Bill Text: NY S08991 | 2017-2018 | General Assembly | Amended
Bill Title: Relates to the definitions of the terms "CFC income" and "entire net income"; provides that exempt CFC income shall include income required to be included in a taxpayer's federal gross income pursuant to subsection (a) of section 951A of the internal revenue code; excludes the amount of any federal deduction allowed pursuant to section 250(a)(1)(B)(i) of the IRC from being included in the calculation of entire net income.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2018-06-19 - referred to ways and means [S08991 Detail]
Download: New_York-2017-S08991-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 8991--A IN SENATE June 11, 2018 ___________ Introduced by Sen. FLANAGAN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law and the administrative code of the city of New York, in relation to the definitions of the terms "CFC income" and "entire net income" The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph (b) of subdivision 6-a of section 208 of the tax 2 law, as amended by section 1 of part KK of chapter 59 of the laws of 3 2018, is amended to read as follows: 4 (b) "Exempt CFC income" means (i) except to the extent described in 5 subparagraph (ii) of this paragraph, the income required to be included 6 in the taxpayer's federal gross income pursuant to subsection (a) of 7 section 951 of the internal revenue code, received from a corporation 8 that is conducting a unitary business with the taxpayer but is not 9 included in a combined report with the taxpayer, and (ii) such income 10 required to be included in the taxpayer's federal gross income pursuant 11 to subsection (a) of such section 951 of the internal revenue code by 12 reason of subsection (a) of section 965 of the internal revenue code, as 13 adjusted by subsection (b) of section 965 of the internal revenue code, 14 and without regard to subsection (c) of such section, received from a 15 corporation that is not included in a combined report with the taxpayer, 16 less, and (iii) such income required to be included in the taxpayer's 17 federal gross income pursuant to subsection (a) of section 951A of the 18 internal revenue code, without regard to the deduction under section 250 19 of the internal revenue code, received from a corporation that is not 20 included in a combined report with the taxpayer, less, (iv) in the 21 discretion of the commissioner, any interest deductions directly or 22 indirectly attributable to that income. In lieu of subtracting from its 23 exempt CFC income the amount of those interest deductions, the taxpayer 24 may make a revocable election to reduce its total exempt CFC income by 25 forty percent. If the taxpayer makes this election, the taxpayer must EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD16215-03-8S. 8991--A 2 1 also make the elections provided for in paragraph (b) of subdivision six 2 of this section and paragraph (c) of this subdivision. If the taxpayer 3 subsequently revokes this election, the taxpayer must revoke the 4 elections provided for in paragraph (b) of subdivision six of this 5 section and paragraph (c) of this subdivision. A taxpayer which does not 6 make this election because it has no exempt CFC income will not be 7 precluded from making those other elections. The income described in 8 [subparagraph] subparagraphs (ii) and (iii) of this paragraph shall not 9 constitute investment income. 10 § 2. Paragraph (b) of subdivision 9 of section 208 of the tax law is 11 amended by adding a new subparagraph 25 to read as follows: 12 (25) The amount of any federal deduction allowed pursuant to section 13 250(a)(1)(B)(i) of the internal revenue code. 14 § 3. Paragraph (b) of subdivision 5-a of section 11-652 of the admin- 15 istrative code of the city of New York, as amended by section 1-a of 16 part KK of chapter 59 of the laws of 2018, is amended to read as 17 follows: 18 (b) "Exempt CFC income" means (i) except to the extent described in 19 subparagraph (ii) of this paragraph, the income required to be included 20 in the taxpayer's federal gross income pursuant to subsection (a) of 21 section 951 of the internal revenue code, received from a corporation 22 that is conducting a unitary business with the taxpayer but is not 23 included in a combined report with the taxpayer, and (ii) such income 24 required to be included in the taxpayer's federal gross income pursuant 25 to subsection (a) of such section 951 of the internal revenue code by 26 reason of subsection (a) of section 965 of the internal revenue code, as 27 adjusted by subsection (b) of section 965 of the internal revenue code, 28 and without regard to subsection (c) of such section, received from a 29 corporation that is not included in a combined report with the taxpayer, 30 less, and (iii) such income required to be included in the taxpayer's 31 federal gross income pursuant to subsection (a) of section 951A of the 32 internal revenue code, without regard to the deduction under section 250 33 of the internal revenue code, received from a corporation that is not 34 included in a combined report with the taxpayer, less, (iv) in the 35 discretion of the commissioner of finance, any interest deductions 36 directly or indirectly attributable to that income. In lieu of 37 subtracting from its exempt CFC income the amount of those interest 38 deductions, the taxpayer may make a revocable election to reduce its 39 total exempt CFC income by forty percent. If the taxpayer makes this 40 election, the taxpayer must also make the elections provided for in 41 paragraph (b) of subdivision five of this section and paragraph (c) of 42 this subdivision. If the taxpayer subsequently revokes this election, 43 the taxpayer must revoke the elections provided for in paragraph (b) of 44 subdivision five of this section and paragraph (c) of this subdivision. 45 A taxpayer which does not make this election because it has no exempt 46 CFC income will not be precluded from making those other elections. The 47 income described in [subparagraph] subparagraphs (ii) and (iii) of this 48 paragraph shall not constitute investment income. 49 § 4. Paragraph (b) of subdivision 8 of section 11-652 of the adminis- 50 trative code of the city of New York is amended by adding a new subpara- 51 graph 22 to read as follows: 52 (22) The amount of any federal deduction allowed pursuant to section 53 250(a)(1)(B)(i) of the internal revenue code. 54 § 5. Paragraph 1 of subdivision (b) of section 1503 of the tax law is 55 amended by adding a new subparagraph (T) to read as follows:S. 8991--A 3 1 (T) To the extent not excluded from income pursuant to subparagraph 2 (A) of this paragraph, the income required to be included in the taxpay- 3 er's federal gross income pursuant to subsection (a) of section 951A of 4 the internal revenue code, without regard to the deduction under section 5 250 of the internal revenue code, that is generated by a corporation 6 that is not included in a combined report with the taxpayer. 7 § 6. Paragraph 2 of subdivision (b) of section 1503 of the tax law is 8 amended by adding a new subparagraph (Y) to read as follows: 9 (Y) The amount of the federal deduction allowed pursuant to subpara- 10 graph (B)(i) of paragraph one of subsection (a) of section 250 of the 11 internal revenue code. 12 § 7. Subparagraph (H) of paragraph 2 of subdivision (b) of section 13 1503 of the tax law, as amended by section 4-e of part KK of chapter 59 14 of the laws of 2018, is amended to read as follows: 15 (H) in the discretion of the commissioner, any amount of interest 16 directly or indirectly and any other amount directly attributable as a 17 carrying charge or otherwise to subsidiary capital or to income, gains 18 or losses from subsidiary capital, or to the income described in 19 [subparagraph] subparagraphs (S) and (T) of paragraph one of this subdi- 20 vision; 21 § 8. This act shall take effect immediately and shall apply to taxable 22 years beginning on or after January 1, 2018.
