Bill Text: NY A00604 | 2019-2020 | General Assembly | Introduced
Bill Title: Repeals chapter 5 of the laws of 1999 and authorizes a city having a population of one million or more to impose the city earnings tax on nonresidents.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - referred to ways and means [A00604 Detail]
Download: New_York-2019-A00604-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 604 2019-2020 Regular Sessions IN ASSEMBLY (Prefiled) January 9, 2019 ___________ Introduced by M. of A. L. ROSENTHAL -- read once and referred to the Committee on Ways and Means AN ACT to amend the general city law and the tax law, in relation to imposing the earnings tax on nonresidents and to repeal chapter 5 of the laws of 1999, amending the tax law and the general city law relat- ing to the definition of nonresident for the purpose of imposing the earnings tax on nonresidents and to repeal such tax in the event of certain judicial determinations relating thereto The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Chapter 5 of the laws of 1999, amending the tax law and the 2 general city law relating to the definition of nonresident for the 3 purpose of imposing the earnings tax on nonresidents and to repeal such 4 tax in the event of certain judicial determinations, is REPEALED. 5 § 2. The general city law is amended by adding a new article 2-E to 6 read as follows: 7 ARTICLE 2-E 8 CITY EARNINGS TAX ON NONRESIDENTS 9 Section 25-m. Authorization to impose tax. 10 25-n. Administrative provisions. 11 25-o. Deposit and disposition of revenues. 12 § 25-m. Authorization to impose tax. In addition to any other taxes, 13 now authorized by law, any city having a population of one million or 14 more is hereby authorized and empowered to adopt and amend local laws 15 imposing a tax on the earnings of nonresidents of such city to be admin- 16 istered in the manner provided for in this article by the administrator 17 as defined in section one of the model local law hereinafter set forth. 18 The tax authorized by this article may be imposed only if the city 19 imposing the tax authorized by this article also imposes a tax on the 20 personal income of its residents. The rates of such tax shall be the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04620-01-9A. 604 2 1 rates contained in either section two or two-A of the model local law 2 and such rates may be reduced and increased, provided that the rates 3 shall not be fixed higher than those contained in section two-A of such 4 model local law. 5 The terms of such local law shall be substantially the same as the 6 following model local law except that the appendix and the supplement to 7 the appendix in such local law may be amended for the purpose of 8 conforming it with the United States internal revenue code or other 9 federal laws relating to taxation as presently in effect or as they may 10 be amended. 11 EARNINGS TAX ON NONRESIDENTS 12 Sec. 1. Meaning of terms.--As used in this local law, the following 13 terms shall mean and include: (a) "Administrator" means the finance 14 administrator or other fiscal officer of the city charged with adminis- 15 tration of the tax on earnings of nonresidents imposed by this local 16 law, except with respect to taxes imposed for any taxable year beginning 17 on or after January first, nineteen hundred seventy-six, such term shall 18 mean state tax commission. 19 (b) "City" means the city imposing the tax. 20 (c) "Payroll period" and "employer" shall mean the same as payroll 21 period and employer as defined in subsections (b) and (d) of section 22 thirty-four hundred one of the internal revenue code, and "employee" 23 shall also include all those included as employees in subsection (c) of 24 such section of such code. 25 (d) "Wages" shall mean wages as defined in subsection (a) of section 26 thirty-four hundred one of the internal revenue code, except that (1) 27 wages shall not include payments for active service as a member of the 28 armed forces of the United States and shall not include, in the case of 29 a nonresident individual or partner of a partnership doing an insurance 30 business as a member of the New York insurance exchange described in 31 section six thousand two hundred one of the insurance law, any item of 32 income, gain, loss or deduction of such business which is such individ- 33 ual's distributive or pro rata share for federal income tax purposes or 34 which such individual is required to take into account separately for 35 federal income tax purposes and (2) wages shall include (i) the amount 36 of member or employee contributions to a retirement system or pension 37 fund picked up by the employer pursuant to subdivision f of section five 38 hundred seventeen or subdivision d of section six hundred thirteen of 39 the retirement and social security law or section 13-225.1, 13-327.1, 40 13-125.1, 13-125.2 or 13-521.1 of title thirteen of the administrative 41 code of the city of New York or subdivision nineteen of section twenty- 42 five hundred seventy-five of the education law, (ii) the amount deducted 43 or deferred from an employee's salary under a flexible benefits program 44 established pursuant to section twenty-three of the general municipal 45 law or section twelve hundred ten-a of the public authorities law, (iii) 46 the amount by which an employee's salary is reduced pursuant to the 47 provisions of subdivision b of section 12-126.1 and subdivision b of 48 section 12-126.2 of the administrative code of the city of New York, and 49 (iv) the amount of member or employee contributions to a retirement 50 system or pension fund picked up or paid by the employer for members of 51 the Manhattan and Bronx surface transportation authority pension plan 52 and treated as employer contributions in determining income tax treat- 53 ment under section 414(h) of the Internal Revenue Code. 54 (e) "Net earnings from self-employment" shall mean the same as net 55 earnings from self-employment as defined in subsection (a) of section 56 fourteen hundred two of the internal revenue code, except that theA. 604 3 1 deduction for wages and salaries paid or incurred for the taxable year 2 which is not allowed pursuant