Bill Text: NY S06542 | 2019-2020 | General Assembly | Introduced


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

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2020-01-08 - REFERRED TO BUDGET AND REVENUE [S06542 Detail]

Download: New_York-2019-S06542-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          6542

                               2019-2020 Regular Sessions

                    IN SENATE

                                      June 15, 2019
                                       ___________

        Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        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
    25  reduce its total exempt CFC income by forty  percent.  If  the  taxpayer

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13370-02-9

        S. 6542                             2

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

        S. 6542                             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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