NY State Senate Bill 2023-S4871

Current Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to budget and revenue
Feb 16, 2023	referred to budget and revenue

2023-S4871 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§210-B & 606, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S4615
2019-2020: S2821
2021-2022: S2087

2023-S4871 (ACTIVE) - Summary

Relates to a business tax credit for purchase of data breach insurance.

2023-S4871 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S4871

SPONSOR: ASHBY
 
TITLE OF BILL:

An act to amend the tax law, in relation to a business tax credit for
purchase of data breach insurance; and providing for the repeal of such
provisions upon expiration thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would create a data breach insurance tax credit for small
businesses.

 
SUMMARY OF PROVISIONS:

Sections 1, 2 and 3: Establishes the Data Breach Insurance tax credit
within three parts of the tax law, laying out the requirements for qual-
ification and the technical compliances required. Defines small business
as employing 100 or less employees.

Section 4: Establishes the effective date.

 
JUSTIFICATION:

As commerce becomes increasingly modernized, an increasing amount of
credit and debit card information are held by businesses both large and
small. As a result of sales over the internet, which have dramatically
increased in the last 20 years, has resulted in many risks for both
businesses and consumers. State law should be upgraded to reflect the
realities of e-commerce, particularly in relation to ensuring small
businesses can remain competitive online. Data breach insurance is a
relatively new form of insurance that covers losses that occur as a
result of hackers, which not only could lead to loss of consumer confi-
dence, but also significant investments of time and money to recover any
lost information. In addition, there are also several potential local,
state, and federal guidelines in relation to fraud that businesses must
comply with. This type of insurance helps cover fraud and some firms
even provide compliance assistance.

This bill would provide a tax credit equal to one-quarter (25%) of the
costs incurred by premiums for data breach insurance for small busi-
nesses. By doing so, this bill would allow small businesses to take
advantage of this new type of insurance, providing not only peace of
mind but also a strong sense of confidence in expanding a small business
to the rapidly expanding world of e-commerce.

 
PRIOR LEGISLATIVE HISTORY:

S2087 of 2020-21 in Budget and Revenue Committee

S2821 of 2019-20

S4615 of 2017-18

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
Immediately, applying to taxable years beginning on and after January
1st after which it had become law, remaining in effect for 5 years.

2023-S4871 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4871
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 16, 2023
                                ___________
 
 Introduced  by  Sen.  ASHBY  -- 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 a business  tax  credit  for
   purchase  of  data  breach  insurance; and providing for the repeal of
   such provisions upon expiration thereof

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  210-B  of the tax law is amended by adding a new
 subdivision 59 to read as follows:
   59. DATA BREACH INSURANCE CREDIT. (A) A TAXPAYER THAT IS A BUSINESS OR
 OWNER OF A BUSINESS SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
 THIS ARTICLE EQUAL TO TWENTY-FIVE PERCENT OF THE PREMIUM PAID DURING THE
 TAXABLE YEAR FOR QUALIFIED DATA BREACH INSURANCE. FOR PURPOSES  OF  THIS
 SECTION,  THE  TERM  "QUALIFIED  DATA  BREACH  INSURANCE" MEANS COVERAGE
 PROVIDED BY AN INSURANCE COMPANY FOR EXPENSES OR  LOSSES  IN  CONNECTION
 WITH  THE  THEFT, LOSS, DISCLOSURE, INACCESSIBILITY, OR MANIPULATION, OF
 DATA.
   (B) IN ORDER TO QUALIFY FOR SUCH CREDIT, TAXPAYERS SHALL ADOPT AND  BE
 IN COMPLIANCE WITH ONE OF THE FOLLOWING:
   (1) VERSION 1.0 OF THE FRAMEWORK FOR IMPROVING CRITICAL INFRASTRUCTURE
 CYBERSECURITY PUBLISHED BY THE NATIONAL INSTITUTE OF STANDARDS AND TECH-
 NOLOGY AS IN EFFECT ON FEBRUARY TWELFTH, TWO THOUSAND FOURTEEN OR SUBSE-
 QUENT VERSIONS OR ITERATIONS; OR
   (2)  ANY  SIMILAR  STANDARD  SPECIFIED BY THE STATE COMPTROLLER, AFTER
 CONSULTATION WITH THE DIRECTOR OF THE OFFICE OF  INFORMATION  TECHNOLOGY
 SERVICES.
   (C)  IN THE CASE OF INSURANCE COVERAGE UNDER WHICH AMOUNTS ARE PAYABLE
 FOR OTHER THAN EXPENSES OR LOSSES DESCRIBED IN  PARAGRAPH  (A)  OF  THIS
 SUBDIVISION:
   (1)  NO  AMOUNT SHALL BE TREATED AS PREMIUMS FOR QUALIFIED DATA BREACH
 INSURANCE UNLESS THE CHARGE FOR  SUCH  INSURANCE  IS  EITHER  SEPARATELY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09237-01-3

