STATE OF NEW YORK
        ________________________________________________________________________
                                          4879
                               2019-2020 Regular Sessions
                    IN SENATE
                                     March 28, 2019
                                       ___________
        Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
          printed to be committed to the Committee on Budget and Revenue
        AN ACT to amend the tax law, in relation to  eliminating  net  operating
          loss carryback deductions; and to repeal certain provisions of the tax
          law relating thereto
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Section 659 of the tax law, as amended by section 8 of part
     2  J of chapter 59 of the laws of 2014, is amended to read as follows:
     3    § 659. Report of federal changes, corrections or disallowances. If the
     4  amount of a taxpayer's federal taxable income, total taxable  amount  or
     5  ordinary income portion of a lump sum distribution or includible gain of
     6  a  trust reported on his federal income tax return for any taxable year,
     7  or the amount of a taxpayer's earned income credit or credit for employ-
     8  ment-related expenses set forth on such return, or  the  amount  of  any
     9  federal  foreign  tax credit affecting the calculation of the credit for
    10  Canadian provincial taxes  under  section  six  hundred  twenty  or  six
    11  hundred  twenty-A  of  this article, or the amount of any claim of right
    12  adjustment, is changed or corrected by the United States internal reven-
    13  ue service or other competent authority or as the result of a  renegoti-
    14  ation of a contract or subcontract with the United States, or the amount
    15  an  employer  is  required to deduct and withhold from wages for federal
    16  income tax withholding purposes is changed or corrected by such  service
    17  or  authority  or  if a taxpayer's claim for credit or refund of federal
    18  income tax is disallowed in whole or in part, the taxpayer  or  employer
    19  shall  report  such  change  or correction or disallowance within ninety
    20  days after the final determination of such change, correction, renegoti-
    21  ation or disallowance, or as otherwise required by the commissioner, and
    22  shall concede the accuracy of such determination or state wherein it  is
    23  erroneous. [The allowance of a tentative carryback adjustment based upon
    24  a  net  operating  loss carryback pursuant to section sixty-four hundred

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10705-01-9

        S. 4879                             2

     1  eleven of the internal revenue code shall be treated as a final determi-
     2  nation for purposes of this section.] Any  taxpayer  filing  an  amended
     3  federal  income  tax  return  and any employer filing an amended federal
     4  return  of income tax withheld shall also file within ninety days there-
     5  after an amended return under this article, and shall give such informa-
     6  tion as the commissioner may require. The commissioner may by regulation
     7  prescribe such exceptions to the requirements of this section as  he  or
     8  she  deems  appropriate.  For  purposes  of  this  section, (i) the term
     9  "taxpayer" shall include a partnership  having  a  resident  partner  or
    10  having  any income derived from New York sources, and a corporation with
    11  respect to which the taxable year of such change, correction,  disallow-
    12  ance  or amendment is a year with respect to which the election provided
    13  for in subsection (a) of section six hundred sixty of this article is in
    14  effect, and (ii) the term "federal income tax return" shall include  the
    15  returns  of  income  required under sections six thousand thirty-one and
    16  six thousand thirty-seven of the internal revenue code. In the  case  of
    17  such  a  corporation,  such  report  shall  also  include  any change or
    18  correction of the  taxes  described  in  paragraphs  two  and  three  of
    19  subsection  (f)  of  section  thirteen hundred sixty-six of the internal
    20  revenue code. Reports made under this section by a partnership or corpo-
    21  ration shall indicate the portion of the change in each item of  income,
    22  gain,  loss  or  deduction  (and,  in the case of a corporation, of each
    23  change in, or disallowance of a claim for credit or  refund  of,  a  tax
    24  referred  to  in  the  preceding  sentence) allocable to each partner or
    25  shareholder and  shall  set  forth  such  identifying  information  with
    26  respect  to  such  partner  or  shareholder  as may be prescribed by the
    27  commissioner.
    28    § 2. Subsection (a) of section 1087 of the  tax  law,  as  amended  by
    29  section 9 of part H of chapter 1 of the laws of 2003, is amended to read
    30  as follows:
    31    (a)  General.--Claim  for  credit  or  refund of an overpayment of tax
    32  under article nine or nine-A shall be filed by the taxpayer  within  (i)
    33  three  years from the time the return was filed, (ii) two years from the
    34  time the tax was paid or (iii) in the case of  any  overpayment  arising
    35  from an erroneous denial by the department of environmental conservation
    36  of  a  certification  of  completion  pursuant to section 27-1419 of the
    37  environmental conservation law, two years from the time a final determi-
    38  nation to the effect that such denial was erroneous is made  and  is  no
    39  longer subject to judicial review, whichever of such periods expires the
    40  latest,  or  if  no return was filed, within two years from the time the
    41  tax was paid. If the claim is filed within the three  year  period,  the
    42  amount  of  the credit or refund shall not exceed the portion of the tax
    43  paid within the three years immediately  preceding  the  filing  of  the
    44  claim plus the period of any extension of time for filing the return. If
    45  the claim is not filed within the three year period, but is filed within
    46  the two year period, the amount of the credit or refund shall not exceed
    47  the  portion  of the tax paid during the two years immediately preceding
    48  the filing of the claim. In the case of a claim  for  credit  or  refund
    49  filed   within   the  period  prescribed  in  paragraph  (iii)  of  this
    50  subsection, the amount of the credit or refund may exceed the portion of
    51  the tax paid within the applicable period specified  in  the  two  imme-
    52  diately preceding sentences, but only to the extent of the amount of the
    53  overpayment  attributable  to  the  denial  described  in such paragraph
    54  (iii). Except as otherwise provided in this  section,  if  no  claim  is
    55  filed,  the  amount  of  a  credit or refund shall not exceed the amount
    56  which would be allowable if a claim had been filed on the date the cred-

