Bill Text: NY A07332 | 2019-2020 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to authorizing small business tax-deferred savings accounts.

Spectrum: Slight Partisan Bill (Democrat 9-4)

Status: (Introduced - Dead) 2020-03-03 - print number 7332b [A07332 Detail]

Download: New_York-2019-A07332-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          7332
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                     April 24, 2019
                                       ___________
        Introduced  by  M.  of  A.  STERN,  LAVINE, ENGLEBRIGHT, THIELE, ABBATE,
          SIMON, D'URSO, CRUZ, RAIA, DeSTEFANO, RA, BRABENEC --  read  once  and
          referred to the Committee on Ways and Means
        AN  ACT  to  amend  the  economic  development  law  and the tax law, in
          relation to authorizing the creation of  small  business  tax-deferred
          savings accounts
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. The economic development law is amended  by  adding  a  new
     2  section 138-a to read as follows:
     3    §  138-a.  Small  business tax-deferred savings accounts.  1. A "small
     4  business taxpayer" or "small business" shall have the  same  meaning  as
     5  defined in section one hundred thirty-one of this article and shall meet
     6  the  requirements  of  paragraph  (f)  of subdivision one of section two
     7  hundred ten of the tax law.
     8    2. Any small business shall be authorized  to  establish  and  deposit
     9  profits into a small business tax-deferred savings account.
    10    3.  The  monies in such tax-deferred savings accounts may be deposited
    11  or withdrawn tax free when they are expended for expansion of such small
    12  business for the purpose of creating or preserving full time jobs.
    13    4. For the purposes of this act, a qualifying  purpose  shall  include
    14  small  business  taxpayer  expenditures  that  result in the creation or
    15  retention of full-time jobs. In addition, working capital used for other
    16  activities, deemed appropriate by the department, which will improve the
    17  competitiveness and productivity of a small business and results in  the
    18  creation or retention of full-time jobs shall be considered a qualifying
    19  business  expenditure.  Qualifying  small business taxpayer expenditures
    20  for the purpose of this section shall include, but not  be  limited  to,
    21  new construction, renovation or leasehold improvements, and the acquisi-
    22  tion of land, buildings, machinery and equipment.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08519-01-9
        A. 7332                             2
     1    5. The monies on deposit in such tax-deferred savings accounts may not
     2  exceed more than five thousand dollars in any taxable year.
     3    6.  On or before April first, and annually thereafter, the department,
     4  in consultation with the  department  of  taxation  and  finance,  shall
     5  report on the number of small business taxpayers utilizing this program,
     6  the  average  aggregate  amount  on  deposit,  the  qualifying  expenses
     7  claimed, any qualifying expenses deemed inappropriate and any other such
     8  data deemed necessary and appropriate by the department.
     9    § 2. Section 209 of the tax law is amended by adding a new subdivision
    10  13 to read as follows:
    11    13. For any taxable year beginning on  or  after  January  first,  two
    12  thousand twenty, any small business, as such term is defined pursuant to
    13  section  one  hundred  thirty-eight-a  of  the economic development law,
    14  shall be exempt from all state income taxes  imposed  pursuant  to  this
    15  article for any deposit or withdrawal from a small business tax-deferred
    16  savings  account  established  pursuant  to  section one hundred thirty-
    17  eight-a of the economic development law and used for  the  expansion  of
    18  such  small business for the purpose of creating or preserving full time
    19  jobs. If a small business taxpayer files for and receives  an  exemption
    20  from  the  state  income  tax imposed under this section pursuant to the
    21  provisions of this subdivision and the funds deposited or withdrawn,  or
    22  any  portion  thereof,  are not expended for a qualifying purpose as set
    23  forth in section one hundred thirty-eight-a of the economic  development
    24  law,  then  the  amount  of such exemption claimed by the small business
    25  taxpayer shall be added back to the amount of state income liability tax
    26  in the next succeeding  taxable  year  or  in  the  year  in  which  the
    27  exemption is disallowed.
    28    § 3. Subsection (c) of section 612 of the tax law is amended by adding
    29  a new paragraph 43 to read as follows:
    30    (43)  Any  deposit  or  withdrawal  from a small business tax-deferred
    31  savings account established pursuant  to  section  one  hundred  thirty-
    32  eight-a  of  the  economic development law and used for the expansion of
    33  such small business for the purpose of creating or preserving full  time
    34  jobs.  If  a small business taxpayer files for and receives an exemption
    35  from the state income tax imposed under this  section  pursuant  to  the
    36  provisions  of  this  paragraph and the funds deposited or withdrawn, or
    37  any portion thereof, are not expended for a qualifying  purpose  as  set
    38  forth  in section one hundred thirty-eight-a of the economic development
    39  law, then the amount of such exemption claimed  by  the  small  business
    40  taxpayer  shall be added back to state income tax in the next succeeding
    41  taxable year or in the year in which the exemption is disallowed.
    42    § 4. The department of taxation and finance, in consultation with  the
    43  department of economic development, shall review and analyze all statis-
    44  tical  data  available for such purposes of determining the economic and
    45  revenue impact associated with this act. Such data shall be included  in
    46  an  annual  report  that  shall also include, but not be limited to, the
    47  number of small business taxpayers utilizing this program,  the  average
    48  aggregate amount on deposit, the qualifying expenses claimed, any quali-
    49  fying  expenses  deemed  inappropriate  and  any  other such data deemed
    50  necessary and appropriate by the department. Such annual report shall be
    51  posted on the websites of the department of taxation and finance and the
    52  department of economic development, and transmitted to the governor, the
    53  temporary president of the  senate,  the  senate  minority  leader,  the
    54  speaker of the assembly and the assembly minority leader.
    55    §  5. Rules and regulations. The department of taxation and finance in
    56  consultation with the department  of  economic  development,  is  hereby
        A. 7332                             3
     1  authorized  to  promulgate  rules and regulations in accordance with the
     2  state administrative procedure act that are  necessary  to  fulfill  the
     3  purposes  of this act. Such regulations shall include but not be limited
     4  to  deadlines  for  establishing  a  small business tax deferred savings
     5  account, standard procedures and forms to be utilized  in  the  program,
     6  and  any  other  such  regulations  deemed necessary to promote the full
     7  utilization of  this  program.  Such  rules  and  regulations  shall  be
     8  completed within 180 days after the effective date of this act.
     9    § 6. This act shall take effect immediately.