Bill Text: NY A05962 | 2019-2020 | General Assembly | Amended


Bill Title: Exempts from tax a portion of global intangible low-taxed income.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2019-06-17 - print number 5962a [A05962 Detail]

Download: New_York-2019-A05962-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5962--A

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                    February 20, 2019
                                       ___________

        Introduced  by  M.  of  A.  SCHIMMINGER -- read once and referred to the
          Committee on Ways and Means --  committee  discharged,  bill  amended,
          ordered reprinted as amended and recommitted to said committee

        AN ACT to amend the tax law, in relation to exempting from tax a portion
          of global intangible low-taxed 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  and (iii) ninety-five percent of the income required to be  included  in
    17  the  taxpayer's  federal  gross  income  pursuant  to  subsection (a) of
    18  section 951A of  the  internal  revenue  code,  without  regard  to  the
    19  deduction  under section 250 of the internal revenue code, received from
    20  a corporation that is not included in a combined report with the taxpay-
    21  er, less, [(iii)] (iv) in the discretion of the commissioner, any inter-
    22  est deductions directly or indirectly attributable to  that  income.  In
    23  lieu  of  subtracting  from  its  exempt  CFC income the amount of those
    24  interest deductions, the taxpayer  may  make  a  revocable  election  to

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09762-02-9

        A. 5962--A                          2

     1  reduce  its  total  exempt  CFC income by forty percent. If the taxpayer
     2  makes this election, the taxpayer must also make the elections  provided
     3  for  in  paragraph  (b) of subdivision six of this section and paragraph
     4  (c)  of  this  subdivision.  If  the  taxpayer subsequently revokes this
     5  election, the taxpayer must revoke the elections provided for  in  para-
     6  graph  (b)  of subdivision six of this section and paragraph (c) of this
     7  subdivision. A taxpayer which does not make this election because it has
     8  no exempt CFC income will not  be  precluded  from  making  those  other
     9  elections. The income described in [subparagraph] subparagraphs (ii) and
    10  (iii)  of  this  paragraph  shall not constitute investment income.  The
    11  income described in subparagraph  (iii)  of  this  paragraph  shall  not
    12  constitute exempt unitary corporation dividends.
    13    §  2.  Paragraph (b) of subdivision 9 of section 208 of the tax law is
    14  amended by adding a new subparagraph 25 to read as follows:
    15    (25) The amount of any federal deduction allowed pursuant  to  section
    16  250(a)(1)(B)(i) of the internal revenue code.
    17    §  3.  Subdivision  5-a  of  section 210-A of the tax law, as added by
    18  section 1 of part C of chapter 59 of the laws of  2019,  is  amended  to
    19  read as follows:
    20    5-a.  [Net  global]  Global  intangible low-taxed income. (a) Notwith-
    21  standing any other provision of this section,  [net]  global  intangible
    22  low-taxed  income  shall  be  included  in the apportionment fraction as
    23  provided in this subdivision. [Receipts constituting net]
    24    (b) For New York C corporations, global  intangible  low-taxed  income
    25  shall  not  be  included in the numerator of the apportionment fraction.
    26  [Receipts constituting net] Five percent of global intangible  low-taxed
    27  income  shall  be included in the denominator of the apportionment frac-
    28  tion.
    29    (c) For New York S corporations, global  intangible  low-taxed  income
    30  shall  not  be  included in the numerator of the apportionment fraction.
    31  Global intangible low-taxed income shall be included in the  denominator
    32  of the apportionment fraction.
    33    (d)  For purposes of this subdivision, the term "[net] global intangi-
    34  ble low-taxed income" means the amount required to be  included  in  the
    35  taxpayer's  federal  gross  income pursuant to subsection (a) of section
    36  951A of the internal revenue code [less  the  amount  of  the  deduction
    37  allowed under clause (i) of section 250(a)(1)(B) of such code].
    38    §  4. Paragraph 1 of subdivision (b) of section 1503 of the tax law is
    39  amended by adding two new subparagraphs (U) and (V) to read as follows:
    40    (U) To the extent not excluded from income  pursuant  to  subparagraph
    41  (A)  of this paragraph, ninety-five percent of the income required to be
    42  included in the taxpayer's federal gross income pursuant  to  subsection
    43  (a)  of section 951A of the internal revenue code, without regard to the
    44  deduction under section 250 of the internal revenue code, that is gener-
    45  ated by a corporation that is not included in a combined report with the
    46  taxpayer.
    47    (V) To the extent not excluded from income  pursuant  to  subparagraph
    48  (A)  or (B) of this paragraph, any amount treated as a dividend received
    49  by the taxpayer under section 78 of the internal revenue  code  that  is
    50  attributable  to  the  income  required to be included in the taxpayer's
    51  federal gross income pursuant to subsection (a) of section 951A of  such
    52  code.
    53    §  5. Paragraph 2 of subdivision (b) of section 1503 of the tax law is
    54  amended by adding a new subparagraph (Y) to read as follows:
    55    (Y) The amount of the federal deduction allowed  pursuant  to  section
    56  250(a)(1)(B) of the internal revenue code.

        A. 5962--A                          3

     1    §  6.  Subparagraph  (H)  of paragraph 2 of subdivision (b) of section
     2  1503 of the tax law, as amended by section 4-e of part KK of chapter  59
     3  of the laws of 2018, is amended to read as follows:
     4    (H)  in  the  discretion  of  the commissioner, any amount of interest
     5  directly or indirectly and any other amount directly attributable  as  a
     6  carrying  charge  or otherwise to subsidiary capital or to income, gains
     7  or losses from  subsidiary  capital,  or  to  the  income  described  in
     8  [subparagraph]  subparagraphs  (S), (U) and (V) of paragraph one of this
     9  subdivision;
    10    § 7. This act shall take effect immediately and apply to taxable years
    11  beginning on or after January 1, 2019.
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