Bill Text: NY S02782 | 2023-2024 | General Assembly | Introduced
Bill Title: Relates to creating a separate tax on inheritance income, creating a separate tax on gift income, the computation of the estate tax, and creating a gift tax.
Spectrum: Partisan Bill (Democrat 22-0)
Status: (Introduced) 2024-01-03 - REFERRED TO BUDGET AND REVENUE [S02782 Detail]
Download: New_York-2023-S02782-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 2782 2023-2024 Regular Sessions IN SENATE January 24, 2023 ___________ Introduced by Sens. BRISPORT, BRESLIN, BROUK, COMRIE, COONEY, GIANARIS, HOYLMAN-SIGAL, JACKSON, LIU, MAY, MYRIE, PARKER, RAMOS, RIVERA, SALA- ZAR, SANDERS, SEPULVEDA, SERRANO, SKOUFIS -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue AN ACT to amend the tax law, in relation to establishing separate taxes on inheritance income and on gift income, amending the estate tax, and establishing a gift tax The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding two new sections 604 and 2 604-a to read as follows: 3 § 604. Separate tax on inheritance income. (a) Definitions. For the 4 purposes of this section, the following terms shall have the following 5 meanings: 6 (1) Except as otherwise provided in subsection (c) of this section, 7 "inheritance income" means any income excluded for federal tax purposes 8 from federal adjusted gross income pursuant to subsection (a) of section 9 one hundred two of the internal revenue code that is received from any 10 estate, regardless of the residence of the decedent of such estate, 11 after the federal estate tax has been paid on such income. 12 (2) "Family member" means "member of the family" as such term is 13 defined in paragraph (2) of subsection (e) of section two thousand thir- 14 ty-two-A of the internal revenue code. 15 (b) Imposition of separate tax. (1) In addition to any other tax 16 imposed by this article, there is hereby imposed for each taxable year a 17 separate tax on the total amount of inheritance income received from any 18 estate of a decedent during such taxable year by any individual who was 19 a New York state resident on the date of death of such decedent. 20 (2) The tax imposed by this subsection shall be computed as provided 21 in section six hundred twenty-four-a of this article with respect to EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03717-01-3S. 2782 2 1 residents and section six hundred thirty-seven-a of this article with 2 respect to nonresidents and part-year residents. 3 (c) Exclusions from inheritance income. (1) Educational or medical 4 expenses. A qualified transfer, as such term is defined in paragraph (2) 5 of subsection (e) of section two thousand five hundred three of the 6 internal revenue code, shall not be considered inheritance income for 7 purposes of this section. 8 (2) Spousal transfers. Transfers of property from a spouse shall not 9 be considered inheritance income for purposes of this section. 10 (3) Retirement accounts. Transfers of property consisting of pensions, 11 health savings accounts, or retirement accounts established pursuant to 12 sections four hundred one, four hundred three, four hundred eight, four 13 hundred eight-A, or four hundred fifty-seven of the internal revenue 14 code shall not be considered inheritance income for purposes of this 15 section. 16 (4) Certain residences. An individual subject to the tax imposed by 17 this section may claim not more than one of the following exclusions 18 from inheritance income, and may not claim either such exclusion for 19 more than one transfer of real property: 20 (A) Primary residences. For real property transferred to a resident, 21 nonresident or part-year resident individual that (i) serves as the 22 primary residence of the transferor of such property or of the resident, 23 nonresident, or part-year resident transferee for the ten consecutive 24 years preceding such transfer or (ii) serves as the primary residence of 25 such transferee for the five consecutive years following such transfer, 26 up to one million seven hundred fifty thousand dollars of the value of 27 such property shall not be considered inheritance income for purposes of 28 this section. 29 (B) Residential homes purchased with a federal housing administration 30 insured mortgage. For a residential home transferred to a resident, 31 nonresident or part-year resident individual that was purchased with a 32 federal housing administration insured mortgage, up to seven hundred 33 fifty thousand dollars of the value of such home shall not be considered 34 inheritance income for purposes of this section. 35 (5) Family farms. A transfer to a resident, nonresident or part-year 36 resident individual from the estate of a decedent who is a family member 37 of such individual of farmland and farm equipment shall not be consid- 38 ered inheritance income for purposes of this section provided that the 39 total value of inheritance income (including the value of such farmland 40 and farm equipment) received by such individual from such estate does 41 not exceed five million dollars, and provided further that the value of 42 such farmland and equipment constitutes over fifty percent of the total 43 value of such inheritance income received from such estate. 