Bill Text: NY A10506 | 2021-2022 | General Assembly | Introduced

---

Bill Title: Relates to the exclusion of certain grants as taxable income for certain business taxes, the imposition of the business corporation tax, the credit of certain overpayments of tax against other taxes owed, and the disclosure of owners of limited liability companies with respect to the real property transfer tax; relates to a city pass-through entity tax.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-06-03 - substituted by s9454 [A10506 Detail]

Download: New_York-2021-A10506-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          10506

                   IN ASSEMBLY

                                      May 31, 2022
                                       ___________

        Introduced  by  COMMITTEE ON RULES -- (at request of M. of A. Weinstein)
          -- read once and referred to the Committee on Ways and Means

        AN ACT to amend the administrative code of the  city  of  New  York,  in
          relation  to  the  exclusion  of  certain grants as taxable income for
          certain business taxes, the imposition  of  the  business  corporation
          tax,  the  credit  of  certain overpayments of tax against other taxes
          owed, and the disclosure of owners of limited liability companies with
          respect to the real property transfer tax; to amend the  tax  law,  in
          relation to a city pass-through entity tax; and to amend chapter 59 of
          the  laws  of  2022,  relating  to  a city pass-through entity tax, in
          relation to the city pass-through entity tax

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subdivision  (c)  of section 11-506 of the administrative
     2  code of the city of New York is amended by adding a new paragraph 12  to
     3  read as follows:
     4    (12)  The  amount  of  any  grant received through either the COVID-19
     5  pandemic small business recovery  grant  program,  pursuant  to  section
     6  sixteen-ff  of  the New York state urban development corporation act, or
     7  the small business resilience grant program administered by the  depart-
     8  ment of small business services, to the extent the amount of either such
     9  grant is included in federal taxable income.
    10    §  2.  Subdivision (a) of section 11-526 of the administrative code of
    11  the city of New York is amended to read as follows:
    12    (a) General. The commissioner of finance, within the applicable period
    13  of limitations, may credit an overpayment of tax and  interest  on  such
    14  overpayment against any liability in respect of any tax imposed by [this
    15  chapter  or  by  chapters six, seventeen and nineteen of] this title, on
    16  the person who made overpayment, and the balance shall be refunded. Such
    17  credit of an overpayment shall be applied before  such  overpayment,  or
    18  any  portion  thereof, is paid to the state commissioner of taxation and
    19  finance pursuant to section one hundred seventy-one-m of the tax law.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15981-01-2
        A. 10506                            2

