NY State Senate Bill 2023-S8115B

Current Bill Status - In Senate Committee Rules 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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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 07, 2024	committed to rules
May 08, 2024	advanced to third reading
May 07, 2024	2nd report cal.
May 06, 2024	1st report cal.869
Mar 18, 2024	print number 8115b
Mar 18, 2024	amend and recommit to investigations and government operations
Mar 05, 2024	print number 8115a
Mar 05, 2024	amend and recommit to investigations and government operations
Jan 08, 2024	referred to investigations and government operations

Votes

- May 6, 2024 - Investigations And Government Operations Committee Vote
  S8115B
  
  6
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  1
  
  Excused
  
  0
  
  Abstained
  - - Investigations And Government Operations Committee Vote: May 6, 2024
      
      aye (6)
      
      Fernandez
      
      Gounardes
      
      Hoylman-Sigal
      
      Palumbo
      
      Sepúlveda
      
      Skoufis
      
      excused (1)
      
      O'Mara

Bill Amendments

Original

B (Active)

2023-S8115 - Details

See Assembly Version of this Bill:: A8451
Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Amd §§861, 864, 868 & 871, Tax L

2023-S8115 - Summary

Relates to the timing of annual tax elections and the amount of the required installments.

2023-S8115 - Sponsor Memo

                                 
BILL NUMBER: S8115

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the tax law, in relation to the timing of annual tax
elections

 
PURPOSE:

This bill would amend the tax law to allow a taxpayer to make the PTET
election by September 15 of the tax year to which the election applies.
Current law requires the election to be made by March 15 of the tax
year.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill modifies Tax Law § 861 to change the date for
making the state-level PTET election from March 15 to September 15
applicable to tax years beginning on or after January 1, 2024.

Section 2 of the bill modifies Tax Law § 864 to require that if a

taxpayer makes this election on or after March fifteenth and before June
fifteenth, the taxpayer must pay twenty-five percent of the required
estimated payment at the time of election, if an election is made on or
after June fifteenth and before September fifteenth, the taxpayer must
pay fifty percent of the required estimated payment at the time of
election.

 
JUSTIFICATION:

This legislation will allow an eligible taxpayer to make the pass
through entity tax (PTET) election by September 15 of the tax year to
which the election applies, rather than by March 15 as the law now
requires, allowing existing taxpayers more time to assess the impact of
the election, and allowing unincorporated businesses created after March
15 of a tax year to take advantage of the PTET program for that year.

The PTET was adopted at the state level in 2021 to provide a mechanism
to restore federal deductibility of state taxes on business income paid
under the personal income tax, such as for Sub-S corporations, partner-
ships and LLCs. Since then, this program has benefitted nearly 100,000
mostly small unincorporated businesses. This limited amendment to the
statute gives taxpayers more time to assess and make this annual
election, and provides access to the program to businesses created after
March 15 of a given tax year. In doing so, this legislation more closely
reflects the approach taken by the majority of states, as thirty of
thirty-three states with a PTET mechanism provide longer election peri-
ods than does New York.

 
LEGISLATIVE HISTORY:

New legislation.

 
FISCAL IMPLICATIONS:

The PTET was designed to be revenue neutral to the state, and this
legislation will have no impact on total state revenues. The legislation
would provide a modest financial benefit to the state based on the tech-
nical components of how the tax works.  Specifically, the tax rate
applicable to many flow-through entities is higher than the personal
income tax rate payable by the underlying owners of the entity. This tax
overage is ultimately refunded to the partners, but the State essential-
ly gets an interest-free loan from PTET participants.

 
EFFECTIVE DATE:
Immediately.

2023-S8115 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8115
 
                             I N  S E N A T E
 
                              January 8, 2024
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- 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  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 is amended by adding
 a new paragraph 4 to read as follows:
   (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 THAT REPRESENTS TWENTY-FIVE  PERCENT  OF  THE
 REQUIRED  ANNUAL  PAYMENT,  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 CORPO-
 RATION IS REQUIRED TO MAKE AN ESTIMATED TAX PAYMENT WITH  SUCH  ELECTION
 THAT REPRESENTS FIFTY PERCENT OF SUCH REQUIRED ANNUAL PAYMENT.
   §  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:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD13841-01-3
 S. 8115                             2
 
   (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 is amended by adding
 a new paragraph 4 to read as follows:
   (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 THAT REPRESENTS TWENTY-FIVE  PERCENT  OF  THE
 REQUIRED  ANNUAL  PAYMENT,  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 CORPO-
 RATION IS REQUIRED TO MAKE AN ESTIMATED TAX PAYMENT WITH  SUCH  ELECTION
 THAT REPRESENTS FIFTY PERCENT OF SUCH REQUIRED ANNUAL PAYMENT.
   § 5. This act shall take effect immediately.