44 (d) Deferrals. (1) Primary residence liquidity deferral. A resident, 45 nonresident or part-year resident individual who in a taxable year 46 receives from a single estate inheritance income totaling less than five 47 million dollars, over fifty percent of the total value of which consists 48 of real property that will serve as the primary residence of such indi- 49 vidual, may elect to defer payment of the tax imposed by this section 50 until the time at which such individual sells such real property or 51 ceases using such property as a primary residence. 52 (2) Family-owned business liquidity deferral. (A) A resident, nonresi- 53 dent or part-year resident individual who in a taxable year receives 54 from the estate of a decedent who is a family member of such individual 55 inheritance income totaling less than five million dollars, over fifty 56 percent of the total value of which consists of equity interests in aS. 2782 3 1 family-owned business, may elect to defer payment of the tax imposed by 2 this section until the time at which such individual sells such busi- 3 ness, provided that during the time of deferral interest will accrue on 4 the amount of such tax at a rate equal to the federal short-term rate as 5 provided under paragraph three of subsection (j) of section six hundred 6 ninety-seven of this article. 7 (B) For the purposes of this paragraph, "family-owned business" means 8 a business for which, at the time ownership of such business is trans- 9 ferred to a resident, nonresident or part-year resident individual, the 10 transferor of such business or family members of such transferor collec- 11 tively have retained majority ownership and have materially participated 12 in the operation of such business for the ten consecutive years proceed- 13 ing such transfer. 14 § 604-a. Separate tax on gift income. (a) Definitions. For the 15 purposes of this section, the following terms shall have the following 16 meanings: 17 (1) "Gift income" means the value of any taxable gifts, as such term 18 is defined in section one thousand of this chapter, received by an indi- 19 vidual who is a New York state resident at the time of receiving such 20 gifts. 21 (2) "Family member" means "member of the family" as such term is 22 defined in paragraph (2) of subsection (e) of section two thousand thir- 23 ty-two-A of the internal revenue code. 24 (b) Imposition of separate tax. (1) In addition to any other tax 25 imposed by this article, there is hereby imposed for each taxable year a 26 separate tax on gift income received during such taxable year by any 27 resident or part-year resident individual. 28 (2) The tax imposed by this section shall be computed as provided in 29 section six hundred twenty-four-b of this article with respect to resi- 30 dents and section six hundred thirty-seven-b of this article with 31 respect to part-year residents. 32 (c) Exclusions from gift income. (1) Educational or medical expenses. 33 A qualified transfer, as such term is defined in paragraph (2) of 34 subsection (e) of section two thousand three of the internal revenue 35 code, shall not be considered gift income for purposes of this section. 36 (2) Spousal transfers. Transfers of property from a spouse shall not 37 be considered gift income for purposes of this section. 38 (3) Retirement accounts. Transfers of property consisting of pensions, 39 health savings accounts, or retirement accounts established pursuant to 40 sections four hundred one, four hundred three, four hundred eight, four 41 hundred eight-A, or four hundred fifty-seven of the internal revenue 42 code shall not be considered gift income for purposes of this section. 43 (4) Family farms. A transfer to a resident or part-year resident indi- 44 vidual from a donor who is a family member of such individual of farm- 45 land and farm equipment shall not be considered gift income for purposes 46 of this section provided that the total value of gift income (including 47 the value of such farmland and farm equipment) received by such individ- 48 ual from such donor does not exceed one million dollars. 49 (d) Family-owned business liquidity deferral. (1) A resident or part- 50 year resident individual who in a taxable year receives from a donor who 51 is a family member of such individual gift income totaling less than 52 five million dollars, over fifty percent of the total value of which 53 consists of equity interests in a family-owned business, may elect to 54 defer payment of the tax imposed by this section until the time at which 55 such individual sells such equity interests, provided that during the 56 time of deferral interest will accrue on the amount of such tax at aS. 2782 4 1 rate equal to the federal short-term rate as provided under paragraph 2 three of subsection (j) of section six hundred ninety-seven of this 3 article. 