to section two hundred eighty-C of such 3 code shall be allowed, and except that an estate or trust shall be 4 deemed to have net earnings from self-employment determined in the same 5 manner as if it were an individual subject to the tax on self-employment 6 income imposed by section fourteen hundred one of the internal revenue 7 code diminished by (1) the amount of any deduction allowed by subsection 8 (c) of section six hundred forty-two of the internal revenue code and 9 (2) the deductions allowed by sections six hundred fifty-one and six 10 hundred sixty-one of said code to the extent that they represent 11 distributions or payments to a resident of the city. However, "trade or 12 business" as used in subsection (a) of section fourteen hundred two of 13 such code shall mean the same as trade or business as defined in 14 subsection (c) of section fourteen hundred two of such code, except that 15 paragraphs (4), (5) and (6) of such subsection shall not apply in deter- 16 mining net earnings from self-employment taxable under this local law. 17 Provided however, in the case of a nonresident individual or partner of 18 a partnership doing an insurance business described in section six thou- 19 sand two hundred one of the insurance law, any item of income, gain, 20 loss or deduction of such business which is the individual's distribu- 21 tive or pro rata share for federal income tax purposes or which the 22 individual is required to take into account separately for federal 23 income tax purposes shall not be considered to be "net earnings from 24 self-employment". 25 (f) "Taxable year" shall mean the taxpayer's taxable year for federal 26 income tax purposes. 27 (g) Resident individual.--A resident individual means an individual: 28 (1) who is domiciled in the city, unless (A) he or she maintains no 29 permanent place of abode in the city, maintains a permanent place of 30 abode elsewhere, and spends in the aggregate not more than thirty days 31 of the taxable year in the city, or (B) (i) within any period of five 32 hundred forty-eight consecutive days he or she is present in a foreign 33 country or countries for at least four hundred fifty days, and (ii) 34 during such period of five hundred forty-eight consecutive days he or 35 she is not present in the city for more than ninety days and does not 36 maintain a permanent place of abode in the city at which his spouse 37 (unless such spouse is legally separated) or minor children are present 38 for more than ninety days, and (iii) during any period of less than 39 twelve months, which would be treated as a separate taxable period based 40 on a change of resident status, and which period is contained within 41 such period of five hundred forty-eight consecutive days, he or she is 42 present in the city for a number of days which does not exceed an amount 43 which bears the same ratio to ninety as the number of days contained in 44 such period of less than twelve months bears to five hundred forty- 45 eight, or 46 (2) who is not domiciled in the city but maintains a permanent place 47 of abode in the city and spends in the aggregate more than one hundred 48 eighty-three days of the taxable year in the city, unless such individ- 49 ual is in active service in the armed forces of the United States. 50 (h) Nonresident individual.--A nonresident individual means an indi- 51 vidual who is not a resident. 52 (i) Resident estate or trust.--A resident estate or trust means: (1) 53 the estate of a decedent who at his or her death was domiciled in the 54 city,A. 604 4 1 (2) a trust, or a portion of a trust, consisting of property trans- 2 ferred by will of a decedent who at his or her death was domiciled in 3 the city, or 4 (3) a trust, or portion of a trust, consisting of the property of: 5 (A) a person domiciled in the city at the time such property was 6 transferred to the trust, if such trust or portion of a trust was then 7 irrevocable, or if it was then revocable and has not subsequently become 8 irrevocable; or 9 (B) a person domiciled in the city at the time such trust, or portion 10 of a trust, became irrevocable, if it was revocable when such property 11 was transferred to the trust but has subsequently become irrevocable. 12 For the purposes of the foregoing, a trust or portion of a trust is 13 revocable if it is subject to a power, exercisable immediately or at any 14 future time, to revest title in the person whose property constitutes 15 such trust or portion of a trust, and a trust or portion of a trust 16 becomes irrevocable when the possibility that such power may be exer- 17 cised has been terminated. 18 (j) Nonresident estate or trust.--A nonresident estate or trust means 19 an estate or trust which is not a resident. 20 (k) Unless a different meaning is clearly required, any term used in 21 this local law shall have the same meaning as when used in a comparable 22 context in the laws of the United States relating to federal taxes but 23 such meaning shall be subject to the exceptions or modifications 24 prescribed in or pursuant to the laws of this state. Any reference in 25 this local law to the internal revenue code, the internal revenue code 26 of nineteen hundred eighty-six or to the laws of the United States shall 27 mean the provisions of the internal revenue code of nineteen hundred 28 eighty-six (unless a reference to the internal revenue code of nineteen 29 hundred fifty-four is clearly intended), and amendments thereto, and 30 other provisions of the laws of the United States relating to federal 31 taxes, as the same are included in this local law as an appendix and 32 supplement to the appendix or as included by reference to an appendix 33 and supplement to the appendix of a title enacted by the same local law 34 as enacts this local law. (The quotation of the aforesaid laws of the 35 United States is intended to make them a part of this local law and to 36 avoid constitutional uncertainties which might result if such laws were 37 merely incorporated by reference. The quotation of a provision of the 38 federal internal revenue code or of any other law of the United States 39 shall not necessarily mean that it is applicable to or has relevance to 40 this local law.) 41 (l) The term "partnership" shall include, unless a different meaning 42 is clearly required, a subchapter K limited liability company. The term 43 "subchapter K limited liability company" shall mean a limited liability 44 company classified as a partnership for federal income tax purposes. 