2005-06 Budget - Article 7 Bill s995
STATE OF NEW YORK
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S. 995 A. 1925
SENATE - ASSEMBLY
January 21, 2005
___________
IN SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti-
cle seven of the Constitution -- read twice and ordered printed, and
when printed to be committed to the Committee on Finance
IN ASSEMBLY -- A BUDGET BILL, submitted by the Governor pursuant to
article seven of the Constitution -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the alcoholic beverage control law, in relation to
permitting eligible out-of-state and in-state wineries to direct ship
limited quantities of wine to New York state residents under certain
circumstances (Part A); to amend chapter 405 of the laws of 1999
amending the real property tax law relating to improving the adminis-
tration of the school tax relief (STAR) program and other laws, and to
amend the tax law, in relation to the lottery game of Quick Draw (Part
B); to amend the tax law, in relation to accelerating the phase of the
temporary increases to the personal income tax rates (Part C); to
amend the tax law, in relation to providing an exemption for new Ener-
gy Star appliances from the state's sales and compensating use taxes
imposed by article 28 of the tax law during two seven-day periods each
year and authorizing counties and cities to elect such exemption from
their sales and use taxes imposed by or pursuant to the authority of
such law (Part D); to amend the tax law and the administrative code of
the city of New York, in relation to requiring certain tax return
preparers to electronically file income tax returns (Part E); to amend
the tax law, in relation to the imposition of filing fees on limited
liability companies which are disregarded entities for federal income
tax purposes (Part F); to amend the public housing law, in relation to
providing a credit against income tax for persons or entities invest-
ing in low-income housing (Part G); to amend the tax law, in relation
to providing two exemption weeks each year for certain clothing and
footwear from sales and compensating use taxes imposed by or pursuant
to the authority of article 28 or 29 of such law and authorizing coun-
ties and cities to elect such exemptions from such taxes; and to
repeal section 6 of part A of chapter 60 of the laws of 2004, relating
to the authority of certain counties and cities to elect or repeal the
year-round clothing and footwear exemption from their sales and
compensating use taxes, effective June 1, 2005 (Part H); to amend the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD12174-01-5
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tax law, in relation to making permanent section 1142-A of such law,
which sets forth special requirements relating to the service of
providing parking, garaging or storing for motor vehicles (Part I); to
amend the tax law, in relation to changing the requirement that resi-
dents must file New York personal income tax returns even if they do
not have sufficient income to incur New York tax (Part J); to amend
the tax law, in relation to permitting the commissioner of taxation
and finance to agree with the finance commissioner of the city of New
York to credit certain city tax overpayments against outstanding state
tax warrants and to agree with officials of other states for recipro-
cal application of tax overpayments to tax debts owed this and such
other states (Part K); to amend the alcoholic beverage control law,
the tax law, the education law and the judiciary law, in relation to
tax compliance by persons seeking state liquor authority licenses,
state contracts, or licenses to practice medicine, certified public
accountancy or law (Part L); to amend the tax law, in relation to the
determination of entire net income of corporations under articles 9-A,
32 and 33 of such law (Part M); to amend the tax law, in relation to
increasing the amount of the capital base tax under article 9-A of
such law (Part N); to amend the tax law, in relation to extending the
time to apply for and claim green building tax credits and providing
an additional amount of such credits (Part O); to amend the tax law,
in relation to the exemption from the franchise tax on town or county
cooperative insurance corporations (Part P); to amend the tax law, in
relation to requiring the disclosure of certain information related to
participation in tax avoidance transactions, or tax shelters, imposing
penalties for non-disclosure or underpayments attributable to tax
shelters, extending the statute of limitations applicable to certain
deficiencies arising from tax shelter transactions, and establishing a
voluntary compliance initiative with respect to tax avoidance trans-
actions (Part Q); to amend the tax law, in relation to providing a
refundable personal income tax credit related to the STAR real proper-
ty tax exemption (Part R); to amend the civil practice law and rules,
in relation to the undertaking required of tobacco product master
settlement agreement signatories and affiliates to stay enforcement of
a judgment during appeal (Part S); to authorize compensation to the
state for any reimbursements, overpayments, adjustments or other
modifications made to a county or the city of New York (Part T); to
amend the tax law, in relation to the long-term care insurance credit
and the computation of such credit for nonresident taxpayers and part-
year resident taxpayers (Part U); to amend the tax law, in relation to
extending certain provisions concerning taxes imposed on the sale of
alternative fuel vehicles, and in relation to providing tax credits
and exemptions for alternative fuel vehicles and the production and
storage of biofuel (Part V); and to amend the tax law, in relation to
taxes on wines under article 18 of the tax law (Part W)
The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
1 Section 1. This act enacts into law major components of legislation
2 which are necessary to implement the state fiscal plan for the 2005-2006
3 state fiscal year. Each component is wholly contained within a Part
4 identified as Parts A through W. The effective date for each particular
5 provision contained within such Part is set forth in the last section of
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1 such Part. Any provision in any section contained within a Part, includ-
2 ing the effective date of the Part, which makes reference to a section
3 "of this act", when used in connection with that particular component,
4 shall be deemed to mean and refer to the corresponding section of the
5 Part in which it is found. Section three of this act sets forth the
6 general effective date of this act.
7 PART A
8 Section 1. The alcoholic beverage control law is amended by adding a
9 new section 79-c to read as follows:
10 § 79-c. Out-of-state-winery direct shipper's license. 1. Persons
11 eligible. A person located in and licensed by another state to operate a
12 winery is eligible to apply for an annual out-of-state-winery direct
13 shipper's license which will permit such out-of-state-winery to ship no
14 more than two cases (no more than nine liters each case) of wine
15 produced by such winery per month to any New York state resident who is
16 at least twenty-one years of age, for such resident's personal use and
17 not for resale, provided that the state in which such out-of-state-win-
18 ery is located affords to New York state winery and farm winery licen-
19 sees reciprocal shipping privileges.
20 2. License required. Before sending any shipment to a New York resi-
21 dent, an eligible out-of-state-winery must first receive New York state
22 liquor authority approval of an application for an out-of-state-winery
23 direct shipper's license. Such application shall set forth such informa-
24 tion as may be required by the New York state liquor authority, and be
25 accompanied by true copies of the applicant's federal basic permit and
26 the applicant's current license to manufacture wine issued in its state
27 of domicile, along with a fee of one hundred twenty-five dollars;
28 notwithstanding the provisions of section one hundred ten of this chap-
29 ter, the authority in its discretion may excuse an out-of-state-winery
30 from the submission of such information.
31 3. Licensee's responsibilities. The holder of an out-of-state-winery
32 direct shipper's license shall:
33 (a) ship no more than two cases (no more than nine liters each case)
34 per month of wine produced by such license holder directly to a New York
35 state resident who is at least twenty-one years of age, for such resi-
36 dent's personal use and not for resale;
37 (b) ensure that the outside of each shipping container used to ship
38 wine directly to a New York resident is conspicuously labeled with the
39 words: "CONTAINS WINE - SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR
40 DELIVERY," or with other language specifically approved by the New York
41 state liquor authority;
42 (c) report to the authority annually, in such manner and form as the
43 authority may direct, the total amount of wine shipped into the state
44 the preceding calendar year; the names and addresses of the purchasers
45 to whom the wine was shipped, the date purchased, the name of the common
46 carrier used to deliver the wine, and the quantity and value of each
47 shipment;
48 (d) in connection with the acceptance of an order for a delivery of
49 wine to a New York resident, require the prospective customer to repre-
50 sent that he or she has attained the age of twenty-one years or more and
51 that the wine being purchased will not be resold or introduced into
52 commerce;
53 (e) require common carriers to:
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1 (1) require the recipient, upon delivery, to demonstrate that the
2 recipient is at least twenty-one years of age by providing a valid form
3 of photographic identification authorized by section sixty-five-b of
4 this chapter;
5 (2) require the recipient to sign an electronic or paper form or other
6 acknowledgement of receipt as approved by the authority; and
7 (3) refuse delivery when the proposed recipient appears to be under
8 twenty-one years of age and refuses to present valid identification as
9 required by subparagraph one of this paragraph;
10 (f) file returns with and pay to the New York state department of
11 taxation and finance all state and local sales taxes and excise taxes
12 due on sales into this state in accordance with the applicable
13 provisions of the tax law relating to such taxes, the amount of such
14 taxes to be determined on the basis that each sale in this state was at
15 the location where delivery is made;
16 (g) keep records for three years and permit the authority or the
17 department of taxation and finance to perform an audit of such out-of-
18 state-winery upon request;
19 (h) execute a written consent to the jurisdiction of this state, its
20 agencies and instrumentalities and the courts of this state concerning
21 enforcement of this section and any related laws, rules, or regulations,
22 including tax laws, rules or regulations; and
23 (i) prior to obtaining an out-of-state-winery's direct shipper's
24 license, obtain a certificate of authority pursuant to section eleven
25 hundred thirty-four of the tax law and a registration as a distributor
26 pursuant to sections four hundred twenty-one and four hundred twenty-two
27 of the tax law.
28 4. Situs. Delivery of a shipment in this state by the holder of an
29 out-of-state-winery direct shipper's license shall be deemed to consti-
30 tute a sale in this state at the place of delivery and shall be subject
31 to all excise taxes levied pursuant to section four hundred twenty-four
32 of the tax law and all sales taxes levied pursuant to articles twenty-
33 eight and twenty-nine of such law.
34 5. Renewal. The out-of-state-winery may annually renew its direct
35 shipper's license with the authority by paying a one hundred twenty-five
36 dollar renewal fee, providing the authority with true copies of its
37 current federal basic permit and its current license to manufacture wine
38 issued in its state of domicile, and by complying with such other appli-
39 cation and renewal procedures as prescribed by rule of the authority.
40 6. Rules and regulations. The authority and the department of taxation
41 and finance may promulgate rules and regulations to effectuate the
42 purposes of this section.
43 7. Violations. In any action brought under this section, the common
44 carrier and the licensee shall only be held liable for their independent
45 acts.
46 8. Enforcement. The authority may enforce the requirements of this
47 section, including the requirements imposed on the common carrier, by
48 administrative proceedings to suspend, cancel or revoke an out-of-state-
49 winery direct shipper's license, and the authority may accept payment of
50 an administrative fine or bond forfeiture in addition to or in lieu of
51 suspension, cancellation or revocation.
52 9. Severability. If any provision of this section or if any applica-
53 tion thereof to any person or circumstance is held to be invalid, such
54 invalidity shall not affect other provisions or applications of this
55 section which shall be given effect without the invalid provisions or
S. 995 5 A. 1925
1 application, and to this end the provisions of this section are severa-
2 ble.
3 § 2. The alcoholic beverage control law is amended by adding a new
4 section 79-d to read as follows:
5 § 79-d. Direct intrastate wine shipments. Any person having applied
6 for and received a license as a winery or farm winery under sections
7 seventy-six and seventy-six-a of this article may ship no more than two
8 cases (no more than nine liters each case) of wine produced by such
9 winery or farm winery per month directly to a New York state resident
10 who is at least twenty-one years of age, for such resident's personal
11 use and not for resale.
12 1. Licensee's shipping responsibilities. Notwithstanding any provision
13 to the contrary contained in this chapter, any winery licensee or farm
14 winery licensee shall:
15 (a) ship no more than two cases (no more than nine liters each case)
16 per month of wine produced by such license holder directly to a New York
17 state resident who is at least twenty-one years of age, for such resi-
18 dent's personal use and not for resale;
19 (b) ensure that the outside of each shipping container used to ship
20 wine directly to a New York state resident is conspicuously labeled with
21 the words: "CONTAINS WINE - SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED
22 FOR DELIVERY," or with other language specifically approved by the New
23 York state liquor authority;
24 (c) report to the authority annually, in such manner and form as the
25 authority may direct the total amount of wine shipped in the state the
26 preceding calendar year, the names and addresses of the purchasers to
27 whom the wine was shipped, the date purchased, the name of the common
28 carrier used to deliver the wine, and the quantity and value of each
29 shipment;
30 (d) in connection with the acceptance of an order for a delivery of
31 wine to a New York resident, require the prospective customer to repre-
32 sent that he or she has attained the age of twenty-one years or more and
33 that the wine being purchased will not be resold or introduced into
34 commerce; and
35 (e) require common carriers to:
36 (1) require the recipient, upon delivery, to demonstrate that the
37 recipient is at least twenty-one years of age by providing a valid form
38 of photographic identification authorized by section sixty-five-b of
39 this chapter;
40 (2) require the recipient to sign an electronic or paper form or other
41 acknowledgment of receipt as approved by the authority; and
42 (3) refuse delivery when the proposed recipient appears to be under
43 twenty-one years of age and refuses to present valid identification as
44 required by subparagraph one of this paragraph.
45 2. Severability. If any provision of this section or if any applica-
46 tion thereof to any person or circumstance is held to be invalid, such
47 invalidity shall not affect other provisions or applications of this
48 section which shall be given effect without the invalid provisions or
49 application, and to this end the provisions of this section are severa-
50 ble.
51 § 3. Paragraphs (c) and (d) of subdivision 1 of section 102 of the
52 alcoholic beverage control law, as amended by chapter 242 of the laws of
53 1970, are amended to read as follows:
54 (c) [No] Except as provided in section seventy-nine-c of this chapter,
55 no alcoholic beverages shall be shipped into the state unless the same
56 shall be consigned to a person duly licensed hereunder to traffic in
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1 alcoholic beverages. This prohibition shall apply to all shipments of
2 alcoholic beverages into New York state and includes importation or
3 distribution for commercial purposes, for personal use, or otherwise,
4 and irrespective of whether such alcoholic beverages were purchased
5 within or without the state, provided, however, this prohibition shall
6 not apply to any shipment consigned to a New York resident who has
7 personally purchased alcoholic beverages for his personal use while
8 outside the United States for a minimum period of forty-eight consec-
9 utive hours and which he has shipped as consignor to himself as
10 consignee. Purchases made outside the United States by persons other
11 than the purchaser himself, regardless whether made as his agent, or by
12 his authorization or on his behalf, are deemed not to have been
13 personally purchased within the meaning of this paragraph.
14 (d) [No] Except as provided in section seventy-nine-c of this chapter,
15 no common carrier or other person shall bring or carry into the state
16 any alcoholic beverages, unless the same shall be consigned to a person
17 duly licensed hereunder to traffic in alcoholic beverages, provided,
18 however, that alcoholic beverages may be delivered by a trucking permit-
19 tee from a steamship or railroad station or terminal to a New York resi-
20 dent who has personally purchased alcoholic beverages for his personal
21 use while outside the United States for a minimum period of forty-eight
22 consecutive hours, and which he has shipped as consignor to himself as
23 consignee, and except as so stated, no trucking permittee shall accept
24 for delivery, deliver or transport from a steamship or railroad station
25 or terminal any shipment of alcoholic beverages consigned to a non-li-
26 censed person having his home or business in New York state. Purchases
27 of alcoholic beverages made outside the United States by persons other
28 than the purchaser himself, regardless whether made as his agent, or by
29 his authorization or on his behalf, are deemed not to have been
30 personally purchased within the meaning of this paragraph.
31 § 4. Subdivision 3 of section 17 of the alcoholic beverage control
32 law, as separately amended by section 1 of part L of chapter 62 and
33 chapter 522 of the laws of 2003, is amended to read as follows:
34 3. To revoke, cancel or suspend for cause any license or permit issued
35 under this chapter and/or to impose a civil penalty for cause against
36 any holder of a license or permit issued pursuant to this chapter. Any
37 civil penalty so imposed shall not exceed the sum of ten thousand
38 dollars as against the holder of any retail permit issued pursuant to
39 sections ninety-five, ninety-seven, ninety-eight, ninety-nine-d and
40 paragraph f of subdivision one of section ninety-nine-b of this chapter
41 and as against the holder of any retail license issued pursuant to
42 sections fifty-two, fifty-three-a, fifty-four, fifty-four-a, fifty-five,
43 fifty-five-a, sixty-three, sixty-four, sixty-four-a, sixty-four-b,
44 sixty-four-c, seventy-nine, seventy-nine-c, eighty-one and eighty-one-a
45 of this chapter, and the sum of thirty thousand dollars as against the
46 holder of a license issued pursuant to sections fifty-three, seventy-
47 six, seventy-six-a, seventy-six-f, and seventy-eight of this chapter,
48 provided that the civil penalty against the holder of a wholesale
49 license issued pursuant to section fifty-three of this chapter shall not
50 exceed the sum of ten thousand dollars where that licensee violates
51 provisions of this chapter during the course of the sale of beer at
52 retail to a person for consumption at home, and the sum of one hundred
53 thousand dollars as against the holder of any license issued pursuant to
54 sections fifty-one, sixty-one and sixty-two of this chapter. Any civil
55 penalty so imposed shall be in addition to and separate and apart from
56 the terms and provisions of the bond required pursuant to section one
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1 hundred twelve of this chapter. Provided that no appeal is pending on
2 the imposition of such civil penalty, in the event such civil penalty
3 imposed by the division remains unpaid, in whole or in part, more than
4 forty-five days after written demand for payment has been sent by first
5 class mail to the address of the licensed premises, a notice of impend-
6 ing default judgment shall be sent by first class mail to the licensed
7 premises and by first class mail to the last known home address of the
8 person who signed the most recent license application. The notice of
9 impending default judgment shall advise the licensee: (a) that a civil
10 penalty was imposed on the licensee; (b) the date the penalty was
11 imposed; (c) the amount of the civil penalty; (d) the amount of the
12 civil penalty that remains unpaid as of the date of the notice; (e) the
13 violations for which the civil penalty was imposed; and (f) that a judg-
14 ment by default will be entered in the supreme court of the county in
15 which the licensed premises are located, or other court of civil juris-
16 diction or any other place provided for the entry of civil judgments
17 within the state of New York unless the division receives full payment
18 of all civil penalties due within twenty days of the date of the notice
19 of impending default judgment. If full payment shall not have been
20 received by the division within thirty days of mailing of the notice of
21 impending default judgment, the division shall proceed to enter with
22 such court a statement of the default judgment containing the amount of
23 the penalty or penalties remaining due and unpaid, along with proof of
24 mailing of the notice of impending default judgment. The filing of such
25 judgment shall have the full force and effect of a default judgment duly
26 docketed with such court pursuant to the civil practice law and rules
27 and shall in all respects be governed by that chapter and may be
28 enforced in the same manner and with the same effect as that provided by
29 law in respect to execution issued against property upon judgments of a
30 court of record. A judgment entered pursuant to this subdivision shall
31 remain in full force and effect for eight years notwithstanding any
32 other provision of law.
33 § 5. This act shall take effect on the sixtieth day after it shall
34 have become a law; and provided, further, that effective immediately,
35 the addition, amendment and/or repeal of any rule or regulation neces-
36 sary for the implementation of this act on its effective date are hereby
37 authorized and directed to be made and completed on or before such
38 effective date.
39 PART B
40 Section 1. Section 1 of part J of chapter 405 of the laws of 1999,
41 amending the real property tax law relating to improving the adminis-
42 tration of the school tax relief (STAR) program and other laws, as
43 amended by section 1 of part X of chapter 60 of the laws of 2004, is
44 amended to read as follows:
45 Section 1. Notwithstanding the provisions of article 5 of the general
46 construction law, the provisions of the tax law amended by sections
47 94-a, 94-d and 94-g of chapter 2 of the laws of 1995 are hereby revived
48 and shall continue in full force and effect as they existed on March 31,
49 1999 [through May 31, 2005, when upon such date they shall expire and be
50 repealed]. Sections 1, 2, 3, 4, and 5, and such part of section 10 of
51 chapter 336 of the laws of 1999 as relates to providing for the effec-
52 tiveness of such sections 1, 2, 3, 4 and 5 shall be nullified in effect
53 on the effective date of this section, except that the amendments made
54 to: paragraph (2) of subdivision a of section 1612 of the tax law by
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1 such section 1; and subdivision b of section 1612 of the tax law by such
2 section 2; and the repeal of section 152 of chapter 166 of the laws of
3 1991 made by such section 5 shall continue to remain in effect.
4 § 2. Paragraph 1 of subdivision a of section 1612 of the tax law, as
5 amended by chapter 336 of the laws of 1999, is amended to read as
6 follows:
7 (1) sixty percent of the total amount for which tickets have been sold
8 for a lawful lottery game introduced on or after the effective date of
9 this paragraph, subject to the following provisions:
10 (A) [drawings in such game shall be held during no more than thirteen
11 hours each day, no more than eight hours of which shall be consecutive;
12 (B) such game shall be available only on premises occupied by licensed
13 lottery sales agents, subject to the following provisions:
14 (i) if the licensee holds a license issued pursuant to the alcoholic
15 beverage control law to sell alcoholic beverages for consumption on the
16 premises, then not less than twenty-five percent of the gross sales must
17 result from sales of food;
18 (ii)] if the licensee does not hold a license issued pursuant to the
19 alcoholic beverage control law to sell alcoholic beverages for consump-
20 tion on the premises, then the premises must have a minimum square
21 footage greater than two thousand five hundred square feet;
22 [(iii) notwithstanding the foregoing provisions, television equipment
23 that automatically displays the results of such drawings may be
24 installed and used without regard to the percentage of food sales or the
25 square footage if such premises are used as:
26 (I) a commercial bowling establishment, or
27 (II) a facility authorized under the racing, pari-mutuel wagering and
28 breeding law to accept pari-mutuel wagers;
29 (C)] (B) the rules for the operation of such game shall be as
30 prescribed by regulations promulgated and adopted by the division,
31 provided however, that such rules shall provide that no person under the
32 age of twenty-one may participate in such games on the premises of a
33 licensee who holds a license issued pursuant to the alcoholic beverage
34 control law to sell alcoholic beverages for consumption on the prem-
35 ises[; and, provided, further, that such regulations may be revised on
36 an emergency basis not later than ninety days after the enactment of
37 this paragraph in order to conform such regulations to the requirements
38 of this paragraph]; or
39 § 3. This act shall take effect immediately.