4 (2) For the purposes of this subsection, "family-owned business" means 5 a business for which, at the time ownership of such business is trans- 6 ferred to a resident or part-year resident individual, the transferor of 7 such business or family members of such transferor collectively have 8 retained majority ownership and have materially participated in the 9 operation of such business for the ten consecutive years proceeding such 10 transfer. 11 § 2. The tax law is amended by adding a new section 620-b to read as 12 follows: 13 § 620-b. Credit against separate tax on inheritance income. A resident 14 shall be allowed a credit against the tax imposed by section six hundred 15 four of this article in the amount of the estate tax imposed by article 16 twenty-six of this chapter or any estate or inheritance tax imposed by 17 another state of the United States, a political subdivision of such 18 state, or the District of Columbia, upon any inheritance income, as such 19 term is defined in such section, received by such resident in a taxable 20 year. Such resident may elect to calculate the amount of such credit in 21 accordance with either subsection (a) or subsection (b) of this section. 22 (a) The amount of credit allowed pursuant to this section may be 23 calculated by multiplying the total amount of estate or inheritance tax 24 imposed by this state, another state of the United States, a political 25 subdivision of such state, or the District of Columbia on the estate 26 from which such resident has received inheritance income by a fraction, 27 the numerator of which is the amount of inheritance income received by 28 such resident from such estate and the denominator of which is the total 29 value of such estate after the federal estate tax has been paid but 30 before the estate tax of this state, or any estate or inheritance tax 31 imposed by another state of the United States, a political subdivision 32 of such state, or the District of Columbia, has been paid. In order to 33 calculate such credit in accordance with this subsection, such resident 34 must know the total amount of estate or inheritance tax imposed on such 35 estate by this state, another state of the United States, a political 36 subdivision of such state, or the District of Columbia and the total 37 value of such estate after the federal estate tax has been paid but 38 before the estate or inheritance tax of this state, another state of the 39 United States, a political subdivision of such state, or the District of 40 Columbia, has been paid. 41 (b) The amount of credit allowed pursuant to this section may be 42 calculated as equal to the amount of estate tax or inheritance tax of 43 this state, another state of the United States, a political subdivision 44 of such state, or the District of Columbia, that would be imposed on the 45 estate from which such resident receives inheritance income as if such 46 inheritance income were equal to the total value of such estate. 47 § 3. The tax law is amended by adding two new sections 624-a and 624-b 48 to read as follows: 49 § 624-a. Computation of separate tax on inheritance income received by 50 a resident individual. The amount of tax imposed under section six 51 hundred four of this article for any taxable year, with respect to 52 inheritance income received by a resident individual, shall be deter- 53 mined in accordance with the following table: 54 For taxable years beginning after two thousand twenty-two: 55 If the inheritance income is: The tax is: 56 Not over $250,000 0% of inheritance incomeS. 2782 5 1 Over $250,000 but not over $500,000 $0 plus 5% of excess over $250,000 2 Over $500,000 but not over $12,500 plus 15% of excess over 3 $1,000,000 $500,000 4 Over $1,000,000 but not over $87,500 plus 30% of excess over 5 $2,000,000 $1,000,000 6 Over $2,000,000 but not over $387,000 plus 40% of excess over 7 $10,000,000 $2,000,000 8 Over $10,000,000 $3,587,500 plus 50% of excess over 9 $10,000,000 10 § 624-b. Computation of separate tax on gift income received by a 11 resident individual. The amount of tax imposed under section six hundred 12 four-a of this part for any taxable year, with respect to gift income 13 received by a resident individual, shall be determined in accordance 14 with the following table: 15 If the gift income is: The tax is: 16 Not over $50,000 0% of gift income 17 Over $50,000 but not over $100,000 $0 plus 5% of excess over $50,000 18 Over $100,000 but not over $2,500 plus 15% of excess over 19 $200,000 $100,000 20 Over $200,000 but not over $17,500 plus 30% of excess over 21 $400,000 $200,000 22 Over $400,000 but not over $77,500 plus 40% of excess over 23 $2,000,000 $400,000 24 Over $2,000,000 $717,500 plus 50% of excess over 25 $2,000,000 26 § 4. The tax law is amended by adding three new sections 637-a, 637-b 27 and 640 to read as follows: 28 § 637-a. Computation of separate tax on inheritance income received by 29 nonresident or part-year resident individuals. The amount of tax imposed 30 under section six hundred four of this article for any taxable year, 31 with respect to inheritance income received by a nonresident or part- 32 year resident individual, shall be determined in accordance with the 33 following table: 34 (a) For taxable years beginning after two thousand twenty-two: 35 If the inheritance income is: The tax is: 36 Not over $250,000 0% of inheritance income 37 Over $250,000 but not over $500,000 $0 plus 5% of excess over $250,000 38 Over $500,000 but not over $12,500 plus 15% of excess over 39 $1,000,000 $500,000 40 Over $1,000,000 but not over $87,500 plus 30% of excess over 41 $2,000,000 $1,000,000 42 Over $2,000,000 but not over $387,000 plus 40% of excess 43 $10,000,000 over $2,000,000 44 Over $10,000,000 $3,587,500 plus 50% of excess over 45 $10,000,000 46 § 637-b. Computation of separate tax on gift income received by part- 47 year resident individuals. The amount of tax imposed under section six 48 hundred four-a of this article for any taxable year, with respect to 49 gift income received by a part-year resident individual, shall be deter- 50 mined in accordance with the following table: 51 If the gift income is: The tax is: 52 Not over $50,000 0% of gift income 53 Over $50,000 but not over $100,000 $0 plus 5% of excess over $50,000 54 Over $100,000 but not over $200,000 $2,500 plus 15% of excess over 55 $100,000 56 Over $200,000 but not over $17,500 plus 30% of excess overS. 2782 6 1 $400,000 $200,000 2 Over $400,000 but not over $77,500 plus 40% of excess over 3 $2,000,000 $400,000 4 Over $2,000,000 $717,500 plus 50% of excess over 5 $2,000,000 6 § 640. Credits against separate tax on inheritance income. A nonresi- 7 dent or part-year resident individual shall be allowed a credit against 8 the tax imposed by section six hundred four of this article in the 9 amount of the estate tax imposed by article twenty-six of this chapter, 10 or of any estate or inheritance tax imposed by another state of the 11 United States, a political subdivision of such state, or the District of 12 Columbia, upon any inheritance income, as such term is defined in such 13 section, received by such individual in a taxable year. Such individual 14 may elect to calculate the amount of such credit in accordance with 15 either subsection (a) or subsection (b) of this section. 16 (a) The amount of credit allowed pursuant to this section may be 17 calculated by multiplying the total amount of estate or inheritance tax 18 imposed by this state, another state of the United States, a political 19 subdivision of such state, or the District of Columbia on the estate 20 from which such individual has received inheritance income by a frac- 21 tion, the numerator of which is the amount of inheritance income 22 received by such individual from such estate and the denominator of 23 which is the total value of such estate after the federal estate tax has 24 been paid but before the estate tax of this state, or any estate or 25 inheritance tax imposed by another state of the United States, a poli- 26 tical subdivision of such state, or the District of Columbia, has been 27 paid. In order to calculate such credit in accordance with this 28 subsection, such individual must know the total amount of estate or 29 inheritance tax imposed on such estate by this state, another state of 30 the United States, a political subdivision of such state, or the 31 District of Columbia and the total value of such estate after the feder- 32 al estate tax has been paid but before the estate or inheritance tax of 33 this state, another state of the United States, a political subdivision 34 of such state, or the District of Columbia, has been paid. 35 (b) The amount of credit allowed pursuant to this section may be 36 calculated as equal to the amount of estate tax or inheritance tax of 37 this state, another state of the United States, a political subdivision 38 of such state, or the District of Columbia that would be imposed on the 39 estate from which such individual receives inheritance income as if such 40 inheritance income were equal to the total value of such estate. 41 § 5. Section 951-a of the tax law is amended by adding a new 42 subsection (g) to read as follows: 43 (g) The term "New York taxable gifts" has the same meaning as provided 44 in section one thousand of this chapter. 45 § 6. Section 952 of the tax law, as amended by section 2 of part X of 46 chapter 59 of the laws of 2014, subsection (b) as amended by section 1 47 of part BB of chapter 59 of the laws of 2015, is amended to read as 48 follows: 49 § 952. Tax imposed. (a) A tax is hereby imposed on the transfer of the 50 New York estate by every deceased individual who at his or her death was 51 a resident of New York state. 