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

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-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         7332--A

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                     April 24, 2019
                                       ___________

        Introduced  by  M.  of  A.  STERN,  LAVINE, ENGLEBRIGHT, THIELE, ABBATE,
          SIMON, D'URSO, CRUZ, DeSTEFANO, RA, BRABENEC, COLTON -- read once  and
          referred  to  the  Committee  on  Ways and Means -- recommitted to the
          Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2
          -- committee discharged, bill amended, ordered  reprinted  as  amended
          and recommitted to said committee

        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    11  or withdrawn tax free when they are expended for expansion of such small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,

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08519-03-0
        A. 7332--A                          2

     1  new construction, renovation or leasehold improvements, and the acquisi-
     2  tion of land, buildings, machinery and equipment.
     3    5. The monies on deposit in such tax-deferred savings accounts may not
     4  exceed more than five thousand dollars in any taxable year.
     5    6.  On or before April first, and annually thereafter, the department,
     6  in consultation with the  department  of  taxation  and  finance,  shall
     7  report on the number of small business taxpayers utilizing this program,
     8  the  average  aggregate  amount  on  deposit,  the  qualifying  expenses
     9  claimed, any qualifying expenses deemed inappropriate and any other such
    10  data deemed necessary and appropriate by the department.
    11    § 2. Section 209 of the tax law is amended by adding a new subdivision
    12  13 to read as follows:
    13    13. For any taxable year beginning on  or  after  January  first,  two
    14  thousand  twenty-one, any small business, as such term is defined pursu-
    15  ant to section one hundred thirty-eight-a of  the  economic  development
    16  law,  shall  be  exempt  from all state income taxes imposed pursuant to
    17  this article for any deposit or withdrawal from a small business tax-de-
    18  ferred savings account established pursuant to section one hundred thir-
    19  ty-eight-a of the economic development law and used for the expansion of
    20  such small business for the purpose of creating or preserving full  time
    21  jobs.  If  a small business taxpayer files for and receives an exemption
    22  from the state income tax imposed under this  section  pursuant  to  the
    23  provisions  of this subdivision and the funds deposited or withdrawn, or
    24  any portion thereof, are not expended for a qualifying  purpose  as  set
    25  forth  in section one hundred thirty-eight-a of the economic development
    26  law, then the amount of such exemption claimed  by  the  small  business
    27  taxpayer shall be added back to the amount of state income liability tax
    28  in  the  next  succeeding  taxable  year  or  in  the  year in which the
    29  exemption is disallowed.
    30    § 3. Subsection (c) of section 612 of the tax law is amended by adding
    31  a new paragraph 43 to read as follows:
    32    (43) Any deposit or withdrawal  from  a  small  business  tax-deferred
    33  savings  account  established  pursuant  to  section one hundred thirty-
    34  eight-a of the economic development law and used for  the  expansion  of
    35  such  small business for the purpose of creating or preserving full time
    36  jobs. If a small business taxpayer files for and receives  an  exemption
    37  from  the  state  income  tax imposed under this section pursuant to the
    38  provisions of this paragraph and the funds deposited  or  withdrawn,  or
    39  any  portion  thereof,  are not expended for a qualifying purpose as set
    40  forth in section one hundred thirty-eight-a of the economic  development
    41  law,  then  the  amount  of such exemption claimed by the small business
    42  taxpayer shall be added back to state income tax in the next  succeeding
    43  taxable year or in the year in which the exemption is disallowed.
    44    §  4. The department of taxation and finance, in consultation with the
    45  department of economic development, shall review and analyze all statis-
    46  tical data available for such purposes of determining the  economic  and
    47  revenue  impact associated with this act. Such data shall be included in
    48  an annual report that shall also include, but not  be  limited  to,  the
    49  number  of  small business taxpayers utilizing this program, the average
    50  aggregate amount on deposit, the qualifying expenses claimed, any quali-
    51  fying expenses deemed inappropriate  and  any  other  such  data  deemed
    52  necessary and appropriate by the department. Such annual report shall be
    53  posted on the websites of the department of taxation and finance and the
    54  department of economic development, and transmitted to the governor, the
    55  temporary  president  of  the  senate,  the  senate minority leader, the
    56  speaker of the assembly and the assembly minority leader.
        A. 7332--A                          3

     1    § 5. Rules and regulations. The department of taxation and finance  in
     2  consultation  with  the  department  of  economic development, is hereby
     3  authorized to promulgate rules and regulations in  accordance  with  the
     4  state  administrative  procedure  act  that are necessary to fulfill the
     5  purposes  of this act. Such regulations shall include but not be limited
     6  to deadlines for establishing a  small  business  tax  deferred  savings
     7  account,  standard  procedures  and forms to be utilized in the program,
     8  and any other such regulations deemed  necessary  to  promote  the  full
     9  utilization  of  this  program.  Such  rules  and  regulations  shall be
    10  completed within 180 days after the effective date of this act.
    11    § 6. This act shall take effect immediately.