        S. 4879                             3
     1  it or refund is allowed. For special restriction in a  proceeding  on  a
     2  claim  for refund of tax paid pursuant to an assessment made as a result
     3  of (i) [a net operating loss carryback or  capital  loss  carryback,  or
     4  (ii)]  an increase or decrease in federal taxable income or federal tax,
     5  or [(iii)] (ii) a federal change  or  correction  or  renegotiation,  or
     6  computation or recomputation of tax, which is treated in the same manner
     7  as  if  it  were a deficiency for federal income tax purposes, see para-
     8  graph [(7)] seven of subsection (c)  of  section  one  thousand  eighty-
     9  three.
    10    §  3.  Subsection  (b)  of  section 1089 of the tax law, as amended by
    11  chapter 55 of the laws of 1982, is amended to read as follows:
    12    (b) Petition for  redetermination  of  a  deficiency.---Within  ninety
    13  days, or one hundred fifty days if the notice is addressed to a taxpayer
    14  whose  last  known  address  is  outside of the United States, after the
    15  mailing of the notice of deficiency authorized by section  one  thousand
    16  eighty-one, the taxpayer may file a petition with the tax commission for
    17  a  redetermination  of  the  deficiency. Such petition may also assert a
    18  claim for refund for the same taxable year  or  years,  subject  to  the
    19  limitations  of subsection (g) of section one thousand eighty-seven. For
    20  special restriction where the notice of deficiency relates to a proposed
    21  assessment made as a result of (i) [a net operating  loss  carryback  or
    22  capital loss carryback, (ii)] an increase or decrease in federal taxable
    23  income or federal tax, or [(iii)] (ii) a federal change or correction or
    24  renegotiation,  or computation or recomputation of tax, which is treated
    25  in the same manner as if it were a deficiency  for  federal  income  tax
    26  purposes,  see  paragraph  [(7)]  seven of subsection (c) of section one
    27  thousand eighty-three.
    28    § 4. Subdivision 3 of section 211 of the tax law is REPEALED.
    29    § 5. Subdivision (e) of section 213-b of the tax law is REPEALED.
    30    § 6. Paragraph 3 of subdivision (a) of section 292 of the tax  law  is
    31  REPEALED.
    32    §  7.  Paragraph  4 of subsection (b) of section 631 of the tax law is
    33  REPEALED.
    34    § 8. Subsection (b) of section 633 of the tax law is REPEALED.
    35    § 9. Paragraph 4 of subsection (c) of section 683 of the  tax  law  is
    36  REPEALED.
    37    § 10. Subsection (e) of section 684 of the tax law is REPEALED.
    38    § 11. Subsection (d) of section 687 of the tax law is REPEALED.
    39    §  12. Paragraph 4 of subsection (c) of section 1083 of the tax law is
    40  REPEALED.
    41    § 13. Subsection (e) of section 1084 of the tax law is REPEALED.
    42    § 14. Subsection (d) of section 1088 of the tax law is REPEALED.
    43    § 15. Paragraph 4 of subdivision (b) of section 1503 of the tax law is
    44  REPEALED.
    45    § 16. Paragraph 1 of subdivision (e) of section 1515 of the tax law is
    46  REPEALED.
    47    § 17. This act shall take effect on  the  one  hundred  eightieth  day
    48  after it shall have become a law.