NY State Senate Bill 2025-S3340

Senate Bill S3340

2025-2026 Legislative Session

Relates to treatment of gains from qualified opportunity zones in calculating taxable income

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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 27, 2025	referred to budget and revenue

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2025-S3340 (ACTIVE) - Details

See Assembly Version of this Bill:: A3246
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§208, 612 & 1503, Tax L; amd §§11-602, 11-652 & 11-1712, NYC Ad Cd
Versions Introduced in Other Legislative Sessions:: 2021-2022: S6800, A8081
2023-2024: S543, A2170

2025-S3340 (ACTIVE) - Summary

Relates to treatment of gains from qualified opportunity zones in calculating taxable income; removes exclusion of gains on property in qualified opportunity zones in calculation of income.

2025-S3340 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S3340

SPONSOR: GIANARIS
 
TITLE OF BILL:

An act to amend the tax law and the administrative code of the city of
New York, in relation to treatment of gains from qualified opportunity
zones in calculating taxable income

 
PURPOSE:

To fully decouple NYS and NYC from the federal Opportunity Zone tax
code.

 
SUMMARY OF PROVISIONS:

Section one of the bill amends paragraph (b) of subdivision 9 of § 208
of the tax law to add a new paragraph 28 to include that "entire net
income" shall be determined without the exclusion, deduction or credit
of the amount of gain excluded from federal gross income for the taxable
year by subparagraph (c) of paragraph (1) of subsection

(a) of § 1400Z-2 of the internal revenue code.

Section two of the bill amends subdivision 9 of § 208 of the tax law to
add a new paragraph (u) which states that for tax years beginning on or
after January 1, 2026, upon the sale or exchange of property with
respect to which the taxpayer has made the election under subparagraph
(c) of paragraph (1) of subsection (a) of § 1400Z-2 of the internal
revenue code, the basis of such property under this article shall be
determined as if the taxpayer had not made such election.

Section three of the bill amends subsection (b) of § 612 of the tax law
to add a new paragraph 44 to include that there shall be added to feder-
al adjusted gross income the amount of gain excluded from federal gross
income for the taxable year by subparagraph (c) of paragraph (1) of
subsection (a) of § 1400Z-2 of the internal revenue code.

Section four of the bill amends § 612 of the tax law to add a new
subsection (y) which states that for tax years beginning on or after
January 1, 2026, upon the sale or exchange of property with respect to
which the taxpayer has made the election under subparagraph (c) of para-
graph (1) of subsection (a) of § 1400Z-2 of the internal revenue code,
the basis of such property under this article shall be determined as if
the taxpayer had not made such election.

Section five of the bill amends paragraph 2 of subdivision (b) of § 1503
of the tax law to add a new subparagraph (AA) to include that "entire
net income" shall be determined without the exclusion, deduction or
credit of the amount of gain excluded from federal gross income for the
taxable year by subparagraph (c) of paragraph (1) of subsection (a) of §
1400Z-2 of the internal revenue code.

Section six of the bill amends § 1503 of the tax law to add a new subdi-
vision (d) which states that for tax years beginning on or after January
1, 2026, upon the sale or exchange of property with respect to which the
taxpayer has made the election under subparagraph (c) of paragraph (1)
of subsection (a) of § 1400Z-2 of the internal revenue code, the basis

of such property under this article shall be determined as if the
taxpayer had not made such election.

Section seven of the bill amends paragraph (b) of subdivision 8 of §
11-602 of the administrative code of the city of New York to add a new
paragraph 23 to include that "entire net income" shall be determined
without the exclusion, deduction or credit of the amount of gain
excluded from federal gross income for the taxable year by subparagraph
(c) of paragraph (1) of subsection (a) of § 1400Z-2 of the internal
revenue code.

Section eight of the bill amends § 11-602 of the administrative code of
the city of New York to add a new subdivision 11 which states that for
tax years beginning on or after January 1, 2026, upon the sale or
exchange of property with respect to which the taxpayer has made the
election under subparagraph (c) of paragraph (1) of subsection (a) of

§ 1400Z-2 of the internal revenue code, the basis of such property under
this article shall be determined as if the taxpayer had not made such
election.

Section nine of the bill paragraph (a) of subdivision 8 of § 11-652 of
the administrative code of the city of New York to add a new subpara-
graph 18 to include that "entire net income" shall not include the
amount of gain excluded from federal gross income for the taxable year
by subparagraph (c) of paragraph (1) of subsection (a) of § 1400Z-2 of
the internal revenue code.

