STATE OF NEW YORK
________________________________________________________________________
10292
IN ASSEMBLY
April 15, 2020
___________
Introduced by M. of A. STECK -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to changing the allocation of
the QEZE tax reduction credit to reflect business activity within the
QEZE
The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
1 Section 1. Paragraph 2 of subdivision (f) of section 16 of the tax
2 law, as amended by section 14 of part CC of chapter 85 of the laws of
3 2002, and clause (ii) of subparagraph (B) as amended by section 34 of
4 part A of chapter 59 of the laws of 2014, is amended to read as follows:
5 (2) Sole proprietors, partners and S corporation shareholders. (A)
6 Where the taxpayer is a sole proprietor of a qualified empire zone
7 enterprise, the taxpayer's tax factor shall be that portion of the
8 amount determined in paragraph one of this subdivision which is attrib-
9 utable to the income of the qualified empire zone enterprise. Such
10 attribution shall be made in accordance with the ratio of the taxpayer's
11 income from the qualified empire zone enterprise allocated within the
12 state, entering into New York adjusted gross income as reported on the
13 taxpayer's income tax return, or to the taxpayer's New York adjusted
14 gross income[, or in accordance with such other methods as the commis-
15 sioner may prescribe as providing an apportionment which reasonably
16 reflects the portion of the taxpayer's tax attributable to the income of
17 the qualified empire zone enterprise] as reported on the taxpayer's
18 income tax return. In no event may the ratio so determined exceed 1.0.
19 (B)(i) Where the taxpayer is a member of a partnership which is a
20 qualified empire zone enterprise, the taxpayer's tax factor shall be
21 that portion of the amount determined in paragraph one of this subdivi-
22 sion which is attributable to the income of the partnership. Such attri-
23 bution shall be made in accordance with the ratio of the partner's
24 income from the partnership allocated within the state to the partner's
25 entire income[, or in accordance with such other methods as the commis-
26 sioner may prescribe as providing an apportionment which reasonably
27 reflects the portion of the partner's tax attributable to the income of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14799-02-0
A. 10292 2
1 the partnership] as reported by the partner on such partner's income tax
2 return. In no event may the ratio so determined exceed 1.0.
3 (ii) For purposes of article nine-A of this chapter, the term "part-
4 ner's income from the partnership" means partnership items of income,
5 gain, loss and deduction, and New York modifications thereto, entering
6 into business income and the term "partner's entire income" means busi-
7 ness income allocated within the state. For purposes of article thirty-
8 three of this chapter, the term "partner's income from the partnership"
9 means partnership items of income, gain, loss and deduction, and New
10 York modifications thereto, entering into entire net income or entire
11 net income plus compensation and the term "partner's entire income"
12 means entire net income, or entire net income plus compensation, allo-
13 cated within the state. For purposes of article twenty-two of this chap-
14 ter, the term "partner's income from the partnership" means partnership
15 items of income, gain, loss and deduction, and New York modifications
16 thereto, entering into New York adjusted gross income, and the term
17 "partner's entire income" means New York adjusted gross income.
18 (C) Where the taxpayer is a shareholder of a New York S corporation
19 which is a qualified empire zone enterprise, the shareholder's tax
20 factor shall be that portion of the amount determined in paragraph one
21 of this subdivision which is attributable to the income of the S corpo-
22 ration. Such attribution shall be made in accordance with the ratio of
23 the shareholder's income from the S corporation allocated within the
24 state, entering into the shareholder's New York adjusted gross income as
25 reported on the income tax return of the S corporation, to the share-
26 holder's New York adjusted gross income[, or in accordance with such
27 other methods as the commissioner may prescribe as providing an appor-
28 tionment which reasonably reflects the portion of the shareholder's tax
29 attributable to the income of the qualified empire zone enterprise] as
30 reported on the shareholder's income tax return. In no event may the
31 ratio so determined exceed 1.0.
32 (D) For the purposes of calculating the amount determined in paragraph
33 one of this subdivision which is attributable to the income of the qual-
34 ified empire zone enterprise, to the extent that the applicable income
35 tax return for the qualified empire zone enterprise does not provide for
36 an allocation of income within and without New York state, the taxpay-
37 er's income from the qualified empire zone enterprise allocated within
38 the state shall be: (i) the federal adjusted gross income of the taxpay-
39 er, (ii) adjusted for the New York modifications, (iii) less income of
40 the qualified empire zone enterprise actually taxed in jurisdictions
41 outside New York. For purposes of this subparagraph, a calculation of
42 the business apportionment factor under section two hundred ten-A of
43 this chapter does not provide for an allocation of income within and
44 without New York state.
45 § 2. This act shall take effect immediately and shall be deemed to
46 have been in full force and effect on the same date and in the same
47 manner as section 2 of part GG of chapter 63 of the laws of 2000, took
48 effect, and shall apply only to any matters not precluded by the statute
49 of limitations as of the date this act shall have become a law.