This bill has been amended

Bill S5016A-2011

Relates to the imposition of personal income tax

Includes New York exemptions of a resident individual within the cost of living adjustment; makes such adjustment applicable to tax years beginning on or after January 1, 2013.

Details

Actions

  • Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jun 7, 2011: REPORTED AND COMMITTED TO FINANCE
  • May 20, 2011: PRINT NUMBER 5016A
  • May 20, 2011: AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • May 2, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Meetings

Votes

VOTE: COMMITTEE VOTE: - Investigations and Government Operations - Jun 7, 2011
Ayes (7): Marcellino, Alesi, Golden, Nozzolio, Zeldin, Squadron, Diaz
Ayes W/R (1): Peralta

Memo

BILL NUMBER:S5016A

TITLE OF BILL: An act to amend the tax law, in relation to the imposition of personal income tax

PURPOSE: To adjust the taxable income brackets, the standard deduction and the dependent exemption under the personal income tax to the rate of inflation.

SUMMARY OF PROVISIONS: Section 1 amends section 601 of the Tax Law to adjust the rate brackets for each personal income tax filing type for the rate of inflation.

Section 2 amends section 601 of the Tax Law to change the calculation of the tax benefit recapture to adjust the applicable income levels by the rate of inflation.

Section 3 amends section 614 of the Tax Law to provide for a cost of living adjustment equal to the rate of inflation for the standard deduction.

Section 4 amends section 616 of the Tax Law to provide a cost of living adjustment equal to the rate of inflation for the dependent exemption.

JUSTIFICATION: The Federal Government provides for a cost of living adjustment in relation to the imposition of the personal income tax at the federal level. This cost of living adjustment applies to the taxable income levels to which the tax rates apply, the standard deduction and the personal exemption. By utilizing this cost of living adjustment, the "bracket creep" is eliminated which forces a taxpayer into a higher income tax bracket as a result of his income increasing due to inflation.

The personal income tax in New York does not currently include a cost of living adjustment for the rate brackets, standard deduction or the dependent deduction. The last time the rate brackets were adjusted was in 1996. The standard deduction was adjusted in 2006 only for married taxpayers to eliminate the marriage penalty. Other than that adjustment, the standard deduction has not been changed since 1996. The dependent exemption, which is set at $1,000 per dependent, has not been changed since 1987. In comparison, the Federal government exemption is equal to $3,650 per dependent.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: $230M in fiscal year 2011-12; $265M when fully effective.

EFFECTIVE DATE:

Applies to tax years beginning on or after January 1, 2011.


