S T A T E O F N E W Y O R K
________________________________________________________________________
540
2009-2010 Regular Sessions
I N S E N A T E
(PREFILED)
January 7, 2009
___________
Introduced by Sen. ALESI -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
AN ACT to amend the tax law, in relation to the personal income tax
table benefit recapture; to repeal subsection (d) of section 601 of
such law relating to personal income tax; and providing for the repeal
of certain provisions upon expiration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The opening paragraph of subsection (d) of section 601 of
the tax law, as amended by section 1 of part R of chapter 63 of the laws
of 2003, is amended to read as follows:
For taxable years beginning after nineteen hundred ninety AND BEFORE
TWO THOUSAND NINE, there is hereby imposed a supplemental tax in addi-
tion to the tax imposed under subsections (a), (b) and (c) of this
section for the purpose of recapturing the benefit of the tax tables
contained in such subsections or section six hundred ninety-nine of this
article, as the case may be. The supplemental tax shall be an amount
equal to the sum of the tax table benefits in paragraphs one, two and
three of this subsection multiplied by their respective fractions in
such paragraphs provided, however, that paragraph two of this subsection
shall not apply to taxpayers that are not subject to the second highest
rate of tax.
S 2. Section 601 of the tax law is amended by adding three new
subsections (d-1), (d-2) and (d-3) to read as follows:
(D-1) TAX TABLE BENEFIT RECAPTURE. FOR TAXABLE YEARS BEGINNING ON AND
AFTER JANUARY FIRST, TWO THOUSAND TEN AND BEFORE JANUARY FIRST, TWO
THOUSAND ELEVEN, THERE IS HEREBY IMPOSED A SUPPLEMENTAL TAX IN ADDITION
TO THE TAX IMPOSED UNDER SUBSECTIONS (A), (B) AND (C) OF THIS SECTION
FOR THE PURPOSE OF RECAPTURING THE BENEFIT OF THE TAX TABLES CONTAINED
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01756-01-9
S. 540 2
IN SUCH SUBSECTIONS OR SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE,
AS THE CASE MAY BE. PROVIDED, HOWEVER, THIS SUBSECTION SHALL NOT APPLY
TO TAXPAYERS WHO ARE SMALL BUSINESSES AS DEFINED IN SECTION ONE HUNDRED
THIRTY-ONE OF THE ECONOMIC DEVELOPMENT LAW AND WHOSE GROSS RECEIPTS OR
SALES FROM THEIR TRADE OR BUSINESS ARE GREATER THAN TEN THOUSAND
DOLLARS. THE SUPPLEMENTAL TAX SHALL BE AN AMOUNT EQUAL TO THE TAX TABLE
BENEFIT MULTIPLIED BY A FRACTION.
(1) RESIDENT MARRIED INDIVIDUALS FILING JOINT RETURNS AND RESIDENT
SURVIVING SPOUSES. (A) THE TAX TABLE BENEFIT IS THE DIFFERENCE BETWEEN
(I) THE AMOUNT OF TAXABLE INCOME SET FORTH IN THE TAX TABLE IN
SUBSECTION (A) OF THIS SECTION, OR IN SECTION SIX HUNDRED NINETY-NINE OF
THIS ARTICLE, AS THE CASE MAY BE, NOT SUBJECT TO THE HIGHEST RATE OF TAX
FOR THE TAXABLE YEAR MULTIPLIED BY SUCH RATE AND (II) THE HIGHEST DOLLAR
DENOMINATED TAX SET FORTH IN THE TAX TABLE APPLICABLE TO THE TAXABLE
YEAR IN SUBSECTION (A) OF THIS SECTION OR SECTION SIX HUNDRED
NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED FIFTY THOUSAND DOLLARS. THE DENOMINATOR IS
FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
(2) RESIDENT HEADS OF HOUSEHOLDS. (A) THE TAX TABLE BENEFIT IS THE
DIFFERENCE BETWEEN (I) THE AMOUNT OF TAXABLE INCOME SET FORTH IN THE TAX
TABLE IN SUBSECTION (B) OF THIS SECTION, OR IN SECTION SIX HUNDRED NINE-
TY-NINE OF THIS ARTICLE, AS THE CASE MAY BE, NOT SUBJECT TO THE HIGHEST
RATE OF TAX FOR THE TAXABLE YEAR MULTIPLIED BY SUCH RATE AND (II) THE
HIGHEST DOLLAR DENOMINATED TAX SET FORTH IN THE TAX TABLE APPLICABLE TO
THE TAXABLE YEAR IN SUBSECTION (B) OF THIS SECTION OR SECTION SIX
HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS. THE DENOMINATOR
IS FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
(3) RESIDENT UNMARRIED INDIVIDUALS, RESIDENT MARRIED INDIVIDUALS
FILING SEPARATE RETURNS AND RESIDENT ESTATES AND TRUSTS. (A) THE TAX
TABLE BENEFIT IS THE DIFFERENCE BETWEEN (I) THE AMOUNT OF TAXABLE INCOME
SET FORTH IN THE TAX TABLE IN SUBSECTION (C) OF THIS SECTION, OR IN
SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE, NOT
SUBJECT TO THE HIGHEST RATE OF TAX FOR THE TAXABLE YEAR MULTIPLIED BY
SUCH RATE AND (II) THE HIGHEST DOLLAR DENOMINATED TAX SET FORTH IN THE
TAX TABLE APPLICABLE TO THE TAXABLE YEAR IN SUBSECTION (C) OF THIS
SECTION OR SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE
MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED THOUSAND DOLLARS. THE DENOMINATOR IS FIFTY THOU-
SAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE GREATER THAN
ONE.
