Bill Text: NY A05962 | 2019-2020 | General Assembly | Introduced


Bill Title: Relates to the definitions of the terms "CFC income" and "entire net income"; provides that exempt CFC income shall include income required to be included in a taxpayer's federal gross income pursuant to subsection (a) of section 951A of the internal revenue code; excludes the amount of any federal deduction allowed pursuant to section 250(a)(1)(B)(i) of the IRC from being included in the calculation of entire net income.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2019-02-20 - referred to ways and means [A05962 Detail]

Download: New_York-2019-A05962-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          5962
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    February 20, 2019
                                       ___________
        Introduced  by  M.  of  A.  SCHIMMINGER -- read once and referred to the
          Committee on Ways and Means
        AN ACT to amend the tax law and the administrative code of the  city  of
          New York, in relation to the definitions of the terms "CFC income" and
          "entire net income"
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Paragraph (b) of subdivision 6-a of section 208 of the  tax
     2  law,  as  amended  by  section 1 of part KK of chapter 59 of the laws of
     3  2018, is amended to read as follows:
     4    (b) "Exempt CFC income" means (i) except to the  extent  described  in
     5  subparagraph  (ii) of this paragraph, the income required to be included
     6  in the taxpayer's federal gross income pursuant  to  subsection  (a)  of
     7  section  951  of  the internal revenue code, received from a corporation
     8  that is conducting a unitary business  with  the  taxpayer  but  is  not
     9  included  in  a  combined report with the taxpayer, and (ii) such income
    10  required to be included in the taxpayer's federal gross income  pursuant
    11  to  subsection  (a)  of such section 951 of the internal revenue code by
    12  reason of subsection (a) of section 965 of the internal revenue code, as
    13  adjusted by subsection (b) of section 965 of the internal revenue  code,
    14  and  without  regard  to subsection (c) of such section, received from a
    15  corporation that is not included in a combined report with the taxpayer,
    16  less, and (iii) such income required to be included  in  the  taxpayer's
    17  federal  gross  income pursuant to subsection (a) of section 951A of the
    18  internal revenue code, without regard to the deduction under section 250
    19  of the internal revenue code, received from a corporation  that  is  not
    20  included  in  a  combined  report  with  the taxpayer, less, (iv) in the
    21  discretion of the commissioner,  any  interest  deductions  directly  or
    22  indirectly  attributable to that income. In lieu of subtracting from its
    23  exempt CFC income the amount of those interest deductions, the  taxpayer
    24  may  make  a revocable election to reduce its total exempt CFC income by
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09762-01-9