45 The term "limited liability company" means a domestic limited liabil- 46 ity company or a foreign limited liability company, as defined in 47 section one hundred two of the limited liability company law, a limited 48 liability investment company formed pursuant to section five hundred 49 seven of the banking law, or a limited liability trust company formed 50 pursuant to section one hundred two-a of the banking law. 51 Sec. 2. Persons subject to tax.--(a) Imposition of tax.--A tax is 52 hereby imposed for each taxable year ending on or after July first, 53 nineteen hundred sixty-six on the wages earned, and net earnings from 54 self-employment, within the city, of every nonresident individual, 55 estate and trust which shall comprise: 56 (1) A tax at the rate of one-fourth of one percent on all wages.A. 604 5 1 (2) A tax at the rate of three-eighths of one percent on all net 2 earnings from self-employment. 3 (b) Exclusion.--(1) In computing the amount of wages and net earn- 4 ings from self-employment taxable under subsection (a), there shall be 5 allowed an exclusion against the total of wages and net earnings from 6 self-employment in accordance with the following table: 7 Total of Wages and Net Earnings 8 From Self-Employment Exclusion Allowable 9 Not Over $10,000 $3,000 10 Over $10,000 But Not Over $20,000 $2,000 11 Over $20,000 But Not Over $30,000 $1,000 12 Over $30,000 NONE 13 (2) The exclusion allowable shall be applied pro rata against wages 14 and net earnings from self-employment. 15 (3) For taxable periods of less than one year, the exclusion allow- 16 able shall be prorated pursuant to regulations of the administrator. 17 (c) Limitation.--In no event shall a taxpayer be subject to the tax 18 under this local law in an amount greater than he or she would be 19 required to pay if he or she were a resident of the city and subject to 20 a tax on personal income of residents of the city adopted by the city 21 pursuant to authority granted by the general city law. 22 Sec. 2-A. Persons subject to tax.--(a) Imposition of tax.--(1) A tax 23 is hereby imposed for each taxable year ending on or after July first, 24 nineteen hundred sixty-six and on or before December thirty-first, nine- 25 teen hundred seventy and for each taxable year beginning after December 26 thirty-first, nineteen hundred ninety-nine, on the wages earned, and net 27 earnings from self-employment, within the city, of every nonresident 28 individual, estate and trust which shall comprise: 29 (i) A tax at the rate of one-fourth of one percent on all wages. 30 (ii) A tax at the rate of three-eighths of one percent on all net 31 earnings from self-employment. 32 (2) For each taxable year beginning on or after January first, nine- 33 teen hundred seventy-one and ending on or before December thirty-first, 34 nineteen hundred ninety-nine, a tax is hereby imposed on the wages 35 earned, and net earnings from self-employment, within the city, of every 36 nonresident individual, estate and trust which shall comprise: 37 (i) A tax at the rate of forty-five hundredths of one percent on all 38 wages. 39 (ii) A tax at the rate of sixty-five hundredths of one percent on all 40 net earnings from self-employment. 41 (3) For each taxable year beginning in nineteen hundred seventy and 42 ending in nineteen hundred seventy-one, two tentative taxes shall be 43 computed, the first as provided in paragraph (1) and the second as 44 provided in paragraph (2), and the tax for each such year shall be the 45 sum of that proportion of each tentative tax which the number of days in 46 nineteen hundred seventy and the number of days in nineteen hundred 47 seventy-one, respectively, bears to the number of days in the entire 48 taxable year. 49 (4) For each taxable year beginning in nineteen hundred ninety-nine 50 and ending in two thousand, two tentative taxes shall be computed, the 51 first as provided in paragraph (2) and the second as provided in para- 52 graph (1), and the tax for each such year shall be the sum of that 53 proportion of each tentative tax which the number of days in nineteen 54 hundred ninety-nine and the number of days in two thousand, respective- 55 ly, bears to the number of days in the entire taxable year.A. 604 6 1 (b) Exclusion.--(1) In computing the amount of wages and net earnings 2 from self-employment taxable under subsection (a), there shall be 3 allowed an exclusion against the total of wages and net earnings from 4 self-employment in accordance with the following table: 5 Total of Wages and Net Earnings 6 From Self-Employment Exclusion Allowable 7 Not Over $10,000 $3,000 8 Over $10,000 But Not Over $20,000 $2,000 9 Over $20,000 But Not Over $30,000 $1,000 10 Over $30,000 NONE 11 (2) The exclusion allowable shall be applied pro rata against wages 12 and net earnings from self-employment. 13 (3) For taxable periods of less than one year, the exclusion allowable 14 shall be prorated pursuant to regulations of the administrator. 15 (c) Limitation.--In no event shall a taxpayer be subject to the tax 16 under this local law in an amount greater than he or she would be 17 required to pay if he or she were a resident of the city and subject to 18 a tax on personal income of residents of the city adopted by the city 19 pursuant to authority granted by the general city law or the tax law. 20 Sec. 3. Taxable years to which tax imposed by this local law applies; 21 tax for taxable years beginning prior to and ending after July first, 22 nineteen hundred sixty-six.--(a) General.-- The tax imposed by this 23 local law is imposed for each taxable year beginning with taxable years 24 ending on or after July first, nineteen hundred sixty-six. 25 (b) Alternate methods for determining tax for taxable years ending on 26 or after July first, nineteen hundred sixty-six.