40 PART C
41 Section 1. Subsections (a), (b) and (c) of section 601 of the tax
42 law, as amended by section 1 of part Y3 of chapter 62 of the laws of
43 2003, are amended to read as follows:
44 (a) Resident married individuals filing joint returns and resident
45 surviving spouses. There is hereby imposed for each taxable year on the
46 New York taxable income of every resident married individual who makes a
47 single return jointly with his spouse under subsection (b) of section
48 six hundred fifty-one and on the New York taxable income of every resi-
49 dent surviving spouse a tax determined in accordance with the following
50 tables:
51 (1) For taxable years beginning after two thousand five:
52 If the New York taxable income is: The tax is:
53 Not over $16,000 4% of the New York taxable
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1 income
2 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over
3 $16,000
4 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over
5 $22,000
6 Over $26,000 but not over $40,000 $1,120 plus 5.9% of excess over
7 $26,000
8 Over $40,000 $1,946 plus 6.85% of excess over
9 $40,000
10 (2) For taxable years beginning in two thousand five:
11 If the New York taxable income is: The tax is:
12 Not over $16,000 4% of the New York taxable
13 income
14 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over
15 $16,000
16 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over
17 $22,000
18 Over $26,000 but not over $40,000 $1,120 plus 5.9% of excess over
19 $26,000
20 Over $40,000 but not over $150,000 $1,946 plus 6.85% of excess over
21 $40,000
22 Over $150,000 but not over $500,000 $9,481 plus [7.25%]
23 7.00% of excess over
24 $150,000
25 Over $500,000 [$34,856] $33,981 plus [7.7%] 7.6%
26 of excess over $500,000
27 (3) For taxable years beginning in two thousand four:
28 If the New York taxable income is: The tax is:
29 Not over $16,000 4% of the New York taxable
30 income
31 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over
32 $16,000
33 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over
34 $22,000
35 Over $26,000 but not over $40,000 $1,120 plus 5.9% of excess over
36 $26,000
37 Over $40,000 but not over $150,000 $1,946 plus 6.85% of excess over
38 $40,000
39 Over $150,000 but not over $500,000 $9,481 plus 7.375% of excess over
40 $150,000
41 Over $500,000 $35,294 plus 7.7% of excess over
42 $500,000
43 (4) For taxable years beginning in two thousand three:
44 If the New York taxable income is: The tax is:
45 Not over $16,000 4% of the New York taxable
46 income
47 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over
48 $16,000
49 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over
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1 $22,000
2 Over $26,000 but not over $40,000 $1,120 plus 5.9% of excess over
3 $26,000
4 Over $40,000 but not over $150,000 $1,946 plus 6.85% of excess over
5 $40,000
6 Over $150,000 but not over $500,000 $9,481 plus 7.5% of excess over
7 $150,000
8 Over $500,000 $35,731 plus 7.7% of excess over
9 $500,000
10 (5) For taxable years beginning after nineteen hundred ninety-six and
11 before two thousand three:
12 If the New York taxable income is: The tax is:
13 Not over $16,000 4% of the New York taxable
14 income
15 Over $16,000 but not over $22,000 $640 plus 4.5% of excess over
16 $16,000
17 Over $22,000 but not over $26,000 $910 plus 5.25% of excess over
18 $22,000
19 Over $26,000 but not over $40,000 $1,120 plus 5.9% of excess over
20 $26,000
21 Over $40,000 $1,946 plus 6.85% of excess over
22 $40,000
23 (6) For taxable years beginning in nineteen hundred ninety-six:
24 If the New York taxable income is: The tax is:
25 Not over $11,000 4% of the New York taxable
26 income
27 Over $11,000 but not over $16,000 $440 plus 5% of excess over
28 $11,000
29 Over $16,000 but not over $22,000 $690 plus 6% of excess over
30 $16,000
31 Over $22,000 $1,050 plus 7% of excess over
32 $22,000
33 (7) For taxable years beginning in nineteen hundred ninety-five:
34 If the New York taxable income is: The tax is:
35 Not over $13,000 4.55% of the New York taxable
36 income
37 Over $13,000 but not over $19,000 $592 plus 5.55% of excess over
38 $13,000
39 Over $19,000 but not over $25,000 $925 plus 6.55% of excess over
40 $19,000
41 Over $25,000 $1,318 plus 7.5% of excess over
42 $25,000
43 (8) For taxable years beginning after nineteen hundred eighty-nine and
44 before nineteen hundred ninety-five:
45 If the New York taxable income is: The tax is:
46 Not over $11,000 4% of the New York taxable
47 income
48 Over $11,000 but not over $16,000 $440 plus 5% of excess over
S. 995 11 A. 1925
1 $11,000
2 Over $16,000 but not over $22,000 $690 plus 6% of excess over
3 $16,000
4 Over $22,000 but not over $26,000 $1,050 plus 7% of excess over
5 $22,000
6 Over $26,000 $1,330 plus 7.875% of excess over
7 $26,000
8 (b) Resident heads of households. There is hereby imposed for each
9 taxable year on the New York taxable income of every resident head of a
10 household a tax determined in accordance with the following tables:
11 (1) For taxable years beginning after two thousand five:
12 If the New York taxable income is: The tax is:
13 Not over $11,000 4% of the New York taxable
14 income
15 Over $11,000 but not over $15,000 $440 plus 4.5% of excess over
16 $11,000
17 Over $15,000 but not over $17,000 $620 plus 5.25% of excess over
18 $15,000
19 Over $17,000 but not over $30,000 $725 plus 5.9% of excess over
20 $17,000
21 Over $30,000 $1,492 plus 6.85% of excess over
22 $30,000
23 (2) For taxable years beginning in two thousand five:
24 If the New York taxable income is: The tax is:
25 Not over $11,000 4% of the New York taxable
26 income
27 Over $11,000 but not over $15,000 $440 plus 4.5% of excess over
28 $11,000
29 Over $15,000 but not over $17,000 $620 plus 5.25% of excess over
30 $15,000
31 Over $17,000 but not over $30,000 $725 plus 5.9% of excess over
32 $17,000
33 Over $30,000 but not over $125,000 $1,492 plus 6.85% of excess over
34 $30,000
35 Over $125,000 but not over $500,000 $8,000 plus [7.25%]
36 7.00% of excess over
37 $125,000
38 Over $500,000 [$35,187] $34,250 plus [7.7%] 7.6%
39 of excess over $500,000
40 (3) For taxable years beginning in two thousand four:
41 If the New York taxable income is: The tax is:
42 Not over $11,000 4% of the New York taxable
43 income
44 Over $11,000 but not over $15,000 $440 plus 4.5% of excess over
45 $11,000
46 Over $15,000 but not over $17,000 $620 plus 5.25% of excess over
47 $15,000
48 Over $17,000 but not over $30,000 $725 plus 5.9% of excess over
49 $17,000
50 Over $30,000 but not over $125,000 $1,492 plus 6.85% of excess over
S. 995 12 A. 1925
1 $30,000
2 Over $125,000 but not over $500,000 $8,000 plus 7.375% of excess over
3 $125,000
4 Over $500,000 $35,656 plus 7.7% of excess over
5 $500,000
6 (4) For taxable years beginning in two thousand three:
7 If the New York taxable income is: The tax is:
8 Not over $11,000 4% of the New York taxable
9 income
10 Over $11,000 but not over $15,000 $440 plus 4.5% of excess over
11 $11,000
12 Over $15,000 but not over $17,000 $620 plus 5.25% of excess over
13 $15,000
14 Over $17,000 but not over $30,000 $725 plus 5.9% of excess over
15 $17,000
16 Over $30,000 but not over $125,000 $1,492 plus 6.85% of excess over
17 $30,000
18 Over $125,000 but not over $500,000 $8,000 plus 7.5% of excess over
19 $125,000
20 Over $500,000 $36,125 plus 7.7% of excess over
21 $500,000
22 (5) For taxable years beginning after nineteen hundred ninety-six and
23 before two thousand three:
24 If the New York taxable income is: The tax is:
25 Not over $11,000 4% of the New York taxable
26 income
27 Over $11,000 but not over $15,000 $440 plus 4.5% of excess over
28 $11,000
29 Over $15,000 but not over $17,000 $620 plus 5.25% of excess over
30 $15,000
31 Over $17,000 but not over $30,000 $725 plus 5.9% of excess over
32 $17,000
33 Over $30,000 $1,492 plus 6.85% of excess over
34 $30,000
35 (6) For taxable years beginning in nineteen hundred ninety-six:
36 If the New York taxable income is: The tax is:
37 Not over $7,500 4% of the New York taxable
38 income
39 Over $7,500 but not over $11,000 $300 plus 5% of excess over
40 $7,500
41 Over $11,000 but not over $15,000 $475 plus 6% of excess over
42 $11,000
43 Over $15,000 $ 715 plus 7% of excess over
44 $15,000
45 (7) For taxable years beginning in nineteen hundred ninety-five:
46 If the New York taxable income is: The tax is:
47 Not over $9,000 4.55% of the New York taxable
S. 995 13 A. 1925
1 income
2 Over $9,000 but not over $14,000 $410 plus 5.55% of excess over
3 $9,000
4 Over $14,000 but not over $19,000 $687 plus 6.55% of excess over
5 $14,000
6 Over $19,000 $1,015 plus 7.5% of excess over
7 $19,000
8 (8) For taxable years beginning after nineteen hundred eighty-nine and
9 before nineteen hundred ninety-five:
10 If the New York taxable income is: The tax is:
11 Not over $7,500 4% of the New York taxable
12 income
13 Over $7,500 but not over $11,000 $300 plus 5% of excess over
14 $7,500
15 Over $11,000 but not over $15,000 $475 plus 6% of excess over
16 $11,000
17 Over $15,000 but not over $17,000 $715 plus 7% of excess over
18 $15,000
19 Over $17,000 $855 plus 7.875% of excess over
20 $17,000
21 (c) Resident unmarried individuals, resident married individuals
22 filing separate returns and resident estates and trusts. There is hereby
23 imposed for each taxable year on the New York taxable income of every
24 resident individual who is not a married individual who makes a single
25 return jointly with his spouse under subsection (b) of section six
26 hundred fifty-one or a resident head of a household or a resident
27 surviving spouse, and on the New York taxable income of every resident
28 estate and trust a tax determined in accordance with the following
29 tables:
30 (1) For taxable years beginning after two thousand five:
31 If the New York taxable income is: The tax is:
32 Not over $8,000 4% of the New York taxable
33 income
34 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over
35 $8,000
36 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over
37 $11,000
38 Over $13,000 but not over $20,000 $560 plus 5.9% of excess over
39 $13,000
40 Over $20,000 $973 plus 6.85% of excess over
41 $20,000
42 (2) For taxable years beginning in two thousand five:
43 If the New York taxable income is: The tax is:
44 Not over $8,000 4% of the New York taxable
45 income
46 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over
47 $8,000
48 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over
49 $11,000
50 Over $13,000 but not over $20,000 $560 plus 5.9% of excess over
S. 995 14 A. 1925
1 $13,000
2 Over $20,000 but not over $100,000 $973 plus 6.85% of excess over
3 $20,000
4 Over $100,000 but not over $500,000 $6,453 plus [7.25%]
5 7.00% of excess over
6 $100,000
7 Over $500,000 [$35,453] $34,453 plus [7.7%] 7.6%
8 of excess over $500,000
9 (3) For taxable years beginning in two thousand four:
10 If the New York taxable income is: The tax is:
11 Not over $8,000 4% of the New York taxable
12 income
13 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over
14 $8,000
15 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over
16 $11,000
17 Over $13,000 but not over $20,000 $560 plus 5.9% of excess over
18 $13,000
19 Over $20,000 but not over $100,000 $973 plus 6.85% of excess over
20 $20,000
21 Over $100,000 but not over $500,000 $6,453 plus 7.375% of excess over
22 $100,000
23 Over $500,000 $35,953 plus 7.7% of excess over
24 $500,000
25 (4) For taxable years beginning in two thousand three:
26 If the New York taxable income is: The tax is:
27 Not over $8,000 4% of the New York taxable
28 income
29 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over
30 $8,000
31 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over
32 $11,000
33 Over $13,000 but not over $20,000 $560 plus 5.9% of excess over
34 $13,000
35 Over $20,000 but not over $100,000 $973 plus 6.85% of excess over
36 $20,000
37 Over $100,000 but not over $500,000 $6,453 plus 7.5% of excess over
38 $100,000
39 Over $500,000 $36,453 plus 7.7% of excess over
40 $500,000
41 (5) For taxable years beginning after nineteen hundred ninety-six and
42 before two thousand three:
43 If the New York taxable income is: The tax is:
44 Not over $8,000 4% of the New York taxable
45 income
46 Over $8,000 but not over $11,000 $320 plus 4.5% of excess over
47 $8,000
48 Over $11,000 but not over $13,000 $455 plus 5.25% of excess over
S. 995 15 A. 1925
1 $11,000
2 Over $13,000 but not over $20,000 $560 plus 5.9% of excess over
3 $13,000
4 Over $20,000 $973 plus 6.85% of excess over
5 $20,000
6 (6) For taxable years beginning in nineteen hundred ninety-six:
7 If the New York taxable income is: The tax is:
8 Not over $5,500 4% of the New York taxable
9 income
10 Over $5,500 but not over $8,000 $220 plus 5% of excess over
11 $5,500
12 Over $8,000 but not over $11,000 $345 plus 6% of excess over
13 $8,000
14 Over $11,000 $525 plus 7% of excess over
15 $11,000
16 (7) For taxable years beginning in nineteen hundred ninety-five:
17 If the New York taxable income is: The tax is:
18 Not over $6,500 4.55% of the New York taxable
19 income
20 Over $6,500 but not over $9,500 $296 plus 5.55% of excess over
21 $6,500
22 Over $9,500 but not over $12,500 $462 plus 6.55% of excess over
23 $9,500
24 Over $12,500 $659 plus 7.5% of excess over
25 $12,500
26 (8) For taxable years beginning after nineteen hundred eighty-nine and
27 before nineteen hundred ninety-five:
28 If the New York taxable
29 income is: The tax is:
30 Not over $5,500 4% of the New York taxable
31 income
32 Over $5,500 but not over $8,000 $220 plus 5% of excess over
33 $5,500
34 Over $8,000 but not over $11,000 $345 plus 6% of excess over
35 $8,000
36 Over $11,000 but not over $13,000 $525 plus 7% of excess over
37 $11,000
38 Over $13,000 $665 plus 7.875% of excess over
39 $13,000
40 § 2. This act shall take effect immediately.
41 PART D
42 Section 1. Subdivision (b) of section 1101 of the tax law is amended
43 by adding a new paragraph 29 to read as follows:
44 (29) New Energy Star appliance. A non-commercial refrigerator (includ-
45 ing a combination refrigerator/freezer), dishwasher, clothes washer (but
46 not including a combination washer/dryer unless the clothes are washed
47 and dried in the same compartment), ceiling fan, ceiling fan light kit,
S. 995 16 A. 1925
1 or room air conditioner, which is sold for the first time at retail,
2 provided such appliance qualifies for, and is labeled with, an Energy
3 Star label by the manufacturer, pursuant to an agreement among the
4 manufacturer, the United States environmental protection agency and the
5 United States department of energy.
6 § 2. Subdivision (a) of section 1115 of the tax law is amended by
7 adding a new paragraph 41 to read as follows:
8 (41) During the seven-day periods each year commencing on the last
9 Monday of January and ending on the first Sunday in February and
10 commencing on the Tuesday immediately preceding the first Monday in
11 September, known as Labor Day, and ending on Labor Day, new Energy Star
12 appliances.
13 § 3. Clause 9 of subdivision (b) of section 1107 of the tax law, as
14 amended by section 78 of part A of chapter 56 of the laws of 1998, is
15 amended to read as follows:
16 (9) Except as otherwise provided by law, the [exemption] exemptions
17 provided for in paragraph thirty of subdivision (a) of section eleven
18 hundred fifteen relating to clothing and footwear and paragraph forty-
19 one of subdivision (a) of section eleven hundred fifteen relating to new
20 Energy Star appliances shall not apply.
21 § 4. Subdivision (f) of section 1109 of the tax law, as added by
22 section 118-a of part A of chapter 389 of the laws of 1997, is amended
23 to read as follows:
24 (f) The [exemption] exemptions contained in [paragraph] paragraphs
25 thirty and forty-one of subdivision (a) of section eleven hundred
26 fifteen of this article shall not apply.
27 § 5. Section 1109 of the tax law is amended by adding a new subdivi-
28 sion (h) to read as follows:
29 (h) Notwithstanding any other provision of state or local law, ordi-
30 nance or resolution to the contrary: (1) In the event that a county,
31 city or school district located in the metropolitan commuter transporta-
32 tion district imposes taxes pursuant to the authority of subpart B of
33 part I of article twenty-nine of this chapter and elects to provide the
34 new Energy Star appliances exemption authorized in paragraph one of
35 subdivision (a) of section twelve hundred ten of this chapter, or a city
36 located in such district in which the taxes provided for in section
37 eleven hundred seven of this article are in effect elects to provide
38 such new Energy Star appliances exemption from such taxes pursuant to
39 the authority of subdivision (m) of such section twelve hundred ten or
40 of section nine of the chapter of the laws of two thousand five which
41 added this subdivision, or the taxes provided for in section eleven
42 hundred eight of this article are in effect in a city located in such
43 district, the exemption provided by paragraph forty-one of subdivision
44 (a) of section eleven hundred fifteen of this article shall be applica-
45 ble in such portion of the metropolitan commuter transportation district
46 in which such county, city or school district is located. The commis-
47 sioner shall determine and certify to the comptroller the amount of
48 revenue forgone at the rate of one-quarter of one percent under this
49 section in such county, city or school district on account of sales of
50 new Energy Star appliances in such county, city or school district.
51 (2) Commencing with the sales tax quarterly period which commences on
52 June first, two thousand five, the commissioner shall make such determi-
53 nations and certifications on the twelfth day of the month following the
54 month in which sales tax quarterly returns are due under section eleven
55 hundred thirty-six of this article with respect to such quarterly period
56 for as long as such new Energy Star appliances exemptions from such
S. 995 17 A. 1925
1 taxes imposed pursuant to the authority of article twenty-nine of this
2 chapter or by section eleven hundred seven or eleven hundred eight of
3 this article are in effect. Neither the commissioner nor the comptroller
4 shall be held liable for any inaccuracy in such determinations and
5 certifications. Such determinations and certifications may be based on
6 such information as may be available to the commissioner at the time
7 such determinations and certifications must be made under this subdivi-
8 sion and may be estimated on the basis of percentages or other indices
9 calculated from distributions from prior periods. The commissioner shall
10 be authorized to require such information as the commissioner deems
11 necessary to comply with the requirements of this subdivision from
12 persons required to file returns under such section eleven hundred thir-
13 ty-six of this article.
14 (3) By the fifteenth day of the month in which the commissioner has
15 made the certifications to the comptroller described in paragraph two of
16 this subdivision, the comptroller shall bill any county, city or school
17 district in such metropolitan commuter transportation district which
18 provides such new Energy Star appliances exemption, and any city in such
19 district in which the taxes imposed by section eleven hundred seven of
20 this part are in effect which has elected to provide such new Energy
21 Star appliances exemption, and any city in such district in which the
22 taxes imposed by section eleven hundred eight of this part are in
23 effect, an amount equal to one-half of the amount certified to the comp-
24 troller by the commissioner in respect of such county, city or school
25 district; and such county, city or school district shall pay the amount
26 of such bill to the comptroller by the twenty-fifth day of such month.
27 The comptroller shall deposit any such amounts received in the mass
28 transportation operating assistance fund established by section eighty-
29 eight-a of the state finance law to the credit of the metropolitan mass
30 transportation operating assistance account therein.
31 (4) In the event that a county, city or school district imposing tax
32 pursuant to the authority of subpart B of part I of article twenty-nine
33 of this chapter does not pay in full a bill described in paragraph three
34 of this subdivision by the twenty-fifth day of the month described in
35 paragraphs two and three of this subdivision, the comptroller shall
36 deduct any amount not paid from the amount of the next payment or
37 payments due such county, city or school district pursuant to subdivi-
38 sion (c) of section twelve hundred sixty-one of this chapter until such
39 amount not paid has been recovered. The comptroller shall deposit the
40 amounts so deducted and recovered in the mass transportation operating
41 assistance fund to be credited as provided in paragraph three of this
42 subdivision.
43 (5) In the event that a city in which the taxes imposed by section
44 eleven hundred seven of this part are in effect does not pay in full a
45 bill described in paragraph three of this subdivision by the twenty-
46 fifth day of the month described in paragraphs two and three of this
47 subdivision, the comptroller shall deduct any amount not paid from the
48 amount of the next payment or payments due such city, with respect to
49 taxes, penalty and interest imposed pursuant to the authority of section
50 twelve hundred twelve-a of this chapter, pursuant to subdivision (c) of
51 section twelve hundred sixty-one of this chapter, until such amount not
52 paid has been recovered. The comptroller shall deposit the amounts so
53 deducted and recovered in the mass transportation operating assistance
54 fund to be credited as provided in paragraph three of this subdivision.
55 (6) In the event that a city in which the taxes imposed by section
56 eleven hundred eight of this part are in effect does not pay in full a
S. 995 18 A. 1925
1 bill described in paragraph three of this subdivision by the twenty-
2 fifth day of the month described in paragraphs two and three of this
3 subdivision, the comptroller shall deduct any amount not paid from the
4 amount of any other moneys due such city from the comptroller, not
5 otherwise pledged, dedicated or encumbered pursuant to other state law,
6 until such amount not paid has been recovered. The comptroller shall
7 deposit the amounts so deducted and recovered in the mass transportation
8 operating assistance fund to be credited as provided in paragraph three
9 of this subdivision.
10 (7) The commissioner shall certify the amount of any over calculation
11 or under calculation of any certification required to be made to the
12 comptroller under paragraph three of this subdivision as soon after its
13 discovery as reasonably possible and subsequent bills to a city, county
14 or school district to which the over calculation or under calculation
15 relates shall be adjusted accordingly, provided that the comptroller may
16 adjust such number of subsequent bills as the comptroller shall consider
17 reasonable in view of the amount of the adjustment and all other facts
18 and circumstances.
19 (8) On the same date that the comptroller is required to bill a coun-
20 ty, city or school district an amount as provided in paragraph three of
21 this subdivision, the comptroller shall, after having first made any
22 deposits required by section ninety-two-r of the state finance law and
23 only to the extent that there are moneys remaining after having made
24 such required deposits, withdraw from the state treasury, to the debit
25 of the general fund, an amount equal to the total of the amounts
26 required to be billed to counties, cities and school districts pursuant
27 to such subdivision three and deposit such total amount in the mass
28 transportation operating assistance fund to be credited as provided in
29 such paragraph three. The amount of any over calculation or under calcu-
30 lation determined in paragraph seven of this subdivision shall likewise
31 be applied to the amounts required to be deposited under this paragraph,
32 so that the amounts deposited under this paragraph equal the total of
33 the amounts required to be billed to counties, cities and school
34 districts under such paragraph three, as adjusted, pursuant to paragraph
35 seven of this subdivision.