 S. 4871                             2
 
 STATED  IN  THE CONTRACT, OR FURNISHED TO THE POLICYHOLDER BY THE INSUR-
 ANCE COMPANY IN A SEPARATE STATEMENT;
   (2)  THE AMOUNT TAKEN INTO ACCOUNT AS THE PREMIUM PAID OR INCURRED FOR
 SUCH INSURANCE SHALL NOT EXCEED SUCH CHARGE; AND
   (3) NO AMOUNT SHALL BE TREATED AS PAID OR INCURRED FOR SUCH  INSURANCE
 IF  THE  AMOUNT  SPECIFIED  IN THE CONTRACT, OR FURNISHED TO THE POLICY-
 HOLDER BY THE INSURANCE COMPANY IN A SEPARATE STATEMENT, AS  THE  CHARGE
 FOR SUCH INSURANCE IS UNREASONABLY LARGE IN RELATION TO THE TOTAL CHARG-
 ES UNDER THE CONTRACT.
   (D)  PREMIUMS  SHALL BE TAKEN INTO ACCOUNT UNDER PARAGRAPH (A) OF THIS
 SUBDIVISION ONLY IF SUCH PREMIUMS ARE PAID OR INCURRED IN  THE  ORDINARY
 COURSE OF THE TAXPAYER'S TRADE OR BUSINESS.
   (E)  THIS  SUBDIVISION SHALL NOT APPLY TO A BUSINESS WHICH EMPLOYS ONE
 HUNDRED AND ONE OR MORE EMPLOYEES.
   § 2. Section 606 of the tax law is amended by adding a new  subsection
 (ooo) to read as follows:
   (OOO)  DATA BREACH INSURANCE CREDIT. (1) A TAXPAYER THAT IS A BUSINESS
 OR OWNER OF A BUSINESS SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED
 BY THIS ARTICLE EQUAL TO TWENTY-FIVE PERCENT OF THE PREMIUM PAID  DURING
 THE  TAXABLE  YEAR  FOR QUALIFIED DATA BREACH INSURANCE. FOR PURPOSES OF
 THIS SECTION, THE TERM "QUALIFIED DATA BREACH INSURANCE" MEANS  COVERAGE
 PROVIDED  BY  AN  INSURANCE COMPANY FOR EXPENSES OR LOSSES IN CONNECTION
 WITH THE THEFT, LOSS, DISCLOSURE, INACCESSIBILITY, OR  MANIPULATION,  OF
 DATA.
   (2)  IN ORDER TO QUALIFY FOR SUCH CREDIT, TAXPAYERS SHALL ADOPT AND BE
 IN COMPLIANCE WITH ONE OF THE FOLLOWING:
   (A) VERSION 1.0 OF THE FRAMEWORK FOR IMPROVING CRITICAL INFRASTRUCTURE
 CYBERSECURITY PUBLISHED BY THE NATIONAL INSTITUTE OF STANDARDS AND TECH-
 NOLOGY AS IN EFFECT ON FEBRUARY TWELFTH, TWO THOUSAND FOURTEEN OR SUBSE-
 QUENT VERSIONS OR ITERATIONS; OR
   (B) ANY SIMILAR STANDARD SPECIFIED BY  THE  STATE  COMPTROLLER,  AFTER
 CONSULTATION  WITH  THE DIRECTOR OF THE OFFICE OF INFORMATION TECHNOLOGY
 SERVICES.
   (3) IN THE CASE OF INSURANCE COVERAGE UNDER WHICH AMOUNTS ARE  PAYABLE
 FOR  OTHER  THAN  EXPENSES  OR LOSSES DESCRIBED IN PARAGRAPH ONE OF THIS
 SUBSECTION:
   (A) NO AMOUNT SHALL BE TREATED AS PREMIUMS FOR QUALIFIED  DATA  BREACH