-- (1) The tax for any 27 taxable year ending on or after July first, nineteen hundred sixty-six 28 and on or before June thirtieth, nineteen hundred sixty-seven, shall be 29 the same part of the tax which would have been imposed had this local 30 law been in effect for the entire taxable year as the number of months 31 (or major portions thereof) of the taxable year occurring after July 32 first, nineteen hundred sixty-six is of the number of months (or major 33 portions thereof) in the taxable year. 34 (2) (i) In lieu of the method of computation of tax prescribed in 35 paragraph (1), if the taxpayer maintains adequate records for any taxa- 36 ble year ending on or after July first, nineteen hundred sixty-six and 37 on or before June thirtieth, nineteen hundred sixty-seven, the tax for 38 such taxable year, at the election of the taxpayer, may be computed on 39 the basis of the wages which the taxpayer would have reported had he or 40 she filed a federal income tax return for a taxable year beginning July 41 first, nineteen hundred sixty-six and ending with the close of such 42 taxable year ending on or before June thirtieth, nineteen hundred 43 sixty-seven, and the net earnings from self-employment which the taxpay- 44 er would have reported for federal income tax purposes had he or she 45 filed a self-employment tax return for a taxable year beginning July 46 first, nineteen hundred sixty-six and ending with the close of such 47 taxable year ending on or before June thirtieth, nineteen hundred 48 sixty-seven. 49 (ii) For purposes of this paragraph, the exclusions allowable under 50 section two shall be reduced by a fraction the numerator of which is the 51 number of months (or major portions thereof) of the taxable year occur- 52 ring before July first, nineteen hundred sixty-six and the denominator 53 of which is the number of months (or major portions thereof) in the 54 taxable year. Except as provided in this paragraph, the tax for such 55 period ending on or before June thirtieth, nineteen hundred sixty-seven,A. 604 7 1 shall be computed in accordance with the other provisions of this local 2 law. 3 Sec. 4. Allocation to the city.--(a) General.-- If net earnings from 4 self-employment are derived from services performed, or from sources, 5 within and without the city, there shall be allocated to the city a fair 6 and equitable portion of such earnings. 7 (b) Allocation of net earnings from self-employment.--(1) Place of 8 business.-- If a taxpayer has no regular place of business outside the 9 city all of his net earnings from self-employment shall be allocated to 10 the city. 11 (2) Allocation by taxpayer's books.-- The portion of net earnings 12 from self-employment allocable to the city may be determined from the 13 books and records of a taxpayer's trade or business, if the methods used 14 in keeping such books and the accuracy thereof are approved by the 15 administrator as fairly and equitably reflecting net earnings from self- 16 employment within the city. 17 (3) Allocation by formula.-- If paragraph (2) does not apply to the 18 taxpayer, the portion of net earnings from self-employment allocable to 19 the city shall be determined by multiplying (A) net earnings from self- 20 employment within and without the city, by (B) the average of the 21 following three percentages: 22 (i) Property percentage. The percentage computed by dividing (A) the 23 average of the value, at the beginning and end of the taxable year, of 24 real and tangible personal property connected with the net earnings from 25 self-employment and located within the city, by (B) the average of the 26 value, at the beginning and end of the taxable year, of all real and 27 tangible personal property connected with the net earnings from self-em- 28 ployment and located both within and without the city. For this 29 purpose, real property shall include real property, whether owned or 30 rented. 31 (ii) Payroll percentage. The percentage computed by dividing (A) the 32 total wages, salaries and other personal service compensation paid or 33 incurred during the taxable year to employees in connection with the net 34 earnings from self-employment derived from a trade or business carried 35 on within the city, by (B) the total of all wages, salaries and other 36 personal service compensation paid or incurred during the taxable year 37 to employees in connection with the net earnings from self-employment 38 derived from a trade or business carried on both within and without the 39 city. 40 (iii) Gross income percentage. The percentage computed by dividing 41 (A) the gross sales or charges for services performed by or through an 42 agency located within the city, by (B) the total of all gross sales or 43 charges for services performed within and without the city. The sales 44 or charges to be allocated to the city shall include all sales negoti- 45 ated or consummated, and charges for services performed, by an employee, 46 agent, agency or independent contractor chiefly situated at, connected 47 by contract or otherwise with, or sent out from, offices or other agen- 48 cies of the trade or business from which a taxpayer is deriving net 49 earnings from self-employment, situated within the city. 50 (c) Other allocation methods.-- The portion of net earnings from self- 51 employment allocable to the city shall be determined in accordance with 52 rules and regulations of the administrator if it shall appear to the 53 administrator that the net earnings from self-employment are not fairly 54 and equitably reflected under the provisions of subsection (b). 55 (d) Special rules for real estate.-- Income and deductions from the 56 rental of real property and gain and loss from the sale, exchange orA. 604 8 1 other disposition of real property, shall not be subject to allocation 2 under subsection (b) or (c), but shall be considered as entirely derived 3 from or connected with the place in which such property is located. 4 Sec. 5. Accounting periods and methods.--(a) Accounting periods.-- A 5 taxpayer's taxable year under this local law shall be the same as his 6 taxable year for federal income tax purposes. 7 (b) Change of accounting periods.