Bill Text: NY A07863 | 2017-2018 | General Assembly | Amended
Bill Title: Relates to the taxation of business corporations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2017-09-12 - signed chap.302 [A07863 Detail]
Download: New_York-2017-A07863-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 7863--A 2017-2018 Regular Sessions IN ASSEMBLY May 17, 2017 ___________ Introduced by M. of A. FARRELL -- read once and referred to the Commit- tee on Ways and Means -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the administrative code of the city of New York, in relation to the taxation of business corporations The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 11-640 of the administrative code of the city of 2 New York is amended by adding a new subdivision (n) to read as follows: 3 (n) Transitional provisions relating to the enactment and implementa- 4 tion of the federal Gramm-Leach-Bliley act. 5 (1) Notwithstanding anything to the contrary contained in this section 6 other than subdivision (m) of this section, a corporation that was in 7 existence before January first, two thousand seventeen and was subject 8 to tax under subchapter two of this chapter for its last taxable year 9 beginning before January first, two thousand seventeen, shall continue 10 to be taxable under such subchapter for all taxable years beginning on 11 or after January first, two thousand seventeen and before January first, 12 two thousand twenty. The preceding sentence shall not apply to any taxa- 13 ble year during which such corporation is a banking corporation 14 described in paragraphs one through eight of subdivision (a) of this 15 section. Notwithstanding anything to the contrary contained in this 16 section other than subdivision (m) of this section, a banking corpo- 17 ration or corporation that was in existence before January first, two 18 thousand seventeen and was subject to tax under this subchapter for its 19 last taxable year beginning before January first, two thousand seven- 20 teen, shall continue to be taxable under this subchapter for all taxable 21 years beginning on or after January first, two thousand seventeen and 22 before January first, two thousand twenty only if the corporation is a 23 banking corporation as defined in subdivision (a) of this section or the 24 corporation satisfies the requirements for a corporation to elect to be EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11821-02-7A. 7863--A 2 1 taxable under this subchapter. Provided further, that nothing in this 2 subdivision shall prohibit a corporation that elected pursuant to subdi- 3 vision (d) of this section to be taxable under subchapter two of this 4 chapter from revoking that election in accordance with subdivision (d) 5 of this section. 6 For purposes of this paragraph, a corporation shall be considered to 7 be subject to tax under subchapter two of this chapter for a taxable 8 year if such corporation was not a taxpayer but was properly included in 9 a combined report filed pursuant to subdivision four of section 11-605 10 of this chapter for such taxable year and a corporation shall be consid- 11 ered to be subject to tax under this subchapter for a taxable year if 12 such corporation was not a taxpayer but was properly included in a 13 combined report filed pursuant to subdivision (f) or (g) of section 14 11-646 of this part for such taxable year. A corporation that was in 15 existence before January first, two thousand seventeen but first becomes 16 a taxpayer in a taxable year beginning on or after January first, two 17 thousand seventeen and before January first, two thousand twenty, shall 18 be considered for purposes of this paragraph to have been subject to tax 19 under subchapter two of this chapter for its last taxable year beginning 20 before January first, two thousand seventeen if such corporation would 21 have been subject to tax under such subchapter for such taxable year if 22 it had been a taxpayer during such taxable year. A corporation that was 23 in existence before January first, two thousand seventeen but first 24 becomes a taxpayer in a taxable year beginning on or after January 25 first, two thousand seventeen and before January first, two thousand 26 twenty, shall be considered for purposes of this paragraph to have been 27 subject to tax under this subchapter for its last taxable year beginning 28 before January first, two thousand seventeen if such corporation would 29 have been subject to tax under this subchapter for such taxable year if 30 it had been a taxpayer during such taxable year. 31 (2) Notwithstanding anything to the contrary contained in this section 32 other than subdivision (m) of this section, a corporation formed on or 33 after January first, two thousand seventeen and before January first, 34 two thousand twenty may elect to be subject to tax under this subchapter 35 or under subchapter two of this chapter for its first taxable year 36 beginning on or after January first, two thousand seventeen and before 37 January first, two thousand twenty in which either (i) sixty-five 38 percent or more of its voting stock is owned or controlled, directly or 39 indirectly by a financial holding company, provided the corporation 40 whose voting stock is so owned or controlled is principally engaged in 41 activities that are described in section 4(k)(4) or 4(k)(5) of the 42 federal bank holding company act of nineteen hundred fifty-six, as 43 amended, and the regulations promulgated pursuant to the authority of 44 such section or (ii) it is a financial subsidiary. An election under 45 this paragraph may not be made by a corporation described in paragraphs 46 one through eight of subdivision (a) of this section or in subdivision 47 (e) of this section. In addition, an election under this paragraph may 48 not be made by a corporation that is a party to a reorganization, as 49 defined in subsection (a) of section 368 of the internal revenue code of 50 1986, as amended, of a corporation described in paragraph one of this 51 subdivision if both corporations were sixty-five percent or more owned 52 or controlled, directly or indirectly, by the same interests at the time 53 of the reorganization. 