     1    § 3. Paragraph (a) of subdivision 8 of section 11-602 of the  adminis-
     2  trative code of the city of New York is amended by adding a new subpara-
     3  graph 16 to read as follows:
     4    (16)  the  amount  of  any  grant received through either the COVID-19
     5  pandemic small business recovery  grant  program,  pursuant  to  section
     6  sixteen-ff  of  the New York state urban development corporation act, or
     7  the small business resilience grant program administered by the  depart-
     8  ment of small business services, to the extent the amount of either such
     9  grant is included in federal taxable income.
    10    § 4. Section 11-641 of the administrative code of the city of New York
    11  is amended by adding a new subdivision (t) to read as follows:
    12    (t)  Entire  net  income  shall  not  include  the amount of any grant
    13  received through either the COVID-19 pandemic  small  business  recovery
    14  grant  program,  pursuant  to  section  sixteen-ff of the New York state
    15  urban development corporation act,  or  the  small  business  resilience
    16  grant program administered by the department of small business services,
    17  to  the  extent  the  amount of either such grant is included in federal
    18  taxable income.
    19    § 5. Paragraph (a) of subdivision 8 of section 11-652 of the  adminis-
    20  trative code of the city of New York is amended by adding a new subpara-
    21  graph 17 to read as follows:
    22    (17)  the  amount  of  any  grant received through either the COVID-19
    23  pandemic small business recovery  grant  program,  pursuant  to  section
    24  sixteen-ff  of  the New York state urban development corporation act, or
    25  the small business resilience grant program administered by the  depart-
    26  ment of small business services, to the extent the amount of either such
    27  grant is included in federal taxable income.
    28    §  6.  Subparagraph  3  of  paragraph  (b) of subdivision 8 of section
    29  11-652 of the administrative code of the city of New York, as  added  by
    30  section  1  of  part  D of chapter 60 of the laws of 2015, is amended to
    31  read as follows:
    32    (3) taxes on or measured by profits or income paid or accrued  to  the
    33  United  States,  any  of  its possessions, territories or commonwealths,
    34  including taxes in lieu of any of the foregoing taxes otherwise general-
    35  ly imposed by any possession, territory or commonwealth  of  the  United
    36  States,  or taxes on or measured by profits or income paid or accrued to
    37  the state or any subdivision thereof, including taxes  paid  or  accrued
    38  under  article nine, nine-A, thirteen-A, twenty-four-A, twenty-four-B of
    39  the tax law or under article thirty-two of the tax law as in  effect  on
    40  December thirty-first, two thousand fourteen;
    41    §  7.  Subdivision  1 and the opening paragraphs of subdivisions 2 and
    42  2-a of section 11-653 of the administrative code  of  the  city  of  New
    43  York,  as added by section 1 of part D of chapter 60 of the laws of 2015
    44  and paragraph (a) of subdivision 1 as amended by section 20 of part Q of
    45  chapter 60 of the laws of 2016, are amended to read as follows:
    46    1. (a) For the privilege of doing business, or of  employing  capital,
    47  or of owning or leasing property in the city in a corporate or organized
    48  capacity,  or  of  maintaining  an  office  in  the city, or of deriving
    49  receipts from activity in the city, for all or any part of each  of  its
    50  fiscal  or calendar years, every domestic or foreign corporation, except
    51  corporations specified in subdivision four of this section, shall  annu-
    52  ally  pay  a  tax,  upon  the basis of its business income, or upon such
    53  other basis as may be  applicable  as  hereinafter  provided,  for  such
    54  fiscal  or  calendar  year  or  part  thereof, on a report that shall be
    55  filed, except as  hereinafter  provided,  for  taxable  years  beginning
    56  before  January  first, two thousand sixteen, on or before the fifteenth
        A. 10506                            3