--If a taxpayer's taxable year is 8 changed for federal income tax purposes, his or her taxable year for 9 purposes of this local law shall be similarly changed. If a taxable 10 period of less than twelve months results from a change of taxable year, 11 the exclusion allowable under section two or two-A of this local law 12 shall be prorated under regulations of the administrator. 13 (c) Accounting methods.--A taxpayer's method of accounting under this 14 section shall be the same as his or her method of accounting for federal 15 income tax purposes. In the absence of any method of accounting for 16 federal income tax purposes, net earnings from self-employment within 17 the city shall be computed under such method as in the opinion of the 18 administrator clearly reflects net earnings from self-employment within 19 the city. 20 (d) Change of accounting methods.--(1) If a taxpayer's method of 21 accounting is changed for federal income tax purposes, his method of 22 accounting for purposes of this local law shall be similarly changed. 23 (2) If a taxpayer's method of accounting is changed, other than from 24 an accrual to an installment method, any additional tax which results 25 from adjustments determined to be necessary solely by reason of the 26 change shall not be greater than if such adjustments were ratably allo- 27 cated and included for the taxable year of the change and the preceding 28 taxable years, beginning after July first, nineteen hundred sixty-six, 29 not in excess of two, during which the taxpayer used the method of 30 accounting from which the change is made. 31 (3) If a taxpayer's method of accounting is changed from an accrual 32 to an installment method, any additional tax for the year of such change 33 of method and for any subsequent year which is attributable to the 34 receipt of installment payments properly accrued in a prior year, shall 35 be reduced by the portion of tax for any prior taxable year attributable 36 to the accrual of such installment payments, in accordance with regu- 37 lations of the administrator. 38 Sec. 8. Withholding of tax on wages.--General.--On or after the first 39 payroll period beginning forty-five days after the date this local law 40 becomes effective every employer maintaining an office or transacting 41 business within this state and making payment of any wages taxable under 42 this local law shall deduct and withhold from such wages for each 43 payroll period a tax computed in such manner as to result, so far as 44 practicable, in withholding from the employee's wages during each calen- 45 dar year an amount substantially equivalent to the tax reasonably esti- 46 mated to be due from the employee under this local law. The method of 47 determining the amount to be withheld shall be prescribed by regulations 48 of the administrator. 49 Sec. 8-A. Withholding of tax on wages for taxable periods commencing 50 on or after January first, nineteen hundred seventy-six.--The provisions 51 contained in sections eight, nine, ten, eleven, twelve and thirteen of 52 this local law shall not be applicable to taxes imposed for taxable 53 periods commencing on or after January first, nineteen hundred seventy- 54 six provided however, with respect to such periods, the provisions 55 contained in part five of article twenty-two of the tax law shall be 56 applicable with the same force and effect as if those provisions hadA. 604 9 1 been incorporated in full in this section except where inconsistent with 2 the provisions of this article, except that the term "aggregate amount" 3 contained in paragraphs one, two and three of subsection (a) of section 4 six hundred seventy-four of the tax law shall mean the aggregate of the 5 aggregate amounts of New York state personal income tax, city earnings 6 tax on nonresidents and city personal income tax on residents authorized 7 pursuant to article thirty of the tax law required to be deducted and 8 withheld and provided, however, that the provisions of such paragraphs 9 shall not be applicable to employer's returns required to be filed with 10 respect to taxes required to be deducted and withheld during the calen- 11 dar year nineteen hundred seventy-six, but such returns shall be 12 required to be filed with the commissioner of taxation and finance at 13 the times and in the manner provided for in subsection (a) of section 14 eleven of this local law, except the term "administrator" in such 15 subsection shall be read as "commissioner of taxation and finance." 16 Sec. 9. Information statement for employee.--Every employer required 17 to deduct and withhold tax under this local law from the wages of an 18 employee, shall furnish to each such employee in respect of the wages 19 paid by such employer to such employee during the calendar year on or 20 before February fifteenth of the succeeding year, or, if his or her 21 employment is terminated before the close of such calendar year, within 22 thirty days from the date on which the last payment of the wages is 23 made, a written statement as prescribed by the administrator showing the 24 total amount of wages paid by the employer to the employee, the amount 25 of wages paid for services performed within the city, the amount 26 deducted and withheld as tax, and such other information as the adminis- 27 trator may prescribe. 28 Sec. 10. Credit for tax withheld.--Wages upon which tax is required 29 to be withheld shall be taxable under this local law as if no withhold- 30 ing were required, but any amount of tax actually deducted and withheld 31 under this local law in any calendar year shall be deemed to have been 32 paid on behalf of the employee from whom withheld, and such employee 33 shall be credited with having paid that amount of tax in such calendar 34 year. For a taxable year of less than twelve months, the credit shall 35 be made under regulations of the administrator. 36 Sec. 11. Employer's return and payment of withheld taxes.--(a) Gener- 37 al.