36 § 6. Paragraph 1 of subdivision (a) of section 1210 of the tax law, as
37 amended by chapter 472 of the laws of 2000, is amended to read as
38 follows:
39 (1) Either, all of the taxes described in article twenty-eight of this
40 chapter, at the same uniform rate, as to which taxes all provisions of
41 the local laws, ordinances or resolutions imposing such taxes shall be
42 identical, except as to rate and except as otherwise provided herein,
43 with the corresponding provisions in such article twenty-eight, includ-
44 ing the definition and exemption provisions of such article, so far as
45 the provisions of such article twenty-eight can be made applicable to
46 the taxes imposed by such city or county and with such limitations and
47 special provisions as are set forth in this article. However, any local
48 law enacted by any city of one million or more, imposing the taxes
49 authorized by this subdivision, shall omit the exemption provided in
50 subdivision (c) of section eleven hundred fifteen of this chapter inso-
51 far as it applies to fuel, gas, electricity, refrigeration and steam,
52 and gas, electric, refrigeration and steam service of whatever nature
53 for use or consumption directly and exclusively in the production of
54 gas, electricity, refrigeration or steam and, unless such city elects
55 otherwise, the provision for refund or credit contained in clause six of
56 subdivision (a) of section eleven hundred nineteen, and may omit (A) the
S. 995 19 A. 1925
1 exception provided in paragraph three of subdivision (c) of section
2 eleven hundred five of this chapter for receipts from laundering, dry-
3 cleaning, tailoring, weaving, pressing, shoe repairing and shoe shining
4 and (B) the exception provided in paragraph one of subdivision (f) of
5 section eleven hundred five of this chapter for charges to a patron for
6 admission to, or use of, facilities for sporting activities in which
7 such patron is to be a participant, such as bowling alleys and swimming
8 pools. Furthermore, any local law enacted by a city of one million or
9 more imposing the taxes authorized by this subdivision may impose the
10 taxes described in paragraph six of subdivision (c) of section eleven
11 hundred five of this chapter at a rate in addition to the rate
12 prescribed by this section not to exceed two per centum in multiples of
13 one-half of one per centum. The taxes authorized under this subdivision
14 may not be imposed by a city or county unless the local law, ordinance
15 or resolution imposes such taxes so as to include all portions and all
16 types of receipts, charges or rents, subject to state tax under sections
17 eleven hundred five and eleven hundred ten of this chapter, except as
18 provided in the following sentence. Any local law, ordinance or resol-
19 ution enacted by any city of less than one million or by any county or
20 school district, imposing the taxes authorized by this subdivision,
21 shall, notwithstanding any provision of law to the contrary, exclude
22 from the operation of such local taxes all sales of tangible personal
23 property for use or consumption directly and predominantly in the
24 production of tangible personal property, gas, electricity, refriger-
25 ation or steam, for sale, by manufacturing, processing, generating,
26 assembly, refining, mining or extracting; and all sales of tangible
27 personal property for use or consumption predominantly either in the
28 production of tangible personal property, for sale, by farming or in a
29 commercial horse boarding operation, or in both; and, unless such city,
30 county or school district elects otherwise, shall omit the provision for
31 credit or refund contained in clause six of subdivision (a) of section
32 eleven hundred nineteen of this chapter. Any local law, ordinance or
33 resolution enacted by any city, county or school district, imposing the
34 taxes authorized by this subdivision, shall omit the clothing and foot-
35 wear exemption provided for in paragraph thirty of subdivision (a)
36 [and], the qualified empire zone enterprise exemptions provided for in
37 subdivision (z) and the new Energy Star appliances exemption provided
38 for in paragraph forty-one of subdivision (a) of section eleven hundred
39 fifteen of this chapter, unless such city, county or school district
40 elects otherwise as to either such clothing and footwear exemption or
41 such qualified empire zone enterprise exemptions or such new Energy Star
42 appliances exemption; provided that if such a city having a population
43 of one million or more enacts the resolution described in subdivision
44 (k) of this section or repeals such resolution or enacts the resolution
45 described in subdivision (l) of this section or repeals such resolution
46 or enacts the resolution described in subdivision (m) of this section or
47 repeals such resolution, such resolution or repeal shall also be deemed
48 to amend any local law, ordinance or resolution enacted by such a city
49 imposing such taxes pursuant to the authority of this subdivision,
50 whether or not such taxes are suspended at the time such city enacts its
51 resolution pursuant to subdivision (k) [or], (l) or (m) of this section
52 or at the time of any such repeal; provided, further, that any such
53 local law, ordinance or resolution and section eleven hundred seven of
54 this chapter, as deemed to be amended in the event a city of one million
55 or more enacts a resolution pursuant to the authority of subdivision (k)
56 [or], (l) or (m) of this section, shall be further amended, as provided
S. 995 20 A. 1925
1 in section twelve hundred eighteen of this subpart, so that the clothing
2 and footwear exemption or the qualified empire zone enterprise
3 exemptions or the new Energy Star appliances exemption in any such local
4 law, ordinance or resolution or in such section eleven hundred seven of
5 this chapter are the same, as the case may be, as the clothing and foot-
6 wear exemption in paragraph thirty of subdivision (a) or the qualified
7 empire zone enterprise exemptions in subdivision (z) or the new Energy
8 Star appliances exemption provided for in paragraph forty-one of subdi-
9 vision (a) of section eleven hundred fifteen of this chapter.
10 § 7. Subdivision (d) of section 1210 of the tax law, as amended by
11 section 12 of part GG of chapter 63 of the laws of 2000, is amended to
12 read as follows:
13 (d) A local law, ordinance or resolution imposing any tax pursuant to
14 this section, increasing or decreasing the rate of such tax, repealing
15 or suspending such tax, exempting from such tax the energy sources and
16 services described in paragraph three of subdivision (a) or of subdivi-
17 sion (b) of this section or changing the rate of tax imposed on such
18 energy sources and services or providing for the credit or refund
19 described in clause six of subdivision (a) of section eleven hundred
20 nineteen of this chapter must go into effect only on one of the follow-
21 ing dates: March first, June first, September first or December first;
22 provided, that a local law, ordinance or resolution providing for the
23 exemption described in paragraph thirty or forty-one of subdivision (a)
24 or providing for the exemptions described in subdivision (z) of section
25 eleven hundred fifteen of this chapter or repealing any such exemption
26 so provided and a resolution enacted pursuant to the authority of subdi-
27 vision (k) or (m) of this section providing such exemption or subdivi-
28 sion (l) of this section providing such exemptions or repealing such
29 exemption or exemptions so provided must go into effect only on March
30 first. No such local law, ordinance or resolution shall be effective
31 unless a certified copy of such law, ordinance or resolution is mailed
32 by registered or certified mail to the commissioner at the commission-
33 er's office in Albany at least ninety days prior to the date it is to
34 become effective. However, the commissioner may waive and reduce such
35 ninety-day minimum notice requirement to a mailing of such certified
36 copy by registered or certified mail within a period of not less than
37 thirty days prior to such effective date if the commissioner deems such
38 action to be consistent with the commissioner's duties under section
39 twelve hundred fifty of this article and the commissioner acts by resol-
40 ution. Where the restriction provided for in section twelve hundred
41 twenty-three of this article as to the effective date of a tax and the
42 notice requirement provided for therein are applicable and have not been
43 waived, the restriction and notice requirement in section twelve hundred
44 twenty-three of this article shall also apply.
45 § 8. Subdivision (m) of section 1210 of the tax law is relettered
46 subdivision (n) and a new subdivision (m) is added to read as follows:
47 (m) Notwithstanding any other provision of state or local law, ordi-
48 nance or resolution to the contrary:
49 (1) Any city having a population of one million or more in which the
50 taxes imposed by section eleven hundred seven of this chapter are in
51 effect, acting through its local legislative body, is hereby authorized
52 and empowered to elect to provide the exemption from such taxes for the
53 same new Energy Star appliances exempt from state sales and compensating
54 use taxes, during the same periods each year, described in paragraph
55 forty-one of subdivision (a) of section eleven hundred fifteen of this
56 chapter by enacting a resolution exactly in the form set forth in para-
S. 995 21 A. 1925
1 graph two of this subdivision; whereupon, upon compliance with the
2 provisions of subdivisions (d) and (e) of this section, such enactment
3 of such resolution shall be deemed to be an amendment to such section
4 eleven hundred seven and such section eleven hundred seven shall be
5 deemed to incorporate such exemption as if it had been duly enacted by
6 the state legislature and approved by the governor.
7 (2) Form of Resolution: Be it enacted by the (insert proper title of
8 local legislative body) as follows:
9 Section one. Receipts from sales of and consideration given or
10 contracted to be given for, or for the use of, new Energy Star appli-
11 ances exempt from state sales and compensating use taxes pursuant to
12 paragraph 41 of subdivision (a) of section 1115 of the New York Tax Law
13 shall also be exempt from sales and compensating use taxes imposed in
14 this jurisdiction, during the same periods set forth in such paragraph
15 41.
16 Section two. This resolution shall take effect March 1, (insert the
17 year, but not earlier than the year 2005) and shall apply to sales made
18 and uses occurring during the applicable exemptions periods each year,
19 in accordance with the applicable transitional provisions of sections
20 1106 and 1217 of the New York Tax Law.
21 § 9. Notwithstanding any other provision of state or local law, ordi-
22 nance or resolution to the contrary: (a) Any county or city imposing
23 sales and compensating use taxes pursuant to the authority of subpart B
24 of part 1 of article 29 of the tax law, acting through its local legis-
25 lative body, is hereby authorized and empowered to elect to provide the
26 exemption from such taxes for new Energy Star appliances exempt from
27 state sales and compensating use taxes described in paragraph 41 of
28 subdivision (a) of section 1115 of the tax law, for the periods
29 described therein, whether such taxes are imposed by local law, ordi-
30 nance or resolution, by enacting a resolution exactly in the form set
31 forth in subdivision (c) of this section; whereupon, upon compliance
32 with the provisions of subdivision (d) of this section, such enactment
33 of such resolution shall be deemed to amend such local law, ordinance or
34 resolution imposing such taxes, and such local law, ordinance or resol-
35 ution shall thenceforth be deemed to incorporate such exemption.
36 (b) Any city of one million or more in which the taxes imposed by
37 section 1107 of the tax law are in effect, acting through its local
38 legislative body, is hereby authorized and empowered to elect to provide
39 the exemption from such taxes for the same new Energy Star appliances
40 exempt from state sales and compensating use taxes described in para-
41 graph 41 of subdivision (a) of section 1115 of the tax law, for the
42 periods described therein, by enacting a resolution exactly in the form
43 set forth in subdivision (c) of this section; whereupon, upon compliance
44 with the provisions of subdivision (d) of this section, such enactment
45 of such resolution shall be deemed to amend such section 1107 of the tax
46 law and such section 1107 shall thenceforth be deemed to incorporate
47 such exemption for such periods as if it had been duly enacted by the
48 state legislature and approved by the governor and such resolution shall
49 also be deemed to amend any local law, ordinance or resolution enacted
50 by such a city imposing such taxes pursuant to the authority of subdivi-
51 sion (a) of section 1210 of the tax law, whether or not such taxes are
52 suspended at the time such city enacts its resolution.
53 (c) Form of Resolution:
54 Be it enacted by the (insert proper title of local legislative body)
55 as follows:
S. 995 22 A. 1925
1 Section one: Receipts from sales of and consideration given or
2 contracted to be given for, or for the use of, new Energy Star appli-
3 ances exempt from state sales and compensating use taxes pursuant to
4 paragraph 41 of subdivision (a) of section 1115 of the New York Tax Law
5 shall also be exempt from sales and compensating use taxes imposed in
6 this jurisdiction.
7 Section two: This resolution shall take effect immediately and shall
8 apply to sales made and uses occurring during the applicable periods
9 each year, in accordance with applicable transitional provisions of the
10 New York Tax Law.
11 (d)(1) A resolution described in subdivision (c) of this section shall
12 not be effective unless (i) it is enacted by June 1, 2005, and (ii) a
13 certified copy of such resolution is received no later than June 15,
14 2005, by: The Commissioner of Taxation and Finance, attention: Christo-
15 pher C. O'Brien, Deputy Commissioner and Counsel, Room 223, Building
16 Nine, State Office Campus, Albany, New York 12227.
17 (2) Certified copies of any resolution enacted pursuant to the author-
18 ity of this section shall also be filed with the county or city clerk,
19 the secretary of state and the state comptroller within five business
20 days after the date it is enacted.
21 § 10. This act shall take effect immediately and shall apply to sales
22 made and uses occurring during exemption periods on or after that date
23 in accordance with the applicable transitional provisions of section
24 1106 of the tax law.
25 PART E
26 Section 1. Subsection (g) of section 658 of the tax law is amended by
27 adding a new paragraph 10 to read as follows:
28 (10) Mandatory electronic filing by certain tax return preparers.
29 (A)(i) If a tax return preparer prepared more than two hundred original
30 returns during the calendar year beginning on January first, two thou-
31 sand five, and if, in the calendar year beginning on January first, two
32 thousand six, such tax return preparer prepares one or more authorized
33 returns using tax software, then, for such calendar year two thousand
34 six and for each subsequent calendar year thereafter, all authorized
35 returns prepared by such tax return preparer shall be filed electron-
36 ically, in accordance with instructions prescribed by the commissioner.
37 (ii) If a tax return preparer prepared more than one hundred original
38 returns during any calendar year beginning on or after January first,
39 two thousand six, and if, in any succeeding calendar year such tax
40 return preparer prepares one or more authorized returns using tax soft-
41 ware, then, for such succeeding calendar year and for each subsequent
42 calendar year thereafter, all authorized returns prepared by such tax
43 return preparer shall be filed electronically, in accordance with
44 instructions prescribed by the commissioner.
45 (B) For purposes of this paragraph:
46 (i) "Electronic" means computer technology; provided, however, that
47 the commissioner may, in instructions, provide that use of barcode tech-
48 nology will also satisfy the mandatory electronic filing requirements of
49 this section.
50 (ii) "Authorized return" means any return required under this article
51 which the commissioner has authorized to be filed electronically.
52 (iii) "Original return" means a return required under this article
53 that is filed, without regard to extensions, during the calendar year
54 for which that return is required to be filed.
S. 995 23 A. 1925
1 (iv) "Tax software" means any computer software program intended for
2 tax return preparation purposes.
3 § 2. Subsection (u) of section 685 of the tax law is amended by adding
4 a new paragraph 5 to read as follows:
5 (5) Failure to electronically file. If a tax return preparer is
6 required to file returns electronically pursuant to paragraph ten of
7 subsection (g) of section six hundred fifty-eight of this article, and
8 such preparer fails to file one or more of such returns electronically,
9 then such preparer shall be subject to a penalty of fifty dollars for
10 each such failure to electronically file a return, unless it is shown
11 that such failure is due to reasonable cause and not due to willful
12 neglect. For purposes of this paragraph, reasonable cause shall include,
13 but not be limited to, a taxpayer's election not to electronically file
14 his or her return.
15 § 3. Subdivision (g) of section 11-1758 of the administrative code of
16 the city of New York is amended by adding a new paragraph 10 to read as
17 follows:
18 (10) Mandatory electronic filing by certain tax return preparers.
19 (A)(i) If a tax return preparer prepared more than two hundred original
20 returns during the calendar year beginning on January first, two thou-
21 sand five, and if, in the calendar year beginning on January first, two
22 thousand six, such tax return preparer prepares one or more authorized
23 returns using tax software, then, for such calendar year two thousand
24 six and for each subsequent calendar year thereafter, all authorized
25 returns prepared by such tax return preparer shall be filed electron-
26 ically, in accordance with instructions prescribed by the commissioner
27 of taxation and finance.
28 (ii) If a tax return preparer prepared more than one hundred original
29 returns during any calendar year beginning on or after January first,
30 two thousand six, and if, in any succeeding calendar year such tax
31 return preparer prepares one or more authorized returns using tax soft-
32 ware, then, for such succeeding calendar year and for each subsequent
33 calendar year thereafter, all authorized returns prepared by such tax
34 return preparer shall be filed electronically, in accordance with
35 instructions prescribed by the commissioner of taxation and finance.
36 (B) For purposes of this paragraph:
37 (i) "Electronic" means computer technology; provided, however, that
38 the commissioner of taxation and finance may, in instructions, provide
39 that use of barcode technology will also satisfy the mandatory electron-
40 ic filing requirements of this section.
41 (ii) "Authorized return" means any return required under this article
42 which the commissioner of taxation and finance has authorized to be
43 filed electronically.
44 (iii) "Original return" means a return required under this article
45 that is filed, without regard to extensions, during the calendar year
46 for which that return is required to be filed.
47 (iv) "Tax software" means any computer software program intended for
48 tax return preparation purposes.
49 § 4. Subdivision (t) of section 11-1785 of the administrative code of
50 the city of New York is amended by adding a new paragraph 5 to read as
51 follows:
52 (5) Failure to electronically file. If a tax return preparer is
53 required to file returns electronically pursuant to paragraph ten of
54 subdivision (g) of section 11-1758, and such preparer fails to file one
55 or more of such returns electronically, then such preparer shall be
56 subject to a penalty of fifty dollars for each such failure to electron-
S. 995 24 A. 1925
1 ically file a return, unless it is shown that such failure is due to
2 reasonable cause and not due to willful neglect. For purposes of this
3 paragraph, reasonable cause shall include, but not be limited to, a
4 taxpayer's election not to electronically file his or her return.
5 § 5. This act shall take effect immediately and shall be deemed to
6 have been in full force and effect on and after April 1, 2005.
7 PART F
8 Section 1. Paragraph 3 of subsection (c) of section 658 of the tax
9 law, as separately amended by chapter 576 of the laws of 1994 and
10 sections 1 and 2 of part J3 of chapter 62 of the laws of 2003, is
11 amended to read as follows:
12 (3) Filing fees. Every subchapter K limited liability company, every
13 limited liability company which is a disregarded entity for federal
14 income tax purposes and every limited liability partnership under arti-
15 cle eight-B of the partnership law and every foreign limited liability
16 partnership, which has any income derived from New York sources, deter-
17 mined in accordance with the applicable rules of section six hundred
18 thirty-one of this article as in the case of a nonresident individual,
19 shall, within thirty days after the last day of the taxable year, make a
20 payment of a filing fee. The amount of the filing fee shall be the prod-
21 uct of (a) [fifty] one hundred dollars and (b) the number of members of
22 such company or number of partners of such partnership, as the case may
23 be, as of the last day of the taxable year, but in no event shall such
24 fee be less than [three] five hundred [twenty-five] dollars nor more
25 than [ten] twenty-five thousand dollars. Such minimum filing fee shall
26 not apply to any single member limited liability company which is a
27 disregarded entity for federal income tax purposes. Where such fee is
28 not timely paid, it shall be paid upon notice and demand and shall be
29 assessed, collected and paid in the same manner as taxes, and for such
30 purposes any reference in this article to tax imposed by this article
31 shall be deemed also to refer to the fee prescribed herein.
32 § 2. This act shall take effect immediately and shall apply to taxable
33 years beginning on or after January 1, 2005.
34 PART G
35 Section 1. Subdivision 4 of section 22 of the public housing law, as
36 amended by section 1 of part B of chapter 60 of the laws of 2004, is
37 amended to read as follows:
38 4. Statewide limitation. The aggregate dollar amount of credit which
39 the commissioner may allocate to eligible low-income buildings under
40 this article shall be [six] eight million dollars. The limitation
41 provided by this subdivision applies only to allocation of the aggregate
42 dollar amount of credit by the commissioner, and does not apply to
43 allowance to a taxpayer of the credit with respect to an eligible low-
44 income building for each year of the credit period.
45 § 2. This act shall take effect immediately.
46 PART H
47 Section 1. Paragraph 30 of subdivision (a) of section 1115 of the tax
48 law, as amended by section 84 of part A of chapter 56 of the laws of
49 1998, is amended to read as follows:
S. 995 25 A. 1925
1 (30) [Clothing] During the seven-day periods each year commencing on
2 the last Monday of January and ending on the first Sunday in February
3 and commencing on the Tuesday immediately preceding the first Monday in
4 September, known as Labor day, and ending on Labor day, clothing and
5 footwear for which the receipt or consideration given or contracted to
6 be given is less than [one] two hundred [ten] fifty dollars per article
7 of clothing, per pair of shoes or other articles of footwear or per item
8 used or consumed to make or repair such clothing and which becomes a
9 physical component part of such clothing.
10 § 2. Subdivision (k) of section 1210 of the tax law, as amended by
11 section 86 of part A of chapter 56 of the laws of 1998, paragraph 2 as
12 amended by section 7 of part KK of chapter 407 of the laws of 1999, is
13 amended to read as follows:
14 (k) Notwithstanding any other provision of state or local law, ordi-
15 nance or resolution to the contrary:
16 (1) Any city having a population of one million or more in which the
17 taxes imposed by section eleven hundred seven of this chapter are in
18 effect, acting through its local legislative body, is hereby authorized
19 and empowered to elect to provide the exemption from such taxes for the
20 same clothing and footwear exempt from state sales and compensating use
21 taxes, during the same periods each year, described in paragraph thirty
22 of subdivision (a) of section eleven hundred fifteen of this chapter by
23 enacting a resolution in the form set forth in paragraph two of this
24 subdivision; whereupon, upon compliance with the provisions of subdivi-
25 sions (d) and (e) of this section, such enactment of such resolution
26 shall be deemed to be an amendment to such section eleven hundred seven
27 and such section eleven hundred seven shall be deemed to incorporate
28 such exemption as if it had been duly enacted by the state legislature
29 and approved by the governor.
30 (2) Form of Resolution: Be it enacted by the (insert proper title of
31 local legislative body) as follows:
32 Section one. Receipts from sales of and consideration given or
33 contracted to be given for purchases of clothing and footwear exempt
34 from state sales and compensating use taxes pursuant to paragraph 30 of
35 subdivision (a) of section 1115 of the New York tax law shall also be
36 exempt from sales and compensating use taxes imposed in this jurisdic-
37 tion, during the same periods set forth in such paragraph 30.
38 Section two. This resolution shall take effect March 1, (insert the
39 year, but not earlier than the year [2000] 2006) and shall apply to
40 sales made and uses occurring [on and after that date although made or
41 occurring under a prior contract] during the applicable exemptions peri-
42 ods each year, in accordance with the applicable transitional provisions
43 of sections 1106 and 1217 of the New York tax law.
44 § 3. Local rejection or election of annual one-week clothing and foot-
45 wear exemption periods. Notwithstanding any provision of state or local
46 law, ordinance or resolution to the contrary:
47 (a)(1) Action by localities which provided the January/February, 2005,
48 temporary exemption. A county or city imposing sales and compensating
49 use taxes pursuant to the authority of subdivision (a) of section 1210,
50 1210-A, 1210-B or 1210-C of the tax law or in which the taxes imposed by
51 section 1107 of the tax law are in effect, which provided the one-week
52 temporary clothing and footwear exemption period commencing January 31,
53 2005, pursuant to part A of chapter 60 of the laws of 2004, acting
54 through its local legislative body, is hereby authorized and empowered
55 to adopt a resolution, in the form set forth in paragraph two of this
56 subdivision, to reject the two annual one-week exemption periods for
S. 995 26 A. 1925
1 clothing and footwear, as described in paragraph 30 of subdivision (a)
2 of section 1115 of the tax law as amended by section one of this act,
3 from its sales and compensating use taxes or from such taxes imposed by
4 such section 1107 of the tax law in a city having a population of one
5 million or more. Such a resolution shall be effective only if it is
6 adopted exactly as set forth in such paragraph two of this subdivision
7 and such county or city adopts it by June 1, 2005, mails a certified
8 copy of it to the commissioner of taxation and finance by certified mail
9 by such date and otherwise complies with the requirements of subdivi-
10 sions (d) and (e) of section 1210 of the tax law. Such a resolution
11 adopted by a county or a city (other than a city having a population of
12 one million or more) in compliance with this section shall be deemed to
13 amend such county's or city's local law, ordinance or resolution impos-
14 ing its sales and compensating use taxes. A resolution adopted by a city
15 having a population of one million or more in compliance with this
16 section shall be deemed to amend section 1107 of the tax law as if an
17 act amending such section 1107 had been duly passed by the state legis-
18 lature and approved by the governor. If such county or city does not
19 adopt the resolution provided for in this subdivision to reject such two
20 annual one-week exemption periods, in the manner prescribed herein, then
21 such exemption periods shall apply annually to such taxes imposed by
22 such county or city or in such city having a population of one million
23 or more.
24 (2) Form of resolution.
25 Be it enacted by the (county or city) of (insert locality's name) as
26 follows:
27 Section one. The (county or city) of (insert locality's name) hereby
28 rejects the two annual one-week clothing and footwear exemption periods
29 commencing in the fall of 2005.
