NY State Senate Bill 2025-S7323

Senate Bill S7323

2025-2026 Legislative Session

Enacts the MEGA corporations act mandating worldwide combined reporting for large corporations

download bill text pdf

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

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 10, 2025	referred to budget and revenue

co-Sponsors

2025-S7323 (ACTIVE) - Details

See Assembly Version of this Bill:: A6629
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§210-C, 208 & 210-A, Tax L

2025-S7323 (ACTIVE) - Summary

Enacts the MEGA corporations act mandating worldwide combined reporting for large corporations that have more than one billion dollars in gross receipts.

2025-S7323 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S7323

SPONSOR: KRUEGER
 
TITLE OF BILL:

An act to amend the tax law, in relation to enacting the MEGA corpo-
rations act mandating worldwide combined reporting for large corpo-
rations

 
PURPOSE OR GENERAL IDEA OF BILL:

The MEGA Corporations Act would ensure that large multinational corpo-
rations pay their fair share of New York State's corporate franchise
tax. The bill closes a significant gap in the way that this tax is
calculated, which currently allows multinationals to shift domestic
profits, including those derived from sales in New York, to foreign
affiliates.

 
SUMMARY OF SPECIFIC PROVISIONS:,

Section 1 titles the bill the "multinational earnings and global
accountability for (MEGA) corporations act."

Section 2 describes the legislative intent of the bill, which is to
ensure that multinational corporations pay their fair share of tax so
that New York-based businesses that cannot shift profits overseas are no
longer at a competitive disadvantage with large multinational companies
that can.

Section 3 amends section 210-c of Article 9-A of the tax law to repeal
the existing rule that alien (i.e. foreign) corporations cannot be
included in a combined tax return for the corporate franchise tax.  The
repeal applies only where the combined annual gross receipts of the
corporation's unitary business exceeds one billion dollars.

Section 4 amends section 208 of the tax law to include worldwide income
in the definition of entire net income for alien corporations required
to file a combined report under the bill.

Section 5 amends section 210-a of the taw law to exclude global intangi-
ble low-taxed income from the denominator of the apportionment formula
for any corporation required to file a combined report Under the bill.

Section 6 provides that the commissioner of tax and finance shall
promulgate any rules or regulations necessary to administer the
provisions of this title, including but not limited to rules and regu-
lations necessary to prevent the double-taxation of income.

Section 7 provides that the bill shall apply to taxable years commencing
on or after January 1, 2026.

 
JUSTIFICATION:;

The MEGA Corporations Act would ensure that large multinational corpo-
rations pay their fair share of New York State's corporate franchise tax
(more commonly referred to as the corporate income tax). The bill closes
a significant gap in the way that this tax is calculated, which current-
ly allows multinationals to shift domestic profits, including those

deriving from sales in New York, to foreign affiliates, often located in
tax haven jurisdictions.

The State's corporate franchise tax generally operates by calculating
the fraction of a corporation's total sales that are made to purchasers
in New York. This is known as the "apportionment fraction." The appor-
tionment fraction is then applied to the corporation's total profits, in
order to calculate the share of those profits subject to tax by New
York.

When multiple corporations operate effectively as a single business, New
York requires them to file what is known as a "combined report," in
order to capture all profits. The combined report, however, only
includes (with some exceptions) domestic entities. This is known as
"water's edge" combined reporting, and it allows multinational corpo-
rations to reduce their New York State tax liability by shifting profits
overseas. This gives them a significant advantage over purely domestic
businesses that cannot engage in such tax avoidance, while depriving the
State of significant tax revenue to which it is reasonably entitled.

This is both a matter of basic fairness in taxation and one with signif-
icant fiscal implications. The institute on Taxation and Economic Policy
(ITEP) estimates that roughly 14% of state corporate income tax revenues
across the country - or nearly $20 billion annually - is being lost to
overseas profit-shifting under existing state tax laws. While the Biden
Administration made progress on international cooperation to reduce
global tax avoidance, an early Trump Administration Executive Order
withdrew from the agreement to establish a global minimum tax, known as
Pillar II.