52 (b) Computation of tax. The tax imposed by this section shall be 53 computed on the deceased resident's New York taxable estate as follows: 54 (1) In the case of decedents dying before April 1, 2023:S. 2782 7 1 If the New York taxable estate is: The tax is: 2 Not over $500,000 3.06% of taxable estate 3 Over $500,000 but not over $1,000,000 $15,300 plus 5.0% of excess over 4 $500,000 5 Over $1,000,000 but not over $1,500,000 $40,300 plus 5.5% of excess over 6 $1,000,000 7 Over $1,500,000 but not over $2,100,000 $67,800 plus 6.5% of excess over 8 $1,500,000 9 Over $2,100,000 but not over $2,600,000 $106,800 plus 8.0% of excess 10 over $2,100,000 11 Over $2,600,000 but not over $3,100,000 $146,800 plus 8.8% of excess over 12 $2,600,000 13 Over $3,100,000 but not over $3,600,000 $190,800 plus 9.6% of excess over 14 $3,100,000 15 Over $3,600,000 but not over $4,100,000 $238,800 plus 10.4% of excess 16 over $3,600,000 17 Over $4,100,000 but not over $5,100,000 $290,800 plus 11.2% of excess 18 over $4,100,000 19 Over $5,100,000 but not over $6,100,000 $402,800 plus 12.0% of excess 20 over $5,100,000 21 Over $6,100,000 but not over $7,100,000 $522,800 plus 12.8% of excess 22 over $6,100,000 23 Over $7,100,000 but not over $8,100,000 $650,800 plus 13.6% of excess 24 over $7,100,000 25 Over $8,100,000 but not over $9,100,000 $786,800 plus 14.4% of excess 26 over $8,100,000 27 Over $9,100,000 but not over $930,800 plus 15.2% of excess over 28 $10,100,000 $9,100,000 29 Over $10,100,000 $1,082,800 plus 16.0% of excess 30 over $10,100,000 31 (2) In the case of decedents dying on or after April 1, 2023: 32 If the New York taxable estate plus The tax is: 33 the lifetime amount of New York 34 taxable gifts is: 35 Not over $750,000 0% of taxable estate 36 Over $750,000 but not over $0 plus 5% of excess over $750,000 37 $1,500,000 38 Over $1,500,000 but not over $37,500 plus 15% of excess over 39 $3,000,000 $1,500,000 40 Over $3,000,000 but not over $262,500 plus 30% of excess over 41 $6,000,000 $3,000,000 42 Over $6,000,000 but not over $1,162,500 plus 40% of excess 43 $30,000,000 over $6,000,000 44 Over $30,000,000 $10,762,500 plus 50% of excess over 45 $30,000,000 46 (c) Applicable credit amount. (1) [A] In the case of any decedent 47 dying before April first, two thousand twenty-three, a credit of the 48 applicable credit amount shall be allowed against the tax imposed by 49 this section as provided in this subsection. In the case of such a dece- 50 dent whose New York taxable estate is less than or equal to the basic 51 exclusion amount, the applicable credit amount shall be the amount of 52 tax that would be due under subsection (b) of this section on such 53 decedent's New York taxable estate. In the case of such a decedent whose 54 New York taxable estate exceeds the basic exclusion amount by an amount 55 that is less than or equal to five percent of such amount, the applica- 56 ble credit amount shall be the amount of tax that would be due underS. 2782 8 1 subsection (b) of this section if the amount on which the tax is to be 2 computed were equal to the basic exclusion amount multiplied by one 3 minus a fraction, the numerator of which is the decedent's New York 4 taxable estate minus the basic exclusion amount, and the denominator of 5 which is five percent of the basic exclusion amount. Provided, however, 6 that the credit allowed by this subsection shall not exceed the tax 7 imposed by this section, and no credit shall be allowed to the estate of 8 any decedent whose New York taxable estate exceeds one hundred five 9 percent of the basic exclusion amount. 10 (2) (A) For purposes of this section, the basic exclusion amount shall 11 be as follows: 12 In the case of decedents dying on or after: The basic exclusion amount 13 is: 14 April 1, 2014 and before April 1, 2015 $ 2,062,500 15 April 1, 2015 and before April 1, 2016 3,125,000 16 April 1, 2016 and before April 1, 2017 4,187,500 17 April 1, 2017 and before January 1, 2019 5,250,000 18 (B) In the case of any decedent dying [in a calendar year beginning] 19 on or after January first, two thousand nineteen and before April first, 20 two thousand twenty-three, the basic exclusion amount shall be equal to: 21 (i) five million dollars, multiplied by 22 (ii) one plus the cost-of-living adjustment, which shall be the 23 percentage by which the consumer price index for the preceding calendar 24 year exceeds the consumer price index for calendar year two thousand 25 ten. 26 (C) (i) For purposes of this paragraph, "consumer price index" means 27 the most recent consumer price index for all-urban consumers published 28 by the United States department of labor. 