30 Section two. This resolution shall take effect immediately.
31 (b)(1) Action by localities which did not provide the
32 January/February, 2005, temporary exemption. A county or city imposing
33 sales and compensating use taxes pursuant to the authority of subdivi-
34 sion (a) of section 1210, 1210-A, 1210-B or 1210-C of the tax law, which
35 did not provide the one-week temporary clothing and footwear exemption
36 period commencing January 31, 2005, pursuant to part A of chapter 60 of
37 the laws of 2004, acting through its local legislative body, is hereby
38 authorized and empowered to adopt a resolution, in the form set forth in
39 paragraph two of this subdivision, to elect the two annual one-week
40 exemption periods for clothing and footwear, as described in paragraph
41 30 of subdivision (a) of section 1115 of the tax law as amended by
42 section one of this act from its sales and compensating use taxes. Such
43 a resolution shall be effective only if it is adopted exactly as set
44 forth in such paragraph two of this subdivision and such county or city
45 adopts it by June 1, 2005, mails a certified copy of it to the commis-
46 sioner of taxation and finance by certified mail by such date and other-
47 wise complies with the requirements of subdivisions (d) and (e) of
48 section 1210 of the tax law. Such a resolution adopted by a county or a
49 city in compliance with this section shall be deemed to amend such coun-
50 ty's or city's local law, ordinance or resolution imposing its sales and
51 compensating use taxes. If such county or city does not adopt the resol-
52 ution provided for in this subdivision to elect such two annual one-week
53 exemption periods, in the manner prescribed herein, then such exemption
54 periods shall not apply to such taxes imposed by such county or city.
55 (2) Form of resolution.
S. 995 27 A. 1925
1 Be it enacted by the (county or city) of (insert locality's name) as
2 follows:
3 Section one. The (county or city) of (insert locality's name) hereby
4 elects the two annual one-week clothing and footwear exemption periods
5 commencing in the fall of 2005.
6 Section two. This resolution shall take effect immediately and shall
7 apply in accordance with applicable transitional provisions of the New
8 York tax law.
9 (c) Subdivision (g) of section 1109 of the tax law shall apply if a
10 county or city located in the metropolitan commuter transportation
11 district provides the exemption authorized by this part.
12 § 4. The provisions of this act, section 1107 of the tax law and para-
13 graph 1 of subdivision (a) of section 1210 of the tax law, and of any
14 resolution enacted pursuant to this part or to such section 1210, taken
15 separately or together, shall not be construed by any person or any
16 court or other entity as either (i) a failure or refusal to continue to
17 impose the taxes imposed by section 1107 of the tax law, as such taxes
18 may from time to time be amended, or (ii) as a reduction in the rate at
19 which such taxes are imposed. After this act shall have become a law,
20 the taxes imposed by such section 1107 of the tax law on receipts from
21 retail sales of and consideration given or contracted to be given for,
22 or for the use of, clothing and footwear shall (except as provided
23 pursuant to section two or three of this act if a city of one million or
24 more provides the exemption described in such sections) continue to
25 apply, persons liable for such taxes on purchases of such clothing and
26 footwear shall continue to be liable for such taxes, persons required to
27 collect such taxes on such clothing and footwear shall continue to be
28 required to collect and pay over such taxes to the commissioner of taxa-
29 tion and finance, such commissioner shall continue to be required to
30 certify such taxes on such clothing and footwear as provided by article
31 28 of the tax law and section 92-d of the state finance law and the
32 state comptroller shall continue to be required to deposit, appropriate
33 and pay over such taxes as required by such section 92-d of the state
34 finance law, in the manner and to the extent as if this act had not
35 become a law.
36 § 5. Section 6 of part A of chapter 60 of the laws of 2004, relating
37 to the authority of certain counties and cities to elect or repeal the
38 year-round clothing and footwear exemption from their sales and compen-
39 sating use taxes, effective June 1, 2005, is REPEALED.
40 § 6. This act shall take effect immediately and shall apply in accord-
41 ance with the applicable transitional provisions of sections 1106 and
42 1217 of the tax law; provided, however, that sections one and two of
43 this act shall take effect on the same date as the reversion of para-
44 graph (30) of subdivision (a) of section 1115 of the tax law and subdi-
45 vision (k) of section 1210 of the tax law as provided in section 5 of
46 part I3 of chapter 62 of the laws of 2003, as amended.
47 PART I
48 Section 1. Subdivision (a) of section 1142-A of the tax law, as
49 amended by section 1 of part B of chapter 407 of the laws of 1999, is
50 amended to read as follows:
51 (a) [For the period commencing December first, nineteen hundred nine-
52 ty-two, and ending November thirtieth, two thousand four, every] Every
53 person required to collect the taxes described in paragraph six of
54 subdivision (c) of section eleven hundred five, subdivision (c) of
S. 995 28 A. 1925
1 section eleven hundred seven and paragraph one of subdivision (a) of
2 section twelve hundred twelve-A of this chapter, in a county with a
3 population density in excess of fifty thousand persons per square mile
4 in any city in this state having a population of one million or more,
5 shall be subject to the requirements set forth in this section, except
6 as otherwise provided herein.
7 § 2. This act shall take effect immediately.
8 PART J
9 Section 1. Paragraph 1 of subsection (a) of section 651 of the tax
10 law, as amended by chapter 333 of the laws of 1987, is amended to read
11 as follows:
12 (1) every resident individual (A) [required to file a federal income
13 tax return for the taxable year, or (B)] having federal adjusted gross
14 income for the taxable year, increased by the modifications under
15 subsection (b) of section six hundred twelve, in excess of [four thou-
16 sand dollars, or in excess of] his or her New York standard deduction,
17 [if lower,] or [(C)] (B) subject to tax under section six hundred two,
18 or [(D)] (C) having received during the taxable year a lump sum distrib-
19 ution any portion of which is subject to tax under section six hundred
20 three;
21 § 2. This act shall take effect immediately and shall apply to taxable
22 years beginning on or after January 1, 2005.
23 PART K
24 Section 1. The tax law is amended by adding a new section 171-m to
25 read as follows:
26 § 171-m. Certain New York city tax overpayments credited against
27 outstanding debts owed to the state of New York. (1) For purposes of
28 this section:
29 (a) "judgment" shall mean a warrant filed with a county clerk whereby
30 the commissioner is, in the right of the people of the state of New
31 York, deemed to have obtained judgment against an individual, corpo-
32 ration, association, company, partnership, estate, trust, liquidator,
33 fiduciary or other entity, identified in a tax warrant as the judgment
34 debtor, for a tax or other imposition;
35 (b) "overpayment" shall mean overpayment of a tax administered by the
36 commissioner of finance of the city of New York pursuant to title eleven
37 of the administrative code of the city of New York;
38 (c) "taxpayer" means a judgment debtor who or which made an overpay-
39 ment.
40 (2) Notwithstanding any law to the contrary, an overpayment may be
41 paid by the commissioner of finance of the city of New York to the
42 commissioner for full or partial satisfaction of a judgment against a
43 taxpayer who or which made the overpayment. The commissioner and the
44 commissioner of finance of the city of New York are hereby authorized to
45 enter into a written agreement which shall set forth procedures for
46 applying an overpayment and interest thereon for satisfaction, in part
47 or in full, of a judgment. The commissioner of finance and the commis-
48 sioner may also obtain and exchange whatever return or report informa-
49 tion is necessary to implement the agreement.
50 (3) Such agreement shall include:
51 (a) the procedure under which the commissioner shall certify to, and
52 notify, the commissioner of finance about an outstanding judgment,
S. 995 29 A. 1925
1 amounts remaining due thereon and the format of certification and
2 notification;
3 (b) the fee, if any, for reimbursement of the commissioner of finance
4 by the commissioner for the cost of implementing procedures authorized
5 by this section;
6 (c) the procedure for transferring overpayments to the commissioner;
7 (d) the procedure for reimbursing the city of New York in the event an
8 overpayment was improperly paid to the commissioner;
9 (e) such other matters as the parties to the agreement shall deem
10 necessary to carry out the provisions of this section.
11 (4) Before notifying the commissioner of finance of a judgment for
12 partial or full satisfaction by application of an overpayment, the
13 commissioner shall make a reasonable attempt to notify a taxpayer at the
14 taxpayer's last known address (i) that the judgment, clearly identified
15 as to amount and the tax or imposition, unless paid within thirty days,
16 will be referred to the city of New York finance department for payment
17 by application of an overpayment; (ii) that state law permits applica-
18 tion of certain overpayments against judgments; (iii) that the taxpayer
19 may request a review of the proposed referral of a judgment by contact-
20 ing the department at a telephone number or address disclosed in the
21 notice; and (iv) that the taxpayer may present to the commissioner any
22 written evidence and arguments in support of a defense to the proposed
23 referral or may appear at a scheduled conference with the department to
24 present oral arguments and written and oral evidence in support of such
25 defense. Provided however, nothing herein shall be deemed to afford a
26 taxpayer the opportunity to reargue any issue which was or could have
27 been adjudicated in an administrative or judicial proceeding prior to
28 filing of a warrant serving as a judgment.
29 (5) An overpayment shall be paid to the commissioner pursuant to this
30 section only to the extent the commissioner of finance determines the
31 overpayment is not subject to offset against a debt owed the city of New
32 York or owed its instrumentalities, or subject to any other enforceable
33 city of New York interest or right in the overpayment.
34 (6) The commissioner of finance shall notify each taxpayer who made an
35 overpayment, in writing, of the amount of such overpayment and the
36 interest thereon paid to the commissioner. Such notice shall include
37 notification to any other person who may have filed a joint return with
38 the taxpayer of the steps such other person may take in order to secure
39 their proper share of the refund.
40 (7) From the time the commissioner of finance is notified by the
41 commissioner of a taxpayer's liability for a judgment under the agree-
42 ment provided for in this section, the city of New York shall be
43 relieved of all liability to such taxpayer, its assigns, successors,
44 heirs or representatives for the amount of the overpayment and interest
45 thereon paid to the commissioner. Such taxpayer, its assigns, succes-
46 sors, heirs or representatives shall have no right to commence a court
47 action or proceeding or have any other legal recourse against the city
48 of New York to recover such overpayment or interest thereon paid to the
49 commissioner. However, nothing herein shall be construed to preclude
50 any legal, equitable, or administrative action by such taxpayer its
51 assigns, successors, heirs or representatives entitled to such overpay-
52 ment against the commissioner to recover that part of the overpayment or
53 interest thereon that is greater than the amount of the judgment owed by
54 such taxpayer on the date such overpayment is credited against a judg-
55 ment.
S. 995 30 A. 1925
1 (8) The commissioner and the commissioner of finance may promulgate
2 such rules and regulations deemed necessary to carry out the provisions
3 of this section.
4 § 2. The tax law is amended by adding a new section 171-n to read as
5 follows:
6 § 171-n. Certain overpayments credited against outstanding tax debts
7 owed to other states. (1) For the purposes of this section:
8 (a) "overpayment" means an amount requested for refund or otherwise
9 determined to be in excess of that owed, with respect to any tax admin-
10 istered by the commissioner and remaining after application, as may be
11 determined by the commissioner, to the satisfaction of debts owed by a
12 taxpayer to this state or the federal government;
13 (b) "taxpayer" means any individual, corporation, partnership, limited
14 liability partnership or company, partner, member, manager, estate,
15 trust, fiduciary or entity, who or which has made an overpayment of any
16 tax administered by the commissioner;
17 (c) "tax debt" means any past due, legally enforceable tax obligation
18 owed any other state administering that tax, which arises from (i) an
19 enforceable judgment of a court of competent jurisdiction which is no
20 longer subject to judicial review, or (ii) an enforceable determination
21 of an administrative body which is no longer subject to administrative
22 or judicial review, or (iii) an assessment or determination (including
23 self-assessment or self-assessed determination) which has become final
24 or finally and irrevocably fixed and no longer subject to administrative
25 or judicial review, and which has not been delinquent for more than ten
26 years; and
27 (d) "claimant state" means any state which requests application of an
28 overpayment to a tax debt.
29 (2) The commissioner may, in his or her discretion, agree to pay the
30 whole or part of an overpayment of tax administered by the commissioner
31 to a claimant state owed a tax debt by a taxpayer, provided the claimant
32 state grants substantially similar privileges to this state. An agree-
33 ment with a claimant state must provide for thirty days advance written
34 notice to, and an opportunity for, taxpayers to present written or oral
35 evidence about application of their overpayments to tax debts. A
36 proceeding may be commenced by a taxpayer within four months after a
37 copy of a decision adverse to the taxpayer is mailed to the taxpayer for
38 judicial review of the decision in the manner provided by article seven-
39 ty-eight of the civil practice law and rules. Article forty of this
40 chapter shall not apply to any hearing or proceeding on whether an over-
41 payment may be applied to a tax debt in accordance with this section.
42 The remedy provided by this section for review of hearings and
43 proceedings shall be the exclusive remedy available to judicially deter-
44 mine whether an overpayment may be applied to a tax debt in accordance
45 with this section. The amount of a tax debt remaining due as certified
46 by a claimant state shall be prima facie evidence of the correct amount
47 of a tax debt.
48 § 3. This act shall take effect immediately.
49 PART L
50 Section 1. The alcoholic beverage control law is amended by adding a
51 new section 131 to read as follows:
52 § 131. Tax compliance by applicants for licenses to traffic in alco-
53 holic beverages. 1. For purposes of this section, the following terms
54 shall have the specified meanings:
S. 995 31 A. 1925
1 (a) "Applicant" means a person applying for a new license, or a
2 license renewal, to traffic in alcoholic beverages;
3 (b) "Department" means the department of taxation and finance;
4 (c) "Tax" means a tax, fee, special assessment or other imposition
5 administered by the commissioner of taxation and finance;
6 (d) "Taxes due and owing" means a tax owed by an applicant for which a
7 warrant has been issued by the commissioner of taxation and finance and
8 filed in the office of the appropriate county clerk. The term "taxes due
9 and owing" shall not include a warranted tax liability which has been
10 paid in full and for which such commissioner has filed a satisfaction in
11 the office of the appropriate county clerk; and
12 (e) "Tax clearance" means information provided by the department indi-
13 cating that the applicant does not have taxes due and owing. A tax
14 clearance shall be issued by the department where (i) the department
15 determines that there are no taxes due and owing or that all taxes due
16 and owing have been paid in full or are being paid pursuant to an
17 installment or other payment agreement, or (ii) based upon information
18 provided, the department is unable to determine that the applicant has
19 taxes due and owing.
20 2. (a) A new license, or a license renewal, to traffic in alcoholic
21 beverages shall not be issued by the liquor authority to an applicant if
22 the applicant has taxes due and owing, unless the department issues a
23 tax clearance for such applicant. Such requirement shall be in addition
24 to any other requirements prescribed by law for the issuance by the
25 liquor authority of new licenses or license renewals to traffic in alco-
26 holic beverages.
27 (b) Prior to issuing a new license to, or renewing the license of, an
28 applicant to traffic in alcoholic beverages, the liquor authority shall
29 determine whether an applicant has taxes due and owing by utilizing
30 either of the following two procedures:
31 (i) The liquor authority shall itself match the applicant's name,
32 address and, where available, federal social security account number or
33 federal employer identification number, as applicable, against an elec-
34 tronic posting of department tax warrant information to determine wheth-
35 er or not there are taxes due and owing; or
36 (ii) The liquor authority shall provide the department with the appli-
37 cant's name, address and, where available, federal social security
38 account number or federal employer identification number, as applicable.
39 The department shall, as soon as practicable but in no event more than
40 three business days, determine whether or not the applicant has taxes
41 due and owing. No other information regarding the applicant shall be
42 disclosed by the department.
43 (c) If the applicant has taxes due and owing, then
44 (i) in the case of an applicant seeking a new license to traffic in
45 alcoholic beverages, the liquor authority shall notify the applicant by
46 mail that the new license will not be issued unless the applicant
47 presents to the liquor authority a tax clearance obtained from the
48 department; or
49 (ii) in the case of an applicant seeking renewal of a license to traf-
50 fic in alcoholic beverages, the liquor authority shall notify such
51 applicant by mail that the license will not be renewed unless the appli-
52 cant, within a period prescribed by the liquor authority, but in no
53 event less than forty-five calendar days from the mailing date of such
54 notice, presents to the liquor authority a tax clearance obtained from
55 the department.
S. 995 32 A. 1925
1 If an applicant fails to obtain the tax clearance within the time
2 period specified in this subparagraph then, notwithstanding the
3 provisions of section four hundred one of the state administrative
4 procedure act or any other law to the contrary, such applicant shall no
5 longer be licensed to traffic in alcoholic beverages.
6 3. The commissioner of taxation and finance shall consult with the
7 liquor authority in developing procedures governing the conduct of the
8 processes prescribed by this section for determining whether an appli-
9 cant has taxes due and owing. Such procedures may include, but shall
10 not be limited to, the format of verification requests or inquiries, and
11 the times at which verification requests or inquiries may be made.
12 4. Notwithstanding any provision of law to the contrary, the liquor
13 authority shall, as part of its procedure for issuing or renewing the
14 license of an applicant to traffic in alcoholic beverages, require that
15 each such applicant provide to the liquor authority such applicant's
16 federal social security account number or federal employer identifica-
17 tion number, or both such numbers when such applicant has both such
18 numbers, or, where such applicant does not have such number or numbers,
19 the reason or reasons why such applicant does not have such number or
20 numbers. Such numbers or reasons shall be obtained by the liquor
21 authority as part of the administration of the taxes administered by the
22 commissioner of taxation and finance.
23 § 2. The tax law is amended by adding a new section 5-b to read as
24 follows:
25 § 5-b. Tax compliance by persons seeking state contracts. 1. For
26 purposes of this section, the following terms shall have the specified
27 meanings:
28 (a) "Affiliate" means a person which, through stock ownership or any
29 other affiliation, directly, indirectly or constructively
30 (i) controls another person;
31 (ii) is controlled by another person; or
32 (iii) is, along with another person, under the control of a common
33 parent;
34 (b) "Contract" means any agreement between a person and a covered
35 agency having a value in excess of fifteen thousand dollars;
36 (c) "Covered agency" means New York state; any department, board,
37 bureau, commission, division, office, council or agency of New York
38 state; public authorities; and public benefit corporations;
39 (d) "Person" means an individual, partnership, limited liability
40 company, society, association, joint stock company, or corporation. If
41 referring to an entity, the term "person" includes an entity in business
42 for either profit or not-for-profit purposes;
43 (e) "Tax" means a tax, fee, special assessment or other imposition
44 administered by the commissioner;
45 (f) "Taxes due and owing" means a tax owed by a person seeking to
46 obtain or maintain a contract, or any affiliate of such person, for
47 which a warrant has been issued by the commissioner and filed in the
48 office of the appropriate county clerk. The term "taxes due and owing"
49 shall not include a warranted tax liability which has been paid in full
50 and for which such commissioner has filed a satisfaction in the office
51 of the appropriate county clerk; and
52 (g) "Tax clearance" means information provided by the department indi-
53 cating that the person seeking to obtain or maintain a contract or, if
54 applicable, an affiliate of such person, does not have taxes due and
55 owing. A tax clearance shall be issued by the department where (i) the
56 department determines that there are no taxes due and owing or that all
S. 995 33 A. 1925
1 taxes due and owing have been paid in full or are being paid pursuant to
2 an installment or other payment agreement or (ii) based upon information
3 provided, the department is unable to determine that such person or
4 affiliate, as applicable, has taxes due and owing.
5 2. (a) A contract shall not be approved by the state comptroller or,
6 in cases in which the state comptroller is not required by law to
7 approve the contract, by such other agency or unit thereof responsible
8 for approval of the contract, and shall not be valid, effective or bind-
9 ing against the procuring covered agency, if the person seeking to
10 obtain the contract, or, if applicable, any affiliate of such person,
11 has taxes due and owing, unless the department issues a tax clearance
12 for such person or, if applicable, such affiliate. Such requirement
13 shall be in addition to any other requirements prescribed by law for the
14 approval of contracts to which a covered agency is a party.
15 (b) Prior to submitting a contract to the state comptroller or, in
16 cases in which the state comptroller is not required by law to approve
17 the contract, such other agency or unit thereof responsible for approval
18 of the contract, the procuring covered agency shall determine whether
19 the person seeking the contract or, if applicable, any affiliate of such
20 person, has taxes due and owing by utilizing either of the following
21 procedures:
22 (i) The procuring covered agency shall itself match the name, address
23 and federal social security account number or federal employer identifi-
24 cation number, as applicable, of the person seeking the contract and, if
25 applicable, each affiliate of such person, against an electronic posting
26 of department tax warrant information to determine whether or not there
27 are taxes due and owing; or
28 (ii) The procuring covered agency shall provide the department with
29 the name, address and federal social security account number or federal
30 employer identification number, as applicable, of the person seeking the
31 contract and, if applicable, each affiliate of such person. The depart-
32 ment shall, as soon as practicable but in no event more than three busi-
33 ness days, determine whether or not such person or affiliate has taxes
34 due and owing. No other information regarding the person seeking the
35 contract or any affiliate shall be disclosed by the department.
36 (c) (i) If the person seeking the state contract or, if applicable,
37 any of its affiliates has taxes due and owing, then the procuring
38 covered agency shall notify the person seeking the state contract by
39 mail that the contract will not be approved unless such person, within a
40 period prescribed by the procuring covered agency, but in no event less
41 than forty-five calendar days of the mailing date of the notice,
42 presents to the procuring covered agency all required tax clearances
43 obtained from the department.
44 (ii) The procuring covered agency shall document in the procurement
45 record (as such term is defined in paragraph f of subdivision one of
46 section one hundred sixty-three of the state finance law), or similar
47 documentation if the state comptroller is not required by law to approve
48 the contract, whether or not the person seeking the state contract, or,
49 if applicable, any affiliate of such person, has taxes due and owing. If
50 such person or affiliate has taxes due and owing, then the contract
51 shall not be approved unless the procurement record or similar documen-
52 tation, as applicable, demonstrates that a tax clearance has been
53 obtained from the department for such person or affiliate.
54 3. (a) If a contract has been approved, and such contract has a term
55 of more than one year, then the contracting covered agency shall annual-
56 ly, prior to the commencement date of the next succeeding year of the
S. 995 34 A. 1925
1 contract, determine whether the person holding the contract or, if
2 applicable, any affiliate of such person, has taxes due and owing. The
3 procedures prescribed by paragraph (b) of subdivision two of this
4 section shall likewise apply to this paragraph. If the person holding
5 the contract or, if applicable, any of its affiliates, has taxes due and
6 owing, then the contracting covered agency shall so notify the person
7 holding the contract by mail. The contracting covered agency shall
8 consider such fact as a material breach of the contract, and the
9 contract shall be subject to termination if such covered agency deter-
10 mines that termination of the contract is in its best interests, unless
11 the person holding the contract, within a period prescribed by the
12 contracting covered agency, but in no event less than forty-five calen-
13 dar days of the mailing date of the notice, presents to the contracting
14 covered agency all required tax clearances obtained from the department.
15 (b) If a contract has been approved, and the terms of such contract
16 provide that it may be renewed upon expiration of the initial or a
17 subsequent term, then the contracting covered agency shall, prior to the
18 commencement date of any renewal term, determine whether the person
19 holding the contract or, if applicable, any of its affiliates, has taxes
20 due and owing. The procedures prescribed by paragraph (b) of subdivision
21 two of this section shall likewise apply to this paragraph. If the
22 person holding the contract or, if applicable, any of its affiliates,
23 has taxes due and owing, then the contracting covered agency shall so
24 notify the person holding the contract by mail. The contracting covered
25 agency shall consider such fact as a material breach of the contract,
26 and the contract shall be subject to termination if such covered agency
27 determines that termination of the contract is in its best interests,
28 unless the person holding the contract, within a period prescribed by
29 the contracting covered agency, but in no event less than forty-five
30 calendar days of the mailing date of the notice, presents to the
31 contracting covered agency all required tax clearances obtained from the
32 department.
33 (c) If an approved contract has a term of more than one year and may
34 also be renewed upon expiration of the initial or a subsequent term,
35 then the contracting covered agency shall determine whether the person
36 holding the contract or, if applicable, any of its affiliates, has taxes
37 due and owing prior to the commencement date of each subsequent year of
38 the contract, as well as prior to the commencement date of any renewal
39 term.
