BILL NUMBER: S4166

SPONSOR: BAILEY
 
TITLE OF BILL:

An act to amend the tax law, in relation to taxpayers affected by a
federal government shutdown

 
PURPOSE OR GENERAL IDEA OF BILL:

To allow New York State residents affected by a federal government shut-
down an automatic tax return extension.

 
SUMMARY OF PROVISIONS:

Section 1: Section 657 of the tax law is amended to create an automatic
extension for employees affected by a federal government shutdown. An
automatic extension shall be granted to any taxpayer who is employed by
the federal government and is furloughed as a result of a government
shutdown. Such extension shall be granted for filing a tax return or
paying a tax otherwise required on April 15th. The length of such exten-
sion shall be 60 days from the date the federal government reopens. No
              

penalties or interest shall be passed or imposed upon a taxpayer during
such extension as granted.

Section 2: Section 171 of the tax law is amended by adding a new subdi-
vision 29. Provide for the payment by the department of every refund due
to a taxpayer pursuant to subsection (d) of section 657 of this chapter
within 30 days of the receipt by the department of the tax return claim-
ing such refund, provided that, if the department is unable to pay tax
refund because of a discrepancy in the taxpayer's tax return, the
department shall, within such 30-day period, provide written notice to
the taxpayer of the specific discrepancy and a date can be expected to
be resolved Upon the failure to provide a refund or written notice to a
taxpayer pursuant to paragraph (a) of this subdivision, the department
shall pay the taxpayer interested on the refund owed at a rate of six
percent per annum.

 
JUSTIFICATION:

The last federal government shutdown was the longest in U.S. history,
taking place between December 22, 2018, and January 25, 2019. As the
shutdown stretched into its second month, many furloughed federal
employees struggled to feed their families. The only real solution is to
reopen the government. However, the continued uncertainty around the
potential for a federal government shutdown means that state governments
must enact legislation that will guarantee financial solvency to the
people directly impacted. During the 2018 shutdown, it was estimated
that 420,000 federal employees were required to work without pay, while
an additional 380,000 were furloughed. In the past, government employees
usually received back pay at the end of a shutdown.

This legislation allows New York State residents affected by a federal
government shutdown an automatic extension that otherwise is required to
file a return on April 15. The length of the extension is 60 days from
the date the federal government reopens, with no penalties or interest
imposed on the taxpayer.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.

 
LEGISLATIVE HISTORY:

2021-22: Referred to Budget and Revenue

2023-24: Referred to Budget and Revenue

 
EFFECTIVE DATE:
Immediately.