--On or after the first payroll period beginning forty-five days 38 after the effective date of this local law, every employer required to 39 deduct and withhold tax under this local law shall, for each calendar 40 month, on or before the fifteenth day of the month following the close 41 of such calendar month file a withholding return as prescribed by the 42 administrator and pay over to the administrator or to the depository 43 designated by the administrator, the taxes so required to be deducted 44 and withheld, except that for the month of December in any year the 45 returns shall be filed and the taxes paid on or before January thirty- 46 first of the succeeding year. Where the aggregate amount required to be 47 deducted and withheld by any employer under this local law and under any 48 local law imposing a tax on personal income of residents of the city 49 adopted by the city pursuant to authority granted by the general city 50 law is less than twenty-five dollars in a calendar month and the aggre- 51 gate of such taxes for the semi-annual period ending on June thirtieth 52 and December thirty-first can reasonably be expected to be less than one 53 hundred fifty dollars, the administrator may, by regulation, permit an 54 employer to file a return on or before July thirty-first for the semi- 55 annual period ending on June thirtieth and on or before January thirty- 56 first for the semi-annual period ending on December thirty-first. TheA. 604 10 1 administrator may, if he or she believes such action necessary for the 2 protection of the revenues, require any employer to make a return and 3 pay to him the tax deducted and withheld at any time, or from time to 4 time. Where the amount of wages paid by an employer is not sufficient 5 under this local law and under any local law imposing a tax on personal 6 income of residents of the city adopted by the city pursuant to authori- 7 ty granted by the general city law to require the withholding of tax 8 from the wages of any of his or her employees, the administrator may, by 9 regulation, permit such employer to file an annual return on or before 10 February twenty-eighth of the following calendar year. 11 (b) Combined returns.--The administrator may by regulation provide 12 for the filing of one return which shall include the return required to 13 be filed under this section, together with the employer's return 14 required to be filed under any local law imposing a tax on personal 15 income of residents of the city adopted by the city pursuant to authori- 16 ty granted by the general city law. 17 (c) Deposit in trust for city.--Whenever any employer fails to 18 collect, truthfully account for, pay over the tax, or make returns of 19 the tax as required in this section, the administrator may serve a 20 notice requiring such employer to collect the taxes which become collec- 21 tible after service of such notice, to deposit such taxes in a bank 22 approved by the administrator, in a separate account, in trust for the 23 city and payable to the administrator, and to keep the amount of such 24 tax in such account until payment over to the administrator. Such 25 notice shall remain in effect until a notice of cancellation is served 26 by the administrator. 27 Sec. 12. Employer's liability for withheld taxes.--Every employer 28 required to deduct and withhold the tax under this local law is hereby 29 made liable for such tax. For purposes of assessment and collection, 30 any amount required to be withheld and paid over to the administrator, 31 and any additions to tax, penalties and interest with respect thereto 32 shall be considered the tax of the employer. Any amount of tax actually 33 deducted and withheld under this local law shall be held to be a special 34 fund in trust for the city. 35 No employee shall have any right of action against his or her employer 36 in respect to any monies deducted and withheld from his or her wages and 37 paid over to the administrator in compliance or in intended compliance 38 with this local law. 39 Sec. 13. Employer's failure to withhold.--If an employer fails to 40 deduct and withhold the tax, as required, and thereafter the tax against 41 which such tax may be credited is paid, the tax so required to be 42 deducted and withheld shall not be collected from the employer, but the 43 employer shall not be relieved from liability for any penalties, inter- 44 est or additions to the tax otherwise applicable in respect of such 45 failure to deduct and withhold. 46 Sec. 14. Returns and payment of tax.--On or before the fifteenth day 47 of the fourth month following the close of the taxable year, every 48 person subject to the tax shall make and file a return and any balance 49 of the tax shown due on the face of such return shall be paid therewith. 50 The administrator may, by regulation, provide for the filing of returns 51 and payment of the tax at such other times as he or she deems necessary 52 for the proper enforcement of this local law. The administrator may 53 also provide by regulation that any return otherwise required to be made 54 and filed under this local law by any nonresident individual need not be 55 made and filed if such nonresident individual had, during the taxable 56 year to which the return would relate, no net earnings from self-employ-A. 604 11 1 ment within the city. Any regulation allowing such waiver of return may 2 provide for additional limitations on and conditions and prerequisites 3 to the privilege of not filing a return. 4 Sec. 14-A. Combined returns, employer's returns and payments.--The 5 state tax commission may require: 6 (1) The filing of any or all of the following: 7 (A) A combined return which in addition to the return provided for in 8 a local law authorized by this article may also include returns required 9 to be filed under a local law authorized by article thirty of the tax 10 law and under article twenty-two of the tax law. 11 (B) A combined employer's return which in addition to the employer's 12 return provided for in a local law authorized by this article may also 13 include employer's returns required to be filed under a local law 14 authorized by article thirty of the tax law and under article twenty-two 15 of the tax law. 16 (2) Where a combined return or employer's return is required, and with 17 respect to the payment of estimated tax, the state tax commission may 18 also require payment of a single amount which shall be the total of the 19 amounts (total taxes less any credits or refunds) required to be paid 20 with the returns or employer's returns or in payment of estimated tax 21 pursuant to the provisions of local laws imposed under the authority of 22 this article, article thirty of the tax law and pursuant to the 23 provisions of article twenty-two of the tax law. 24 Sec. 15. Effect of invalidity in part; inconsistencies with other 25 laws.