40 4. The commissioner shall consult with covered agencies in developing
41 procedures governing the conduct of the processes prescribed by this
42 section for determining whether persons seeking to obtain or maintain
43 contracts or, if applicable, any of their affiliates, has taxes due and
44 owing. Such procedures may include, but shall not be limited to, the
45 format of verification requests or inquiries, and the times at which
46 verification requests or inquiries may be made.
47 5. The provisions of this section shall not apply to a contract if the
48 procuring covered agency and the state comptroller, or, in cases in
49 which the state comptroller is not required by law to approve the
50 contract, such other agency or unit thereof responsible for approval of
51 the contract, determine in writing that
52 (a) the contract is necessary to address an "emergency," within the
53 meaning of article eleven of the state finance law; or
54 (b) the contract is necessary to ensure public health, safety or
55 welfare.
S. 995 35 A. 1925
1 § 3. The education law is amended by adding a new section 6524-a to
2 read as follows:
3 § 6524-a. Tax compliance by persons seeking to practice, or practic-
4 ing, medicine. 1. For purposes of this section, the following terms
5 shall have the specified meanings:
6 (a) "Applicant" means an individual applying to the department for a
7 license to practice medicine;
8 (b) "Licensee" means a person licensed to practice medicine in accord-
9 ance with the provisions of this article;
10 (c) "Tax" means a tax, fee, special assessment or other imposition
11 administered by the commissioner of taxation and finance;
12 (d) "Taxes due and owing" means a tax owed by an applicant or licensee
13 for which a warrant has been issued by the commissioner of taxation and
14 finance and filed in the office of the appropriate county clerk. The
15 term "taxes due and owing" shall not include a warranted tax liability
16 which has been paid in full and for which such commissioner has filed a
17 satisfaction in the office of the appropriate county clerk; and
18 (e) "Tax clearance" means information provided by the department of
19 taxation and finance indicating that the applicant or licensee does not
20 have taxes due and owing. A tax clearance shall be issued by the depart-
21 ment of taxation and finance where (i) such department determines that
22 there are no taxes due and owing or that all taxes due and owing have
23 been paid in full or are being paid pursuant to an installment or other
24 payment agreement, or (ii) based upon information provided, such depart-
25 ment is unable to determine that such applicant or licensee has taxes
26 due and owing.
27 2.(a) The department shall not license an applicant to practice medi-
28 cine if the applicant has taxes due and owing, unless the department of
29 taxation and finance issues a tax clearance for such applicant. Such
30 requirement shall be in addition to any other requirements prescribed by
31 law relating to the licensing of individuals to practice medicine.
32 (b) Prior to issuing a license to an applicant to practice medicine,
33 the department shall determine whether the applicant has taxes due and
34 owing by utilizing either of the following two procedures:
35 (i) The department shall itself match the applicant's name, address
36 and federal social security account number against an electronic posting
37 of department of taxation and finance tax warrant information to deter-
38 mine whether or not there are taxes due and owing; or
39 (ii) The department shall provide the department of taxation and
40 finance with the applicant's name, address and federal social security
41 account number. The department of taxation and finance shall, as soon as
42 practicable but in no event more than three business days, determine
43 whether or not the applicant has taxes due and owing. No other informa-
44 tion regarding the applicant shall be disclosed by the department of
45 taxation and finance.
46 (c) If the applicant has taxes due and owing, then the department
47 shall notify the applicant by mail that such license will not be issued
48 unless the applicant presents to the department a tax clearance obtained
49 from the department of taxation and finance.
50 3. (a) As part of the biennial registration process for licensees
51 specified by section sixty-five hundred twenty-four of this article, the
52 department shall determine whether the licensee has taxes due and owing.
53 The procedures prescribed by paragraph (b) of subdivision two of this
54 section shall likewise apply to this paragraph. If the licensee has
55 taxes due and owing, then the department shall notify the licensee by
56 mail that the licensee's license to practice medicine will be suspended
S. 995 36 A. 1925
1 unless the licensee, within a period prescribed by the department, but
2 in no event less than forty-five calendar days of the mailing date of
3 the notice, presents to the department a tax clearance obtained from the
4 department of taxation and finance.
5 If the licensee fails to obtain the tax clearance from the department
6 of taxation and finance within the time period specified in this para-
7 graph, then the department shall notify the licensee by mail that his or
8 her license is being suspended.
9 (b) A licensee who has his or her license to practice medicine
10 suspended pursuant to the provisions of paragraph (a) of this subdivi-
11 sion shall, notwithstanding the provisions of this chapter, section four
12 hundred one of the state administrative procedure act or any other law
13 to the contrary, have his or her license to practice medicine revoked
14 unless, within a period prescribed by the department, but in no event
15 less than forty-five calendar days of the mailing date of the notice of
16 license suspension, the licensee presents to the department a tax clear-
17 ance obtained from the department of taxation and finance.
18 If the licensee fails to obtain the tax clearance from the department
19 of taxation and finance within the time period specified in this para-
20 graph, then the department shall notify the licensee by mail that
21 his/her license is being revoked.
22 4. The commissioner of taxation and finance shall consult with the
23 department in developing procedures governing the conduct of the proc-
24 esses prescribed by this section for determining whether an applicant or
25 licensee has taxes due and owing. Such procedures may include, but
26 shall not be limited to, the format of verification requests or
27 inquiries, and the times at which verification requests or inquiries may
28 be made.
29 5. Notwithstanding any provision of law to the contrary, the depart-
30 ment shall, as part of its procedure for issuing a license to practice
31 medicine, or biennially registering a licensee, as applicable, require
32 that each such applicant or licensee provide to the department such
33 applicant's or licensee's federal social security account number, or,
34 where such applicant or licensee does not have such number, the reason
35 or reasons why such applicant or licensee does not have such number.
36 Such number or reasons shall be obtained by the department as part of
37 the administration of the taxes administered by the commissioner of
38 taxation and finance.
39 § 4. The education law is amended by adding a new section 7404-a to
40 read as follows:
41 § 7404-a. Tax compliance by persons seeking to practice, or practic-
42 ing, as a certified public accountant. 1. For purposes of this section,
43 the following terms shall have the specified meanings:
44 (a) "Applicant" means an individual applying to the department for a
45 license to practice as a certified public accountant;
46 (b) "Licensee" means an individual licensed to practice as a certified
47 public accountant in accordance with the provisions of this article;
48 (c) "Tax" means a tax, fee, special assessment or other imposition
49 administered by the commissioner of taxation and finance;
50 (d) "Taxes due and owing" means a tax owed by an applicant or licensee
51 for which a warrant has been issued by the commissioner of taxation and
52 finance and filed in the office of the appropriate county clerk. The
53 term "taxes due and owing" shall not include a warranted tax liability
54 which has been paid in full and for which such commissioner has filed a
55 satisfaction in the office of the appropriate county clerk; and
S. 995 37 A. 1925
1 (e) "Tax clearance" means information provided by the department of
2 taxation and finance indicating that the applicant or licensee does not
3 have taxes due and owing. A tax clearance shall be issued by the depart-
4 ment of taxation and finance where (i) such department determines that
5 there are no taxes due and owing or that all taxes due and owing have
6 been paid in full or are being paid pursuant to an installment or other
7 payment agreement, or (ii) based upon information provided, such depart-
8 ment is unable to determine that such applicant or licensee has taxes
9 due and owing.
10 2.(a) The department shall not license an applicant to practice as a
11 certified public accountant if the applicant has taxes due and owing,
12 unless the department of taxation and finance issues a tax clearance for
13 such applicant. Such requirement shall be in addition to any other
14 requirements prescribed by law relating to the licensing of individuals
15 to practice as certified public accountants.
16 (b) Prior to issuing a license to practice as a certified public
17 accountant, the department shall determine whether the applicant has
18 taxes due and owing by utilizing either of the following two procedures:
19 (i) The department shall itself match the applicant's name, address
20 and federal social security account number against an electronic posting
21 of department of taxation and finance tax warrant information to deter-
22 mine whether or not there are taxes due and owing; or
23 (ii) The department shall provide the department of taxation and
24 finance with the applicant's name, address and federal social security
25 account number. The department of taxation and finance shall, as soon as
26 practicable but in no event more than three business days, determine
27 whether or not the applicant has taxes due and owing. No other informa-
28 tion regarding the applicant shall be disclosed by the department of
29 taxation and finance.
30 (c) If the applicant has taxes due and owing, then the department
31 shall notify the applicant by mail that such license will not be issued
32 unless the applicant presents to the department a tax clearance obtained
33 from the department of taxation and finance.
34 3. (a) As part of the triennial registration process for licensees
35 specified by section seventy-four hundred four of this article, the
36 department shall determine whether the licensee has taxes due and owing.
37 The procedures prescribed by paragraph (b) of subdivision two of this
38 section shall likewise apply to this paragraph. If the licensee has
39 taxes due and owing, then the department shall notify the licensee by
40 mail that the licensee's license to practice as a certified public
41 accountant will be suspended unless the licensee, within a period
42 prescribed by the department, but in no event less than forty-five
43 calendar days of the mailing date of the notice, presents to the depart-
44 ment a tax clearance obtained from the department of taxation and
45 finance.
46 If the licensee fails to obtain the tax clearance from the department
47 of taxation and finance within the time period specified in this para-
48 graph, then the department shall notify the licensee by mail that his or
49 her license is being suspended.
50 (b) A licensee who has his or her license to practice as a certified
51 public accountant suspended pursuant to the provisions of paragraph (a)
52 of this subdivision shall, notwithstanding the provisions of this chap-
53 ter, section four hundred one of the state administrative procedure act
54 or any other law to the contrary, have his or her license to practice as
55 a certified public accountant revoked unless, within a period prescribed
56 by the department, but in no event less than forty-five calendar days of
S. 995 38 A. 1925
1 the mailing date of the notice of license suspension, the licensee
2 presents to the department a tax clearance obtained from the department
3 of taxation and finance.
4 If the licensee fails to obtain the tax clearance from the department
5 of taxation and finance within the time period specified in this para-
6 graph, then the department shall notify the licensee by mail that his or
7 her license is being revoked.
8 4. The commissioner of taxation and finance shall consult with the
9 department in developing procedures governing the conduct of the proc-
10 esses prescribed by this section for determining whether an applicant or
11 licensee has taxes due and owing. Such procedures may include, but
12 shall not be limited to, the format of verification requests or
13 inquiries, and the times at which verification requests or inquiries may
14 be made.
15 5. Notwithstanding any provision of law to the contrary, the depart-
16 ment shall, as part of its procedure for issuing a license to practice
17 as a certified public accountant, or triennially registering a licensee,
18 as applicable, require that each such applicant or licensee provide to
19 the department such applicant's or licensee's federal social security
20 account number, or, where such applicant or licensee does not have such
21 number, the reason or reasons why such applicant or licensee does not
22 have such number. Such number or reasons shall be obtained by the
23 department as part of the administration of the taxes administered by
24 the commissioner of taxation and finance.
25 § 5. The judiciary law is amended by adding a new section 460-c to
26 read as follows:
27 § 460-c. Tax compliance by persons seeking to practice, or practicing,
28 law. 1. For purposes of this section, the following terms shall have the
29 specified meanings:
30 (a) "Applicant" means an individual seeking admission to practice as
31 an attorney or counselor in this state;
32 (b) "Licensee" means a person licensed to practice as an attorney or
33 counselor in this state in accordance with the provisions of this arti-
34 cle;
35 (c) "Tax" means a tax, fee, special assessment or other imposition
36 administered by the commissioner of taxation and finance;
37 (d) "Taxes due and owing" means a tax owed by an applicant or licensee
38 for which a warrant has been issued by the commissioner of taxation and
39 finance and filed in the office of the appropriate county clerk. The
40 term "taxes due and owing" shall not include a warranted tax liability
41 which has been paid in full and for which such commissioner has filed a
42 satisfaction in the office of the appropriate county clerk; and
43 (e) "Tax clearance" means information provided by the department of
44 taxation and finance indicating that the applicant or licensee does not
45 have taxes due and owing. A tax clearance shall be issued by the depart-
46 ment of taxation and finance where (i) such department determines that
47 there are no taxes due and owing or that all taxes due and owing have
48 been paid in full or are being paid pursuant to an installment or other
49 payment agreement, or (ii) based upon information provided, such depart-
50 ment is unable to determine that such applicant or licensee has taxes
51 due and owing.
52 2.(a) An applicant shall not be certified for admission to practice as
53 an attorney or counselor in this state by the state board of law examin-
54 ers if the applicant has taxes due and owing, unless the department of
55 taxation and finance issues a tax clearance for such applicant. Such
56 requirement shall be in addition to any other requirements prescribed by
S. 995 39 A. 1925
1 law relating to certification for admission to practice as an attorney
2 or counselor in this state.
3 (b) Prior to certifying an applicant for admission to practice as an
4 attorney or counselor in this state, the state board of law examiners
5 shall determine whether an applicant has taxes due and owing by utiliz-
6 ing either of the following two procedures:
7 (i) The state board of law examiners shall itself match the appli-
8 cant's name, address and federal social security account number against
9 an electronic posting of department of taxation and finance tax warrant
10 information to determine whether or not there are taxes due and owing;
11 or
12 (ii) The state board of law examiners shall provide the department of
13 taxation and finance with the applicant's name, address and federal
14 social security number. The department of taxation and finance shall, as
15 soon as practicable but in no event more than three business days,
16 determine whether or not the applicant has taxes due and owing. No
17 other information regarding the applicant shall be disclosed by the
18 department of taxation and finance.
19 (c) If the applicant has taxes due and owing, then the state board of
20 law examiners shall notify the applicant by mail that such license will
21 not be issued unless the applicant presents to the state board of law
22 examiners a tax clearance obtained from the department of taxation and
23 finance.
24 3. (a) As part of the biennial registration process for licensees
25 specified by section four hundred sixty-seven of this article, the chief
26 administrator of the courts shall determine whether the licensee has
27 taxes due and owing. The procedures prescribed by paragraph (b) of
28 subdivision two of this section shall likewise apply to this paragraph.
29 If the licensee has taxes due and owing, then the chief administrator of
30 the courts shall notify the licensee by mail that the licensee's license
31 to practice as an attorney or counselor in this state will be suspended
32 unless the licensee, within a period prescribed by the chief administra-
33 tor of the courts, but in no event less than forty-five calendar days of
34 the mailing date of the notice, presents to the chief administrator of
35 the courts a tax clearance obtained from the department of taxation and
36 finance.
37 If the licensee fails to obtain the tax clearance from the department
38 of taxation and finance within the time period specified in this para-
39 graph, then the chief administrator of the courts shall notify the
40 licensee by mail that his or her license is being suspended.
41 (b) A licensee who has his or her license to practice as an attorney
42 or counselor in this state suspended pursuant to the provisions of para-
43 graph (a) of this subdivision shall, notwithstanding the provisions of
44 this chapter, section four hundred one of the state administrative
45 procedure act or any other law to the contrary, have his or her license
46 to practice as an attorney or counselor in this state revoked unless,
47 within a period prescribed by the chief administrator of the courts, but
48 in no event less than forty-five calendar days of the mailing date of
49 the notice of license suspension, the licensee presents to the chief
50 administrator of the courts a tax clearance obtained from the department
51 of taxation and finance.
52 If the licensee fails to obtain the tax clearance from the department
53 of taxation and finance within the time period specified in this para-
54 graph, then the chief administrator of the courts shall notify the
55 licensee by mail that his or her license is being revoked.
S. 995 40 A. 1925
1 4. The commissioner of taxation and finance shall consult with the
2 state board of law examiners and the chief administrator of the courts
3 in developing procedures governing the conduct of the processes
4 prescribed by this section for determining whether an applicant or
5 licensee has taxes due and owing. Such procedures may include, but
6 shall not be limited to, the format of verification requests or
7 inquiries, and the times at which verification requests or inquiries may
8 be made.
9 5. Notwithstanding any provision of law to the contrary, the state
10 board of law examiners and the chief administrator of the courts shall,
11 as part of their procedures, respectively, for certifying an applicant
12 for admission to practice as an attorney or counselor in this state, or
13 biennially registering a licensee, require that each such applicant or
14 licensee provide to the state board of law examiners or chief adminis-
15 trator of the courts, as applicable, such applicant's or licensee's
16 federal social security account number, or, where such applicant or
17 licensee does not have such number, the reason or reasons why such
18 applicant or licensee does not have such number. Such number or reasons
19 shall be obtained by the state board of law examiners and the chief
20 administrator of the courts as part of the administration of the taxes
21 administered by the commissioner of taxation and finance.
22 § 6. This act shall take effect immediately, provided, however, that:
23 (a) section one of this act shall apply to applications for licenses
24 or license renewals to traffic in alcoholic beverages received by the
25 state liquor authority on or after January 1, 2006; provided further,
26 however, that the commissioner of taxation and finance and the state
27 liquor authority may take any steps necessary to implement the
28 provisions of section one of this act on or after the date it shall have
29 become a law;
30 (b) section two of this act shall apply to procurements begun by New
31 York state on or after January 1, 2006; provided further, however, that
32 the commissioner of taxation and finance may prescribe any procedures
33 necessary to implement the provisions of section two of this act on or
34 after the date it shall have become a law;
35 (c) section three of this act shall apply to applications for licenses
36 to practice medicine, and biennial registrations received by the state
37 education department on or after January 1, 2006; provided further,
38 however, that the commissioner of taxation and finance and the state
39 education department may take any steps necessary to implement the
40 provisions of section three of this act on or after the date it shall
41 have become a law;
42 (d) section four of this act shall apply to applications for licenses
43 to practice as a certified public accountant, and triennial registra-
44 tions received by the state education department on or after January 1,
45 2006; provided further, however, that the commissioner of taxation and
46 finance and the state education department may take any steps necessary
47 to implement the provisions of section four of this act on or after the
48 date it shall have become a law; and
49 (e) section five of this act shall apply to applications for certif-
50 ication for admission to practice as an attorney or counselor in this
51 state received by the state board of law examiners, and biennial regis-
52 trations as an attorney or counselor received by the chief administrator
53 of the courts on or after January 1, 2006; provided further, however,
54 that the commissioner of taxation and finance, the state board of law
55 examiners and the chief administrator of the courts may take any steps
S. 995 41 A. 1925
1 necessary to implement the provisions of section five of this act on or
2 after the date it shall have become a law.
3 PART M
4 Section 1. Subparagraphs 1 and 2 of paragraph (a) of subdivision 9 of
5 section 208 of the tax law, subparagraph 1 as amended by chapter 778 of
6 the laws of 1972 and subparagraph 2 as amended by section 7 of part M of
7 chapter 407 of the laws of 1999, are amended to read as follows:
8 (1) income, gains and losses from subsidiary capital which do not
9 include the amount of a recovery in respect of any war loss, except for
10 (A) such amounts from a former DISC which are treated as business income
11 under subdivision eight-A of this section, (B) a distribution (including
12 any amount designated as a capital gain dividend) from, or gain or loss
13 from the disposition of an ownership interest in, a real estate invest-
14 ment trust, as defined in section eight hundred fifty-six of the inter-
15 nal revenue code, (C) a distribution (including any amount designated as
16 a capital gain dividend) from, or gain or loss from the disposition of
17 an ownership interest in, a regulated investment company, as defined in
18 section eight hundred fifty-one of the internal revenue code, or (D) a
19 distribution from, or gain or loss from the disposition of an ownership
20 interest in, a corporation that (i) owns, directly or indirectly, over
21 fifty percent of the capital stock of a real estate investment trust or
22 a regulated investment company, or (ii) in connection with one or more
23 other corporations in its affiliated group (as such term is defined in
24 section fifteen hundred four of the internal revenue code), owns over
25 fifty percent of the capital stock of a real estate investment trust or
26 a regulated investment company, to the extent the distribution, gain or
27 loss is attributable to such corporation's ownership interest in such a
28 real estate investment trust or regulated investment company,
29 (2) fifty percent of dividends (A) other than from subsidiaries,
30 except as otherwise provided in clause (E) of this subparagraph, [and]
31 (B) other than amounts treated as business income under subdivision
32 eight-A of this section, on shares of stock which conform to the
33 requirements of subsection (c) of section two hundred forty-six of the
34 internal revenue code, (C) other than dividends (including any amount
35 designated as a capital gain dividend) from a real estate investment
36 trust as defined in section eight hundred fifty-six of the internal
37 revenue code, (D) other than dividends from a corporation that is a
38 member of an affiliated group (as such term is defined in section
39 fifteen hundred four of the internal revenue code) that includes the
40 taxpayer, and that, alone or in connection with one or more other corpo-
41 rations in such affiliated group, owns over fifty percent of the capital
42 stock of a real estate investment trust, to the extent the distribution
43 is attributable to such corporation's ownership interest in such a real
44 estate investment trust, and (E) in the case of (i) a regulated invest-
45 ment company that is a subsidiary of the taxpayer, (ii) a regulated
46 investment company that is not a subsidiary of the taxpayer, or (iii) a
47 subsidiary of the taxpayer whose distributions are described in clause
48 (D) of subparagraph one of this paragraph and are attributable to an
49 ownership interest in a regulated investment company, such modification
50 shall apply only with respect to a dividend that is properly designated
51 by such a regulated investment company under subparagraph (A) of para-
52 graph (1) of subsection (b) of section eight hundred fifty-four of the
53 internal revenue code.
S. 995 42 A. 1925
1 § 2. Subparagraphs 2 and 6 of paragraph (b) of subdivision 9 of
2 section 208 of the tax law, subparagraph 2 as amended by chapter 713 of
3 the laws of 1961 and subparagraph 6 as amended by chapter 817 of the
4 laws of 1987, are amended, and a new subparagraph 19 is added to read as
5 follows:
6 (2) any part of any income from dividends or interest on any kind of
7 stock, securities or indebtedness, except as provided in [clauses (1)
8 and (2)] subparagraphs one and two of paragraph (a) [hereof] of this
9 subdivision,
10 (6) in the discretion of the [tax commission] commissioner, any amount
11 of interest directly or indirectly and any other amount directly or
12 indirectly attributable as a carrying charge or otherwise to subsidiary
13 capital or to income, gains or losses from subsidiary capital[.], except
14 with respect to subsidiary capital the income, gains or losses from
15 which are not excluded from entire net income pursuant to subparagraph
16 one of paragraph (a) of this subdivision, but only to the extent such
17 amounts are directly or indirectly attributable to income, gains or
18 losses that are not so excluded;
19 (19) payments for the use, possession or occupancy of real property
20 made to a real estate investment trust as defined in section eight
21 hundred fifty-six of the internal revenue code, if over fifty percent of
22 the capital stock of such real estate investment trust is owned directly
23 or indirectly by the taxpayer or by one or more other corporations that
24 are members of an affiliated group (as such term is defined in section
25 fifteen hundred four of the internal revenue code) that includes the
26 taxpayer.
