the city of New York relating to the imposition of taxes in the city of New York, in relation to the effectiveness of certain provisions of such chapters THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 51 of chapter 298 of the laws of 1985, amending the tax law relating to the franchise tax on banking corporations imposed by the tax law, authorized to be imposed by any city having a population of one million or more by chapter 772 of the laws of 1966 and imposed by the administrative code of the city of New York and relating to other provisions of the tax law, chapter 883 of the laws of 1975 and the administrative code of the city of New York which relates to such fran- chise tax, as amended by chapter 67 of the laws of 2010, is amended to read as follows: S 51. This act shall take effect immediately and shall apply to taxa- ble years beginning on or after January 1, 1985[, except that: (a) sections one through eight shall not apply to taxable years begin- ning on or after January 1, 2011;
(b) sections nine, twelve, the amendment made to paragraph 9 of subsection (a) of section 1452 of the tax law by section thirteen, sections fifteen, sixteen, eighteen, nineteen, twenty, twenty-three, twenty-seven, thirty and thirty-two, the amendment made to paragraph 9 of subdivision (a) of section 11-640 of the administrative code of the city of New York by section thirty-three, sections thirty-five, thirty- six, thirty-eight, thirty-nine, forty, and forty-five shall not apply to corporations other than savings banks and savings and loan associations for taxable years beginning on or after January 1, 2011. (c) sections twenty-one, twenty-two, twenty-four, forty-one and forty-two shall not apply to corporations other than savings banks and savings and loan associations for taxable years beginning on or after January 1, 2011, provided, however, that the provisions of such sections which relate to the alternative minimum tax measured by taxable assets shall continue to apply to all taxpayers for taxable years beginning on or after January 1, 2011; (d) the amendment to the section heading and the opening paragraph of section 11-643.3 of the administrative code of the city of New York made by section forty-three shall not apply to corporations other than savings banks and savings and loan associations for taxable years begin- ning on or after January 1, 2011 with respect to those provisions of such section 11-643.3 which relate to the basic tax measured by entire net income; and (e) section twenty-eight, and the addition of new section 11-643.5 of the administrative code of the city of New York made by section forty- four shall not apply to corporations other than savings banks and savings and loan associations for taxable years beginning on or after January 1, 2011, provided, however, that the provisions of such sections which relate to the alternative minimum taxes measured by assets, issued capital stock and one hundred twenty-five dollars shall continue to apply to all taxpayers for taxable years beginning on or after January 1, 2011]
. S 2. Subdivisions (d) and (f) of section 110 of chapter 817 of the laws of 1987, amending the tax law and the environmental conservation law, constituting the business tax reform and rate reduction act of 1987, as amended by chapter 67 of the laws of 2010, are amended to read as follows: (d) The provisions of section sixty-seven of this act except insofar as it amends paragraph 10 of subsection (b) of section 1453 of the tax law, seventy-one and seventy-four shall apply to taxable years beginning after December 31, 1986[, provided, however, that new paragraphs 11 and 12 of subsection (b) of section 1453 of the tax law as added by section sixty-seven of this act, the amendments made by section seventy-one of this act, and new subsection (i) of section 1453 of the tax law as added by section seventy-four of this act shall not apply to taxable years beginning on or after January 1, 2011]; (f) The provisions of section one hundred four of this act shall apply to taxable years beginning after December 31, 1986[, and shall not apply to corporations other than savings banks and savings and loan associ- ations for taxable years beginning on or after January 1, 2011, provided, however, that the provisions of such section which relate to the alternative minimum tax measured by taxable assets shall continue to apply to all taxpayers for taxable years beginning on or after January 1, 2011]. S 3. Subdivisions (c) and (d) of section 68 of chapter 525 of the laws of 1988, amending the tax law and the administrative code of the city of
New York relating to the imposition of taxes in the city of New York, as amended by chapter 67 of the laws of 2010, are amended to read as follows: (c) The provisions of sections one, thirty-one, thirty-two, thirty- three, thirty-six, thirty-seven, forty through forty-five, forty-seven and forty-eight of this act shall apply to taxable years beginning after December 31, 1986[, provided, however, that the amendments made by sections thirty-six and forty-one of this act, and new subdivision (i) of section 11-641 of the administrative code of the city of New York as added by section forty-four of this act shall not apply to taxable years beginning on or after January 1, 2011]; (d) The provisions of section forty-six of this act shall apply to taxable years beginning after December 31, 1986[, and shall not apply to corporations other than savings banks and savings and loan associations for taxable years beginning on or after January 1, 2011, provided, however, that the provisions of such section which relate to the alter- native minimum tax measured by taxable assets shall continue to apply to all taxpayers for taxable years beginning on or after January 1, 2011]; S 4. This act shall take effect immediately.

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