29 (ii) For purposes of clause (ii) of subparagraph (B) of this para- 30 graph, the consumer price index for any calendar year shall be the aver- 31 age of the consumer price index as of the close of the twelve-month 32 period ending on August thirty-first of such calendar year. 33 (iii) If any amount adjusted under this paragraph is not a multiple of 34 ten thousand dollars, such amount shall be rounded to the nearest multi- 35 ple of ten thousand dollars. 36 (d) Credit for lifetime gift taxes paid. In the case of a decedent 37 dying on or after April first, two thousand twenty-three, a credit shall 38 be allowed against the tax imposed by this section equal to the total 39 amount of gift tax imposed by section one thousand one of this chapter 40 paid by such decedent during the lifetime of such decedent. 41 § 7. Subsection (a) of section 954 of the tax law is amended by adding 42 six new paragraphs 5, 6, 7, 8, 9 and 10 to read as follows: 43 (5) Reduced by the amount of any qualified transfer, as such term is 44 defined in paragraph (2) of subsection (e) of section two thousand five 45 hundred three of the internal revenue code, to the extent the amount of 46 such transfer is included in the decedent's federal gross estate. 47 (6) Reduced by the value of any transfers of property consisting of 48 pensions, health savings accounts, or retirement accounts established 49 pursuant to sections four hundred one, four hundred three, four hundred 50 eight, four hundred eight-A, or four hundred fifty-seven of the internal 51 revenue code to the extent the amount of any such transfer is included 52 in the decedent's federal gross estate. 53 (7) Reduced by one of the following, but not both, with respect to not 54 more than one transfer of real property: 55 (A) Up to one million seven hundred fifty thousand dollars of the 56 value of real property transferred to an individual that (i) served asS. 2782 9 1 the primary residence of the decedent or of such individual for the ten 2 consecutive years preceding such transfer or (ii) serves as the primary 3 residence of such individual for the five consecutive years following 4 such transfer to the extent the value of such real property is included 5 in the decedent's federal gross estate; or 6 (B) Up to seven hundred fifty thousand dollars of the value of a resi- 7 dential home that was purchased with a federal housing administration 8 insured mortgage to the extent the value of such residential home is 9 included in the decedent's federal gross estate. 10 (8) Reduced by the value of farmland and farm equipment transferred to 11 an individual from the estate of a family member of such individual to 12 the extent the value of such farmland and equipment is included in the 13 decedent's federal gross estate, provided that the total value of all 14 transfers from such estate to such individual is less than five million 15 dollars, and provided further that the value of such farmland and equip- 16 ment constitutes over fifty percent of the total value of such trans- 17 fers. For the purposes of this paragraph, "family member" has the same 18 meaning as provided in section six hundred four of this chapter. 19 (9) Reduced by the value of real property transferred by the estate of 20 the decedent to an individual who was a resident of this state on the 21 date of death of such decedent that will serve as the primary residence 22 of such individual, provided that the total value of all transfers from 23 such estate to such individual is less than five million dollars and 24 provided that the value of such real property constitutes over fifty 25 percent of the total value of such transfers; and provided further that 26 such estate and such individual agree in writing at the time of transfer 27 that such individual will be liable for any inheritance tax imposed by 28 section six hundred four of this chapter on the transfer of such proper- 29 ty that may be deferred and paid upon disposition of such property as 30 provided in paragraph one of subsection (d) of such section. 31 (10) Reduced by the value of a family-owned business transferred by 32 the estate of the decedent to an individual who was a resident of this 33 state on the date of death of such decedent, provided that the total 34 value of all transfers from such estate to such individual is less than 35 five million dollars and provided that the value of such family-owned 36 business constitutes over fifty percent of the total value of such 37 transfers; and provided further that such estate and such individual 38 agree in writing at the time of transfer that such individual will be 39 liable for any inheritance tax imposed by section six hundred four of 40 this chapter on the transfer of such family-owned business that may be 41 deferred and paid upon disposition of such business as provided in para- 42 graph two of subsection (d) of such section. For the purposes of this 43 paragraph, the term "family-owned business" has the same meaning as 44 provided in subparagraph (B) of paragraph two of subsection (d) of 45 section six hundred four of this chapter. 