Section ten of the bill amends subdivision 8 of § 11-652 of the adminis-
trative code of the city of New York to add a new paragraph (Li) which
states that for tax years beginning on or after January 1, 2026, upon
the sale or exchange of property with respect to which the taxpayer has
made the election under subparagraph (c) of paragraph

(1) of subsection (a) of § 1400Z-2 of the internal revenue code, the
basis of such property under this article shall be determined as if the
taxpayer had not made such election.

Section eleven of the bill amends subdivision (b) of § 11-1712 of the
administrative code of the city of New York to add a new paragraph 40 to
include that there shall be added to federal adjusted gross income the
amount of gain excluded from federal gross income for the taxable year
by subparagraph (c) of paragraph (1) of subsection (a) of § 1400Z-2 of
the internal revenue code.

Section twelve of the bill amends § 11-1712 of the administrative code
of the city of New York to add a new subdivision (w) which states that
for tax years beginning on or after January 1, 2026, upon the sale or
exchange of property with respect to which the taxpayer has made the
election under subparagraph (c) of paragraph (1) of subsection (a) of §
1400Z-2 of the internal revenue code, the basis of such property under
this article shall be determined as if the taxpayer had not made such
election.

Section thirteen of the bill sets the effective date.

 
JUSTIFICATION:

The FY21 New York State Budget partially decoupled the NYS and NYC tax
laws from the federal Opportunity Zone program, which will save the
state hundreds of millions of dollars. However, it is imperative that
the Exclusion (10 year) Benefit also be decoupled. Although this benefit
has had no fiscal impact to the State for several years, it is imper-
ative that we fully decouple the program from our state's tax laws now.

 
LEGISLATIVE HISTORY:

2024: S543-B (Gianaris) PASSED SENATE / A2170-B (Dinowitz) died in ways
& means

2023: S543 (Gianaris) PASSED SENATE / A2170 (Dinowitz) died in ways &
means

2022: S6800-A (Gianaris) PASSED SENATE / A8081-A (Dinowitz) died in ways
& means

2021: S6800 (Gianaris) died in Budget & Revenue / A8081 (Dinowitz) died
in ways & means

 
FISCAL IMPLICATIONS:

The bill will prevent a loss in tax revenue to the state.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2026.

2025-S3340 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3340
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 27, 2025
                                ___________
 
 Introduced  by  Sens.  GIANARIS, HOYLMAN-SIGAL, KRUEGER, SALAZAR -- 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 and the administrative code of the city of
   New York, in relation to treatment of gains from qualified opportunity
   zones in calculating taxable income
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.   Paragraph (b) of subdivision 9 of section 208 of the tax
 law is amended by adding a new subparagraph 28 to read as follows:
   (28) THE AMOUNT OF GAIN EXCLUDED FROM FEDERAL  GROSS  INCOME  FOR  THE
 TAXABLE  YEAR  BY SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION (A) OF
 SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE.
   § 2. Subdivision 9 of section 208 of the tax law is amended by  adding
 a new paragraph (u) to read as follows:
   (U)  FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-SIX, UPON THE SALE OR EXCHANGE OF PROPERTY WITH RESPECT TO  WHICH
 THE  TAXPAYER  HAS MADE THE ELECTION UNDER SUBPARAGRAPH (C) OF PARAGRAPH
 (1) OF SUBSECTION (A) OF SECTION 1400Z-2 OF THE INTERNAL  REVENUE  CODE,
 THE  BASIS OF SUCH PROPERTY UNDER THIS ARTICLE SHALL BE DETERMINED AS IF
 THE TAXPAYER HAD NOT MADE SUCH ELECTION.
   § 3. Subsection (b) of section 612 of the tax law is amended by adding
 a new paragraph 44 to read as follows:
   (44) THE AMOUNT OF GAIN EXCLUDED FROM FEDERAL  GROSS  INCOME  FOR  THE
 TAXABLE  YEAR  BY SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION (A) OF
 SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE.
   § 4. Section 612 of the tax law is amended by adding a new  subsection
 (y) to read as follows:
   (Y)  QUALIFIED OPPORTUNITY ZONES.  FOR TAX YEARS BEGINNING ON OR AFTER
 JANUARY FIRST, TWO THOUSAND TWENTY-SIX, UPON THE  SALE  OR  EXCHANGE  OF
 PROPERTY  WITH RESPECT TO WHICH THE TAXPAYER HAS MADE THE ELECTION UNDER
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02005-01-5