(D-2) TAX TABLE BENEFIT RECAPTURE. FOR TAXABLE YEARS BEGINNING ON AND
AFTER JANUARY FIRST, TWO THOUSAND ELEVEN AND BEFORE JANUARY FIRST, TWO
THOUSAND TWELVE, THERE IS HEREBY IMPOSED A SUPPLEMENTAL TAX IN ADDITION
TO THE TAX IMPOSED UNDER SUBSECTIONS (A), (B) AND (C) OF THIS SECTION
S. 540 3
FOR THE PURPOSE OF RECAPTURING THE BENEFIT OF THE TAX TABLES CONTAINED
IN SUCH SUBSECTIONS OR SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE,
AS THE CASE MAY BE. THE SUPPLEMENTAL TAX SHALL BE AN AMOUNT EQUAL TO
THE TAX TABLE BENEFIT MULTIPLIED BY A FRACTION.
(1) RESIDENT MARRIED INDIVIDUALS FILING JOINT RETURNS AND RESIDENT
SURVIVING SPOUSES. (A) THE TAX TABLE BENEFIT IS THE DIFFERENCE BETWEEN
(I) THE AMOUNT OF TAXABLE INCOME SET FORTH IN THE TAX TABLE IN
SUBSECTION (A) OF THIS SECTION, OR IN SECTION SIX HUNDRED NINETY-NINE OF
THIS ARTICLE, AS THE CASE MAY BE, NOT SUBJECT TO THE HIGHEST RATE OF TAX
FOR THE TAXABLE YEAR MULTIPLIED BY SUCH RATE AND (II) THE HIGHEST DOLLAR
DENOMINATED TAX SET FORTH IN THE TAX TABLE APPLICABLE TO THE TAXABLE
YEAR IN SUBSECTION (A) OF THIS SECTION OR SECTION SIX HUNDRED
NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO TWO HUNDRED THOUSAND DOLLARS. THE DENOMINATOR IS FIFTY THOU-
SAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE GREATER THAN
ONE.
(2) RESIDENT HEADS OF HOUSEHOLDS. (A) THE TAX TABLE BENEFIT IS THE
DIFFERENCE BETWEEN (I) THE AMOUNT OF TAXABLE INCOME SET FORTH IN THE
TAX TABLE IN SUBSECTION (B) OF THIS SECTION, OR IN SECTION SIX HUNDRED
NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE, NOT SUBJECT TO THE
HIGHEST RATE OF TAX FOR THE TAXABLE YEAR MULTIPLIED BY SUCH RATE AND
(II) THE HIGHEST DOLLAR DENOMINATED TAX SET FORTH IN THE TAX TABLE
APPLICABLE TO THE TAXABLE YEAR IN SUBSECTION (B) OF THIS SECTION OR
SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED FIFTY THOUSAND DOLLARS. THE DENOMINATOR IS
FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
(3) RESIDENT UNMARRIED INDIVIDUALS, RESIDENT MARRIED INDIVIDUALS
FILING SEPARATE RETURNS AND RESIDENT ESTATES AND TRUSTS. (A) THE TAX
TABLE BENEFIT IS THE DIFFERENCE BETWEEN (I) THE AMOUNT OF TAXABLE INCOME
SET FORTH IN THE TAX TABLE IN SUBSECTION (C) OF THIS SECTION, OR IN
SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE, NOT
SUBJECT TO THE HIGHEST RATE OF TAX FOR THE TAXABLE YEAR MULTIPLIED BY
SUCH RATE AND (II) THE HIGHEST DOLLAR DENOMINATED TAX SET FORTH IN THE
TAX TABLE APPLICABLE TO THE TAXABLE YEAR IN SUBSECTION (C) OF THIS
SECTION OR SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE
MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS. THE DENOMINATOR IS
FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
(D-3) TAX TABLE BENEFIT RECAPTURE. FOR TAXABLE YEARS BEGINNING ON AND
AFTER JANUARY FIRST, TWO THOUSAND TWELVE, THERE IS HEREBY IMPOSED A
SUPPLEMENTAL TAX IN ADDITION TO THE TAX IMPOSED UNDER SUBSECTIONS (A),
(B) AND (C) OF THIS SECTION FOR THE PURPOSE OF RECAPTURING THE BENEFIT
OF THE TAX TABLES CONTAINED IN SUCH SUBSECTIONS OR SECTION SIX HUNDRED
NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE. THE SUPPLEMENTAL TAX
S. 540 4
SHALL BE AN AMOUNT EQUAL TO THE TAX TABLE BENEFIT MULTIPLIED BY A FRAC-
TION.