2023-S8115A - Details

See Assembly Version of this Bill:: A8451
Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Amd §§861, 864, 868 & 871, Tax L

2023-S8115A - Summary

Relates to the timing of annual tax elections and the amount of the required installments.

2023-S8115A - Sponsor Memo

                                 
BILL NUMBER: S8115A

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the tax law, in relation to the timing of annual tax
elections

 
PURPOSE:

This bill would amend the tax law to allow a taxpayer to make the PTET
election by September 15 of the tax year to which the election applies.
Current law requires the election to be made by March 15 of the tax
year.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill modifies Tax Law § 861 to change the date for
making the state-level PTET election from March 15 to September 15
applicable to tax years beginning on or after January 1, 2024.

Section 2 of the bill modifies Tax Law § 864 to require that if a

taxpayer makes this election on or after March fifteenth and before June
fifteenth, the taxpayer must pay twenty-five percent of the required
estimated payment at the time of election. If an election is made on or
after June fifteenth and before September fifteenth, the taxpayer must
pay fifty percent of the required estimated payment at the time of
election. Additionally, this section permits the use of the annualized
income installment method for the computation of estimated payments.

Sections 3 and 4 of the bill modify Tax Law § 868 and § 871 to extend
the adjustments being made to the state-level PTET election to the City
PTET election.

Section 5 provides the effective date.

 
JUSTIFICATION:

This legislation will allow an eligible taxpayer to make the pass
through entity tax (PTET) election by September 15 of the tax year to
which the election applies, rather than by March 15 as the law now
requires, allowing existing taxpayers more time to assess the impact of
the election, and allowing unincorporated businesses created after March
15 of a tax year to take advantage of the PTET program for that year.

The PTET was adopted at the state level in 2021 to provide a mechanism
to restore federal deductibility of state taxes on business income paid
under the personal income tax, such as for Sub-S corporations, partner-
ships and LLCs. Since then, this program has benefitted nearly 100,000
mostly small unincorporated businesses.

This limited amendment to the statute gives taxpayers more time to
assess and make this annual election, and provides access to the program
to businesses created after March 15 of a given tax year.  Additionally,
the bill would permit the use of the annualized income installment meth-
od for the computation of estimated payments which is the same method
applied to personal income tax estimated payments. In doing so, this
legislation more closely reflects the approach taken by the majority of

states, as thirty of thirty-three states with a PTET mechanism provide
longer election periods than does New York.

 
LEGISLATIVE HISTORY:

New legislation.

 
FISCAL IMPLICATIONS:

The PTET was designed to be revenue neutral to the state, and this
legislation will have no impact on total state revenues. The legislation
would provide a modest financial benefit to the state based on the tech-
nical components of how the tax works. Specifically, the tax rate appli-
cable to many flow-through entities is higher than the personal income
tax rate payable by the underlying owners of the entity. This tax over-
age is ultimately refunded to the partners, but the State essentially
gets an interest-free loan from PTET participants.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2024.

2023-S8115A - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8115--A
 
                             I N  S E N A T E
 
                              January 8, 2024
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment  Operations  --  committee  discharged,  bill  amended,   ordered
   reprinted as amended and recommitted to said committee
 
 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.
   (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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD13841-03-4
 S. 8115--A                          2
 
 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
 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
 S. 8115--A                          3
 
 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.

co-Sponsors

2023-S8115B (ACTIVE) - Details

See Assembly Version of this Bill:: A8451
Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Amd §§861, 864, 868 & 871, Tax L

2023-S8115B (ACTIVE) - Summary

Relates to the timing of annual tax elections and the amount of the required installments.

2023-S8115B (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8115B

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the tax law, in relation to the timing of annual tax
elections

 
PURPOSE:

This bill would amend the tax law to allow a taxpayer to make the PTET
election by September 15 of the tax year to which the election applies.
Current law requires the election to be made by March 15 of the tax
year.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill modifies Tax Law § 861 to change the date for
making the state-level PTET election from March 15 to September 15
applicable to tax years beginning on or after January 1, 2024.

