This bill has been amended

Bill S770A-2013

Subtracts from federal adjusted gross income qualified transportation fringe benefits

Subtracts from federal adjusted gross income qualified transportation fringe benefits.

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  • May 23, 2013: ADVANCED TO THIRD READING
  • May 22, 2013: 2ND REPORT CAL.
  • May 21, 2013: 1ST REPORT CAL.646
  • May 1, 2013: PRINT NUMBER 770A
  • May 1, 2013: AMEND AND RECOMMIT TO FINANCE
  • Apr 16, 2013: REPORTED AND COMMITTED TO FINANCE
  • Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

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BILL NUMBER:S770A

TITLE OF BILL: An act to amend the tax law, in relation to qualified transportation fringe benefits

PURPOSE:

To restore the New York State commuter pretax deduction benefit.

SUMMARY OF PROVISIONS:

Section 1. Amends subsection (c) of section 612 of the tax law by adding a new paragraph 40 to make permanent the New York State pretax deduction benefit for commuting expenses for employees.

Section 2. Effective date.

JUSTIFICATION:

Federal law permits employers to allow their employees to set aside a portion of their pre-tax wages to pay for transit, vanpool fares, and parking. In 2009, Congress approved an increase in the maximum transit benefit ($230/month), but required re-approval of the increase on an annual basis. An extension was approved in 2010, but Congress did not reauthorize another extension by the December 31, 2011 deadline. The result was that commuters' mass transit tax benefits were cut from $230 to $125 a month. New York State mirrors this benefit, thus with Congress' failure to re-authorize transit benefit in 2011 commuters saw both their state and federal benefits cut almost in half in 2012.

Washington's lack of action not only raised costs for commuters, it gave them new incentives to avoid mass transit all together. Commuters who drive in a car pool are allowed a similar pre-tax benefit to help offset parking costs under federal law. Unlike the pre-tax transit benefit, that law is permanent and indexed to inflation. This means that commuters who drive to work had their parking benefit increase to $240 a month in 2012 while mass transit riders' benefits were cut by nearly half. This disparity provided an incentive for commuters to drive to work and not use mass transit, increasing congestion and auto emissions.

Finally Congress did approve an extension of the transit benefit at the eleventh hour in 2012 however they did not make it permanent and it will expire at the end of 2013. This legislation is needed to protect commuters from losing their New York State monthly pre-tax transit benefit and to create parity on the state level between state pre-tax parking and transit benefit in the event that Congress again fails to extend this benefit as they did in 2011.

LEGISLATIVE HISTORY:

2012: Passed the Senate(S. 2728C/A. 6175B) 2011: Passed the Senate (S.2728B/A. 6175A)

FISCAL IMPLICATIONS:

Prior to December 31, 2011 this income was not taxed by the State, therefore there is no cost to the State.

EFFECTIVE DATE:

Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 770--A 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sens. FUSCHILLO, AVELLA, CARLUCCI, GOLDEN, LAVALLE, LITTLE, MARTINS, SAVINO, SERRANO, STAVISKY, ZELDIN -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to qualified transportation fringe benefits THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (c) of section 612 of the tax law is amended by adding a new paragraph 40 to read as follows: (40) FOR ANY MONTH THE DOLLAR AMOUNT IN EFFECT UNDER SUBPARAGRAPH (A) OF PARAGRAPH TWO OF SUBSECTION (F) OF SECTION ONE HUNDRED THIRTY-TWO OF THE INTERNAL REVENUE CODE IS GREATER THAN THE DOLLAR AMOUNT IN EFFECT UNDER SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (F) OF SECTION ONE HUNDRED THIRTY-TWO OF THE INTERNAL REVENUE CODE FOR THE SAME MONTH, THE AMOUNT OF QUALIFIED TRANSPORTATION FRINGE BENEFITS INCLUDED IN FEDERAL ADJUSTED GROSS INCOME EQUAL TO THE DIFFERENCE BETWEEN THE DOLLAR AMOUNTS IN EFFECT FOR SUBPARAGRAPHS (A) AND (B) OF PARAGRAPH TWO OF SUBSECTION (F) OF SECTION ONE HUNDRED THIRTY-TWO OF THE INTERNAL REVENUE CODE. NOTWITHSTANDING THE FOREGOING, IF, PURSUANT TO THIS PARAGRAPH, THE AMOUNT THAT WOULD BE IN EFFECT FOR ANY MONTH UNDER SUBPARAGRAPH (A) OR (B) OF PARAGRAPH TWO OF SUBSECTION (F) OF SECTION ONE HUNDRED THIRTY-TWO OF THE INTERNAL REVENUE CODE IS LESS THAN ONE HUNDRED SEVENTY-FIVE DOLLARS, SUBPARAGRAPHS (A) AND (B) SHALL BE APPLIED AS IF THE DOLLAR AMOUNT IN EFFECT FOR SUCH MONTH UNDER SUCH SUBPARAGRAPHS WAS ONE HUNDRED SEVENTY-FIVE DOLLARS. S 2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2013.

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