(1) RESIDENT MARRIED INDIVIDUALS FILING JOINT RETURNS AND RESIDENT
SURVIVING SPOUSES. (A) THE TAX TABLE BENEFIT IS THE DIFFERENCE BETWEEN
(I) THE AMOUNT OF TAXABLE INCOME SET FORTH IN THE TAX TABLE IN
SUBSECTION (A) OF THIS SECTION, OR IN SECTION SIX HUNDRED NINETY-NINE OF
THIS ARTICLE, AS THE CASE MAY BE, NOT SUBJECT TO THE HIGHEST RATE OF TAX
FOR THE TAXABLE YEAR MULTIPLIED BY SUCH RATE AND (II) THE HIGHEST DOLLAR
DENOMINATED TAX SET FORTH IN THE TAX TABLE APPLICABLE TO THE TAXABLE
YEAR IN SUBSECTION (A) OF THIS SECTION OR SECTION SIX HUNDRED
NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO TWO HUNDRED FIFTY THOUSAND DOLLARS. THE DENOMINATOR IS
FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
(2) RESIDENT HEADS OF HOUSEHOLDS. (A) THE TAX TABLE BENEFIT IS THE
DIFFERENCE BETWEEN (I) THE AMOUNT OF TAXABLE INCOME SET FORTH IN THE
TAX TABLE IN SUBSECTION (B) OF THIS SECTION, OR IN SECTION SIX HUNDRED
NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE, NOT SUBJECT TO THE
HIGHEST RATE OF TAX FOR THE TAXABLE YEAR MULTIPLIED BY SUCH RATE AND
(II) THE HIGHEST DOLLAR DENOMINATED TAX SET FORTH IN THE TAX TABLE
APPLICABLE TO THE TAXABLE YEAR IN SUBSECTION (B) OF THIS SECTION OR
SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS. THE DENOMINATOR
IS FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
(3) RESIDENT UNMARRIED INDIVIDUALS, RESIDENT MARRIED INDIVIDUALS
FILING SEPARATE RETURNS AND RESIDENT ESTATES AND TRUSTS. (A) THE TAX
TABLE BENEFIT IS THE DIFFERENCE BETWEEN (I) THE AMOUNT OF TAXABLE INCOME
SET FORTH IN THE TAX TABLE IN SUBSECTION (C) OF THIS SECTION, OR IN
SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE MAY BE, NOT
SUBJECT TO THE HIGHEST RATE OF TAX FOR THE TAXABLE YEAR MULTIPLIED BY
SUCH RATE AND (II) THE HIGHEST DOLLAR DENOMINATED TAX SET FORTH IN THE
TAX TABLE APPLICABLE TO THE TAXABLE YEAR IN SUBSECTION (C) OF THIS
SECTION OR SECTION SIX HUNDRED NINETY-NINE OF THIS ARTICLE, AS THE CASE
MAY BE.
(B) THE FRACTION IS COMPUTED AS FOLLOWS: THE NUMERATOR IS THE EXCESS
OF NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER THE INCOME
THRESHOLD. FOR THE PURPOSES OF THIS SUBPARAGRAPH, THE INCOME THRESHOLD
IS EQUAL TO ONE HUNDRED FIFTY THOUSAND DOLLARS. THE DENOMINATOR IS
FIFTY THOUSAND DOLLARS. PROVIDED, HOWEVER, THE FRACTION SHALL NOT BE
GREATER THAN ONE.
S 3. Subsection (d) of section 601 of the tax law is REPEALED.
S 4. This act shall take effect immediately and shall apply to taxable
years starting on or after January 1, 2010; provided, however that
section two of this act shall expire and be deemed repealed January 1,
2013 and section three of this act shall take effect January 1, 2013.