        A. 5962                             2
     1  forty percent. If the taxpayer makes this election,  the  taxpayer  must
     2  also make the elections provided for in paragraph (b) of subdivision six
     3  of  this  section and paragraph (c) of this subdivision. If the taxpayer
     4  subsequently  revokes  this  election,  the  taxpayer  must  revoke  the
     5  elections provided for in paragraph  (b)  of  subdivision  six  of  this
     6  section and paragraph (c) of this subdivision. A taxpayer which does not
     7  make  this  election  because  it  has  no exempt CFC income will not be
     8  precluded from making those other elections.  The  income  described  in
     9  [subparagraph]  subparagraphs (ii) and (iii) of this paragraph shall not
    10  constitute investment income.
    11    § 2. Paragraph (b) of subdivision 9 of section 208 of the tax  law  is
    12  amended by adding a new subparagraph 25 to read as follows:
    13    (25)  The  amount of any federal deduction allowed pursuant to section
    14  250(a)(1)(B)(i) of the internal revenue code.
    15    § 3. Paragraph (b) of subdivision 5-a of section 11-652 of the  admin-
    16  istrative  code  of  the  city of New York, as amended by section 1-a of
    17  part KK of chapter 59 of the  laws  of  2018,  is  amended  to  read  as
    18  follows:
    19    (b)  "Exempt  CFC  income" means (i) except to the extent described in
    20  subparagraph (ii) of this paragraph, the income required to be  included
    21  in  the  taxpayer's  federal  gross income pursuant to subsection (a) of
    22  section 951 of the internal revenue code, received  from  a  corporation
    23  that  is  conducting  a  unitary  business  with the taxpayer but is not
    24  included in a combined report with the taxpayer, and  (ii)  such  income
    25  required  to be included in the taxpayer's federal gross income pursuant
    26  to subsection (a) of such section 951 of the internal  revenue  code  by
    27  reason of subsection (a) of section 965 of the internal revenue code, as
    28  adjusted  by subsection (b) of section 965 of the internal revenue code,
    29  and without regard to subsection (c) of such section,  received  from  a
    30  corporation that is not included in a combined report with the taxpayer,
    31  less,  and  (iii)  such income required to be included in the taxpayer's
    32  federal gross income pursuant to subsection (a) of section 951A  of  the
    33  internal revenue code, without regard to the deduction under section 250
    34  of  the  internal  revenue code, received from a corporation that is not
    35  included in a combined report with  the  taxpayer,  less,  (iv)  in  the
    36  discretion  of  the  commissioner  of  finance,  any interest deductions
    37  directly or  indirectly  attributable  to  that  income.    In  lieu  of
    38  subtracting  from  its  exempt  CFC  income the amount of those interest
    39  deductions, the taxpayer may make a revocable  election  to  reduce  its
    40  total  exempt  CFC  income  by forty percent. If the taxpayer makes this
    41  election, the taxpayer must also make  the  elections  provided  for  in
    42  paragraph  (b)  of subdivision five of this section and paragraph (c) of
    43  this subdivision. If the taxpayer subsequently  revokes  this  election,
    44  the  taxpayer must revoke the elections provided for in paragraph (b) of
    45  subdivision five of this section and paragraph (c) of this  subdivision.
    46  A  taxpayer  which  does not make this election because it has no exempt
    47  CFC income will not be precluded from making those other elections.  The
    48  income  described in [subparagraph] subparagraphs (ii) and (iii) of this
    49  paragraph shall not constitute investment income.
    50    § 4. Paragraph (b) of subdivision 8 of section 11-652 of the  adminis-
    51  trative code of the city of New York is amended by adding a new subpara-
    52  graph 22 to read as follows:
    53    (22)  The  amount of any federal deduction allowed pursuant to section
    54  250(a)(1)(B)(i) of the internal revenue code.
    55    § 5. Paragraph 1 of subdivision (b) of section 1503 of the tax law  is
    56  amended by adding a new subparagraph (T) to read as follows:

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     1    (T)  To  the  extent not excluded from income pursuant to subparagraph
     2  (A) of this paragraph, the income required to be included in the taxpay-
     3  er's federal gross income pursuant to subsection (a) of section 951A  of
     4  the internal revenue code, without regard to the deduction under section
     5  250  of  the  internal  revenue code, that is generated by a corporation
     6  that is not included in a combined report with the taxpayer.
     7    § 6. Paragraph 2 of subdivision (b) of section 1503 of the tax law  is
     8  amended by adding a new subparagraph (Y) to read as follows:
     9    (Y)  The  amount of the federal deduction allowed pursuant to subpara-
    10  graph (B)(i) of paragraph one of subsection (a) of section  250  of  the
    11  internal revenue code.
    12    §  7.  Subparagraph  (H)  of paragraph 2 of subdivision (b) of section
    13  1503 of the tax law, as amended by section 4-e of part KK of chapter  59
    14  of the laws of 2018, is amended to read as follows:
    15    (H)  in  the  discretion  of  the commissioner, any amount of interest
    16  directly or indirectly and any other amount directly attributable  as  a
    17  carrying  charge  or otherwise to subsidiary capital or to income, gains
    18  or losses from  subsidiary  capital,  or  to  the  income  described  in
    19  [subparagraph] subparagraphs (S) and (T) of paragraph one of this subdi-
    20  vision;
    21    § 8. This act shall take effect immediately and shall apply to taxable
    22  years beginning on or after January 1, 2018.
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