27 § 3. Subparagraph 2 of paragraph (e) of subdivision 1 of section 210
28 of the tax law, as added by section 1 of part P of chapter 407 of the
29 laws of 1999, is amended to read as follows:
30 (2) For purposes of this paragraph, the amount of such subsidiary
31 capital, prior to allocation, shall be reduced by the applicable
32 percentage of the taxpayer's (i) investments in the stock of, and any
33 indebtedness from, subsidiaries subject to tax under [section one
34 hundred eighty-six of] this chapter (but only to the extent such indebt-
35 edness is included in subsidiary capital), [and] (ii) investments in the
36 stock of, and any indebtedness from, subsidiaries subject to tax under
37 article thirty-two or thirty-three of this chapter (but only to the
38 extent such indebtedness is included in subsidiary capital), and (iii)
39 investments in the stock of, and any indebtedness from, subsidiaries the
40 income, gains or losses from which are not excluded from entire net
41 income pursuant to subparagraph one of paragraph (a) of subdivision nine
42 of section two hundred eight of this article, but only to the extent
43 such investments and indebtedness are directly or indirectly attribut-
44 able to income, gains or losses that are not so excluded. For purposes
45 of clause (i) of this subparagraph, the applicable percentage shall be
46 thirty percent for taxable years beginning in two thousand, and one
47 hundred percent for taxable years beginning after two thousand. For
48 purposes of clause (ii) of this subparagraph, the applicable percentage
49 shall be one hundred percent for taxable years beginning after nineteen
50 hundred ninety-nine. For the purposes of clause (iii) of this subpara-
51 graph, the applicable percentage shall be one hundred percent.
52 § 4. Paragraph 12 and 13 of subsection (b) of section 1453 of the tax
53 law, paragraph 12 as added by chapter 817 of the laws of 1987 and para-
54 graph 13 as added by section 8 of part O3 of chapter 62 of the laws of
55 2003, are amended, and a new paragraph 14 is added to read as follows:
S. 995 43 A. 1925
1 (12) for taxpayers subject to the provisions of subsection (i) of this
2 section, twenty percent of the excess of (A) the amount determined
3 pursuant to such subsection (i) over (B) the amount which would have
4 been allowable had such institution maintained its bad debt reserve for
5 all taxable years on the basis of actual experience [.];
6 (13) for taxable years beginning after December thirty-first, two
7 thousand two, in the case of qualified property described in paragraph
8 two of subsection k of section 168 of the internal revenue code, other
9 than qualified resurgence zone property described in subsection (t) of
10 this section, and other than qualified New York Liberty Zone property
11 described in paragraph two of subsection b of section 1400L of the
12 internal revenue code (without regard to clause (i) of subparagraph (C)
13 of such paragraph), which was placed in service on or after June first,
14 two thousand three, the amount allowable as a deduction under section
15 167 of the internal revenue code[.]; and
16 (14) payments for the use, possession or occupancy of real property
17 made to a real estate investment trust, as defined in section eight
18 hundred fifty-six of the internal revenue code, if over fifty percent of
19 the capital stock of such real estate investment trust is owned directly
20 or indirectly by the taxpayer or by one or more other corporations that
21 are members of an affiliated group (as such term is defined in section
22 fifteen hundred four of the internal revenue code) that includes the
23 taxpayer.
24 § 5. Paragraph 11 of subsection (e) of section 1453 of the tax law, as
25 added by chapter 298 of the laws of 1985, and subparagraph (ii) as
26 amended and subparagraph (iii) as added by chapter 170 of the laws of
27 1994, is amended to read as follows:
28 (11) (i) seventeen percent of interest income from subsidiary capital,
29 and
30 (ii) sixty percent of dividend income from subsidiary capital, which
31 does not include (i) dividends (including any amount designated as a
32 capital gain dividend) from a real estate investment trust as defined in
33 section eight hundred fifty-six of the internal revenue code, or a regu-
34 lated investment company as defined in section eight hundred fifty-one
35 of the internal revenue code, (ii) dividends from a corporation that (A)
36 owns, directly or indirectly, over fifty percent of the capital stock of
37 a real estate investment trust or a regulated investment company, or (B)
38 in connection with one or more other corporations in its affiliated
39 group (as such term is defined in section fifteen hundred four of the
40 internal revenue code), owns over fifty percent of the capital stock of
41 a real estate investment trust or a regulated investment company, to the
42 extent the dividends are attributable to such corporation's ownership
43 interest in such a real estate investment trust or regulated investment
44 company, and
45 (iii) sixty percent of the amount by which gains from subsidiary capi-
46 tal exceed losses from subsidiary capital, to the extent such gains and
47 losses were taken into account in determining the entire taxable income
48 referred to in subsection (a) of this section, except that gains or
49 losses from the disposition of an ownership interest in a corporation
50 whose dividends do not qualify for the deduction allowed by subparagraph
51 (ii) of this paragraph shall not be considered in determining such
52 amount to the extent the gains or losses are attributable to such corpo-
53 ration's ownership interest in such a real estate investment trust or
54 regulated investment company,
55 § 6. Subparagraphs (A) and (B) of paragraph 1 of subdivision (b) of
56 section 1503 of the tax law, subparagraph (A) as amended by chapter 55
S. 995 44 A. 1925
1 of the laws of 1982 and subparagraph (B) as amended by chapter 817 of
2 the laws of 1987, are amended to read as follows:
3 (A) income, gains and losses from subsidiary capital which do not
4 include (i) the amount of a recovery in respect of any war loss, (ii) a
5 distribution (including any amount designated as a capital gain divi-
6 dend) from, or gain or loss from the disposition of an ownership inter-
7 est in, a real estate investment trust as defined in section eight
8 hundred fifty-six of the internal revenue code, (iii) a distribution
9 (including any amount designated as a capital gain dividend) from, or
10 gain or loss from the disposition of an ownership interest in, a regu-
11 lated investment company as defined in section eight hundred fifty-one
12 of the internal revenue code, or (iv) a distribution from, or gain or
13 loss from the disposition of an ownership interest in, a corporation
14 that (I) owns, directly or indirectly, over fifty percent of the capital
15 stock of a real estate investment trust or a regulated investment compa-
16 ny, or (II) in connection with one or more other corporations in its
17 affiliated group (as such term is defined in section fifteen hundred
18 four of the internal revenue code), owns over fifty percent of the capi-
19 tal stock of a real estate investment trust or a regulated investment
20 company, to the extent the distribution or gain or loss is attributable
21 to such corporation's ownership interest in such a real estate invest-
22 ment trust or regulated investment company;
23 (B) fifty percent of dividends other than from subsidiaries, except
24 [that] (i) in the case of a life insurance company, such modification
25 shall apply only with respect to the company's share of such dividends,
26 which share means the percentage determined under paragraph one of
27 subsection (a) of section eight hundred twelve of the internal revenue
28 code, (ii) dividends (including any amount designated as a capital gain
29 dividend) from a real estate investment trust as defined in section
30 eight hundred fifty-six of the internal revenue code shall not be treat-
31 ed as dividends for purposes of this subparagraph, (iii) dividends from
32 a corporation that is a member of an affiliated group (as such term is
33 defined in section fifteen hundred four of the internal revenue code)
34 that includes the taxpayer, and that, alone or in connection with one or
35 more other corporations in such affiliated group, owns over fifty
36 percent of the capital stock of a real estate investment trust, shall
37 not be treated as dividends for purposes of this subparagraph to the
38 extent the dividends are attributable to such corporation's ownership
39 interest in such a real estate investment trust, and (iv) in the case of
40 (I) a regulated investment company that is a subsidiary of the taxpayer,
41 (II) a regulated investment company that is not a subsidiary of the
42 taxpayer, or (III) a subsidiary of the taxpayer whose distributions are
43 described in clause (iv) of subparagraph (A) of this paragraph and are
44 attributable to an ownership interest in a regulated investment company,
45 such modification shall apply only with respect to a dividend that is
46 properly designated by such a regulated investment company under subpar-
47 agraph (A) of paragraph (1) of subsection (b) of section eight hundred
48 fifty-four of the internal revenue code;
49 § 7. Subparagraphs (H) and (R) of paragraph 2 of subdivision (b) of
50 section 1503 of the tax law, subparagraph (H) as added by chapter 649 of
51 the laws of 1974 and as relettered by chapter 788 of the laws of 1978
52 and subparagraph (R) as amended by chapter 57 of the laws of 1993, are
53 amended, and a new subparagraph (U) is added, to read as follow:
54 (H) in the discretion of the [tax commission] commissioner, any amount
55 of interest directly or indirectly and any other amount directly or
56 indirectly attributable as a carrying charge or otherwise to subsidiary
S. 995 45 A. 1925
1 capital or to income, gains or losses from subsidiary capital[.], except
2 with respect to subsidiary capital the income, gains or losses from
3 which are not excluded from entire net income pursuant to subparagraph
4 (A) of paragraph one of this subdivision, but only to the extent such
5 amounts are directly or indirectly attributable to income, gains or
6 losses that are not so excluded;
7 (R) the amount which is the difference between the amount of
8 discounted unpaid losses at the end of the preceding federal taxable
9 year used in the computation of losses incurred for the taxable year
10 pursuant to section 832(b)(5)(A) of the internal revenue code, and the
11 amount of unpaid losses at the end of the preceding federal taxable year
12 that would have been used in such computation for the taxable year if
13 such losses were not discounted pursuant to the provisions of section
14 846(a) of the internal revenue code; [and]
15 (U) payments for the use, possession or occupancy of real property
16 made to a real estate investment trust, as defined in section eight
17 hundred fifty-six of the internal revenue code, if over fifty percent of
18 the capital stock of such real estate investment trust is owned directly
19 or indirectly by the taxpayer or by one or more other corporations that
20 are members of an affiliated group (as such term is defined in section
21 fifteen hundred four of the internal revenue code) that includes the
22 taxpayer.
23 § 8. This act shall take effect immediately and shall apply to taxable
24 years beginning on or after January 1, 2005.
25 PART N
26 Section 1. Paragraph (b) of subdivision 1 of section 210 of the tax
27 law, as added by chapter 817 of the laws of 1987, is amended to read as
28 follows:
29 (b) Capital base. (1) The amount prescribed by this paragraph shall be
30 computed at one and seventy-eight hundredths mills for each dollar of
31 the taxpayer's total business and investment capital, or the portion
32 thereof allocated within the state as hereinafter provided, except that
33 in the case of a cooperative housing corporation as defined in the
34 internal revenue code, the applicable rate shall be four-tenths of a
35 mill. In no event shall the amount prescribed by this paragraph exceed
36 three hundred fifty thousand dollars for manufacturers and one million
37 dollars for all other taxpayers.
38 (2) For purposes of subparagraph one of this paragraph, the term
39 "manufacturer" shall mean a taxpayer which during the taxable year is
40 principally engaged in the production of goods by manufacturing, proc-
41 essing, assembling, refining, mining, extracting, farming, agriculture,
42 horticulture, floriculture, viticulture or commercial fishing. Moreover,
43 for purposes of computing the capital base in a combined report, the
44 combined group shall be considered a "manufacturer" for purposes of this
45 subparagraph only if the combined group during the taxable year is prin-
46 cipally engaged in the activities set forth above, or any combination
47 thereof. A taxpayer or a combined group shall be "principally engaged"
48 in activities described above if, during the taxable year, more than
49 fifty percent of the gross receipts of the taxpayer or combined group,
50 respectively, are derived from receipts from the sale of goods produced
51 by such activities. In computing a combined group's gross receipts,
52 intercorporate receipts shall be eliminated.
53 § 2. This act shall take effect immediately and apply to taxable years
54 commencing on and after January 1, 2005.
S. 995 46 A. 1925
1 PART O
2 Section 1. Paragraph 1 of subdivision (c) of section 19 of the tax
3 law, as added by section 2 of part II of chapter 63 of the laws of 2000,
4 is amended to read as follows:
5 (1) Initial credit component certificate. Upon application by a
6 taxpayer, DEC shall issue an initial credit component certificate where
7 the taxpayer has made a showing that the taxpayer is likely within a
8 reasonable time to place in service property which would warrant the
9 allowance of a credit under this section. Such certificate shall state
10 the first taxable year for which the credit may be claimed and an expi-
11 ration date, and shall apply only to property placed in service by such
12 expiration date. Such expiration date may be extended at the discretion
13 of DEC, in order to avoid unwarranted hardship. [Such certificates may
14 be issued in years 2000-2004.] Such certificates shall state the maximum
15 amount of credit component allowable for each of the five taxable years
16 for which the credit component is allowed, under paragraphs two through
17 seven of subdivision (a) of this section.
18 (a) Period one. Initial credit component certificates for period one
19 may be issued in years 2000-2004. Such certificates for period one shall
20 not be issued, in the aggregate, for more than twenty-five million
21 dollars worth of credit components. In addition, such certificates for
22 period one shall be limited in their applicability, as follows:
23 Credit components in the aggregate With respect to taxable
24 shall not be allowed for more than: years beginning in:
25 $ 1 million 2001
26 $ 2 million 2002
27 $ 3 million 2003
28 $ 4 million 2004
29 $ 5 million 2005
30 $ 4 million 2006
31 $ 3 million 2007
32 $ 2 million 2008
33 $ 1 million 2009
34 Provided, however, that if as of the end of a calendar year, certif-
35 icates for credit component amounts totalling less than the amount
36 permitted with respect to taxable years commencing in such calendar year
37 have been issued, then the amount permitted with respect to taxable
38 years commencing in the subsequent calendar year shall be augmented by
39 the amount of such shortfall.
40 (b) Period two. Initial credit component certificates for period two
41 may be issued in years 2005-2009. Such certificates for period two shall
42 not be issued, in the aggregate, for more than twenty-five million
43 dollars worth of credit components. The total amount of credit component
44 allowable for the five taxable years for which the credit components are
45 allowed, as set forth on any one initial credit component certificate,
46 shall be limited to two million dollars. However, a taxpayer that is the
47 owner or tenant of more than one building that qualifies for the credits
48 provided for under this section may be issued initial credit component
49 certificates with respect to each such building with the aggregate
50 amount of credit components permitted for each such certificate being
51 two million dollars. Provided further, a taxpayer that is the owner or
52 tenant of a building for which an initial credit component certificate
53 was issued for period one, shall not be issued an initial credit compo-
S. 995 47 A. 1925
1 nent certificate with respect to such building for period two. In addi-
2 tion, such certificates for period two shall be limited in their appli-
3 cability, as follows:
4 Credit components in the aggregate With respect to taxable
5 shall not be allowed for more than: years beginning in:
6 $ 1 million 2006
7 $ 2 million 2007
8 $ 3 million 2008
9 $ 4 million 2009
10 $ 5 million 2010
11 $ 4 million 2011
12 $ 3 million 2012
13 $ 2 million 2013
14 $ 1 million 2014
15 Provided, however, that if as of the end of a calendar year, certif-
16 icates for credit component amounts totaling less than the amount
17 permitted with respect to taxable years commencing in such calendar year
18 have been issued, then the amount permitted with respect to taxable
19 years commencing in the subsequent calendar year shall be augmented by
20 the amount of such shortfall. Provided, further, that if at the end of
21 calendar year two thousand nine, certificates for credit component
22 amounts issued by the DEC have totaled less than twenty-five million
23 dollars for calendar years 2005-2009, then the period to issue initial
24 credit component certificates shall be extended to the end of calendar
25 year two thousand ten and the DEC shall be permitted to issue in two
26 thousand ten initial credit component certificates for amounts that
27 equal the difference between the amounts issued for calendar years
28 2005-2009 and twenty-five million dollars.
29 (c) For purposes of either period one or two, if a taxpayer who is
30 issued an initial credit component certificate is unable to claim as a
31 credit any amount of credit component, (i) such amount of unclaimed
32 credit component may be allocated to another taxpayer that has already
33 been issued an initial credit component certificate with such certif-
34 icate being reissued to reflect the amount so allocated, provided that
35 such other taxpayer applied for and would have qualified for such addi-
36 tional amount, and with respect to period two the initial credit compo-
37 nent certificate of such other taxpayer as augmented does not exceed the
38 two million dollar limit, or as an alternative (ii) the DEC may issue to
39 other applicants new initial credit component certificates which include
40 such amounts of unclaimed credit components. If a taxpayer is unable to
41 claim all or a portion of the amount of credit components after the
42 close of the last calendar year for which initial credit component
43 certificates may be issued, the DEC shall have twelve months to accept
44 applications for and issue initial credit component certificates for
45 such amount of unclaimed credit components.
46 § 2. Paragraph 4 of subdivision (d) of section 19 of the tax law, as
47 added by section 2 of part II of chapter 63 of the laws of 2000, is
48 amended to read as follows:
49 (4) Report. [On] For period one, on or before April first, two thou-
50 sand [eight] eleven, the commissioner and the commissioner of DEC,
51 jointly and in consultation with NYSERDA, shall submit a written report
52 regarding the number of certifications and taxpayers claiming the credit
53 provided for under this section; the amount of the credits claimed, the
54 geographical distribution of the credits claimed; and any other such
S. 995 48 A. 1925
1 available information DEC may deem meaningful and appropriate. A prelim-
2 inary version of such report for period one shall be so issued by April
3 first, two thousand five. For period two, on or before April first, two
4 thousand sixteen the commissioner and the commissioner of DEC, jointly
5 and in consultation with NYSERDA, shall submit a written report regard-
6 ing the number of certificates and taxpayers claiming the credit
7 provided for under this section; the amount of the credits claimed, the
8 geographical distribution of the credits claimed; and any other such
9 available information DEC may deem meaningful and appropriate. A prelim-
10 inary version of such report for period two shall be issued by April
11 first, two thousand ten. The commissioner and the commissioner of DEC
12 shall ensure that the information is presented and/or classified in a
13 manner consistent with the secrecy requirements of this chapter. DEC
14 shall also make recommendations regarding the establishment of a perma-
15 nent green building tax credit program. Recommendations may include
16 methods to enhance the effectiveness, simplicity or other aspects of the
17 program. The report shall be submitted to the governor, the temporary
18 president of the senate, the speaker of the assembly, the chairman of
19 the senate finance committee and the chairman of the assembly ways and
20 means committee.
21 § 3. Subparagraphs (A) and (B) of paragraph 1 of subdivision (e) of
22 section 19 of the tax law, as added by section 2 of part II of chapter
23 63 of the laws of 2000, are amended to read as follows:
24 (A) regulations establishing standards for energy use for eligible
25 buildings. DEC, in consultation with NYSERDA shall review and update
26 such regulations if deemed necessary at least every two years from the
27 date on which such regulations are promulgated.
28 (B) regulations establishing standards for appliances and heating,
29 cooling and water heating equipment that, on the effective date of this
30 section, are covered by specifications from organizations such as the
31 United States department of energy or environmental protection agency.
32 The development of such regulations shall be informed by such specifica-
33 tions. DEC, in consultation with NYSERDA shall review and update such
34 regulations if deemed necessary at least every two years from the date
35 on which such regulations are promulgated.
36 § 4. Subparagraph (A) of paragraph 3 of subdivision (e) of section 19
37 of the tax law, as added by section 2 of part II of chapter 63 of the
38 laws of 2000, is amended to read as follows:
39 (A) regulations establishing standards for building materials,
40 finishes and furnishings regarding minimum percentages of recycled
41 content and renewable source material and maximum levels of toxicity and
42 volatile organic compounds and any other standards that the DEC deems
43 appropriate. Standards shall be developed for building materials,
44 finishes and furnishings, including but not limited to concrete and
45 concrete masonry units; wood and wood products; millwork substrates;
46 insulation; ceramic, ceramic/glass and cementitious tiles; ceiling tiles
47 and panels; flooring and carpet; paints, coatings, sealants and adhe-
48 sives; and furniture. The development of such standards shall be
49 informed by the LEED rating system. The DEC shall review and update such
50 regulations if deemed necessary at least every two years from the date
51 on which such regulations are promulgated. For purposes of this clause,
52 "LEED rating system" means the leadership in energy and environmental
53 design green building rating system criteria being developed by the
54 United States green building council.
55 § 5. This act shall take effect immediately.
S. 995 49 A. 1925
1 PART P
2 Section 1. Paragraph 7 of subdivision (a) of section 1512 of the tax
3 law, as amended by chapter 817 of the laws of 1987, is amended to read
4 as follows:
5 (7) a town or county cooperative insurance corporation as heretofore
6 contemplated by section one hundred eighty-seven of this chapter in
7 effect immediately prior to January first, nineteen hundred
8 seventy-four, which properly reported total direct premiums written to
9 the superintendent of insurance for the taxable year of twenty-five
10 million dollars or less.
11 § 2. This act shall take effect immediately and shall apply to taxable
12 years beginning on or after January 1, 2005.
13 PART Q
14 Section 1. The tax law is amended by adding a new section 25 to read
15 as follows:
16 § 25. Disclosure of certain transactions and related information.
17 (a)(1) Every taxpayer, or person as defined in section seven thousand
18 seven hundred one of the internal revenue code, required to file a
19 disclosure statement with the internal revenue service pursuant to
20 section six thousand eleven of the internal revenue code, or the regu-
21 lations promulgated thereunder, related to a reportable transaction or a
22 listed transaction, as those terms are defined in such section or regu-
23 lations, must attach a duplicate of such disclosure statement to the
24 return or report required to be filed by such taxpayer or person for the
25 taxable year under article nine, nine-A, twenty-two, thirty-two or thir-
26 ty-three of this chapter, and provide such other information related to
27 such disclosure as prescribed by the commissioner. Such disclosure shall
28 be made notwithstanding that one member of an affiliated group, as
29 defined by section fifteen hundred four of the internal revenue code,
30 may file such disclosure statement with the internal revenue service on
31 behalf of its affiliates including such taxpayer or person.
32 (2) Every taxpayer or such person who participates in a New York
33 reportable transaction for a taxable year must disclose such partic-
34 ipation with its return or report required to be filed under article
35 nine, nine-A, twenty-two, thirty-two or thirty-three of this chapter for
36 the taxable year in a form prescribed by the commissioner, and provide
37 such other information related to such transaction as prescribed by the
38 commissioner. A New York reportable transaction is a transaction that
39 has the potential to be a tax avoidance transaction as determined by the
40 commissioner.
41 (3) The commissioner may in his discretion prescribe, by regulation,
42 New York reportable transactions.
43 (4) Provided the commissioner has prescribed regulations pursuant to
44 paragraph three of this subdivision the commissioner is authorized to
45 designate specific transactions that are the same as, or substantially
46 similar to, transactions that the commissioner has determined to be tax
47 avoidance transactions. The provisions of article two of the state
48 administrative procedure act shall not apply to the designation of a
49 specific transaction as a tax avoidance transaction; provided, however,
50 that the commissioner shall designate any such transaction by notice or
51 other form of published guidance.
52 (b)(1) Every person required to make and file a statement or return
53 pursuant to section six thousand one hundred eleven of the internal
S. 995 50 A. 1925
1 revenue code must file a duplicate of such statement or return, includ-
2 ing all documentation submitted to the internal revenue service in
3 connection with such statement or return, with the commissioner if any
4 of the following conditions apply:
5 (A) the person is organized in this state,
6 (B) the person is doing business in this state,
7 (C) the person is deriving income in this state, or
8 (D)(i) the list required to be maintained by such person pursuant to
9 section six thousand one hundred twelve of the internal revenue code
10 identifies or is required to identify a taxpayer subject to tax under
11 article nine, nine-A, twenty-two, thirty-two or thirty-three of this
12 chapter, and
13 (ii) such person is a material advisor, as defined in section six
14 thousand one hundred eleven of the internal revenue code, who within the
15 state of New York, provides any material aid, assistance, or advice with
16 respect to organizing, managing, promoting, selling, implementing, or
17 carrying out any reportable transaction.
18 (2) Such duplicate statement or return must be filed within sixty days
19 of the later of:
20 (A) the date required for filing the statement or return with the
21 internal revenue service,
22 (B) the date that any of the conditions described in paragraph (1) of
23 this subdivision first applies, or
24 (C) ninety days after the enactment of this section.
25 (c) Every person who is required to maintain a list of persons pursu-
26 ant to section six thousand one hundred twelve of the internal revenue
27 code, or the regulations promulgated thereunder, must maintain a dupli-
28 cate of such list if any of the conditions described in paragraph one of
29 subdivision (b) of this section applies to such person and must furnish
30 a copy thereof to the commissioner within twenty days after written
31 request is made for such list by the commissioner.