In New York, every year, we arc losing more than $700 million in corpo-
rate franchise tax revenue. This money could be recovered by shifting
from water's edge combined reporting to worldwide combined reporting.
The MEGA Corporations Act would make this reform for multinationals that
have gross receipts in excess of $1 billion, in order to recoup most, if
not all, of this revenue.

Even as it accounts for worldwide sales and profits, this corporate
franchise tax would still only tax a share of profits that is propor-
tional to New York's share of a company's worldwide sales. A company
with significant foreign sales would see the denominator of its appor-
tionment fraction grow, making the fraction smaller. For a hypothetical
company that is not engaged in profit shifting, and for which profits
track sales, the reduction of the apportionment fraction would offset
the inclusion of foreign profits, and the company's tax liability would
not change. Along the same lines, a company with substantial foreign
losses might see their Lax liability in New York decrease.

It is also important to note that a company's corporate franchise tax
liability is based on sales in New York, and not whether the company is
headquartered in New York or employs New Yorkers. As a result, shifting
from water's edge combined reporting to worldwide combined reporting,
and doing so only for large multinational corporations, should have
little effect on the state's business climate or economic competitive-
ness.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS:

Significant additional revenue for the State of New York.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2025-S7323 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7323
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              April 10, 2025
                                ___________
 
 Introduced  by Sens. KRUEGER, GOUNARDES -- read twice and ordered print-
   ed, and when printed to be committed to the Committee  on  Budget  and
   Revenue
 
 AN  ACT  to  amend  the tax law, in relation to enacting the MEGA corpo-
   rations act mandating worldwide combined reporting  for  large  corpo-
   rations

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the  "multinational earnings and global accountability for (MEGA) corpo-
 rations act".
   § 2. Legislative intent.  The  legislature  finds  that  multinational
 corporations who profit from sales in New York often engage in practices
 that shift profits outside the United States to reduce their tax liabil-
 ity.  To ensure a level playing field with New York-based businesses and
 that multinationals pay their fair share, this  act  mandates  worldwide
 combined  reporting  for  multinational corporations with gross receipts
 exceeding one billion dollars, requiring them  to  report  all  profits,
 international  and  domestic,  against which the corporate franchise tax
 can be levied based on the portion of sales made in New York.
   § 3. Paragraphs (b) and (c) of subdivision 2 of section 210-C  of  the
 tax  law,  as added by section 18 of part A of chapter 59 of the laws of
 2014, are amended to read as follows:
   (b) A corporation required to make a combined report within the  mean-
 ing  of this section shall also include (i) a captive REIT and a captive
 RIC if the captive REIT or captive RIC is not required to be included in
 a combined report under article thirty-three of  this  chapter;  (ii)  a
 combinable  captive  insurance  company;  and (iii) an alien corporation
 that satisfies the conditions in paragraph (a) of  this  subdivision  if
 (I)  under  any provision of the internal revenue code, that corporation
 is treated as a "domestic corporation" as defined in section seven thou-