     1  day of March next succeeding the close of each such calendar  year,  or,
     2  in  the  case  of a taxpayer that reports on the basis of a fiscal year,
     3  within two and one-half months after the close of each such fiscal year,
     4  and  for taxable years beginning on or after January first, two thousand
     5  sixteen, on or before the fifteenth day of  April  next  succeeding  the
     6  close  of  each  such  calendar year, or, in the case of a taxpayer that
     7  reports on the basis of a fiscal year, within three and one-half  months
     8  after  the  close of each such fiscal year, and shall be paid as herein-
     9  after provided.
    10    (b) [Intentionally omitted] A corporation is  deriving  receipts  from
    11  activity  in  the city if it has receipts within the city of one million
    12  dollars or more in a taxable year. For purposes  of  this  section,  the
    13  term  "receipts"  means  the receipts that are subject to the allocation
    14  rules set forth in section 11-654.2 of this  subchapter,  and  the  term
    15  "receipts  within the city" means the receipts included in the numerator
    16  of the receipts fraction  determined  under  section  11-654.2  of  this
    17  subchapter.  For  purposes  of  this paragraph, receipts from processing
    18  credit card transactions for merchants include  merchant  discount  fees
    19  received by the corporation.
    20    (c)  A  corporation is doing business in the city if (1) it has issued
    21  credit cards to one thousand  or  more  customers  who  have  a  mailing
    22  address  within  the city as of the last day of its taxable year, (2) it
    23  has merchant customer contracts with merchants and the total  number  of
    24  locations  covered  by  those  contracts  equals  one  thousand  or more
    25  locations in the city to whom  the  corporation  remitted  payments  for
    26  credit  card transactions during the taxable year, or (3) the sum of the
    27  number of customers described in subparagraph one of this paragraph plus
    28  the number of locations covered by its contracts described  in  subpara-
    29  graph two of this paragraph equals one thousand or more. As used in this
    30  subdivision,  the  term  "credit card" includes bank, credit, travel and
    31  entertainment cards.
    32    (d) [Intentionally omitted] (1)  A  corporation  with  less  than  one
    33  million dollars but at least ten thousand dollars of receipts within the
    34  city  in  a  taxable year that is part of a unitary group that meets the
    35  ownership test under section 11-654.3 of  this  subchapter  is  deriving
    36  receipts  from  activity  in the city if the receipts within the city of
    37  the members of the unitary group that have at least ten thousand dollars
    38  of receipts within the city in the  aggregate  meet  the  threshold  set
    39  forth in paragraph (b) of this subdivision.
    40    (2)  A  corporation that does not meet any of the thresholds set forth
    41  in paragraph (c) of this subdivision but has at least ten customers,  or
    42  locations,  or customers and locations, as described in paragraph (c) of
    43  this subdivision, and is part of a unitary group that meets  the  owner-
    44  ship  test  under section 11-654.3 of this subchapter, is doing business
    45  in the city if the number of  customers,  locations,  or  customers  and
    46  locations, within the city of the members of the unitary group that have
    47  at  least  ten  customers, locations, or customers and locations, within
    48  the city in the aggregate meets any of the thresholds set forth in para-
    49  graph (c) of this subdivision.
    50    (3) For purposes of this paragraph, any corporation described in para-
    51  graph (c) of subdivision two of  section  11-654.3  of  this  subchapter
    52  shall not be considered.
    53    (e)  [Intentionally omitted] At the end of each year, the commissioner
    54  shall review the cumulative percentage  change  in  the  consumer  price
    55  index. The commissioner shall adjust the receipt thresholds set forth in
    56  this  subdivision if the consumer price index has changed by ten percent
        A. 10506                            4

     1  or more since January first, two thousand twenty-two, or since the  date
     2  that  the  thresholds  were  last  adjusted  under this subdivision. The
     3  thresholds shall be adjusted to reflect the cumulative percentage change
     4  in the consumer price index. The adjusted thresholds shall be rounded to
     5  the  nearest  one thousand dollars. As used in this paragraph, "consumer
     6  price index" means the consumer price  index  for  all  urban  consumers
     7  (CPI-U)  available  from  the  bureau  of labor statistics of the United
     8  States department of labor. Any adjustment shall apply  to  tax  periods
     9  that begin after the adjustment is made.
    10    (f)  If  a partnership is doing business, employing capital, owning or
    11  leasing property in the city, or maintaining an office in the  city,  or
    12  deriving  receipts  from activity in the city, any corporation that is a
    13  partner in such partnership shall be subject to tax under this  subchap-
    14  ter as described in the regulations of the commissioner of finance.
    15    A  foreign  corporation  shall  not  be  deemed  to be doing business,
    16  employing capital, owning or leasing property, or maintaining an  office
    17  in  the  city,  or  deriving receipts from activity in the city, for the
    18  purposes of this subchapter, by reason of:
    19     An alien corporation shall  not  be  deemed  to  be  doing  business,
    20  employing  capital, owning or leasing property, or maintaining an office
    21  in the city, or deriving receipts from activity in  the  city,  for  the
    22  purposes  of  this subchapter, if its activities in the city are limited
    23  solely to:
    24    § 8. Subdivision 1 of section 11-677 of the administrative code of the
    25  city of New York is amended to read as follows:
    26    1. General. The commissioner of finance, within the applicable  period
    27  of  limitations,  may  credit an overpayment of tax and interest on such
    28  overpayment against any liability in respect of any tax imposed by  [any
    29  of  the named subchapters of this chapter or] this title on the taxpayer
    30  who made the overpayment, and the balance shall be refunded out  of  the
    31  proceeds  of  the  tax.  Such  credit of an overpayment shall be applied
    32  before such overpayment, or any portion thereof, is paid  to  the  state
    33  commissioner  of  taxation  and  finance pursuant to section one hundred
    34  seventy-one-m of the tax law.
    35    § 9. Subdivision h of section 11-2105 of the  administrative  code  of
    36  the  city  of  New York, as added by chapter 297 of the laws of 2019, is
    37  amended to read as follows:
    38    h. When the grantor or grantee of a deed for a building used as  resi-
    39  dential real property containing [one- to four-family] up to four family
    40  dwelling  units  is  a limited liability company, the joint return shall
    41  not be accepted for filing unless it is accompanied by a document  which
    42  identifies  the  names  and business addresses of all members, managers,
    43  and any other authorized persons, if  any,  of  such  limited  liability
    44  company  and  the names and business addresses or, if none, the business
    45  addresses of all shareholders, directors,  officers,  members,  managers
    46  and  partners  of any limited liability company or other business entity
    47  that are to be the members, managers or authorized persons, if  any,  of
    48  such  limited  liability  company.  The identification of such names and
    49  addresses shall not be deemed an unwarranted invasion of personal priva-
    50  cy pursuant to article six of the  public  officers  law.  If  any  such
    51  member, manager or authorized person of the limited liability company is
    52  itself a limited liability company or other business entity other than a
    53  publicly  traded  entity, a REIT, an UPREIT, or a mutual fund, the names
    54  and addresses of the shareholders, directors, officers, members,  manag-
    55  ers  and  partners  of  the  limited liability company or other business
    56  entity shall also be disclosed until full disclosure of ultimate  owner-
        A. 10506                            5