--(a) If any clause, sentence, paragraph, subsection, section, 26 provision or other portion of this local law or the application thereof 27 to any person or circumstances shall be held to be invalid, such holding 28 shall not affect, impair or invalidate the remainder of this local law 29 or the application of such portion held invalid, to any other person or 30 circumstances, but shall be confined in its operation to the clause, 31 sentence, paragraph, subsection, section, provision or other portion 32 thereof directly involved in such holding or to the person and circum- 33 stances therein involved. 34 (b) If any provision of this local law is inconsistent with, in 35 conflict with, or contrary to any other provision of law, such provision 36 of this local law shall prevail over such other provision and such other 37 provision shall be deemed to have been amended, superseded or repealed 38 to the extent of such inconsistency, conflict or contrariety. 39 § 25-n. Administrative provisions. (a) General. Any local law adopted 40 pursuant to this article shall also contain provisions necessary and 41 appropriate for the collection and the administration of the tax herein 42 authorized, except that with respect to any taxable year beginning in 43 nineteen hundred seventy, until and including the thirty-first day of 44 December, nineteen hundred seventy-one, any local law adopted pursuant 45 to this article shall contain the same provisions as are contained in 46 chapter nineteen of title eleven of the administrative code of the city 47 of New York, but "administrator" shall be read "state tax commission"; 48 "administrative agencies of the city" shall be read as "administrative 49 agencies of the state"; "depositories or financial agents of the city" 50 shall be read as "depositories or financial agents of the state"; "offi- 51 cers or employees of the department of finance of the city" shall be 52 read "officers or employees of the state department of taxation and 53 finance"; in sections 11-1934, 11-1936, 11-1939, and 11-1942 (except for 54 the last sentence thereof) of chapter nineteen of title eleven of the 55 administrative code of the city of New York "city" shall be read as 56 "state"; "corporation counsel or other appropriate officer of the city"A. 604 12 1 or "corporation counsel of the city" shall be read as "state attorney 2 general"; and the words "it" or "its" shall apply instead of the 3 pronouns used where the reference is to state tax commission. Provided, 4 however, with respect to declarations of estimated tax and payments of 5 such tax and the withholding tax requirements, until and including the 6 thirty-first day of December, nineteen hundred seventy-one, any such 7 terms shall be so read with respect to any taxable year or other period 8 beginning in nineteen hundred seventy-one. 9 (b) Methods of review.--Such local law shall also contain provisions 10 substantially the same as the following: 11 (i) Any final determination of the amount of any tax payable hereunder 12 shall be reviewable for error, illegality or unconstitutionality or any 13 other reason whatsoever by a proceeding under article seventy-eight of 14 the civil practice law and rules if application therefor is made to the 15 supreme court within four months after the giving of the notice of such 16 final determination, provided, however, that any such proceeding under 17 article seventy-eight of the civil practice law and rules shall not be 18 instituted unless (A) the amount of any tax sought to be reviewed, with 19 such interest and penalties thereon as may be provided for by local law 20 or regulation, shall be first deposited and there is filed an undertak- 21 ing, issued by a surety company authorized to transact business in this 22 state and approved by the superintendent of insurance of this state as 23 to solvency and responsibility, in such amount as a justice of the 24 supreme court shall approve to the effect that if such proceeding be 25 dismissed or the tax confirmed the petitioner will pay all costs and 26 charges which may accrue in the prosecution of such proceeding or (B) at 27 the option of the petitioner such undertaking may be in a sum sufficient 28 to cover the taxes, interest and penalties stated in such determination 29 plus the costs and charges which may accrue against it in the prose- 30 cution of the proceeding, in which event the petitioner shall not be 31 required to pay such taxes, interest or penalties as a condition prece- 32 dent to the application. 33 (ii) Where any tax imposed hereunder shall have been erroneously, 34 illegally or unconstitutionally collected and application for the refund 35 thereof duly made to the proper fiscal officer or officers, and such 36 officer or officers shall have made a determination denying such refund, 37 such determination shall be reviewable by a proceeding under article 38 seventy-eight of the civil practice law and rules, provided, however, 39 that such proceeding is instituted within four months after the giving 40 of the notice of such denial, that a final determination of tax due was 41 not previously made, and that an undertaking is filed with the proper 42 fiscal officer or officers in such amount and with such sureties as a 43 justice of the supreme court shall approve to the effect that if such 44 proceeding be dismissed or the tax confirmed, the petitioner will pay 45 all costs and charges which may accrue in the prosecution of such 46 proceeding. 47 (iii) No assessment of additional tax shall be made after the expira- 48 tion of more than three years from the date of the filing of the return 49 except that where no return has been filed or, in the case of the filing 50 of a wilfully false or fraudulent return with intent to evade the tax, 51 the tax may be assessed at any time; provided, however, where a taxpayer 52 omits from his or her return an amount which should be properly included 53 therein which is in excess of twenty-five percent of the amount of the 54 gross income derived by him or her from any trade or business, no 55 assessment of additional tax shall be made after the expiration of moreA. 