Text

STATE OF NEW YORK ________________________________________________________________________ 5016--A 2011-2012 Regular Sessions IN SENATE May 2, 2011 ___________
Introduced by Sens. DeFRANCISCO, SKELOS, LARKIN, MAZIARZ, RANZENHOFER, SEWARD, ZELDIN -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Oper- ations -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to the imposition of personal income tax THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 601 of the tax law is amended by adding a new subsection (c-1) to read as follows: (C-1) COST OF LIVING ADJUSTMENT. FOR TAXABLE YEARS BEGINNING ON AND AFTER JANUARY FIRST, TWO THOUSAND ELEVEN, THE MINIMUM AND MAXIMUM DOLLAR AMOUNT FOR EACH RATE BRACKET FOR WHICH A TAX IS IMPOSED UNDER SUBSECTIONS (A), (B) AND (C) OF THIS SECTION SHALL BE INCREASED FOR THE COST OF LIVING ADJUSTMENT. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE COST OF LIVING ADJUSTMENT FOR ANY TAXABLE YEAR SHALL BE THE PERCENTAGE (IF ANY) BY WHICH THE CPI FOR THE PRECEDING CALENDAR YEAR EXCEEDS THE CPI FOR CALENDAR YEAR TWO THOUSAND NINE. THE CPI IS DEFINED AS THE AVERAGE OF THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR AS OF THE CLOSE OF THE TWELVE MONTH PERIOD ENDING AUGUST THIRTY-FIRST OF SUCH CALENDAR YEAR. IF ANY INCREASE DETERMINED UNDER THIS SUBPARAGRAPH IS NOT A MULTIPLE OF ONE HUNDRED DOLLARS, SUCH INCREASE SHALL BE ROUNDED TO THE NEXT HIGHEST MULTIPLE OF ONE HUNDRED DOLLARS. S 2. Subparagraph (B) of paragraph 1 of subsection (d) of section 601 of the tax law, as amended by section 1 of part R of chapter 63 of the laws of 2003, is amended to read as follows: (B) The fraction is computed as follows: (I) FOR TAXABLE YEARS BEGIN- NING ON OR BEFORE JANUARY FIRST, TWO THOUSAND TEN, 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 thousand dollars and the denominator is fifty thousand dollars. (II) IN THE CASE OF ANY TAXABLE YEAR BEGINNING AFTER TWO THOUSAND TEN, THE NUMERATOR IS THE LESSER OF THE DIFFERENCE BETWEEN THE UPPER INCOME THRESHOLD AND THE LOWER INCOME THRESHOLD OR THE EXCESS OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE LOWER INCOME THRESH- OLD. THE DENOMINATOR SHALL BE THE DIFFERENCE BETWEEN THE UPPER INCOME THRESHOLD AND THE LOWER INCOME THRESHOLD. (III) FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE LOWER INCOME THRESH- OLD SHALL BE THE PRODUCT OF ONE HUNDRED THOUSAND DOLLARS AND THE COST OF LIVING ADJUSTMENT AND THE UPPER INCOME THRESHOLD SHALL BE THE PRODUCT OF ONE HUNDRED FIFTY THOUSAND DOLLARS AND THE COST OF LIVING ADJUSTMENT. (IV) FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE COST OF LIVING ADJUST- MENT FOR ANY TAXABLE YEAR SHALL BE THE PERCENTAGE (IF ANY) BY WHICH THE CPI FOR THE PRECEDING CALENDAR YEAR EXCEEDS THE CPI FOR CALENDAR YEAR TWO THOUSAND NINE. THE CPI IS DEFINED AS THE AVERAGE OF THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR AS OF THE CLOSE OF THE TWELVE MONTH PERIOD ENDING AUGUST THIRTY-FIRST OF SUCH CALENDAR YEAR. (V) IF ANY INCREASE DETERMINED UNDER THIS SUBPARAGRAPH IS NOT A MULTI- PLE OF ONE HUNDRED DOLLARS, SUCH INCREASE SHALL BE ROUNDED TO THE NEXT HIGHEST MULTIPLE OF ONE HUNDRED DOLLARS. S 3. Section 614 of the tax law is amended by adding a new subsection (f) to read as follows: (F) COST OF LIVING ADJUSTMENT. FOR TAXABLE YEARS BEGINNING ON AND AFTER JANUARY FIRST, TWO THOUSAND ELEVEN, EACH DOLLAR AMOUNT CONTAINED IN SUBSECTIONS (A), (B), (C), (D) AND (E) OF THIS SECTION SHALL BE INCREASED FOR THE COST OF LIVING ADJUSTMENT. FOR THE PURPOSES OF THIS SUBSECTION, THE COST OF LIVING ADJUSTMENT FOR ANY TAXABLE YEAR SHALL BE THE PERCENTAGE (IF ANY) BY WHICH THE CPI FOR THE PRECEDING CALENDAR YEAR EXCEEDS THE CPI FOR CALENDAR YEAR TWO THOUSAND NINE. THE CPI IS DEFINED AS THE AVERAGE OF THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR AS OF THE CLOSE OF THE TWELVE MONTH PERIOD ENDING AUGUST THIRTY-FIRST OF SUCH CALENDAR YEAR. IF ANY INCREASE DETERMINED UNDER THIS SUBPARAGRAPH IS NOT A MULTI- PLE OF ONE HUNDRED DOLLARS, SUCH INCREASE SHALL BE ROUNDED TO THE NEXT HIGHEST MULTIPLE OF ONE HUNDRED DOLLARS. S 4. Section 616 of the tax law is amended by adding a new subsection (c) to read as follows: (C) COST OF LIVING ADJUSTMENT. FOR TAXABLE YEARS BEGINNING ON AND AFTER JANUARY FIRST, TWO THOUSAND ELEVEN, EACH DOLLAR AMOUNT CONTAINED IN SUBSECTION (A) OF THIS SECTION SHALL BE INCREASED FOR THE COST OF LIVING ADJUSTMENT. FOR THE PURPOSES OF THIS SUBSECTION, THE COST OF LIVING ADJUSTMENT FOR ANY TAXABLE YEAR SHALL BE THE PERCENTAGE (IF ANY) BY WHICH THE CPI FOR THE PRECEDING CALENDAR YEAR EXCEEDS THE CPI FOR CALENDAR YEAR TWO THOUSAND NINE. THE CPI IS DEFINED AS THE AVERAGE OF THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR AS OF THE CLOSE OF THE TWELVE MONTH PERIOD ENDING AUGUST THIRTY-FIRST OF SUCH CALENDAR YEAR. IF ANY INCREASE DETER- MINED UNDER THIS SUBPARAGRAPH IS NOT A MULTIPLE OF ONE HUNDRED DOLLARS, SUCH INCREASE SHALL BE ROUNDED TO THE NEXT HIGHEST MULTIPLE OF ONE HUNDRED DOLLARS. S 5. This act shall take effect immediately and shall apply to taxable years starting on or after January 1, 2011.

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