S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8451--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             December 29, 2023
                                ___________
 
 Introduced by M. of A. PAULIN -- 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  commit-
   tee

 AN  ACT  to  amend  the tax law, in relation to the timing of annual tax
   elections
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsection (c) of section 861 of the tax law, as amended by
 section  2  of subpart C of part J of chapter 59 of the laws of 2023, is
 amended to read as follows:
   (c) [The] FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO  THOU-
 SAND  TWENTY-FOUR, THE annual election must be made on or before the due
 date of the first estimated payment under section eight  hundred  sixty-
 four  of this article and will take effect for the current taxable year,
 AND FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
 TWENTY-FOUR,  SUCH  ELECTION  MUST BE MADE BY SEPTEMBER FIFTEENTH OF THE
 TAXABLE YEAR FOR WHICH SUCH ELECTION IS BEING MADE.  Only  one  election
 may  be  made  during  each  calendar  year. An election made under this
 section is irrevocable after the due date.
   § 2. Subsection (b) of section 864 of the tax law, as added by section
 1 of part C of chapter 59 of the laws of 2021, paragraph 3 as amended by
 chapter 555 of the laws of 2022, is amended to read as follows:
   (b) General. The estimated tax shall be paid as follows for an  elect-
 ing partnership and an electing S corporation:
   (1)  The  estimated  tax shall be paid in four [equal] installments on
 March  fifteenth,  June  fifteenth,  September  fifteenth  and  December
 fifteenth  in  the calendar year prior to the year in which the due date
 of the return required by this article falls.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13841-04-4
 A. 8451--A                          2
              

 
   (2) AMOUNT OF REQUIRED INSTALLMENT. (A) The  amount  of  any  required
 installment shall be twenty-five percent of the required annual payment.
   (B)  IN THE CASE OF ANY REQUIRED INSTALLMENT, IF THE ELECTING PARTNER-
 SHIP OR THE ELECTING  S  CORPORATION  ESTABLISHES  THAT  THE  ANNUALIZED
 INCOME  INSTALLMENT  DETERMINED UNDER SUBPARAGRAPH (B) OF PARAGRAPH FOUR
 OF SUBSECTION (C) OF SECTION SIX HUNDRED EIGHTY-FIVE OF THIS CHAPTER  IS
 LESS  THAN  THE  AMOUNT  DETERMINED UNDER SUBPARAGRAPH (A) OF THIS PARA-
 GRAPH, THE ANNUALIZED INCOME INSTALLMENT SHALL BE THE REQUIRED  INSTALL-
 MENT.  ANY REDUCTION IN A REQUIRED INSTALLMENT RESULTING FROM THE APPLI-
 CATION OF THIS SUBPARAGRAPH SHALL BE RECAPTURED BY INCREASING THE AMOUNT
 OF THE NEXT REQUIRED INSTALLMENT DETERMINED UNDER THIS PARAGRAPH BY  THE
 AMOUNT OF SUCH REDUCTION, AND BY INCREASING SUCCESSIVE REQUIRED INSTALL-
 MENTS AS NECESSARY TO EFFECT FULL RECAPTURE.
   (3)  [Notwithstanding  paragraph four of subsection (c) of section six
 hundred eighty-five of this chapter, the] THE required annual payment is
 the lesser of: (A) ninety percent of the tax shown on the return for the
 taxable year; or (B) one hundred percent of the tax shown on the  return
 of  the electing partnership or electing S corporation for the preceding
 taxable year.
   (4) WITHOUT REGARD TO PARAGRAPHS ONE AND TWO OF THIS SUBSECTION, IF AN
 ELECTION IS MADE ON OR AFTER MARCH FIFTEENTH AND BEFORE  JUNE  FIFTEENTH
 OF  THE TAXABLE YEAR FOR WHICH SUCH ELECTION IS MADE, THE ELECTING PART-
 NERSHIP OR ELECTING S CORPORATION IS REQUIRED TO MAKE AN  ESTIMATED  TAX
 PAYMENT  WITH  SUCH  ELECTION  IN  AN AMOUNT EQUAL TO THE FIRST REQUIRED
 INSTALLMENT AND IF AN ELECTION IS MADE ON OR AFTER  JUNE  FIFTEENTH  AND
 BEFORE  SEPTEMBER  FIFTEENTH OF THE TAXABLE YEAR FOR WHICH SUCH ELECTION
 IS MADE, THE ELECTING PARTNERSHIP OR ELECTING S CORPORATION IS  REQUIRED
 TO  MAKE  AN ESTIMATED TAX PAYMENT WITH SUCH ELECTION IN AN AMOUNT EQUAL
 TO THE SUM OF THE FIRST AND SECOND REQUIRED INSTALLMENTS.
   § 3. Subsection (c) of section 868 of  the  tax  law,  as  amended  by
 section  7  of subpart C of part J of chapter 59 of the laws of 2023, is
 amended to read as follows:
   (c) [The annual election to be taxed pursuant to this article must  be
 made  on  or  before  the  due date of the first estimated payment under
 section eight hundred sixty-four of this chapter and  will  take  effect
 for the current taxable year.] Only one election to be taxed pursuant to
 this  article  may  be  made during each calendar year. An election made
 under this section is irrevocable after such due date. To the extent  an
 election  made  under section eight hundred sixty-one of this chapter is
 revoked or otherwise invalidated an election made under this section  is
 automatically invalidated.
   § 4. Subsection (b) of section 871 of the tax law, as added by section
 1 of subpart B of part MM of chapter 59 of the laws of 2022, paragraph 3
 as  amended  by  chapter  555 of the laws of 2022, is amended to read as
 follows:
   (b) General. Except as provided in subsection (c) of this section, the
 estimated tax shall be paid as follows for an electing city  partnership
 and an electing city resident S corporation:
   (1)  The  estimated  tax shall be paid in four [equal] installments on
 March  fifteenth,  June  fifteenth,  September  fifteenth  and  December
 fifteenth  in  the calendar year prior to the year in which the due date
 of the return required by this article falls.
   (2) AMOUNT OF REQUIRED INSTALLMENT. (A) The  amount  of  any  required
 installment shall be twenty-five percent of the required annual payment.
   (B)  IN  THE  CASE  OF  ANY REQUIRED INSTALLMENT, IF THE ELECTING CITY
 PARTNERSHIP OR THE ELECTING CITY RESIDENT S CORPORATION ESTABLISHES THAT
 A. 8451--A                          3
 
