Bill Text: NY A03434 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to small business savings accounts; provides tax incentives for contributions and distributions.
Spectrum: Slight Partisan Bill (Democrat 20-7)
Status: (Introduced - Dead) 2018-01-03 - referred to ways and means [A03434 Detail]
Download: New_York-2017-A03434-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3434 2017-2018 Regular Sessions IN ASSEMBLY January 27, 2017 ___________ Introduced by M. of A. LAVINE, M. G. MILLER, BENEDETTO, BLAKE, OTIS, COOK, THIELE, JAFFEE, GUNTHER, SIMANOWITZ, MOSLEY, ZEBROWSKI, BRINDI- SI, GJONAJ, MONTESANO, MURRAY, PALUMBO, RA, SKARTADOS, COLTON, BRABE- NEC, PICHARDO, SALADINO, ENGLEBRIGHT, HOOPER, RAIA, JEAN-PIERRE -- Multi-Sponsored by -- M. of A. BARCLAY, SOLAGES, WALKER -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to establishing small business savings accounts The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "savings accounts for a variable economy (SAVE) for small businesses 3 act". 4 § 2. The tax law is amended by adding a new section 43 to read as 5 follows: 6 § 43. Small business savings accounts. (a) General. (1) The commis- 7 sioner shall establish a program to administer small business savings 8 accounts under this section. 9 (2) The commissioner shall establish minimum standards for small busi- 10 ness savings accounts and shall establish accounts, or enter into agree- 11 ments that meet these standards to administer such accounts. In estab- 12 lishing such standards and making such agreements the commissioner 13 shall, to the extent practicable, seek to minimize fees, minimize risk 14 of loss of principal, and ensure a range of investment risk options 15 available to account beneficiaries. Any eligible small business may 16 establish a small business savings account with respect to such business 17 under terms which meet the requirements of this section. 18 (b) Definition. For the purposes of this section, the term "small 19 business savings account" means a tax preferred savings account which is 20 designated at the time of establishment of the plan as a small business EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06746-01-7A. 3434 2 1 savings account. Such designation shall be made in such manner as the 2 commissioner may by regulation prescribe. 3 (c) Contributions. (1) There shall be allowed as a deduction an amount 4 equal to the contributions to a small business savings account for the 5 taxable year. 6 (2) The aggregate amount of contributions for any taxable year to all 7 small business savings accounts maintained for the benefit of an eligi- 8 ble small business shall not exceed an amount equal to ten percent of 9 the gross profits of the business for the preceding taxable year. 10 (d) Distributions. (1) Any qualified distribution from a small busi- 11 ness savings account shall not be includible in gross income. 12 (2) Any amounts distributed out of a small business savings account 13 that are not qualified distributions shall be included in gross income 14 for the taxable year of the distribution. 15 (3) For purposes of this section: 16 (A) The term "qualified distribution" means any amount: 17 (i) distributed from a small business savings account during a speci- 18 fied period of economic hardship; and 19 (ii) the distribution of which is certified by the taxpayer as part of 20 a plan which provides for the reinvestment of such distribution for the 21 funding of worker hiring or financial stabilization for the purposes of 22 job retention or creation. 23 (B) The term "specified period of economic hardship" means: 24 (i) any one-year period beginning immediately after the end of any two 25 consecutive quarters during which the annual rate of real gross domestic 26 product (as determined by the Bureau of Economic Analysis of the Depart- 27 ment of Commerce) decreases, or 28 (ii) any period, in no event shorter than one year, specified by the 29 commissioner for purposes of this section. 30 (C) The commissioner may specify a period under clause (ii) of subpar- 31 agraph (B) of this paragraph with respect to a specified area in the 32 case of an area determined by the governor to warrant assistance from 33 the Federal Government under the Robert T. Stafford Disaster Relief and 34 Emergency Assistance Act. 35 (D) The commissioner shall, for each specified period of economic 36 hardship establish a distribution limitation for qualified distributions 37 from eligible small business accounts with respect to such period. The 38 aggregate qualified distributions for any such period from all accounts 39 with respect to an eligible small business shall not exceed such limita- 40 tion. 41 (E) Any distribution not used in the manner certified under subpara- 42 graph (A) of this paragraph shall be treated as a distribution other 43 than a qualified distribution in the taxable year of such distribution. 44 (F) Any amount contributed to a small business savings account (and 45 any earnings attributable thereto), once distributed, shall not be 46 treated as a qualified distribution unless such distribution is made not 47 later than eight years after the date of such contribution. For purposes 48 of this subparagraph, amounts (and the earnings attributable thereto) 49 shall be treated as distributed on a first-in first-out basis. 50 (e) Eligible small business. For purposes of this section: 51 (1) The term "eligible small business" means, with respect to any 52 calendar year, any person if the annual average number of full-time 53 employees employed by such person during the preceding calendar year was 54 fifty or fewer. For purposes of this paragraph, a preceding calendar 55 year may be taken into account only if the person was in existence 56 throughout the year.A. 3434 3 1 (2)(A) The term "full-time employee" means, with respect to any year, 2 an employee who is employed on average at least forty hours of service 3 per week. 4 (B) The commissioner shall prescribe such regulations, rules, and 5 guidance as may be necessary to determine the hours of service of an 6 employee, including rules for the application of this subdivision to 7 employees who are not compensated on an hourly basis. 8 (f) Effect of pledging account as security. If, during any taxable 9 year of the eligible small business for whose benefit an account is 10 established, the account or any portion thereof is pledged as security 11 for a loan, the portion so pledged shall be treated as distributed in a 12 distribution other than a qualified distribution. 13 § 3. Section 209 of the tax law is amended by adding a new subdivision 14 13 to read as follows: 15 13. For any taxable year beginning on or after January first, two 16 thousand seventeen, any eligible small business, as such term is defined 17 pursuant to section forty-three of this chapter, shall be exempt from 18 all taxes imposed pursuant to this article for any contribution to and 19 qualified distribution from a small business savings account established 20 pursuant to section forty-three of this chapter, subject to the limits 21 set forth in such section. If a taxpayer files for and receives an 22 exemption from the tax imposed under this section pursuant to the 23 provisions of this subdivision and the funds withdrawn, or any portion 24 thereof, are not expended for a qualifying purpose as set forth in 25 section forty-three of this chapter, then the amount of such exemption 26 claimed by the taxpayer shall be added back to tax in the next succeed- 27 ing taxable year or in the year in which the exemption is disallowed. 28 § 4. Subsection (c) of section 612 of the tax law is amended by adding 29 a new paragraph 44 to read as follows: 30 (44) Any qualified contribution to and any qualified distribution from 31 a small business savings account established pursuant to section forty- 32 three of this chapter. If a taxpayer files for and receives an 33 exemption from the tax imposed under this section pursuant to the 34 provisions of this paragraph and are not a qualifying contribution or 35 distribution as set forth in section forty-three of this chapter, then 36 the amount of any such exemption claimed by the taxpayer shall be added 37 back to tax in the next succeeding taxable year. 38 § 5. This act shall take effect immediately and shall apply to taxable 39 years beginning after such date.