     1  ship  by  natural persons is achieved. For purposes of this subdivision,
     2  the terms "members", "managers", "authorized person", "limited liability
     3  company" and "other business entity" shall  have  the  same  meaning  as
     4  those  terms  are  defined  in  section  one  hundred two of the limited
     5  liability company law.
     6    § 10. Subsection (b) of section 868  of  the  tax  law,  as  added  by
     7  section  1 of subpart B of part MM of chapter 59 of the laws of 2022, is
     8  amended to read as follows:
     9    (b) In order to be effective, the annual election to be taxed pursuant
    10  to this article must be made by [a city taxpayer and (1) if  the  entity
    11  is  an  S  corporation,  by any officer, manager or shareholder of the S
    12  corporation who is authorized under the  law  of  the  state  where  the
    13  corporation  is incorporated or under the S corporation's organizational
    14  documents to make the election and who represents to having such author-
    15  ization under penalty of perjury; or (2) if  the  entity  is  not  an  S
    16  corporation,  by  any  member,  partner, owner, or other individual with
    17  authority to bind the entity or sign returns  pursuant  to  section  six
    18  hundred  fifty-three  of  this  chapter]  an  individual as described in
    19  subsection (b) of section eight hundred sixty-one of  this  chapter  who
    20  made  the  annual election to be taxed pursuant to article twenty-four-A
    21  of this chapter for the taxable year.
    22    § 11. Paragraph 3 of subsection (b) of section 864 of the tax law,  as
    23  added  by  section  1  of  part  C of chapter 59 of the laws of 2021, is
    24  amended to read as follows:
    25    (3) [The] Notwithstanding paragraph four of subsection (c) of  section
    26  six  hundred eighty-five of this chapter, the required annual payment is
    27  the lesser of: (A) ninety percent of the tax shown on the return for the
    28  taxable year; or (B) one hundred percent of the tax shown on the  return
    29  of  the electing partnership or electing S corporation for the preceding
    30  taxable year.
    31    § 12. Paragraph 3 of subsection (b) of section 871 of the tax law,  as
    32  added  by section 1 of subpart B of part MM of chapter 59 of the laws of
    33  2022, is amended to read as follows:
    34    (3) [The] Without regard  to  paragraph  four  of  subsection  (c)  of
    35  section  six  hundred  eighty-five  of this chapter, the required annual
    36  payment is the lesser of: (A) ninety percent of the  tax  shown  on  the
    37  return for the taxable year; or (B) one hundred percent of the tax shown
    38  on the return of the electing city partnership or electing city resident
    39  S corporation for the preceding taxable year.
    40    §  13. Paragraph 3 of subsection (c) of section 873 of the tax law, as
    41  added by section 1 of subpart B of part MM of chapter 59 of the laws  of
    42  2022, is amended to read as follows:
    43    (3) Any [city] taxpayer eligible to claim a credit authorized pursuant
    44  to  subsection  (g) of section thirteen hundred ten of this chapter or a
    45  credit authorized pursuant to subsection (kkk) of  section  six  hundred
    46  six  of  this chapter because such taxpayer is a partner or member in an
    47  electing city partnership or a shareholder in an electing city  resident
    48  S  corporation, either directly or through a disregarded entity, that is
    49  a general, managing or controlling partner of the electing city partner-
    50  ship or managing or controlling shareholder of the electing  city  resi-
    51  dent  S corporation, or owns greater than fifty percent of the interests
    52  or profits of the electing city partnership or electing city resident  S
    53  corporation, or is under a duty to act for the electing city partnership
    54  or electing city resident S corporation in complying with the provisions
    55  of  this article, or was the individual that made the election on behalf
    56  of the electing city partnership or electing city resident S corporation
        A. 10506                            6