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04124-04-5

 S. 7323                             2
 
 sand seven hundred one of the internal revenue code, [or]  (II)  it  has
 effectively  connected  income  for  the taxable year pursuant to clause
 (iv) of the opening paragraph of subdivision nine of section two hundred
 eight of this article, OR (III) IT IS ENGAGED IN A UNITARY BUSINESS WITH
 ANY TAXPAYER AND THE COMBINED ANNUAL GROSS RECEIPTS OF THE UNITARY BUSI-
 NESS  INCLUDING  BOTH  TAXPAYERS  AND  NONTAXPAYERS  EXCEEDS ONE BILLION
 DOLLARS.
   (c) A corporation required or permitted  to  make  a  combined  report
 under  this  section  does not include (i) a corporation that is taxable
 under a franchise tax imposed by article nine or article thirty-three of
 this chapter or would be taxable under a franchise tax imposed by  arti-
 cle  nine or thirty-three of this chapter if subject to tax; (ii) a REIT
 that is not a captive REIT, and a RIC that is not a captive RIC; (iii) a
 New York S corporation; or (iv) an  alien  corporation  that  under  any
 provision  of  the  internal  revenue code is not treated as a "domestic
 corporation" as defined in section seven thousand seven hundred  one  of
 such  code,  IS NOT ENGAGED WITH ANY TAXPAYER IN A UNITARY BUSINESS WITH
 COMBINED ANNUAL GROSS RECEIPTS INCLUDING BOTH TAXPAYERS AND NONTAXPAYERS
 IN EXCESS OF ONE BILLION  DOLLARS,  and  has  no  effectively  connected
 income for the taxable year pursuant to clause (iv) of the opening para-
 graph  of subdivision nine of section two hundred eight of this article.
 If a corporation is subject to tax under this article solely as a result
 of its ownership of a limited partner interest in a limited  partnership
 that  is  doing business, employing capital, owning or leasing property,
 maintaining an office in this state, or deriving receipts from  activity
 in  this  state,  and none of the corporation's related corporations are
 subject to tax  under  this  article,  such  corporation  shall  not  be
 required  or permitted to file a combined report under this section with
 such related corporations.
   § 4.  Paragraph (iv) of the opening  paragraph  of  subdivision  9  of
 section 208 of the tax law, as amended by section 4 of part A of chapter
 59  of  the laws of 2014, is amended and a new paragraph (v) is added to
 read as follows:
   (iv) EXCEPT AS PROVIDED IN PARAGRAPH (V) OF  THIS  PARAGRAPH,  in  the
 case  of  an  alien corporation that under any provision of the internal
 revenue code is not treated as a "domestic corporation"  as  defined  in
 section  seven  thousand  seven  hundred one of such code is effectively
 connected with the conduct of a trade  or  business  within  the  United
 States  as determined under section 882 of the Internal Revenue Code[.];
 OR
   (V) IN THE CASE OF AN ALIEN CORPORATION REQUIRED TO BE INCLUDED  IN  A
 COMBINED  REPORT PURSUANT TO PARAGRAPH (B) OF SUBDIVISION TWO OF SECTION
 TWO HUNDRED TEN-C OF THIS ARTICLE, THE  CORPORATION'S  WORLDWIDE  INCOME
 COMPUTED AS IF SUCH CORPORATION WERE SUBJECT TO TAX.
   § 5. Paragraph (a) of subdivision 5-a of section 210-A of the tax law,
 as  amended by section 3 of part I of chapter 39 of the laws of 2019, is
 amended to read as follows:
   (a) Notwithstanding any other provision of this section, global intan-
 gible low-taxed income shall be included in the  apportionment  fraction
 as  provided  in  this subdivision, EXCEPT FOR A CORPORATION REQUIRED TO
 FILE A COMBINED REPORT WITHIN THE MEANING OF SUBPARAGRAPH (III) OF PARA-
 GRAPH (B) OF SUBDIVISION TWO OF SECTION TWO HUNDRED TEN-C OF THIS  ARTI-
 CLE,  BECAUSE  THEY  ARE ENGAGED IN A UNITARY BUSINESS WITH ANY TAXPAYER
 AND THE COMBINED ANNUAL GROSS RECEIPTS OF THE UNITARY BUSINESS INCLUDING
 BOTH TAXPAYERS AND NONTAXPAYERS EXCEEDS ONE BILLION DOLLARS, WHICH SHALL
 S. 7323                             3
 
 NOT INCLUDE GLOBAL INTANGIBLE LOW-TAXED INCOME IN THE DENOMINATOR OF THE
 APPORTIONMENT FRACTION.
   §  6. The commissioner of taxation and finance is authorized to repeal
 or make any necessary additions or amendments to any applicable rules or
 regulations in order to administer the provisions of this  act,  includ-
 ing,  but not limited to, those necessary to prevent the double-taxation
 of income.
   § 7. This act shall take effect immediately and shall apply to taxable
 years commencing on or after January 1, 2026.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Senate Bill S7323

Share this bill

Sponsored By

Liz Krueger