S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2120--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 12, 2017
                                ___________
 
 Introduced  by  Sens.  O'MARA,  BONACIC, BOYLE, FUNKE, GALLIVAN, LARKIN,
   MARCHIONE, ORTT, YOUNG -- read twice and  ordered  printed,  and  when
   printed to be committed to the Committee on Investigations and Govern-
   ment  Operations -- recommitted to the Committee on Investigations and
   Government Operations in accordance with Senate  Rule  6,  sec.  8  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 AN ACT to amend the tax law and the administrative code of the  city  of
   New  York, in relation to business income base and certain small busi-
   ness taxpayers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subparagraph  (iv)  of  paragraph (a) of subdivision 1 of
 section 210 of the tax law, as amended by section 12 of part A of  chap-
 ter 59 of the laws of 2014, is amended to read as follows:
   (iv)  (A)  for taxable years beginning before January first, two thou-
 sand sixteen, if the business income base is not more than  two  hundred
 ninety  thousand dollars the amount shall be six and one-half percent of
 the business income base; if the business income base is more  than  two
 hundred  ninety thousand dollars but not over three hundred ninety thou-
 sand dollars the amount shall be the sum of (1) eighteen thousand  eight
 hundred  fifty dollars, (2) seven and one-tenth percent of the excess of
 the business income base over two hundred ninety  thousand  dollars  but
 not  over three hundred ninety thousand dollars and (3) four and thirty-
 five hundredths percent of the excess of the business income  base  over
 three  hundred  fifty thousand dollars but not over three hundred ninety
 thousand dollars;
   (B) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,  TWO  THOU-
 SAND NINETEEN, IF THE BUSINESS INCOME BASE IS NOT MORE THAN FOUR HUNDRED
 THOUSAND DOLLARS THE AMOUNT SHALL BE FOUR PERCENT OF THE BUSINESS INCOME
 BASE;  IF  THE  BUSINESS  INCOME BASE IS MORE THAN FOUR HUNDRED THOUSAND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07109-02-8