 THE ANNUALIZED INCOME INSTALLMENT DETERMINED UNDER SUBPARAGRAPH  (B)  OF
 PARAGRAPH  FOUR  OF SUBSECTION (C) OF SECTION SIX HUNDRED EIGHTY-FIVE OF
 THIS CHAPTER IS LESS THAN THE AMOUNT DETERMINED UNDER  SUBPARAGRAPH  (A)
 OF  THIS  PARAGRAPH,  THE  ANNUALIZED  INCOME  INSTALLMENT  SHALL BE THE
 REQUIRED INSTALLMENT. ANY REDUCTION IN A REQUIRED INSTALLMENT  RESULTING
 FROM  THE  APPLICATION  OF  THIS  SUBPARAGRAPH  SHALL  BE  RECAPTURED BY
 INCREASING THE AMOUNT OF THE NEXT REQUIRED INSTALLMENT DETERMINED  UNDER
 THIS  PARAGRAPH  BY  THE  AMOUNT  OF  SUCH  REDUCTION, AND BY INCREASING
 SUCCESSIVE REQUIRED INSTALLMENTS AS NECESSARY TO EFFECT FULL RECAPTURE.
   (3) [Without regard to paragraph four of subsection (c) of section six
 hundred eighty-five of this chapter, the] THE required annual payment is
 the lesser of: (A) ninety percent of the tax shown on the return for the
 taxable year; or (B) one hundred percent of the tax shown on the  return
 of the electing city partnership or electing city resident S corporation
 for the preceding taxable year.
   (4) WITHOUT REGARD TO PARAGRAPHS ONE AND TWO OF THIS SUBSECTION, IF AN
 ELECTION  IS  MADE ON OR AFTER MARCH FIFTEENTH AND BEFORE JUNE FIFTEENTH
 OF THE TAXABLE YEAR FOR WHICH SUCH ELECTION IS MADE, THE ELECTING  PART-
 NERSHIP  OR  ELECTING S CORPORATION IS REQUIRED TO MAKE AN ESTIMATED TAX
 PAYMENT WITH SUCH ELECTION IN AN AMOUNT  EQUAL  TO  THE  FIRST  REQUIRED
 INSTALLMENT,  AND  IF AN ELECTION IS MADE ON OR AFTER JUNE FIFTEENTH AND
 BEFORE SEPTEMBER FIFTEENTH OF THE TAXABLE YEAR FOR WHICH  SUCH  ELECTION
 IS  MADE, THE ELECTING PARTNERSHIP OR ELECTING S CORPORATION IS REQUIRED
 TO MAKE AN ESTIMATED TAX PAYMENT WITH SUCH ELECTION IN AN  AMOUNT  EQUAL
 TO THE SUM OF THE FIRST AND SECOND REQUIRED INSTALLMENTS.
   § 5. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2024.