54 An election under this paragraph mush be made by the taxpayer on or 55 before the due date for filing its return (determined with regard to 56 extensions of time for filing) for the applicable taxable year. TheA. 7863--A 3 1 election to be taxed under subchapter two of this chapter shall be made 2 by the taxpayer by filing the return required pursuant to subdivision 3 one of section 11-605 of this chapter and the election to be taxed under 4 this subchapter shall be made by the taxpayer by filing the return 5 required pursuant to subdivision (a) of section 11-646 of this part. Any 6 election made pursuant to this paragraph shall be irrevocable and shall 7 apply to each subsequent taxable year beginning on or after January 8 first, two thousand seventeen and before January first, two thousand 9 twenty, provided that the stock ownership and activities requirements 10 described in subparagraph (i) of this paragraph are met or such corpo- 11 ration described in subparagraph (ii) of this paragraph continues as a 12 financial subsidiary. 13 (3) For purposes of this subdivision, a financial subsidiary means a 14 corporation (i) sixty-five percent or more of whose voting stock is 15 owned or controlled, directly or indirectly by a banking corporation 16 described in paragraph one, two or three of subdivision (a) of this 17 section and (ii) is described in section 5136A(g) of the revised stat- 18 utes of the United States or section 46 of the federal deposit insurance 19 act. For purposes of this subchapter, the term "banking corporation" 20 shall include a corporation electing to be taxed under this subchapter 21 pursuant to paragraph two of this subdivision for so long as such 22 election shall be in effect. 23 § 2. Subparagraph (iv) of paragraph 2 of subdivision (f) of section 24 11-646 of the administrative code of the city of New York, as amended by 25 section 111 of part A of chapter 59 of the laws of 2014, is amended to 26 read as follows: 27 (iv) (A) Notwithstanding any provision of this paragraph, any bank 28 holding company exercising its corporate franchise or doing business in 29 the city may make a return on a combined basis without seeking the 30 permission of the commissioner with any banking corporation exercising 31 its corporate franchise or doing business in the city in a corporate or 32 organized capacity sixty-five percent or more of whose voting stock is 33 owned or controlled, directly or indirectly, by such bank holding compa- 34 ny, for the first taxable year beginning on or after January first, two 35 thousand and before January first, two thousand [seventeen] twenty 36 during which such bank holding company registers for the first time 37 under the federal bank holding company act, as amended, and also elects 38 to be a financial holding company. In addition, for each subsequent 39 taxable year beginning after January first, two thousand and before 40 January first, two thousand [seventeen] twenty, any such bank holding 41 company may file on a combined basis without seeking the permission of 42 the commissioner with any banking corporation that is exercising its 43 corporate franchise or doing business in the city and sixty-five percent 44 or more of whose voting stock is owned or controlled, directly or indi- 45 rectly, by such bank holding company if either such banking corporation 46 is exercising its corporate franchise or doing business in the city in a 47 corporate or organized capacity for the first time during such subse- 48 quent taxable year, or sixty-five percent or more of the voting stock of 49 such banking corporation is owned or controlled, directly or indirectly, 50 by such bank holding company for the first time during such subsequent 51 taxable year. Provided however, for each subsequent taxable year begin- 52 ning after January first, two thousand and before January first, two 53 thousand [seventeen] twenty, a banking corporation described in either 54 of the two preceding sentences which filed on a combined basis with any 55 such bank holding company in a previous taxable year, must continue to 56 file on a combined basis with such bank holding company if such bankingA. 7863--A 4 1 corporation, during such subsequent taxable year, continues to exercise 2 its corporate franchise or do business in the city in a corporate or 3 organized capacity and sixty-five percent or more of such banking corpo- 4 ration's voting stock continues to be owned or controlled, directly or 5 indirectly, by such bank holding company, unless the permission of the 6 commissioner has been obtained to file on a separate basis for such 7 subsequent taxable year. Provided further, however, for each subsequent 8 taxable year beginning after January first, two thousand and before 9 January first, two thousand [seventeen] twenty, a banking corporation 10 described in either of the first two sentences of this clause which did 11 not file on a combined basis with any such bank holding company in a 12 previous taxable year, may not file on a combined basis with such bank 13 holding company during any such subsequent taxable year unless the 14 permission of the commissioner has been obtained to file on a combined 15 basis for such subsequent taxable year. 16 (B) Notwithstanding any provision of this paragraph other than clause 17 (A) of this subparagraph, the commissioner may not require a bank hold- 18 ing company which, during a taxable year beginning on or after January 19 first, two thousand and before January first, two thousand [seventeen] 20 twenty, registers for the first time during such taxable year under the 21 federal bank holding company act, as amended, and also elects to be a 22 financial holding company, to make a return on a combined basis for any 23 taxable year beginning on or after January first, two thousand and 24 before January first, two thousand [seventeen] twenty with a banking 25 corporation sixty-five percent or more of whose voting stock is owned or 26 controlled, directly or indirectly, by such bank holding company. 27 § 3. This act shall take effect immediately.
