Bill Text: NY S01434 | 2021-2022 | General Assembly | Amended
Bill Title: Creates the middle class circuit breaker tax credit and a tax reform study commission.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2022-01-19 - PRINT NUMBER 1434A [S01434 Detail]
Download: New_York-2021-S01434-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 1434--A 2021-2022 Regular Sessions IN SENATE January 12, 2021 ___________ Introduced by Sens. KRUEGER, BAILEY, LIU, SALAZAR -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -- recommitted to the Committee on Budget and Revenue 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 tax law, in relation to creating the middle class circuit breaker tax credit and creating a tax reform study commission The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 606 of the tax law is amended by adding a new 2 subsection (nnn) to read as follows: 3 (nnn) Middle class circuit breaker credit. (1) Definitions. For the 4 purposes of this subsection: 5 (A) "Qualified taxpayer" means a resident individual of the state who 6 owns or rents the residential real property in which he or she resides, 7 and has resided in such residential real property for not less than five 8 years. 9 (B) "Household" or "members of the household" means a qualified 10 taxpayer or qualified taxpayers and all other persons, not necessarily 11 related, who all reside in the residential real property owned by the 12 taxpayer or taxpayers, and share its furnishings, facilities and accom- 13 modations; provided that no person may be a member of more than one 14 household at one time. 15 (C) "Household gross income" means the aggregate adjusted gross income 16 of all members of the household for the taxable year as reported for 17 federal income tax purposes, or which would be reported as adjusted 18 gross income if a federal income tax return were required to be filed, 19 with the modifications in subsection (b) of section six hundred twelve 20 of this article but without the modifications in subsection (c) of such 21 section, plus any portion of the gain from the sale or exchange of prop- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06575-02-2S. 1434--A 2 1 erty otherwise excluded from such amount; earned income from sources 2 without the United States excludable from federal gross income by 3 section nine hundred eleven of the internal revenue code; support money 4 not included in adjusted gross income; nontaxable strike benefits; 5 supplemental security income payments; the gross amount of any pension 6 or annuity benefits to the extent not included in such adjusted gross 7 income (including, but not limited to, railroad retirement benefits and 8 all payments received under the federal social security act and veter- 9 ans' disability pensions); nontaxable interest received from the state 10 of New York, its agencies, instrumentalities, public corporations, or 11 political subdivisions (including a public corporation created pursuant 12 to agreement or compact with another state or Canada); workers' compen- 13 sation; the gross amount of "loss-of-time" insurance; and the amount of 14 cash public assistance and relief, other than medical assistance for the 15 needy, paid to or for the benefit of the qualified taxpayer or members 16 of his or her household. Household gross income shall not include 17 surplus foods or other relief in kind or payments made to individuals 18 because of their status as victims of Nazi persecution as defined in 19 public law 103-286 or any disability compensation received by veterans 20 on account of injury or illness incurred or aggravated during military 21 service in the wars in Afghanistan and Iraq since September eleventh, 22 two thousand one. Provided, further, household gross income shall only 23 include all such income received by all members of the household while 24 members of such household. 25 (D) "Adjusted rent" means rent paid for the right of occupancy of a 26 residence. 27 (E) "Real property tax equivalent" means (1) for taxable years begin- 28 ning in two thousand twenty-three, fifteen percent of the adjusted rent 29 actually paid in the taxable year by a household solely for the right of 30 occupancy of its New York residence for the taxable year. If (i) a resi- 31 dence is rented to two or more individuals as cotenants, or such indi- 32 viduals share in the payment of a single rent for the right of occupancy 33 of such residence, and (ii) each of such individuals is a member of a 34 different household, one or more of which individuals shares such resi- 35 dence, real property tax equivalent is that portion of fifteen percent 36 of the adjusted rent paid in the taxable year which reflects that 37 portion of the rent attributable to the qualified taxpayer and the 38 members of his or her household; and (2) for taxable years beginning in 39 two thousand twenty-three and thereafter, twenty percent of the adjusted 40 rent actually paid in the taxable year by a household solely for the 41 right of occupancy of its New York residence for the taxable year. If 42 (i) a residence is rented to two or more individuals as cotenants, or 43 such individuals share in the payment of a single rent for the right of 44 occupancy of such residence, and (ii) each of such individuals is a 45 member of a different household, one or more of which individuals shares 46 such residence, real property tax equivalent is that portion of twenty 47 percent of the adjusted rent paid in the taxable year which reflects 48 that portion of the rent attributable to the qualified taxpayer and the 49 members of his or her household. 