Establishes a small business tax credit.

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S7650-2011 Actions

• Jun 18, 2012: referred to ways and means
• Jun 18, 2012: DELIVERED TO ASSEMBLY
• Jun 18, 2012: PASSED SENATE
• Jun 18, 2012: ORDERED TO THIRD READING CAL.1292
• Jun 11, 2012: REFERRED TO RULES

S7650-2011 Meetings

Rules: Jun 18, 2012, Rules: Jun 21, 2012

S7650-2011 Calendars

Floor Calendar: Jun 18, 2012

S7650-2011 Votes

S7650-2011 Memo

BILL NUMBER:S7650

TITLE OF BILL:
An act
to amend the tax law, in relation to establishing a small business tax
credit

PURPOSE:
To create a small business personal income tax credit and reduce
corporate franchise taxes for small businesses to encourage growth
among this state's small businesses to help spur job creation.

SUMMARY OF PROVISIONS:
20% TAX CUT FOR SMALL BUSINESSES: This bill would provide small
businesses with a corporate tax rate cut from 6.5 percent to 5.2
percent - a 20 percent reduction. The corporate tax rate for small
business applies to those businesses with entire net income base of
not more than $290,000. It would also virtually eliminate the fixed
dollar minimum for small businesses (those businesses with New York
receipts of not more than $1 million). This reduction will save small
businesses $20 million in SFY 2012-13 and $49 million on an annual
basis.

SMALL BUSINESS JOBS CREDIT: Provides a credit of 10% of business
income for about 800,000 small businesses that have at least one
employee, have business income of less than $250,000, and that file
under the personal income tax. This tax credit would save small
businesses $80 million annually.

JUSTIFICATION:
This bill will deliver tax relief to small businesses to make New York
State more economically competitive to encourage our small businesses
to stay and expand.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
This bill will save New York businesses $20 million this year.

EFFECTIVE DATE:
Effective immediately.

S7650-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    7650

                              I N  SENATE

                                June 11, 2012
                                 ___________

  Introduced  by  Sen.  SKELOS -- read twice and ordered printed, and when
    printed to be committed to the Committee on Rules

  AN ACT to amend the tax law, in relation to establishing a  small  busi-
    ness tax credit

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Section 606 of the tax law  is  amended  by  adding  a  new
  subsection (uu) to read as follows:

    (UU)  SMALL  BUSINESS  TAX  CREDIT.  (1) GENERAL. A QUALIFIED TAXPAYER
  SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE  EQUAL
  TO SIX AND SIXTY-FIVE HUNDREDTHS PERCENT OF QUALIFIED BUSINESS INCOME.
    (2) DEFINITIONS. FOR THE PURPOSES OF THIS SUBSECTION, THE TERM:

    (A)  "QUALIFIED TAXPAYER" SHALL MEAN A SOLE PROPRIETOR WHO EMPLOYS ONE
  OR MORE PERSONS AND WHO HAS NET BUSINESS INCOME OF LESS THAN TWO HUNDRED
  FIFTY THOUSAND DOLLARS.
    (B) "QUALIFIED BUSINESS INCOME" SHALL MEAN TEN PERCENT OF THE BUSINESS
  INCOME OF THE TAXPAYER AS DEFINED IN THE LAWS OF THE UNITED STATES.
    (3) IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR  ANY
  TAXABLE  YEAR  SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
  SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN
  ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS
  ARTICLE, PROVIDED, HOWEVER, NO INTEREST SHALL BE PAID THEREON.
    S  2.  Subparagraph  (iv) of paragraph (a) of subdivision 1 of section
  210 of the tax law, as amended by section 2 of part N of chapter  60  of
  the laws of 2007, is amended to read as follows:

    (iv)  for taxable years beginning on or after January first, two thou-
  sand seven AND ENDING BEFORE JANUARY FIRST, TWO  THOUSAND  THIRTEEN,  if
  the  entire net income base is not more than two hundred ninety thousand
  dollars the amount shall be six and one-half percent of the  entire  net
  income  base;  if  the  entire  net income base is more than two hundred
  ninety thousand dollars but  not  over  three  hundred  ninety  thousand
  dollars  the  amount  shall  be  the  sum of (1) eighteen thousand eight
  hundred fifty dollars, (2) seven and one-tenth percent of the excess  of
  the  entire net income base over two hundred ninety thousand dollars but

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD14994-06-2

 S. 7650                             2

  not over three hundred ninety thousand dollars and (3) four and  thirty-
  five hundredths percent of the excess of the entire net income base over
  three  hundred  fifty thousand dollars but not over three hundred ninety
  thousand dollars;
    S  3.  Paragraph (a) of subdivision 1 of section 210 of the tax law is
  amended by adding a new subparagraph (vii) to read as follows:

    (VII) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
  SAND THIRTEEN, IF THE ENTIRE NET  INCOME  BASE  IS  NOT  MORE  THAN  TWO
  HUNDRED  NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE FIVE AND TWO-TENTHS
  PERCENT OF THE ENTIRE NET INCOME BASE; IF THE ENTIRE NET INCOME BASE  IS
  MORE THAN TWO HUNDRED NINETY THOUSAND DOLLARS BUT NOT OVER THREE HUNDRED
  NINETY THOUSAND DOLLARS THE AMOUNT SHALL BE THE SUM OF (1) FIFTEEN THOU-
  SAND EIGHTY DOLLARS, (2) NINE AND SEVENTY-FIVE ONE-HUNDREDTHS PERCENT OF
  THE  EXCESS  OF THE ENTIRE NET INCOME BASE OVER TWO HUNDRED NINETY THOU-
  SAND DOLLARS BUT NOT OVER THREE HUNDRED NINETY THOUSAND DOLLARS AND  (3)
  SEVEN AND ONE-TENTHS PERCENT OF THE EXCESS OF THE ENTIRE NET INCOME BASE
  OVER  THREE  HUNDRED  FIFTY  THOUSAND DOLLARS BUT NOT OVER THREE HUNDRED
  NINETY THOUSAND DOLLARS;
    S 4. The opening paragraph of  subparagraph  4  of  paragraph  (d)  of
  subdivision  1  of  section 210 of the tax law, as added by section 2 of
  part AA-1 of chapter 57 of the laws of  2008,  is  amended  to  read  as
  follows:

    Notwithstanding subparagraphs one and two of this paragraph, for taxa-
  ble  years  beginning  on or after January first, two thousand eight AND
  ENDING  BEFORE  JANUARY  FIRST,  TWO  THOUSAND  THIRTEEN,   the   amount
  prescribed  by this paragraph for New York S corporations will be deter-
  mined in accordance with the following table:

    S 5. Subparagraph 5 of paragraph (d) of subdivision 1 of  section  210
  of the tax law is renumbered subparagraph 6.
    S  6.  Paragraph (d) of subdivision 1 of section 210 of the tax law is
  amended by adding a new subparagraph 5 to read as follows:

    (5) NOTWITHSTANDING SUBPARAGRAPHS ONE AND TWO OF THIS  PARAGRAPH,  FOR
  TAXABLE  YEARS  BEGINNING  ON OR AFTER JANUARY FIRST, TWO THOUSAND THIR-
  TEEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH  FOR  NEW  YORK  S  CORPO-
  RATIONS WILL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLE:

  IF NEW YORK RECEIPTS ARE:               THE FIXED DOLLAR MINIMUM TAX IS:

  NOT MORE THAN $100,000                                      $1
  MORE THAN $100,000 BUT NOT OVER $250,000                    $1
  MORE THAN $250,000 BUT NOT OVER $500,000                    $1
  MORE THAN $500,000 BUT NOT OVER $1,000,000                  $1
  MORE THAN $1,000,000 BUT NOT OVER $5,000,000                $1,000
  MORE THAN $5,000,000 BUT NOT OVER $25,000,000               $3,000
  OVER $25,000,000                                            $4,500
  OTHERWISE  THE AMOUNT PRESCRIBED BY THIS PARAGRAPH WILL BE DETERMINED IN
  ACCORDANCE WITH THE FOLLOWING TABLE:

  IF NEW YORK RECEIPTS ARE:               THE FIXED DOLLAR MINIMUM TAX IS:

  NOT MORE THAN $100,000                                      $1
  MORE THAN $100,000 BUT NOT OVER $250,000                    $1
  MORE THAN $250,000 BUT NOT OVER $500,000                    $1
  MORE THAN $500,000 BUT NOT OVER $1,000,000                  $1
  MORE THAN $1,000,000 BUT NOT OVER $5,000,000                $1,500
  MORE THAN $5,000,000 BUT NOT OVER $25,000,000               $3,500
  OVER $25,000,000                                            $5,000
  FOR PURPOSES OF THIS PARAGRAPH,  NEW  YORK  RECEIPTS  ARE  THE  RECEIPTS
  COMPUTED  IN ACCORDANCE WITH SUBPARAGRAPH TWO OF PARAGRAPH (A) OF SUBDI-
  VISION THREE OF THIS SECTION FOR THE TAXABLE YEAR.

 S. 7650                             3

    S 7. Subparagraph 6 of paragraph (d) of subdivision 1 of  section  210
  of  the  tax  law,  as added by section 3 of part C of chapter 56 of the
  laws of 2011 and as renumbered by section five of this act,  is  amended
  to read as follows:

    (6)  For  taxable years beginning on or after January first, two thou-
  sand twelve and before January first, two thousand fifteen, the  amounts
  prescribed in subparagraphs one and [four] FIVE of this paragraph as the
  fixed dollar minimum tax for an eligible qualified New York manufacturer
  shall  be  one-half  of  the  amounts stated in those subparagraphs. For
  purposes of this subparagraph, the term  "eligible  qualified  New  York
  manufacturer"  shall  have  the  same meaning as in subparagraph (vi) of
  paragraph (a) of this subdivision.
    S 8. This act shall take effect immediately;  provided  that  sections
  one  and  seven of this act shall apply to taxable years beginning on or
  after January 1, 2013.