 S. 3340                             2
 
 SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION (A) OF  SECTION  1400Z-2
 OF  THE  INTERNAL  REVENUE  CODE,  THE BASIS OF SUCH PROPERTY UNDER THIS
 ARTICLE SHALL BE DETERMINED  AS  IF  THE  TAXPAYER  HAD  NOT  MADE  SUCH
 ELECTION.
   §  5. Paragraph 2 of subdivision (b) of section 1503 of the tax law is
 amended by adding a new subparagraph (AA) to read as follows:
   (AA)  THE AMOUNT OF GAIN EXCLUDED FROM FEDERAL GROSS  INCOME  FOR  THE
 TAXABLE  YEAR  BY SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION (A) OF
 SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE.
   § 6. Section 1503 of the tax law is amended by adding a  new  subdivi-
 sion (d) to read as follows:
   (D)  FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-SIX, UPON THE SALE OR EXCHANGE OF PROPERTY WITH RESPECT TO  WHICH
 THE  TAXPAYER  HAS MADE THE ELECTION UNDER SUBPARAGRAPH (C) OF PARAGRAPH
 (1) OF SUBSECTION (A) OF SECTION 1400Z-2 OF THE INTERNAL  REVENUE  CODE,
 THE  BASIS OF SUCH PROPERTY UNDER THIS ARTICLE SHALL BE DETERMINED AS IF
 THE TAXPAYER HAD NOT MADE SUCH ELECTION.
   § 7. Paragraph (b) of subdivision 8 of section 11-602 of the  adminis-
 trative code of the city of New York is amended by adding a new subpara-
 graph 23 to read as follows:
   (23)  THE  AMOUNT  OF  GAIN EXCLUDED FROM FEDERAL GROSS INCOME FOR THE
 TAXABLE YEAR BY SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION  (A)  OF
 SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE.
   § 8. Section 11-602 of the administrative code of the city of New York
 is amended by adding a new subdivision 11 to read as follows:
   11.  FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-SIX, UPON THE SALE OR EXCHANGE OF PROPERTY WITH RESPECT TO  WHICH
 THE  TAXPAYER  HAS MADE THE ELECTION UNDER SUBPARAGRAPH (C) OF PARAGRAPH
 (1) OF SUBSECTION (A) OF SECTION 1400Z-2 OF THE INTERNAL  REVENUE  CODE,
 THE  BASIS OF SUCH PROPERTY UNDER THIS ARTICLE SHALL BE DETERMINED AS IF
 THE TAXPAYER HAD NOT MADE SUCH ELECTION.
   § 9. Paragraph (b) of subdivision 8 of section 11-652 of the  adminis-
 trative code of the city of New York is amended by adding a new subpara-
 graph 24 to read as follows:
   (24)  THE  AMOUNT  OF  GAIN EXCLUDED FROM FEDERAL GROSS INCOME FOR THE
 TAXABLE YEAR BY SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION  (A)  OF
 SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE.
   §  10.  Subdivision  8 of section 11-652 of the administrative code of
 the city of New York is amended by adding a new paragraph (u) to read as
 follows:
   (U) FOR TAX YEARS BEGINNING ON OR AFTER JANUARY  FIRST,  TWO  THOUSAND
 TWENTY-SIX,  UPON THE SALE OR EXCHANGE OF PROPERTY WITH RESPECT TO WHICH
 THE TAXPAYER HAS MADE THE ELECTION UNDER SUBPARAGRAPH (C)  OF  PARAGRAPH
 (1)  OF  SUBSECTION (A) OF SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE,
 THE BASIS OF SUCH PROPERTY UNDER THIS ARTICLE SHALL BE DETERMINED AS  IF
 THE TAXPAYER HAD NOT MADE SUCH ELECTION.
   § 11. Subdivision (b) of section 11-1712 of the administrative code of
 the  city of New York is amended by adding a new paragraph 40 to read as
 follows:
   (40) THE AMOUNT OF GAIN EXCLUDED FROM FEDERAL  GROSS  INCOME  FOR  THE
 TAXABLE  YEAR  BY SUBPARAGRAPH (C) OF PARAGRAPH (1) OF SUBSECTION (A) OF
 SECTION 1400Z-2 OF THE INTERNAL REVENUE CODE.
   § 12. Section 11-1712 of the administrative code of the  city  of  New
 York is amended by adding a new subdivision (w) to read as follows:
   (W)  FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-SIX, UPON THE SALE OR EXCHANGE OF PROPERTY WITH RESPECT TO  WHICH
 S. 3340                             3
 
 THE  TAXPAYER  HAS MADE THE ELECTION UNDER SUBPARAGRAPH (C) OF PARAGRAPH
 (1) OF SUBSECTION (A) OF SECTION 1400Z-2 OF THE INTERNAL  REVENUE  CODE,
 THE  BASIS OF SUCH PROPERTY UNDER THIS ARTICLE SHALL BE DETERMINED AS IF
 THE TAXPAYER HAD NOT MADE SUCH ELECTION.
   §  13. This act shall take effect immediately and shall apply to taxa-
 ble years beginning on or after January 1, 2026.

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Senate Bill S3340

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Sponsored By

Michael Gianaris