50 (F) "Net real property tax" means the real property taxes assessed on 51 the residential real property owned and occupied by the taxpayer or 52 taxpayers after any exemption or abatement received pursuant to the real 53 property tax law. 54 (2) Credit. A qualified taxpayer shall be allowed a credit against the 55 taxes imposed by this article, equal to seventy percent of the amount by 56 which the taxpayer's net real property tax or the taxpayer's real prop-S. 1434--A 3 1 erty tax equivalent exceeds the taxpayer's maximum real property tax, as 2 determined by paragraph three of this subsection. If such credit exceeds 3 the tax for such taxable year, as reduced by the other credits permitted 4 by this article, the qualified taxpayer may receive, and the comp- 5 troller, subject to a certificate of the department, shall pay as an 6 overpayment, without interest, any excess between such tax as so reduced 7 and the amount of the credit. If a qualified taxpayer is not required to 8 file a return pursuant to section six hundred fifty-one of this article, 9 a qualified taxpayer may nevertheless receive and the comptroller, 10 subject to a certificate of the department, shall pay as an overpayment 11 the full amount of the credit, without interest. 12 (3) Maximum real property tax. (A) A qualified taxpayer's maximum real 13 property tax shall be determined as follows: 14 (i) For tax years beginning in two thousand twenty-three: 15 Household gross income Maximum real property tax 16 One hundred thousand Nine percent of the 17 dollars or less household gross income 18 More than one hundred No limitation. 19 thousand dollars 20 (ii) For tax years beginning in two thousand twenty-four: 21 Household gross income Maximum real property tax 22 One hundred thousand Eight and one-half percent of the 23 dollars or less household gross income 24 More than one hundred No limitation. 25 thousand dollars 26 (iii) For tax years beginning in two thousand twenty-five: 27 Household gross income Maximum real property tax 28 One hundred thousand dollars Seven and one-half percent of 29 or less household gross income 30 More than one hundred thousand Seven and one-half percent of 31 dollars, but less than or equal to one hundred thousand dollars 32 one hundred fifty thousand dollars plus eight and one-half percent of 33 household gross income above 34 one hundred thousand dollars 35 More than one hundred fifty No limitation. 36 thousand dollars 37 (iv) For tax years beginning in two thousand twenty-six and thereafter: 38 Household gross income Maximum real property tax 39 One hundred thousand Six percent of household gross 40 dollars or less income 41 More than one hundred thousand Six percent of one hundred 42 dollars, but less than or equal to thousand dollars plus seven 43 one hundred fifty thousand dollars percent of household gross income 44 above one hundred thousand dollars 45 More than one hundred fifty Six percent of one hundred thousand 46 thousand dollars, but less than dollars plus seven 47 or equal to two hundred fifty percent of fifty thousand dollars 48 thousand dollars plus eight and one-half percent of 49 household gross income above one 50 hundred fifty thousand dollars 51 More than two hundred fifty No limitation. 52 thousand dollarsS. 1434--A 4 1 (B) The thresholds of household gross income established by clause 2 (iv) of subparagraph (A) of this paragraph shall be indexed for 3 inflation for tax years beginning in two thousand twenty-seven and ther- 4 eafter. 5 (4) Exclusions from eligibility. No credit shall be granted under this 6 subsection if the qualified taxpayer claims the real property tax 7 circuit breaker credit, pursuant to subsection (e) of this section, 8 during the taxable year. 9 § 2. There is hereby established a tax reform study commission to 10 provide the governor and the legislature with a long run plan for 11 reforming the state and local tax systems. The tax reform study commis- 12 sion shall consist of five members appointed by the governor, four 13 members each appointed by the speaker of the assembly and the temporary 14 president of the senate, and one member each appointed by the minority 15 leader of the senate and the minority leader of the assembly. In addi- 16 tion, on or before January 1, 2025, the tax reform study commission 17 shall provide the governor and the legislature with recommendations on 18 any changes that should be made in the definitions of income used in the 19 various property tax relief programs authorized by the laws of the state 20 of New York. Such recommendations shall be based on an examination of 21 such laws and of such laws in other states. In preparing such recommen- 22 dations, the tax reform study commission shall review the distributional 23 impact of the items of income included in the definition of household 24 income for purposes of the circuit breaker and other property tax relief 25 programs established by state law and make recommendations to the gover- 26 nor and the legislature for any changes in any of these definitions that 27 the tax reform study commission deems appropriate. The commissioner of 28 taxation and finance and the director of the office of real property 29 services shall provide the tax reform study commission with such data 30 and analysis as it may require. 31 § 3. This act shall take effect immediately.