 INSURANCE  UNLESS  THE  CHARGE  FOR  SUCH INSURANCE IS EITHER SEPARATELY
 STATED IN THE CONTRACT, OR FURNISHED TO THE POLICYHOLDER BY  THE  INSUR-
 ANCE COMPANY IN A SEPARATE STATEMENT;
   (B)  THE AMOUNT TAKEN INTO ACCOUNT AS THE PREMIUM PAID OR INCURRED FOR
 SUCH INSURANCE SHALL NOT EXCEED SUCH CHARGE; AND
   (C) NO AMOUNT SHALL BE TREATED AS PAID OR INCURRED FOR SUCH  INSURANCE
 IF  THE  AMOUNT  SPECIFIED  IN THE CONTRACT, OR FURNISHED TO THE POLICY-
 HOLDER BY THE INSURANCE COMPANY IN A SEPARATE STATEMENT, AS  THE  CHARGE
 FOR SUCH INSURANCE IS UNREASONABLY LARGE IN RELATION TO THE TOTAL CHARG-
 ES UNDER THE CONTRACT.
   (4)  PREMIUMS  SHALL BE TAKEN INTO ACCOUNT UNDER PARAGRAPH ONE OF THIS
 SUBSECTION ONLY IF SUCH PREMIUMS ARE PAID OR INCURRED  IN  THE  ORDINARY
 COURSE OF THE TAXPAYER'S TRADE OR BUSINESS.
   (5)  THIS  SUBSECTION  SHALL NOT APPLY TO A BUSINESS WHICH EMPLOYS ONE
 HUNDRED AND ONE OR MORE EMPLOYEES.
   § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of the tax law is amended by adding a new clause (l) to read as follows:
   (L) DATA BREACH INSURANCE       AMOUNT OF CREDIT UNDER SUBDIVISION
   CREDIT UNDER SUBSECTION (OOO)   FIFTY-NINE OF SECTION TWO HUNDRED
 S. 4871                             3
 
                                   TEN-B
   § 4. This act shall take effect immediately and shall apply to taxable
 years  beginning  on  and after the first of January next succeeding the
 date on which it shall have become a law and shall remain in effect  for
 five  years  after  it  shall have become a law, when upon such date the
 provisions of this act shall expire and be deemed repealed.

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Senate Bill S4871

Sponsored By

Current Bill Status - In Senate Committee Budget And Revenue Committee

2023-S4871 (ACTIVE) - Details

2023-S4871 (ACTIVE) - Summary

2023-S4871 (ACTIVE) - Sponsor Memo

2023-S4871 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S4871

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Sponsored By

Jacob Ashby

Current Bill Status - In Senate Committee Budget And Revenue Committee

2023-S4871 (ACTIVE) - Details

2023-S4871 (ACTIVE) - Summary

2023-S4871 (ACTIVE) - Sponsor Memo

2023-S4871 (ACTIVE) - Bill Text download pdf

Comments