     1  authorized by section eight hundred sixty-eight of this  article,  shall
     2  be  jointly  and  severally  liable for the tax imposed pursuant to this
     3  article on such electing city partnership or electing  city  resident  S
     4  corporation.
     5    §  14. Section 12 of subpart B of part MM of chapter 59 of the laws of
     6  2022 is amended to read as follows:
     7    § 12. This act shall take effect immediately and shall apply to  taxa-
     8  ble years beginning on or after January 1, [2023] 2022; provided, howev-
     9  er,  that  subparagraph  3  of paragraph (b) of subdivision 8 of section
    10  11-602 of the administrative code of the city of New York as amended  by
    11  section  nine  of this act and paragraph 2 of subdivision (b) of section
    12  11-641 of the administrative code of the city of New York as amended  by
    13  section  ten  of  this  act  other than the amendments in those sections
    14  relating to article 24-B of the tax law, shall be deemed to have been in
    15  full force and effect on and after January 1, 2021.
    16    § 15. (a) Notwithstanding section 868 of the tax law,  as  amended  by
    17  section  ten  of  this act, the election to be taxed pursuant to article
    18  24-B of the tax law for taxable year 2022 must  be  made  by  March  15,
    19  2023, in a manner prescribed by the commissioner.
    20    (b)  Further for the taxable year 2022, notwithstanding section 871 of
    21  the tax law, as amended by section twelve of this act, an electing  city
    22  partnership or electing city S corporation shall not be required to make
    23  estimated tax payments for taxable year 2022.
    24    (c) For taxable year 2022, city taxpayers who are partners, members or
    25  shareholders  of  electing  city partnerships and electing city S corpo-
    26  rations shall continue to make  the  required  New  York  city  personal
    27  income  tax estimated tax payments, calculated as if they were not enti-
    28  tled to the tax credit allowed pursuant to  subsection  (g)  of  section
    29  1310 of the tax law. Any addition to tax imposed under subsection (c) of
    30  section  685 of the tax law for the failure of a partner or member of an
    31  electing city partnership or a shareholder of an electing city S  corpo-
    32  ration to make such required estimated tax payments for the 2022 taxable
    33  year  shall be calculated as if such partner, member, or shareholder was
    34  not entitled to a tax credit  allowed  pursuant  to  subsection  (g)  of
    35  section 1310 of the tax law.
    36    §  16.  This  act  shall  take  effect immediately; provided, however,
    37  sections one, three, four, and five of this act shall be retroactive  to
    38  and  deemed to have been in full force and effect as of January 1, 2021,
    39  and shall be applicable to tax years beginning on or  after  such  date;
    40  and provided further, however, sections six, seven, ten, eleven, twelve,
    41  thirteen,  fourteen,  and  fifteen  of this act shall apply to tax years
    42  beginning on or after January 1, 2022.