604 13 1 than six years from the date of the filing of the return, except as 2 otherwise provided herein. 3 (c) Bulk sales.-- Such local law may contain a provision substantially 4 the same as the following: 5 Whenever there is made a sale, transfer or assignment in bulk of any 6 part or the whole of a stock of merchandise or of fixtures, or merchan- 7 dise and of fixtures pertaining to the conducting of the business of the 8 seller, transferrer or assignor, otherwise than in the ordinary course 9 of trade and in the regular prosecution of said business, the purchaser, 10 transferee or assignee shall at least ten days before taking possession 11 of such merchandise, fixtures, or merchandise and fixtures, or paying 12 therefor, notify the administrator by registered mail of the proposed 13 sale and of the price, terms and conditions thereof, whether or not the 14 seller, transferrer or assignor, has represented to, or informed the 15 purchaser, transferee or assignee, that it owes any tax pursuant to this 16 local law, whether or not the purchaser, transferee or assignee has 17 knowledge that such taxes are owing, and whether or not any such taxes 18 are in fact owing. 19 Whenever the purchaser, transferee or assignee shall fail to give the 20 notice to the administrator required by the preceding paragraph, or 21 whenever the administrator shall inform the purchaser, transferee or 22 assignee that a possible claim for such tax or taxes exists, any sums of 23 money, property or choses in action, or other consideration, which the 24 purchaser, transferee or assignee is required to transfer over to the 25 seller, transferrer or assignor shall be subject to a first priority 26 right and lien for any such taxes theretofore or thereafter determined 27 to be due from the seller, transferrer or assignor to the city, and the 28 purchaser, transferee or assignee is forbidden to transfer to the sell- 29 er, transferrer or assignor any such sums of money, property or choses 30 in action to the extent of the amount of the city's claim. For failure 31 to comply with the provisions of this subdivision the purchaser, trans- 32 feree or assignee, in addition to being subject to liabilities and reme- 33 dies imposed under any provisions of law, shall be personally liable for 34 the payment to the city of any such taxes, theretofore or thereafter 35 determined to be due to the city from the seller, transferrer or assig- 36 nor and such liability may be assessed and enforced in the same manner 37 as the liability for tax is imposed under this local law. 38 (d) Delegation of functions.--The local law may provide that the 39 administrator of the tax imposed, as defined in the local law, may dele- 40 gate his or her powers and functions under the local law to one of his 41 or her deputies or to any employee or employees of his or her department 42 and authorize banks or trust companies which are depositories or finan- 43 cial agents of the city to receive and give a receipt for any tax 44 imposed under the local law. 45 (e) The provisions contained in subsections (a), (b), (c) and (d) 46 shall not be applicable with respect to taxes imposed for taxable peri- 47 ods commencing on or after January first, nineteen hundred seventy-six 48 but, with respect to the tax imposed for such periods the provisions 49 contained in part six of article twenty-two of the tax law and sections 50 six hundred fifty-three, six hundred fifty-eight, six hundred sixty-two 51 and thirteen hundred eleven of the tax law including the provisions of 52 judicial review by a proceeding under article seventy-eight of the civil 53 practice law and rules shall be applicable with the same force and 54 effect as if those provisions had been incorporated in full in this 55 section except where inconsistent with the provisions of this local law.A. 604 14 1 § 25-o. Deposit and disposition of revenues. Revenues resulting from 2 the imposition of the tax authorized by this article shall be paid into 3 the treasury of the city and shall be credited to and deposited in the 4 general fund of such city and shall be available for any lawful city 5 purpose. For taxable years beginning on or after January first, nineteen 6 hundred seventy-six such revenues shall be deposited and disposed of in 7 the same manner as revenues resulting from the imposition of the taxes 8 authorized by article thirty of the tax law. 9 § 3. Section 1301 of the tax law is amended by adding a new subsection 10 (c) to read as follows: 11 (c) The taxes authorized by this article may be imposed only if the 12 general city law authorizes the adoption of a city tax on the earnings 13 of nonresidents and the city imposing the tax authorized by this article 14 also imposes such tax on the earnings of nonresidents. 15 § 4. Separability. If any clause, sentence, paragraph or part of this 16 act shall be adjudged to be unconstitutional or invalid, such judgment 17 shall not affect, impair, or invalidate, the remainder thereof, but 18 shall be confined in its operation to the clause, sentence, paragraph, 19 section or part thereof directly involved in controversy in which such 20 judgment shall have been rendered. 21 § 5. This act shall take effect immediately and shall be deemed to 22 have been in full force and effect on and after July 1, 1999. The tax 23 authorized, administered, enforced and levied in accordance with article 24 2-E and subsection (h) of section 1 of section 25-m of the general city 25 law, and subsection (c) of section 1301 and subsection (b) of section 26 1305 of the tax law shall be continuously computed and shall be adminis- 27 tered, enforced, and levied as if chapter 5 of the laws of 1999 had not 28 been enacted. The commissioner of taxation and finance is authorized to 29 promulgate immediately and on an emergency basis all necessary and 30 reasonable rules and regulations for the timely implementation of this 31 act.