 S. 2120--A                          2
 
 DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS THE AMOUNT  SHALL  BE
 THE SUM OF (1) SIXTEEN THOUSAND DOLLARS, (2) SIX AND ONE-HALF PERCENT OF
 THE  EXCESS  OF  THE  BUSINESS  INCOME  BASE  OVER FOUR HUNDRED THOUSAND
 DOLLARS  BUT  NOT  OVER  FIVE  HUNDRED  THOUSAND  DOLLARS AND (3) TWENTY
 PERCENT OF THE EXCESS OF THE BUSINESS  INCOME  BASE  OVER  FOUR  HUNDRED
 FIFTY THOUSAND DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS;
   (C)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
 SAND TWENTY, IF THE BUSINESS INCOME BASE IS NOT MORE THAN  FOUR  HUNDRED
 THOUSAND  DOLLARS  THE  AMOUNT  SHALL BE TWO AND ONE-HALF PERCENT OF THE
 BUSINESS INCOME BASE; IF THE BUSINESS INCOME  BASE  IS  MORE  THAN  FOUR
 HUNDRED  THOUSAND DOLLARS BUT NOT OVER FIVE HUNDRED THOUSAND DOLLARS THE
 AMOUNT SHALL BE THE SUM OF (1) TEN THOUSAND DOLLARS, (2)  SIX  AND  ONE-
 HALF PERCENT OF THE EXCESS OF THE BUSINESS INCOME BASE OVER FOUR HUNDRED
 THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE HUNDRED THOUSAND DOLLARS AND (3)
 THIRTY-TWO PERCENT OF THE EXCESS OF THE BUSINESS INCOME BASE  OVER  FOUR
 HUNDRED  FIFTY  THOUSAND  DOLLARS  BUT  NOT  OVER  FIVE HUNDRED THOUSAND
 DOLLARS.
   § 2. Paragraph 39 of subsection (c) of section 612 of the tax law,  as
 added  by  section  1  of  part  Y of chapter 59 of the laws of 2013, is
 amended to read as follows:
   (39) (A) In the case of a taxpayer  who  is  a  small  business  OR  A
 TAXPAYER WHO IS A MEMBER, PARTNER, OR SHAREHOLDER OF A LIMITED LIABILITY
 COMPANY, PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY, THAT IS A
 SMALL BUSINESS, who OR WHICH has business income [and/or farm income] as
 defined  in  the  laws  of the United States, an amount equal to [three]
 FIVE percent of the net  items  of  income,  gain,  loss  and  deduction
 attributable  to  such business [or farm] entering into federal adjusted
 gross income, but not less than zero, for taxable years beginning  after
 two  thousand  [thirteen] EIGHTEEN, an amount equal to [three and three-
 quarters] TEN percent of  the  net  items  of  income,  gain,  loss  and
 deduction  attributable to such business [or farm] entering into federal
 adjusted gross income, but not less than zero, for taxable years  begin-
 ning  after  two  thousand  [fourteen]  NINETEEN, and an amount equal to
 [five] FIFTEEN percent of the  net  items  of  income,  gain,  loss  and
 deduction  attributable to such business [or farm] entering into federal
 adjusted gross income, but not less than zero[, for taxable years begin-
 ning after two thousand fifteen].
   (B) IN THE CASE OF A TAXPAYER WHO IS A FARM BUSINESS OR A TAXPAYER WHO
 IS A MEMBER, PARTNER, OR SHAREHOLDER OF  A  LIMITED  LIABILITY  COMPANY,
 PARTNERSHIP,  OR  NEW  YORK  S CORPORATION, RESPECTIVELY, THAT IS A FARM
 BUSINESS, WHO OR WHICH HAS FARM INCOME AS DEFINED BY  THE  LAWS  OF  THE
 UNITED  STATES,  AN  AMOUNT  EQUAL TO TWENTY PERCENT OF THE NET ITEMS OF
 INCOME, GAIN, LOSS AND DEDUCTION ATTRIBUTABLE TO  SUCH  FARM.  THE  TERM
 FARM  BUSINESS  SHALL  MEAN  A FARM BUSINESS THAT HAS NET FARM INCOME OF
 LESS THAN FIVE HUNDRED THOUSAND DOLLARS.
   (C) (I) For the purposes of this paragraph, the  term  small  business
 shall mean: (I) a sole proprietor [or a farm business who employs one or
 more  persons  during  the taxable year and] who has net business income
 [or net farm income] of less than [two hundred fifty] FIVE HUNDRED thou-
 sand dollars; OR (II) A LIMITED LIABILITY COMPANY,  PARTNERSHIP  OR  NEW
 YORK S CORPORATION THAT DURING THE TAXABLE YEAR HAS NEW YORK GROSS BUSI-
 NESS  INCOME  ATTRIBUTABLE  TO  A NON-FARM BUSINESS THAT IS GREATER THAN
 ZERO BUT LESS THAN ONE MILLION FIVE HUNDRED THOUSAND DOLLARS OR NET FARM
 INCOME ATTRIBUTABLE TO A FARM BUSINESS THAT IS  GREATER  THAN  ZERO  BUT
 LESS THAN FIVE HUNDRED THOUSAND DOLLARS. (II) FOR PURPOSES OF THIS PARA-
 GRAPH,  THE  TERM  NEW YORK GROSS BUSINESS INCOME SHALL MEAN: (I) IN THE