32 (d) Every person required by this section to disclose any transaction,
33 file any duplicate return, or maintain any list shall retain all rele-
34 vant correspondence, memoranda, notes, valuation studies, meeting
35 minutes, spreadsheets, models, opinions, records required to be retained
36 pursuant to section six thousand eleven of the internal revenue code, or
37 the regulations promulgated thereunder, and all other records or docu-
38 ments related to the disclosure, filing and list maintenance require-
39 ments of this section for six years and must make such information
40 available for inspection by the commissioner in connection with any
41 examination.
42 (e) The filing, disclosure and retention requirements of this section
43 shall be in addition to any other filing, disclosure or retention
44 requirements, general or specific, provided by law. The commissioner
45 may require electronic filing or disclosure of any or all submissions
46 required under this section, shall have the authority to prescribe
47 whether a signature, including an electronic signature, is required on
48 any or all filings or disclosures under this section. If an electronic
49 signature is so required, it shall be in a form consistent with the
50 provisions of the electronic signatures and records act of the state
51 technology law.
52 (f)(1) The penalties imposed for a violation of subdivision (a) of
53 this section are contained in subsection (x) of section six hundred
54 eighty-five and subsection (p) of section one thousand eighty-five of
55 this chapter.
S. 995 51 A. 1925
1 (2) The penalties imposed for a violation of subdivision (b) of this
2 section are contained in subsection (y) of section six hundred eighty-
3 five and subsection (q) of section one thousand eighty-five of this
4 chapter.
5 (3) The penalties imposed for a violation of subdivision (c) of this
6 section are contained in subsection (z) of section six hundred eighty-
7 five and subsection (r) of section one thousand eighty-five of this
8 chapter.
9 § 2. Subsection (c) of section 683 of the tax law is amended by adding
10 a new paragraph 11 to read as follows:
11 (11) Extended statute of limitations for tax avoidance transactions.
12 (A) If a taxpayer or person fails to file, disclose or provide any
13 statement, return or other information for any taxable year with respect
14 to a listed transaction, as defined in paragraph three of subsection (x)
15 of section six hundred eighty-five of this article, which is required
16 under subdivision (a) of section twenty-five of this chapter, the time
17 for assessment of any tax imposed by this article with respect to such
18 transaction shall not expire before the date which is one year after the
19 earlier of:
20 (i) the date on which the commissioner is furnished the statement,
21 return, or information so required, or
22 (ii) if later than the date described in clause (i) of this subpara-
23 graph, the date that the requirements of subdivision (c) of section
24 twenty-five of this chapter are met with respect to a request under such
25 subdivision by the commissioner relating to such transaction.
26 (B) If later than the time for assessment otherwise provided by this
27 section, tax may be assessed at any time within six years after the
28 return was filed if the deficiency is attributable to an abusive tax
29 avoidance transaction.
30 (C) For purposes of subparagraph (B) of this paragraph, an "abusive
31 tax avoidance transaction" means a plan or arrangement devised for the
32 principal purpose of avoiding tax. Abusive tax avoidance transactions
33 include, but are not limited to, listed transactions described in para-
34 graph five of subsection (p-1) of section six hundred eighty-five of
35 this article.
36 § 3. Subsection (p) of section 685 of the tax law, as amended by chap-
37 ter 765 of the laws of 1985, is amended to read as follows:
38 (p) Substantial understatement of liability.-- (1) If there is a
39 substantial understatement of income tax for any taxable year, there
40 shall be added to the tax an amount equal to ten percent of the amount
41 of any underpayment attributable to such understatement. For purposes of
42 this subsection, there is a substantial understatement of income tax for
43 any taxable year if the amount of the understatement for the taxable
44 year exceeds the greater of ten percent of the tax required to be shown
45 on the return for the taxable year, or two thousand dollars. For
46 purposes of the preceding sentence, the term "understatement" means the
47 excess of the amount of the tax required to be shown on the return for
48 the taxable year, over the amount of tax imposed which is shown on the
49 return reduced by any rebate (within the meaning of subsection (g) of
50 section six hundred eighty-one). [The amount of such understatement
51 shall be reduced by that portion of the understatement which is attrib-
52 utable to the tax treatment of any item by the taxpayer if there is or
53 was substantial authority for such treatment, or any item with respect
54 to which the relevant facts affecting the item's tax treatment are
55 adequately disclosed in the return or in a statement attached to the
56 return.] The excess under the preceding sentence shall be determined
S. 995 52 A. 1925
1 without regard to items to which subsection (p-1) of this section
2 applies. The [tax commission] commissioner may waive all or any part of
3 the addition to tax provided by this subsection on a showing by the
4 taxpayer that there was reasonable cause for the understatement, or part
5 thereof, and that the taxpayer acted in good faith.
6 (2) The amount of the understatement under paragraph (1) shall be
7 reduced by that portion of the understatement which is attributable to
8 (A) the tax treatment of any item by the taxpayer if there is or was
9 substantial authority for such treatment, or (B) any item if the rele-
10 vant facts affecting the item's tax treatment are adequately disclosed
11 in the return or in a statement attached to the return.
12 (3)(A) Subparagraph (B) of paragraph two of this subsection shall not
13 apply to any item attributable to a tax shelter.
14 (B) For purposes of this paragraph, the term "tax shelter" means
15 (i) a partnership or other entity,
16 (ii) any investment plan or arrangement, or
17 (iii) any other plan or arrangement,
18 if a significant purpose of such partnership, entity, plan, or arrange-
19 ment is the avoidance or evasion of tax.
20 § 4. Section 685 of the tax law is amended by adding a new subsection
21 (p-1) to read as follows:
22 (p-1) Reportable transaction understatement.-- (1) If a taxpayer has a
23 reportable transaction understatement for any taxable year, there shall
24 be added to the tax an amount equal to twenty percent of the amount of
25 such understatement.
26 (2) For purposes of this section, the term "reportable transaction
27 understatement" means the sum of:
28 (A) the product of--
29 (i) the amount of the increase (if any) in the applicable tax base
30 which results from a difference between the proper tax treatment of an
31 item to which this section applies and the taxpayer's treatment of such
32 item (as shown on the taxpayer's return of tax), and
33 (ii) the highest rate of tax imposed by this article, and
34 (B) the amount of the decrease (if any) in the aggregate amount of
35 credits determined under this article which results from a difference
36 between the taxpayer's treatment of an item to which this section
37 applies (as shown on the taxpayer's return of tax) and the proper tax
38 treatment of such item.
39 For purposes of subparagraph (A) of this paragraph, any reduction of
40 the excess of deductions allowed for the taxable year over gross income
41 for such year, and any reduction in the amount of capital losses which
42 would (without regard to section one thousand two hundred eleven of the
43 internal revenue code) be allowed for such year, shall be treated as an
44 increase in the applicable tax base.
45 (3) This subsection shall apply to any item which is attributable to--
46 (A) any listed transaction, and
47 (B) any reportable transaction (other than a listed transaction) if a
48 significant purpose of such transaction is the avoidance or evasion of
49 tax.
50 (4) Paragraph one of this subsection shall be applied by substituting
51 "thirty percent" for "twenty percent" with respect to the portion of any
52 reportable transaction understatement with respect to which the require-
53 ment of clause (i) of subparagraph (B) of paragraph ten of this
54 subsection is not met.
55 (5) For purposes of this subsection, the terms "reportable trans-
56 action" and "listed transaction" have the meanings given to such terms
S. 995 53 A. 1925
1 by section twenty-five of this chapter, the term "reportable trans-
2 action" shall include a "New York reportable transaction" as defined in
3 such section twenty-five, and the term "listed transaction" shall
4 include any transaction designated as a tax avoidance transaction pursu-
5 ant to such section twenty-five.
6 (6) In the case of an understatement (as defined in subsection (p) of
7 this section):
8 (A) the amount of such understatement (determined without regard to
9 this paragraph) shall be increased by the aggregate amount of reportable
10 transaction understatements for purposes of determining whether such
11 understatement is a substantial understatement under subsection (p) of
12 this section, and (B) the addition to tax under subsection (p) of this
13 section shall apply only to the excess of the amount of the substantial
14 understatement (if any) after the application of this subparagraph over
15 the aggregate amount of reportable transaction understatements.
16 (7) References to an understatement (or a deficiency) in subsection
17 (e) of this section shall be treated as including references to a
18 reportable transaction understatement.
19 (8) This subsection shall not apply to any portion of any understate-
20 ment on which a penalty is imposed under subsection (e) of this section.
21 (9) Except as provided in regulations prescribed by the commissioner,
22 in no event shall any tax treatment included with an amendment or
23 supplement to a return of tax be taken into account in determining the
24 amount of any reportable transaction understatement if the amendment or
25 supplement is filed after the earlier of the date the taxpayer is first
26 contacted by the commissioner regarding the examination of the return or
27 such other date as is specified by the commissioner.
28 (10)(A) No penalty shall be imposed under this subsection with respect
29 to any portion of a reportable transaction understatement if it is shown
30 that there was a reasonable cause for such portion and that the taxpayer
31 acted in good faith with respect to such portion.
32 (B) Subparagraph (A) of this paragraph shall not apply to any report-
33 able transaction understatement unless
34 (i) the relevant facts affecting the tax treatment of the item are
35 adequately disclosed in accordance with section twenty-five of this
36 chapter,
37 (ii) there is or was substantial authority for such treatment, and
38 (iii) the taxpayer reasonably believed that such treatment was more
39 likely than not the proper treatment.
40 A taxpayer failing to adequately disclose in accordance with section
41 twenty-five of this chapter shall be treated as meeting the requirements
42 of clause (i) of this subparagraph if the penalty for such failure was
43 rescinded under subsection (x) of this section.
44 (11)(A) A taxpayer shall be treated as having a reasonable belief with
45 respect to the tax treatment of an item only if such belief
46 (i) is based on the facts and law that exist at the time the return
47 which includes such tax treatment is filed, and
48 (ii) relates solely to the taxpayer's chances of success on the merits
49 of such treatment and does not take into account the possibility that a
50 return will not be audited, such treatment will not be raised on audit,
51 or such treatment will be resolved through settlement if it is raised.
52 (B)(i) An opinion of a tax advisor may not be relied upon to establish
53 the reasonable belief of a taxpayer if
54 (I) the tax advisor is described in clause (ii) of this subparagraph,
55 or
56 (II) the opinion is described in clause (iii) of this subparagraph.
S. 995 54 A. 1925
1 (ii) A tax advisor is described in this clause if the tax advisor
2 (I) is a material advisor (within the meaning of section six thousand
3 one hundred eleven of the internal revenue code or within such meaning
4 as it also applies to a New York reportable transaction as defined in
5 section twenty-five of this chapter) and participates in the organiza-
6 tion, management, promotion, or sale of the transaction or is related
7 (within the meaning of subsection (b) of section two hundred sixty-seven
8 of the internal revenue code or subsection (b) of section seven hundred
9 seven of the internal revenue code) to any person who so participates,
10 (II) is compensated directly or indirectly by a material advisor with
11 respect to the transaction,
12 (III) has a fee arrangement with respect to the transaction which is
13 contingent on all or part of the intended tax benefits from the trans-
14 action being sustained, or
15 (IV) has a disqualifying financial interest with respect to the trans-
16 action.
17 (iii) For purposes of clause (i) of this subparagraph, an opinion is
18 disqualified if the opinion
19 (I) is based on unreasonable factual or legal assumptions (including
20 assumptions as to future events),
21 (II) unreasonably relies on representations, statements, findings, or
22 agreements of the taxpayer or any other person,
23 (III) does not identify and consider all relevant facts, or
24 (IV) fails to meet any other requirement as the commissioner may
25 prescribe.
26 § 5. Subsection (r) of section 685 of the tax law, as added by chapter
27 65 of the laws of 1985, paragraph 1 as amended by chapter 765 of the
28 laws of 1985, is amended to read as follows:
29 (r) Aiding or assisting in the giving of fraudulent returns, reports,
30 statements or other documents.--(1) Any person who, with the intent that
31 tax be evaded, shall, for a fee or other compensation or as an incident
32 to the performance of other services for which such person receives
33 compensation, aid or assist in, or procure, counsel, or advise the prep-
34 aration or presentation under, or in connection with any matter arising
35 under this article of any return, report, declaration, statement or
36 other document which is fraudulent or false as to any material matter,
37 or supply any false or fraudulent information, whether or not such
38 falsity or fraud is with the knowledge or consent of the person author-
39 ized or required to present such return, report, declaration, statement
40 or other document shall pay a penalty not exceeding [one] five thousand
41 dollars.
42 (2) For purposes of paragraph one of this subsection, the term
43 "procures" includes ordering (or otherwise causing) a subordinate to do
44 an act, and knowing of, and not attempting to prevent, participation by
45 a subordinate in an act. The term "subordinate" means any other person
46 (whether or not a director, officer, employee, or agent of the taxpayer
47 involved) over whose activities the person has direction, supervision,
48 or control.
49 (3) For purposes of paragraph one of this subsection, a person
50 furnishing typing, reproducing, or other mechanical assistance with
51 respect to a document shall not be treated as having aided or assisted
52 in the preparation of such document by reason of such assistance.
53 (4) The penalty imposed by this subsection shall be in addition to any
54 other penalty provided by law.
55 § 6. Section 685 of the tax law is amended by adding five new
56 subsections (x), (y), (z), (aa) and (bb) to read as follows:
S. 995 55 A. 1925
1 (x) Failure to disclose or provide reportable transaction informa-
2 tion.-- (1) Any person who fails to file, disclose or provide any state-
3 ment, return or other document which is required under subdivision (a)
4 of section twenty-five of this chapter shall pay a penalty in the amount
5 determined under paragraph two of this subsection.
6 (2)(A) Except as provided in subparagraph (B) of this paragraph, the
7 amount of the penalty under paragraph one of this subsection shall be
8 ten thousand dollars.
9 (B) The amount of the penalty under paragraph one of this subsection
10 with respect to a listed transaction shall be twenty-five thousand
11 dollars.
12 (3) For purposes of this subsection, the terms "reportable trans-
13 action" and "listed transaction" shall have the same meanings as used in
14 section twenty-five of this chapter, and the term "reportable trans-
15 action" shall include a "New York reportable transaction" as defined in
16 such section twenty-five, and the term "listed transaction" shall
17 include any transaction designated as a tax avoidance transaction pursu-
18 ant to such section twenty-five.
19 (4) The commissioner may rescind all or any portion of any penalty
20 imposed by this subsection with respect to any violation if
21 (A) the violation is with respect to a reportable transaction other
22 than a listed transaction, and
23 (B) rescinding the penalty would promote compliance with the require-
24 ments of this chapter and effective tax administration.
25 (5) The penalty imposed by this section shall be in addition to any
26 other penalty imposed by this chapter.
27 (y) Failure to disclose or provide reportable transaction return.--
28 (1) Any person who fails to file, disclose or provide any statement,
29 return or other document which is required under subdivision (b) of
30 section twenty-five of this chapter shall pay a penalty in the amount
31 determined under paragraph two of this subsection.
32 (2)(A) Except as provided in subparagraph (B) of this paragraph, the
33 amount of the penalty under paragraph one of this subsection shall be
34 twenty thousand dollars.
35 (B) The amount of the penalty under paragraph one of this subsection
36 with respect to a listed transaction shall be the greater of
37 (i) fifty thousand dollars or,
38 (ii) fifty percent of the gross income that the organizer or material
39 advisor derived with respect to activities that were the basis for the
40 requirement to file, disclose or provide information pursuant to section
41 six thousand eleven of the internal revenue code, to the extent such
42 gross income is attributable to the avoidance of any tax imposed under
43 this article.
44 (C) Clause (ii) of subparagraph (B) of this paragraph shall be applied
45 by substituting "seventy-five percent" for "fifty percent" in the case
46 of an intentional failure or act described in paragraph one of this
47 subsection.
48 (3) For purposes of this subsection, the terms "reportable trans-
49 action" and "listed transaction" shall have the same meanings as used in
50 section twenty-five of this chapter, the term "reportable transaction"
51 shall include a "New York reportable transaction" as defined in such
52 section twenty-five, and the term "listed transaction" shall include any
53 transaction designated as a tax avoidance transaction pursuant to such
54 section twenty-five.
55 (4) The commissioner may rescind all or any portion of any penalty
56 imposed by this subsection with respect to any violation if
S. 995 56 A. 1925
1 (A) the violation is with respect to a reportable transaction other
2 than a listed transaction, and
3 (B) rescinding the penalty would promote compliance with the require-
4 ments of this chapter and effective tax administration.
5 (5) The penalty imposed by this subsection shall be in addition to any
6 other penalty imposed by this chapter, except that no penalty shall be
7 imposed under subparagraph (A) or clause (i) of subparagraph (B) of
8 paragraph two of subsection (q) of section one thousand eighty-five of
9 this chapter for the same failure that is the basis for a penalty under
10 this subsection. Nothing in this paragraph shall preclude the imposition
11 of a penalty under clause (ii) of subparagraph (B) of paragraph two of
12 subsection (q) of section one thousand eighty-five of this chapter for
13 the same failure that is the basis for a penalty under clause (ii) of
14 subparagraph (B) of paragraph two of this subsection.
15 (z) Failure to maintain list of advisees.-- (1) If any person who is
16 required to maintain a list under subdivision (c) of section twenty-five
17 of this chapter fails to make a duplicate of such list available, upon
18 written request to the commissioner in accordance with such subsection
19 within twenty business days after the date of the request, such person
20 shall pay a penalty of ten thousand dollars for each day of such failure
21 after such twentieth day.
22 (2) No penalty shall be imposed by paragraph one of this subsection
23 with respect to the failure on any day if such failure is due to reason-
24 able cause.
25 (aa) Tax preparer penalty.-- (1) If:
26 (A) any part of any understatement of liability with respect to any
27 return or claim for refund is due to a position for which there was not
28 a reasonable belief that the tax treatment in that position was more
29 likely than not the proper treatment,
30 (B) any person who is an income tax return preparer with respect to
31 such return or claim knew (or reasonably should have known) of such
32 position, and
33 (C) such position was not disclosed as provided in subsection (p) of
34 this section or there was no reasonable basis for the tax treatment of
35 that position,
36 such person shall pay a penalty of one thousand dollars with respect to
37 such return or claim unless it is shown that there is reasonable cause
38 for the understatement and such person acted in good faith.
39 (2) If any part of any understatement of liability with respect to any
40 return or claim for refund is due:
41 (A) to a willful attempt in any manner to understate the liability for
42 tax by a person who is a tax return preparer with respect to such return
43 or claim, or
44 (B) to any reckless or intentional disregard of rules or regulations
45 by any such person,
46 such person shall pay a penalty of five thousand dollars with respect to
47 such return or claim. With respect to any return or claim, the amount of
48 the penalty payable by any person by reason of this paragraph shall be
49 reduced by the amount of the penalty paid by such person by reason of
50 paragraph one of this subsection.
51 (3) For purposes of this subsection, the term "understatement of
52 liability" means any understatement of the net amount payable with
53 respect to any tax imposed under this article or any overstatement of
54 the net amount creditable or refundable with respect to any such tax.
S. 995 57 A. 1925
1 (4) This subsection shall not apply if the penalty under subsection
2 (r) of this section is imposed on the tax return preparer with respect
3 to such understatement.
4 (bb) Promoting abusive tax shelters.-- (1) Any person who
5 (A)(i) organizes (or assists in the organization of)
6 (I) a partnership or other entity,
7 (II) any investment plan or arrangement, or
8 (III) any other plan or arrangement, or
9 (ii) participates (directly or indirectly) in the sale of any interest
10 in an entity or plan or arrangement referred to in clause (i) of this
11 subparagraph, and
12 (B) makes or furnishes or causes another person to make or furnish (in
13 connection with such organization or sale)
14 (i) a statement with respect to the allowability of any deduction or
15 credit, the excludability of any income, or the securing of any other
16 tax benefit by reason of holding an interest in the entity or partic-
17 ipating in the plan or arrangement which the person knows or has reason
18 to know is false or fraudulent as to any material matter, or
19 (ii) a gross valuation overstatement as to any material matter, and
20 (C) satisfies any of the following conditions
21 (i) the person is organized in this state,
22 (ii) the person is doing business in this state,
23 (iii) the person is deriving income in this state, or
24 (iv) the person conducts any of the activities described in subpara-
25 graph (A) or (B) of this paragraph within the state of New York, shall
26 pay, with respect to each activity described in subparagraph (A) of this
27 paragraph, a penalty equal to one thousand dollars or, if the person
28 establishes that it is lesser, one hundred percent of the gross income
29 derived (or to be derived) by such person from such activity to the
30 extent such gross income is attributable to the avoidance of any tax
31 imposed under this article; provided, however, that if an activity with
32 respect to which a penalty imposed under this subsection involves a
33 statement described in clause (i) of subparagraph (B) of paragraph one
34 of this subsection, the penalty shall be equal to fifty percent of the
35 gross income derived (or to be derived) from that activity within the
36 state by the person on which the penalty is imposed. For purposes of the
37 preceding sentence, activities described in clause (i) of subparagraph
38 (A) of this paragraph with respect to each entity or arrangement shall
39 be treated as a separate activity and participation in each sale
40 described in clause (ii) of subparagraph (A) of this paragraph shall be
41 so treated.
42 (2)(A) For purposes of this subsection, the term "gross valuation
43 overstatement" means any statement as to the value of any property or
44 services if
45 (i) the value so stated exceeds two hundred percent of the amount
46 determined to be the correct valuation, and
47 (ii) the value of such property or services is directly related to the
48 amount of any deduction or credit allowable under this chapter to any
49 participant.
50 (B) The commissioner may waive all or any part of the penalty provided
51 by paragraph one of this subsection with respect to any gross valuation
52 overstatement on a showing that there was a reasonable basis for the
53 valuation and that such valuation was made in good faith.
54 (3) The penalty imposed by this subsection shall be in addition to any
55 other penalty provided by law.
S. 995 58 A. 1925
1 § 7. Subsection (c) of section 1083 of the tax law is amended by
2 adding a new paragraph 11 to read as follows:
3 (11) Extended statute of limitations for tax avoidance transactions.--
4 (A) If a taxpayer fails to file, disclose or provide any statement,
5 return or other information for any taxable year with respect to a list-
6 ed transaction (as defined in paragraph three of subsection (p) of
7 section one thousand eighty-five of this article) which is required
8 under subdivision (a) of section twenty-five of this chapter, the time
9 for assessment of any tax imposed by this article with respect to such
10 transaction shall not expire before the date which is one year after the
11 earlier of:
12 (i) the date on which the commissioner is furnished the statement,
13 return, or information so required, or
14 (ii) if later than the date described in clause (i) of this subpara-
15 graph, the date that the requirements of subdivision (c) of section
16 twenty-five of this chapter are met with respect to a request under such
17 subdivision by the commissioner relating to such transaction.
18 (B) If later than the time for assessment otherwise provided by this
19 section, tax may be assessed at any time within six years after the
20 return was filed if the deficiency is attributable to an abusive tax
21 avoidance transaction.
22 (C) For purposes of subparagraph (B) of this paragraph, an "abusive
23 tax avoidance transaction" means a plan or arrangement devised for the
24 principal purpose of avoiding tax. Abusive tax avoidance transactions
25 include, but are not limited to, listed transactions described in para-
26 graph five of subsection (k-1) of section one thousand eighty-five of
27 this article.