46 § 8. Subsection (a) of section 955 of the tax law, as added by section 47 4 of part X of chapter 59 of the laws of 2014, is amended to read as 48 follows: 49 (a) General.--The taxable estate of a New York resident shall be his 50 or her New York gross estate, minus the deductions allowable for deter- 51 mining his or her federal taxable estate under the internal revenue code 52 (whether or not a federal estate tax return is required to be filed), 53 except to the extent that such deductions relate to real or tangible 54 personal property sitused outside New York state, reduced by the amount 55 of federal estate tax imposed on the estate of such resident, provided 56 that with respect to the estate of a decedent who on the date of suchS. 2782 10 1 decedent's death was a not a resident of New York, the New York gross 2 estate shall be reduced only by an amount equal to the total amount of 3 federal estate tax imposed on such estate multiplied by a fraction the 4 numerator of which is the value of property contained in such estate 5 that is subject to the tax imposed by section nine hundred sixty of this 6 part and the denominator of which is the total value of such estate. 7 § 9. The tax law is amended by adding a new article 26-A to read as 8 follows: 9 ARTICLE 26-A 10 GIFT TAX 11 Section 1000. Definitions. 12 1001. Tax imposed. 13 1002. Rate of tax. 14 1003. Administration. 15 § 1000. Definitions. (a) "Taxable gifts" means the transfers by gift 16 which are included in taxable gifts for federal gift tax purposes under 17 section 2503 and sections 2511 to 2514, inclusive, and sections 2516 to 18 2519, inclusive, of the internal revenue code, less the deductions 19 allowed in sections 2522 to 2524, inclusive, of such code. 20 (b) (1) Except as otherwise provided in paragraph two of this 21 subsection, "New York taxable gifts" means taxable gifts made during a 22 taxable year commencing on or after January first, two thousand twenty- 23 four, that are (i) for residents, taxable gifts, wherever located, 24 except for gifts of real estate or tangible personal property located 25 outside New York and (ii) for nonresidents of this state, gifts of real 26 estate or tangible personal property located within New York. 27 (2) Gifts made to any person by the donor during the calendar year for 28 which a tax is imposed on such person for the receipt of such gift by 29 this state, another state of the United States, a political subdivision 30 of such state, or the District of Columbia, including the tax imposed by 31 section six hundred four-a of this chapter, shall not for the purposes 32 of paragraph one of this subsection be included in the total amount of 33 New York taxable gifts made during such year. 34 (c) In the administration of the tax under this article, the commis- 35 sioner shall apply the provisions of sections 2701 to 2704, inclusive, 36 of the internal revenue code, and the term "secretary or his delegate" 37 as used in such sections means the commissioner. 38 § 1001. Tax imposed. For the calendar year commencing on January 39 first, two thousand twenty-four, and for each year thereafter, a tax 40 computed as provided in section one thousand two of this article is 41 hereby imposed on the transfer of property by gift during a taxable year 42 by any resident or nonresident individual. 43 § 1002. Rate of tax. With respect to New York taxable gifts, as 44 defined in section one thousand of this article, made by a donor during 45 a calendar year commencing on or after January first, two thousand twen- 46 ty-four, including the aggregate amount of all New York taxable gifts 47 made by the donor during all calendar years commencing on or after Janu- 48 ary first, two thousand twenty-four, the tax imposed by section one 49 thousand one of this article for the calendar year shall be at the rate 50 set forth in the following schedule, with a credit allowed against such 51 tax for any tax previously paid to this state pursuant to this section, 52 provided such credit shall not exceed the amount of tax imposed by this 53 section: 54 If the amount of New York 55 taxable gifts is: The tax is: 56 Not over $750,000 0% of taxable giftsS. 2782 11 1 Over $750,000 but not over $0 plus 5% of excess over $750,000 2 $1,500,000 3 Over $1,500,000 but not over $37,500 plus 15% of excess over 4 $3,000,000 $1,500,000 5 Over $3,000,000 but not over $262,500 plus 30% of excess over 6 $6,000,000 $3,000,000 7 Over $6,000,000 but not over $1,162,500 plus 40% of excess 8 $30,000,000 over $6,000,000 9 Over $30,000,000 $10,762,500 plus 50% of excess over 10 $30,000,000 11 § 1003. Administration. The commissioner shall promulgate rules and 12 regulations necessary and appropriate to effectuate the provisions of 13 this article, including the establishment of deadlines and procedures 14 for the filing of gift tax returns by any resident or nonresident of 15 this state who gave New York taxable gifts during a taxable year. 16 § 10. This act shall take effect immediately.