 S. 2120--A                          3
 
 CASE OF A LIMITED LIABILITY COMPANY OR A PARTNERSHIP,  NEW  YORK  SOURCE
 GROSS  INCOME  AS  DEFINED  IN  SUBPARAGRAPH  (B)  OF PARAGRAPH THREE OF
 SUBSECTION (C) OF SECTION SIX HUNDRED FIFTY-EIGHT OF THIS ARTICLE,  AND,
 (II) IN THE CASE OF A NEW YORK S CORPORATION, NEW YORK RECEIPTS INCLUDED
 IN  THE  NUMERATOR  OF THE APPORTIONMENT FACTOR DETERMINED UNDER SECTION
 TWO HUNDRED TEN-A OF THIS CHAPTER FOR THE TAXABLE YEAR.
   (D) TO QUALIFY FOR THIS MODIFICATION IN RELATION TO A  NON-FARM  SMALL
 BUSINESS  THAT IS A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW YORK S
 CORPORATION, THE TAXPAYER'S INCOME  ATTRIBUTABLE  TO  THE  NET  BUSINESS
 INCOME FROM ITS OWNERSHIP INTERESTS IN NON-FARM LIMITED LIABILITY COMPA-
 NIES,  PARTNERSHIPS  OR  NEW  YORK S CORPORATIONS MUST BE LESS THAN FIVE
 HUNDRED THOUSAND DOLLARS.
   § 3. Paragraph 35 of subdivision (c) of section 11-1712 of the  admin-
 istrative  code of the city of New York, as added by section 2 of part Y
 of chapter 59 of the laws of 2013, is amended to read as follows:
   (35) (A) In the case of a taxpayer  who  is  a  small  business  OR  A
 TAXPAYER WHO IS A MEMBER, PARTNER, OR SHAREHOLDER OF A LIMITED LIABILITY
 COMPANY, PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY, THAT IS A
 SMALL BUSINESS, who OR WHICH has business income [and/or farm income] as
 defined  in  the  laws  of the United States, an amount equal to [three]
 FIFTEEN percent of the net items of income,  gain,  loss  and  deduction
 attributable  to  such business [or farm] entering into federal adjusted
 gross income, but not less than zero[, for taxable years beginning after
 two thousand thirteen, an  amount  equal  to  three  and  three-quarters
 percent  of  the net items of income, gain, loss and deduction attribut-
 able to such business or  farm  entering  into  federal  adjusted  gross
 income,  but  not  less than zero, for taxable years beginning after two
 thousand fourteen, and an amount equal to five percent of the net  items
 of  income,  gain,  loss  and deduction attributable to such business or
 farm entering into federal adjusted gross  income,  but  not  less  than
 zero, for taxable years beginning after two thousand fifteen].
   (B) IN THE CASE OF A TAXPAYER WHO IS A FARM BUSINESS OR A TAXPAYER WHO
 IS  A  MEMBER,  PARTNER,  OR SHAREHOLDER OF A LIMITED LIABILITY COMPANY,
 PARTNERSHIP, OR NEW YORK S CORPORATION, RESPECTIVELY,  THAT  IS  A  FARM
 BUSINESS,  WHO  OR  WHICH  HAS FARM INCOME AS DEFINED BY THE LAWS OF THE
 UNITED STATES, AN AMOUNT EQUAL TO TWENTY PERCENT OF  THE  NET  ITEMS  OF
 INCOME,  GAIN,  LOSS  AND  DEDUCTION ATTRIBUTABLE TO SUCH FARM. THE TERM
 FARM BUSINESS SHALL MEAN A FARM BUSINESS THAT HAS  NET  FARM  INCOME  OF
 LESS THAN FIVE HUNDRED THOUSAND DOLLARS.
   (C)  (I)  For  the purposes of this paragraph, the term small business
 shall mean: (I) a sole proprietor [or a farm business who employs one or
 more persons during the taxable year and] who has  net  business  income
 [or net farm income] of less than [two hundred fifty] FIVE HUNDRED thou-
 sand  dollars;  OR  (II) A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW
 YORK S CORPORATION THAT DURING THE TAXABLE YEAR HAS NEW YORK GROSS BUSI-
 NESS INCOME ATTRIBUTABLE TO A NON-FARM BUSINESS  THAT  IS  GREATER  THAN
 ZERO BUT LESS THAN ONE MILLION FIVE HUNDRED THOUSAND DOLLARS OR NET FARM
 INCOME  ATTRIBUTABLE  TO  A  FARM BUSINESS THAT IS GREATER THAN ZERO BUT
 LESS THAN FIVE HUNDRED THOUSAND DOLLARS. (II) FOR PURPOSES OF THIS PARA-
 GRAPH, THE TERM NEW YORK GROSS BUSINESS INCOME SHALL MEAN:  (I)  IN  THE
 CASE  OF  A  LIMITED LIABILITY COMPANY OR A PARTNERSHIP, NEW YORK SOURCE
 GROSS INCOME AS DEFINED  IN  SUBPARAGRAPH  (B)  OF  PARAGRAPH  THREE  OF
 SUBSECTION  (C)  OF SECTION SIX HUNDRED FIFTY-EIGHT OF THE TAX LAW, AND,
 (II) IN THE CASE OF A NEW YORK S CORPORATION, NEW YORK RECEIPTS INCLUDED
 IN THE NUMERATOR OF THE APPORTIONMENT FACTOR  DETERMINED  UNDER  SECTION
 TWO HUNDRED TEN-A OF THE TAX LAW FOR THE TAXABLE YEAR.

 S. 2120--A                          4
 
   (D)  TO  QUALIFY FOR THIS MODIFICATION IN RELATION TO A NON-FARM SMALL
 BUSINESS THAT IS A LIMITED LIABILITY COMPANY, PARTNERSHIP OR NEW YORK  S
 CORPORATION,  THE  TAXPAYER'S  INCOME  ATTRIBUTABLE  TO THE NET BUSINESS
 INCOME FROM ITS OWNERSHIP INTERESTS IN NON-FARM LIMITED LIABILITY COMPA-
 NIES,  PARTNERSHIPS  OR  NEW  YORK S CORPORATIONS MUST BE LESS THAN FIVE
 HUNDRED THOUSAND DOLLARS.
   § 4. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2019.