Bill Text: NY S00022 | 2021-2022 | General Assembly | Amended

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Bill Title: Relates to authorizing small business tax-deferred savings accounts.

Spectrum: Slight Partisan Bill (Democrat 4-2)

Status: (Introduced - Dead) 2022-03-02 - REPORTED AND COMMITTED TO FINANCE [S00022 Detail]

Download: New_York-2021-S00022-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          22--A

                               2021-2022 Regular Sessions

                    IN SENATE

                                       (Prefiled)

                                     January 6, 2021
                                       ___________

        Introduced  by Sens. KAPLAN, HELMING, HINCHEY, MARTUCCI, MAY, SANDERS --
          read twice and ordered printed, and when printed to  be  committed  to
          the  Committee on Commerce, Economic Development and Small Business --
          recommitted to the Committee on  Commerce,  Economic  Development  and
          Small  Business  in accordance with Senate Rule 6, sec. 8 -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee

        AN ACT to amend the  economic  development  law  and  the  tax  law,  in
          relation  to  authorizing  the creation of small business tax-deferred
          savings accounts

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

     1    Section  1.  The  economic  development law is amended by adding a new
     2  section 138-a to read as follows:
     3    § 138-a. Small business tax-deferred savings accounts.   1.  A  "small
     4  business  taxpayer"  or  "small business" shall have the same meaning as
     5  defined in section one hundred thirty-one of this article and shall meet
     6  the requirements of paragraph (f) of  subdivision  one  of  section  two
     7  hundred ten of the tax law.
     8    2. Any small business shall be authorized to establish with any finan-
     9  cial  organization  a small business tax-deferred savings account and to
    10  make deposits into and withdrawals from such account.  For  purposes  of
    11  this  section,  "financial  organization"  shall  mean  an  organization
    12  authorized to do business in the state of New  York  and  (a)  which  is
    13  licensed  or  chartered  by the department of financial services, (b) is
    14  chartered by an agency of the federal government, or (c) is  subject  to
    15  the  jurisdiction  and regulation of the securities and exchange commis-
    16  sion of the federal government.
    17    3. The amount deposited into such tax-deferred  savings  accounts  and
    18  any  interest earned on such deposits shall be subject to the provisions

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00218-02-2
        S. 22--A                            2

     1  of subparagraph twenty-one of  paragraph  (a)  of  subdivision  nine  of
     2  section two hundred eight and paragraph forty-three of subsection (c) of
     3  section six hundred twelve of the tax law, unless such amounts are with-
     4  drawn and expended for a purpose other than a qualifying purpose.
     5    4.  For  the  purposes of this act, a qualifying purpose shall include
     6  small business taxpayer expenditures (a) for tangible personal  property
     7  or     other  tangible  property, including but not limited to buildings
     8  and structural components of buildings, that are principally used in the
     9  ordinary course of the  taxpayer's  trade  or  business  and  (b)  other
    10  expenditures  deemed  appropriate  by the department, which will improve
    11  the competitiveness and productivity of a small business and results  in
    12  the creation or retention of full-time jobs.
    13    5. The monies deposited into such tax-deferred savings accounts during
    14  any taxable year may not exceed five thousand dollars.
    15    6.  On  or  before April first, two thousand twenty-three and annually
    16  thereafter, the department, in consultation with the department of taxa-
    17  tion and finance, shall report on the number of small business taxpayers
    18  utilizing this program, the aggregate amount deposited for which  a  tax
    19  credit  was  claimed,  the  average aggregate amount on deposit in small
    20  business savings accounts, the amount of qualifying  and  non-qualifying
    21  withdrawals, and any other such data deemed necessary and appropriate by
    22  the department.
    23    §  2.  Paragraph (a) of subdivision 9 of section 208 of the tax law is
    24  amended by adding a new subparagraph 23 to read as follows:
    25    (23) any amount deposited into a small business  tax-deferred  savings
    26  account  created   pursuant to section one hundred thirty-eight-a of the
    27  economic development law, and any  interest  earned  on  such  deposits,
    28  provided that any amount withdrawn for a non-qualifying purpose shall be
    29  included  in  the  entire net income for the tax year in which the with-
    30  drawal was made.
    31    § 3. Subsection (c) of section 612 of the tax law is amended by adding
    32  a new paragraph 46 to read as follows:
    33    (46) any amount deposited into a small business  tax-deferred  savings
    34  account  created   pursuant to section one hundred thirty-eight-a of the
    35  economic development law, and any  interest  earned  on  such  deposits,
    36  provided that any amount withdrawn for a non-qualifying purpose shall be
    37  included  in  the  entire net income for the tax year in which the with-
    38  drawal was made.
    39    § 4. The department of taxation and finance, in consultation with  the
    40  department of economic development, shall review and analyze all statis-
    41  tical  data  available for such purposes of determining the economic and
    42  revenue impact associated with this act. Such data shall be included  in
    43  an  annual  report  that  shall also include, but not be limited to, the
    44  number of small business taxpayers utilizing this program,  the  average
    45  aggregate amount on deposit, the qualifying expenses claimed, any quali-
    46  fying  expenses  deemed  inappropriate  and  any  other such data deemed
    47  necessary and appropriate by the department. Such annual report shall be
    48  posted on the websites of the department of taxation and finance and the
    49  department of economic development, and transmitted to the governor, the
    50  temporary president of the  senate,  the  senate  minority  leader,  the
    51  speaker of the assembly and the assembly minority leader.
    52    §  5. Rules and regulations. The department of taxation and finance in
    53  consultation with the department  of  economic  development,  is  hereby
    54  authorized  to  promulgate  rules and regulations in accordance with the
    55  state administrative procedure act that are  necessary  to  fulfill  the
    56  purposes  of this act. Such regulations shall include but not be limited
        S. 22--A                            3

     1  to deadlines for establishing a  small  business  tax  deferred  savings
     2  account,  standard  procedures  and forms to be utilized in the program,
     3  and any other such regulations deemed  necessary  to  promote  the  full
     4  utilization  of  this  program.  Such  rules  and  regulations  shall be
     5  completed within 180 days after the effective date of this act.
     6    § 6. This act shall take effect on the first of April next  succeeding
     7  the date on which it shall have become a law.