Section 2 of the bill modifies Tax Law § 864 to require that if a

taxpayer makes this election on or after March fifteenth and before June
fifteenth, the taxpayer must pay twenty-five percent of the required
estimated payment at the time of election. If an election is made on or
after June fifteenth and before September fifteenth, the taxpayer must
pay fifty percent of the required estimated payment at the time of
election. Additionally, this section permits the use of the annualized
income installment method for the computation of estimated payments.

Sections 3 and 4 of the bill modify Tax Law § 868 and § 871 to extend
the adjustments being made to the state-level PTET election to the City
PTET election.

Section 5 provides the effective date.

 
JUSTIFICATION:

This legislation will allow an eligible taxpayer to make the pass
through entity tax (PTET) election by September 15 of the tax year to
which the election applies, rather than by March 15 as the law now
requires, allowing existing taxpayers more time to assess the impact of
the election, and allowing unincorporated businesses created after March
15 of a tax year to take advantage of the PTET program for that year.

The PTET was adopted at the state level in 2021 to provide a mechanism
to restore federal deductibility of state taxes on business income paid
under the personal income tax, such as for Sub-S corporations, partner-
ships and LLCs. Since then, this program has benefitted nearly 100,000
mostly small unincorporated businesses.

This limited amendment to the statute gives taxpayers more time to
assess and make this annual election, and provides access to the program
to businesses created after March 15 of a given tax year.  Additionally,
the bill would permit the use of the annualized income installment meth-
od for the computation of estimated payments which is the same method
applied to personal income tax estimated payments. In doing so, this
legislation more closely reflects the approach taken by the majority of

states, as thirty of thirty-three states with a PTET mechanism provide
longer election periods than does New York.

 
LEGISLATIVE HISTORY:

New legislation.

 
FISCAL IMPLICATIONS:

The PTET was designed to be revenue neutral to the state, and this
legislation will have no impact on total state revenues. The legislation
would provide a modest financial benefit to the state based on the tech-
nical components of how the tax works. Specifically, the tax rate appli-
cable to many flow-through entities is higher than the personal income
tax rate payable by the underlying owners of the entity. This tax over-
age is ultimately refunded to the partners, but the State essentially
gets an interest-free loan from PTET participants.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2024.

2023-S8115B (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8115--B
 
                             I N  S E N A T E
 
                              January 8, 2024
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment  Operations  --  committee  discharged,  bill  amended,   ordered
   reprinted  as  amended  and recommitted to said committee -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee

 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.
   (2)  AMOUNT  OF  REQUIRED  INSTALLMENT. (A) The amount of any required
 installment shall be twenty-five percent of the required annual payment.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13841-05-4

 S. 8115--B                          2
 
   (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
 THE ANNUALIZED INCOME INSTALLMENT DETERMINED UNDER SUBPARAGRAPH  (B)  OF
 PARAGRAPH  FOUR  OF SUBSECTION (C) OF SECTION SIX HUNDRED EIGHTY-FIVE OF
 S. 8115--B                          3
 
 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.

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Senate Bill S8115B

Sponsored By

Current Bill Status - In Senate Committee Rules Committee

May 6, 2024 - Investigations And Government Operations Committee Vote

Investigations And Government Operations Committee Vote: May 6, 2024

Bill Amendments

2023-S8115 - Details

2023-S8115 - Summary

2023-S8115 - Sponsor Memo

2023-S8115 - Bill Text download pdf

2023-S8115A - Details

2023-S8115A - Summary

2023-S8115A - Sponsor Memo

2023-S8115A - Bill Text download pdf

co-Sponsors

2023-S8115B (ACTIVE) - Details

2023-S8115B (ACTIVE) - Summary

2023-S8115B (ACTIVE) - Sponsor Memo

2023-S8115B (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8115B

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Sponsored By

James Skoufis

Current Bill Status - In Senate Committee Rules Committee

Bill Amendments

2023-S8115 - Details

2023-S8115 - Summary

2023-S8115 - Sponsor Memo

2023-S8115 - Bill Text download pdf

2023-S8115A - Details

2023-S8115A - Summary

2023-S8115A - Sponsor Memo

2023-S8115A - Bill Text download pdf

co-Sponsors

Nathalia Fernandez

2023-S8115B (ACTIVE) - Details

2023-S8115B (ACTIVE) - Summary

2023-S8115B (ACTIVE) - Sponsor Memo

2023-S8115B (ACTIVE) - Bill Text download pdf

Comments