28 § 8. Subsection (k) of section 1085 of the tax law, as amended by
29 chapter 765 of the laws of 1985, is amended to read as follows:
30 (k) Substantial understatement of liability.-- (1) If there is a
31 substantial understatement of tax for any taxable year, there shall be
32 added to the tax an amount equal to ten percent of the amount of any
33 underpayment attributable to such understatement. For purposes of this
34 subsection, there is a substantial understatement of tax for any taxable
35 year if the amount of the understatement for the taxable year exceeds
36 the greater of ten percent of the tax required to be shown on the return
37 for the taxable year or five thousand dollars. For purposes of the
38 preceding sentence, the term "understatement" means the excess of the
39 amount of the tax required to be shown on the return for the taxable
40 year, over the amount of the tax imposed which is shown on the return
41 reduced by any rebate (within the meaning of subsection (h) of section
42 one thousand eighty-one of this article). [The amount of such under-
43 statement shall be reduced by that portion of the understatement which
44 is attributable to the tax treatment of any item by the taxpayer if
45 there is or was substantial authority for such treatment, or any item
46 with respect to which the relevant facts affecting the item's tax treat-
47 ment are adequately disclosed in the return or in a statement attached
48 to the return.] The excess under the preceding sentence shall be deter-
49 mined without regard to items to which subsection (k-1) of this section
50 applies. The [tax commission] commissioner may waive all or any part of
51 the addition to tax provided by this section on a showing by the taxpay-
52 er that there was reasonable cause for the understatement (or part ther-
53 eof) and that the taxpayer acted in good faith.
54 (2) The amount of the understatement under paragraph one of this
55 subsection shall be reduced by that portion of the understatement which
56 is attributable to (A) the tax treatment of any item by the taxpayer if
S. 995 59 A. 1925
1 there is or was substantial authority for such treatment, or (B) any
2 item if the relevant facts affecting the item's tax treatment are
3 adequately disclosed in the return or in a statement attached to the
4 return.
5 (3)(A) Subparagraph (B) of paragraph two of this subsection shall not
6 apply to any item attributable to a tax shelter.
7 (B) For purposes of this paragraph, the term "tax shelter" means
8 (i) a partnership or other entity,
9 (ii) any investment plan or arrangement, or
10 (iii) any other plan or arrangement,
11 if a significant purpose of such partnership, entity, plan, or arrange-
12 ment is the avoidance or evasion of tax.
13 § 9. Section 1085 of the tax law is amended by adding a new subsection
14 (k-1) to read as follows:
15 (k-1) Reportable transaction understatement.-- (1) If a taxpayer has a
16 reportable transaction understatement for any taxable year, there shall
17 be added to the tax an amount equal to twenty percent of the amount of
18 such understatement.
19 (2) For purposes of this section, the term "reportable transaction
20 understatement" means the sum of
21 (A) the product of--
22 (i) the amount of the increase (if any) in the applicable tax base
23 which results from a difference between the proper tax treatment of an
24 item to which this section applies and the taxpayer's treatment of such
25 item (as shown on the taxpayer's return of tax), and
26 (ii) the highest rate of tax imposed under the article of this chapter
27 that applies to the taxpayer, and
28 (B) the amount of the decrease (if any) in the aggregate amount of
29 credits determined under the article of this chapter that applies to the
30 taxpayer which results from a difference between the taxpayer's treat-
31 ment of an item to which this section applies (as shown on the taxpay-
32 er's return of tax) and the proper tax treatment of such item.
33 For purposes of subparagraph (A) of this paragraph, any reduction of
34 the excess of deductions allowed for the taxable year over gross income
35 for such year, and any reduction in the amount of capital losses which
36 would (without regard to section one thousand two hundred eleven of the
37 internal revenue code) be allowed for such year, shall be treated as an
38 increase in the applicable tax base.
39 (3) This subsection shall apply to any item which is attributable to--
40 (A) any listed transaction, and
41 (B) any reportable transaction (other than a listed transaction) if a
42 significant purpose of such transaction is the avoidance or evasion of
43 tax.
44 (4) Paragraph one of this subsection shall be applied by substituting
45 "thirty percent" for "twenty percent" with respect to the portion of any
46 reportable transaction understatement with respect to which the require-
47 ment of clause (i) of subparagraph (B) of paragraph ten of this
48 subsection is not met.
49 (5) For purposes of this subsection, the terms "reportable trans-
50 action" and "listed transaction" have the meanings given to such terms
51 by section twenty-five of this chapter, the term "reportable trans-
52 action" shall include a "New York reportable transaction" as defined in
53 such section twenty-five, and the term "listed transaction" shall
54 include any transaction designated as a tax avoidance transaction pursu-
55 ant to such section twenty-five.
S. 995 60 A. 1925
1 (6) In the case of an understatement (as defined in subsection (k) of
2 this section)
3 (A) the amount of such understatement (determined without regard to
4 this paragraph) shall be increased by the aggregate amount of reportable
5 transaction understatements for purposes of determining whether such
6 understatement is a substantial understatement under subsection (k) of
7 this section, and (B) the addition to tax under subsection (k) of this
8 section shall apply only to the excess of the amount of the substantial
9 understatement (if any) after the application of subparagraph (A) of
10 this paragraph over the aggregate amount of reportable transaction
11 understatements.
12 (7) References to an understatement (or a deficiency) in subsection
13 (f) of this section shall be treated as including references to a
14 reportable transaction understatement.
15 (8) This subsection shall not apply to any portion of any understate-
16 ment on which a penalty is imposed under subsection (f) of this section.
17 (9) Except as provided in regulations prescribed by the commissioner,
18 in no event shall any tax treatment included with an amendment or
19 supplement to a return of tax be taken into account in determining the
20 amount of any reportable transaction understatement if the amendment or
21 supplement is filed after the earlier of the date the taxpayer is first
22 contacted by the commissioner regarding the examination of the return or
23 such other date as is specified by the commissioner.
24 (10)(A) No penalty shall be imposed under this subsection with respect
25 to any portion of a reportable transaction understatement if it is shown
26 that there was a reasonable cause for such portion and that the taxpayer
27 acted in good faith with respect to such portion.
28 (B) Subparagraph (A) of this paragraph shall not apply to any report-
29 able transaction understatement unless:
30 (i) the relevant facts affecting the tax treatment of the item are
31 adequately disclosed in accordance with section twenty-five of this
32 chapter,
33 (ii) there is or was substantial authority for such treatment, and
34 (iii) the taxpayer reasonably believed that such treatment was more
35 likely than not the proper treatment.
36 A taxpayer failing to adequately disclose in accordance with section
37 twenty-five of this chapter shall be treated as meeting the requirements
38 of clause (i) of this subparagraph if the penalty for such failure was
39 rescinded under subsection (p) of this section.
40 (11)(A) A taxpayer shall be treated as having a reasonable belief with
41 respect to the tax treatment of an item only if such belief
42 (i) is based on the facts and law that exist at the time the return of
43 tax which includes such tax treatment is filed, and
44 (ii) relates solely to the taxpayer's chances of success on the merits
45 of such treatment and does not take into account the possibility that a
46 return will not be audited, such treatment will not be raised on audit,
47 or such treatment will be resolved through settlement if it is raised.
48 (B)(i) An opinion of a tax advisor may not be relied upon to establish
49 the reasonable belief of a taxpayer if
50 (I) the tax advisor is described in clause (ii) of this subparagraph,
51 or
52 (II) the opinion is described in clause (iii) of this subparagraph.
53 (ii) A tax advisor is described in this clause if the tax advisor:
54 (I) is a material advisor (within the meaning of section six thousand
55 one hundred eleven of the internal revenue code or within such meaning
56 as it also applies to a New York reportable transaction as defined in
S. 995 61 A. 1925
1 section twenty-five of this chapter) and participates in the organiza-
2 tion, management, promotion, or sale of the transaction or is related
3 (within the meaning of subsection (b) of section two hundred sixty-seven
4 of the internal revenue code or subsection (b) of section seven hundred
5 seven of the internal revenue code) to any person who so participates,
6 (II) is compensated directly or indirectly by a material advisor with
7 respect to the transaction,
8 (III) has a fee arrangement with respect to the transaction which is
9 contingent on all or part of the intended tax benefits from the trans-
10 action being sustained, or
11 (IV) has a disqualifying financial interest with respect to the trans-
12 action.
13 (iii) For purposes of clause (i) of this subparagraph, an opinion is
14 disqualified if the opinion
15 (I) is based on unreasonable factual or legal assumptions (including
16 assumptions as to future events),
17 (II) unreasonably relies on representations, statements, findings, or
18 agreements of the taxpayer or any other person,
19 (III) does not identify and consider all relevant facts, or
20 (IV) fails to meet any other requirement as the commissioner may
21 prescribe.
22 § 10. Section 1085 of the tax law is amended by adding five new
23 subsections (p), (q), (r), (s) and (t) to read as follows:
24 (p) Failure to disclose or provide reportable transaction information.
25 -- (1) Any person who fails to file, disclose or provide any statement,
26 return or other document which is required under subdivision (a) of
27 section twenty-five of this chapter shall pay a penalty in the amount
28 determined under paragraph two of this subsection.
29 (2)(A) Except as provided in subparagraph (B) of this paragraph, the
30 amount of the penalty under paragraph one of this subsection shall be
31 twenty thousand dollars.
32 (B) The amount of the penalty under paragraph one of this subsection
33 with respect to a listed transaction shall be fifty thousand dollars.
34 (3) For purposes of this subsection, the terms "reportable trans-
35 action" and "listed transaction" shall have the same meanings as used in
36 section twenty-five of this chapter, the term "reportable transaction"
37 shall include a "New York reportable transaction" as defined in such
38 section twenty-five, and the term "listed transaction" shall include any
39 transaction designated as a tax avoidance transaction pursuant to such
40 section twenty-five.
41 (4) The commissioner may rescind all or any portion of any penalty
42 imposed by this subsection with respect to any violation if
43 (A) the violation is with respect to a reportable transaction other
44 than a listed transaction, and
45 (B) rescinding the penalty would promote compliance with the require-
46 ments of this chapter and effective tax administration.
47 (5) The penalty imposed by this section shall be in addition to any
48 other penalty imposed by this chapter.
49 (q) Failure to disclose or provide reportable transaction return.--
50 (1) Any person who fails to file, disclose or provide any statement,
51 return or other document which is required under subdivision (b) of
52 section twenty-five of this chapter shall pay a penalty in the amount
53 determined under paragraph two of this subsection.
54 (2)(A) Except as provided in subparagraph (B) of this paragraph, the
55 amount of the penalty under paragraph one of this subsection shall be
56 twenty thousand dollars.
S. 995 62 A. 1925
1 (B) The amount of the penalty under paragraph one of this subsection
2 with respect to a listed transaction shall be the greater of
3 (i) fifty thousand dollars or,
4 (ii) fifty percent of the gross income that the organizer or material
5 advisor derived with respect to activities that were the basis for the
6 requirement to file, disclose or provide information pursuant to section
7 six thousand eleven of the internal revenue code, to the extent such
8 gross income is attributable to the avoidance of any tax imposed under
9 article nine, nine-A, thirty-two, or thirty-three of this chapter.
10 (C) Clause (ii) of subparagraph (B) of this paragraph shall be applied
11 by substituting "seventy-five percent" for "fifty percent" in the case
12 of an intentional failure or act described in paragraph one of this
13 subsection.
14 (3) For purposes of this subsection, the terms "reportable trans-
15 action" and "listed transaction" shall have the same meanings as used in
16 section twenty-five of this chapter, the term "reportable transaction"
17 shall include a "New York reportable transaction" as defined in such
18 section twenty-five, and the term "listed transaction" shall include any
19 transaction designated as a tax avoidance transaction pursuant to such
20 section twenty-five.
21 (4) The commissioner may rescind all or any portion of any penalty
22 imposed by this subsection with respect to any violation if
23 (A) the violation is with respect to a reportable transaction other
24 than a listed transaction, and
25 (B) rescinding the penalty would promote compliance with the require-
26 ments of this chapter and effective tax administration.
27 (5) The penalty imposed by this subsection shall be in addition to any
28 other penalty imposed by this chapter, except that no penalty shall be
29 imposed under subparagraph (A) or clause (i) of subparagraph (B) of
30 paragraph two of subsection (y) of section six hundred eighty-five of
31 this chapter for the same failure that is the basis for a penalty under
32 this subsection. Nothing in this paragraph shall preclude the imposition
33 of a penalty under clause (ii) of subparagraph (B) of paragraph two of
34 subsection (y) of section six hundred eighty-five of this chapter for
35 the same failure that is the basis for a penalty under clause (ii) of
36 subparagraph (B) of paragraph two of this subsection.
37 (r) Failure to maintain list of advisees.-- (1) If any person who is
38 required to maintain a list under subdivision (c) of section twenty-five
39 of this chapter fails to make a duplicate of such list available upon
40 written request to the commissioner in accordance with such subdivision
41 within twenty business days after the date of such request, such person
42 shall pay a penalty of ten thousand dollars for each day of such failure
43 after such twentieth day.
44 (2) No penalty shall be imposed by paragraph one of this subsection
45 with respect to the failure on any day if such failure is due to reason-
46 able cause.
47 (s) Tax preparer penalty.-- (1) If:
48 (A) any part of any understatement of liability with respect to any
49 return or claim for refund is due to a position for which there was not
50 a reasonable belief that the tax treatment in that position was more
51 likely than not the proper treatment,
52 (B) any person who is a tax return preparer with respect to such
53 return or claim knew (or reasonably should have known) of such position,
54 and
55 (C) such position was not disclosed as provided in subsection (k) of
56 this section or there was no reasonable basis for the tax treatment of
S. 995 63 A. 1925
1 that position, such person shall pay a penalty of one thousand dollars
2 with respect to such return or claim unless it is shown that there is
3 reasonable cause for the understatement and such person acted in good
4 faith.
5 (2) If any part of any understatement of liability with respect to any
6 return or claim for refund is due
7 (A) to a willful attempt in any manner to understate the liability for
8 tax by a person who is a tax return preparer with respect to such return
9 or claim, or
10 (B) to any reckless or intentional disregard of rules or regulations
11 by any such person,
12 such person shall pay a penalty of five thousand dollars with respect to
13 such return or claim. With respect to any return or claim, the amount of
14 the penalty payable by any person by reason of this paragraph shall be
15 reduced by the amount of the penalty paid by such person by reason of
16 paragraph one of this subsection.
17 (3) For purposes of this subsection, the term "understatement of
18 liability" means any understatement of the net amount payable with
19 respect to any tax imposed under article nine, nine-A, thirty-two, or
20 thirty-three of this chapter or any overstatement of the net amount
21 creditable or refundable with respect to any such tax.
22 (4) This subsection shall not apply if the penalty under subsection
23 (l) of this section is imposed on the tax return preparer with respect
24 to such understatement.
25 (t) Promoting abusive tax shelters.-- (1) Any person who
26 (A)(i) organizes (or assists in the organization of)
27 (I) a partnership or other entity,
28 (II) any investment plan or arrangement, or
29 (III) any other plan or arrangement, or
30 (ii) participates (directly or indirectly) in the sale of any interest
31 in an entity or plan or arrangement referred to in clause (i) of this
32 subparagraph, and
33 (B) makes or furnishes or causes another person to make or furnish (in
34 connection with such organization or sale)
35 (i) a statement with respect to the allowability of any deduction or
36 credit, the excludability of any income, or the securing of any other
37 tax benefit by reason of holding an interest in the entity or partic-
38 ipating in the plan or arrangement which the person knows or has reason
39 to know is false or fraudulent as to any material matter, or
40 (ii) a gross valuation overstatement as to any material matter, and
41 (C) satisfies any of the following conditions
42 (i) the person is organized in this state,
43 (ii) the person is doing business in this state,
44 (iii) the person is deriving income in this state, or
45 (iv) the person conducts any of the activities described in subpara-
46 graph (A) or (B) of this paragraph within the state of New York,
47 shall pay, with respect to each activity described in subparagraph (A)
48 of this paragraph, a penalty equal to one thousand dollars or, if the
49 person establishes that it is lesser, one hundred percent of the gross
50 income derived (or to be derived) by such person from such activity to
51 the extent such gross income is attributed to the avoidance of any tax
52 imposed under articles nine, nine-A, thirty-two or thirty-three of this
53 chapter; provided, however, that if an activity with respect to which a
54 penalty imposed under this subsection involves a statement described in
55 clause (i) of subparagraph (B) of paragraph one of this subsection, the
56 penalty shall be equal to fifty percent of the gross income derived (or
S. 995 64 A. 1925
1 to be derived) from that activity within the state by the person on
2 which the penalty is imposed. For purposes of the preceding sentence,
3 activities described in clause (i) of subparagraph (A) of this paragraph
4 with respect to each entity or arrangement shall be treated as a sepa-
5 rate activity and participation in each sale described in clause (ii) of
6 subparagraph (A) of this paragraph shall be so treated.
7 (2)(A) For purposes of this subsection, the term "gross valuation
8 overstatement" means any statement as to the value of any property or
9 services if--
10 (i) the value so stated exceeds two hundred percent of the amount
11 determined to be the correct valuation, and
12 (ii) the value of such property or services is directly related to the
13 amount of any deduction or credit allowable under this chapter to any
14 participant.
15 (B) The commissioner may waive all or any part of the penalty provided
16 by paragraph one of this subsection with respect to any gross valuation
17 overstatement on a showing that there was a reasonable basis for the
18 valuation and that such valuation was made in good faith.
19 (3) The penalty imposed by this subsection shall be in addition to any
20 other penalty provided by law.
21 § 11. Voluntary Compliance Initiative.-- (a) Notwithstanding the
22 provisions of any other law to the contrary, there is hereby established
23 a voluntary compliance initiative to be administered by the Commissioner
24 of Taxation and Finance as provided in this section for eligible taxpay-
25 ers as described herein.
26 (b) The tax shelter voluntary compliance program shall apply to tax
27 liabilities under articles nine, nine-A, twenty-two, thirty-two or thir-
28 ty-three of the tax law ("designated taxes") attributable to the use of
29 tax avoidance transactions for taxable years beginning before January 1,
30 2005.
31 (c) For purposes of the voluntary compliance initiative established by
32 this section and except as otherwise provided in this section, an
33 "eligible taxpayer" is an individual, partnership, estate, trust, corpo-
34 ration, limited liability company, joint stock company, or any other
35 company, trustee, receiver, assignee, referee, society, association,
36 business or any other person as described in the tax law, who or which
37 has a tax liability with regard to one or more of the designated taxes
38 for the period of time described in subdivision (b) of this section.
39 (d) The commissioner of taxation and finance may adopt rules, issue
40 forms and instructions, determine the period the initiative under this
41 section shall be conducted, and take such other actions necessary to
42 implement the provisions of the voluntary compliance initiative estab-
43 lished by this section.
44 (e) An eligible taxpayer that meets the requirements with respect to
45 any taxable year to which this section applies may elect to participate
46 in the voluntary compliance initiative under either method described in
47 paragraphs (1) and (2) of this subdivision for any particular taxable
48 year. Such election shall be made separately for each taxable year and
49 in the form and manner prescribed by the commissioner of taxation and
50 finance, and once made shall be irrevocable.
51 (1) Voluntary compliance without appeal. If an eligible taxpayer
52 elects to participate under this paragraph and complies with the
53 requirements for such participation, then
54 (A) the commissioner of taxation and finance shall waive any penalty
55 that may be applicable to the underreporting or underpayment of tax
S. 995 65 A. 1925
1 liabilities under one or more designated taxes attributable to the use
2 of tax avoidance transactions for such taxable year,
3 (B) except as otherwise provided, the commissioner of taxation and
4 finance shall not bring or seek civil, administrative or criminal action
5 against the taxpayer for such taxable year with respect to any tax
6 avoidance transactions,
7 (C) the taxpayer may not file a claim for credit or refund with
8 respect to such tax avoidance transaction for such taxable year;
9 provided, however, that nothing in this section shall preclude
10 (i) a taxpayer from filing a claim for credit or refund for the same
11 taxable year in which such a tax avoidance transaction was reported if
12 such credit or refund is not attributable to the tax avoidance trans-
13 action,
14 (ii) the commissioner of taxation and finance on his or her own motion
15 from redetermining the amount of tax due including applicable interest,
16 with respect to any taxes and interest paid under this initiative, and
17 granting a refund or allowing a credit with respect to such redetermi-
18 nation, and
19 (D) no penalty may be waived under this section if the penalty imposed
20 is attributable to an assessment of taxes that became final prior to
21 January 1, 2006.
22 (2) Voluntary compliance with appeal. If an eligible taxpayer elects
23 to participate under this paragraph and complies with the requirements
24 for such participation, then
25 (A) the commissioner of taxation and finance shall waive any penalty
26 that may be applicable to the underreporting or underpayment of tax
27 liabilities under one or more designated taxes attributable to the use
28 of tax avoidance transactions for such taxable year, except the penal-
29 ties imposed under subsections (b) and (p) of section 685 of the tax law
30 and subsections (b) and (k) of section 1085 of the tax law (as such
31 subsections were in effect on December 31, 2004),
32 (B) except as otherwise provided in this section, the commissioner of
33 taxation and finance shall not seek civil, administrative or criminal
34 action against the taxpayer for such taxable year with respect to any
35 tax avoidance transactions,
36 (C) the taxpayer may file a claim for credit or refund with respect to
37 the use of a tax avoidance transaction for such taxable year pursuant to
38 section 686 or 1086 of the tax law, and
39 (D) no penalty may be waived under this section if the penalty imposed
40 is attributable to an assessment of taxes that became final prior to
41 January 1, 2006.
42 (f) In order to participate in the voluntary compliance initiative
43 established by this section, an eligible taxpayer must, during the peri-
44 od of the initiative prescribed by the commissioner of taxation and
45 finance, do all of the following:
46 (1) file an application for participation in the voluntary compliance
47 initiative in the form and manner prescribed by the commissioner of
48 taxation and finance;
49 (2) file an amended return in the form and manner prescribed by the
50 commissioner of taxation and finance for the taxable year for which the
51 taxpayer used any tax avoidance transaction to underreport or underpay
52 the taxpayer's New York tax liability, reporting the total New York
53 income and tax liability for such taxable year computed without regard
54 to any tax avoidance transaction; and
55 (3) make full payment of the additional New York tax liability and
56 interest due for such taxable year that is attributable to the use of
S. 995 66 A. 1925
1 the tax avoidance transaction; provided, however, the commissioner of
2 taxation and finance may enter into an installment payment agreement in
3 lieu of the full payment required by this paragraph. Failure by the
4 taxpayer to fully comply with the terms of the installment payment
5 agreement shall render the waiver of penalties null and void, and the
6 total amount of tax, interest, and all penalties shall be immediately
7 due and payable.
8 (g) For purposes of this section, if the commissioner of taxation and
9 finance subsequently determines that the correct amount of New York tax
10 was not paid for the taxable year, then the penalty relief under this
11 section, including forbearance from seeking civil, administrative or
12 criminal action shall not apply to any unpaid portion of the underpay-
13 ment attributable to a tax avoidance transaction.
14 (h) For purposes of this section, a "tax avoidance transaction" means
15 a plan or arrangement devised for the principal purpose of avoiding tax.
16 Tax avoidance transactions include, but are not limited to, "listed
17 transactions" as described in subdivisions (a) or (b) of section 25 of
18 the tax law.
19 (i) For purposes of this section the term "taxpayer" shall include any
20 person subject to any designated tax described in subdivision (a) of
21 this section.
22 (j) An otherwise eligible taxpayer shall not be entitled to partic-
23 ipate in the voluntary compliance initiative established by this section
24 if any of the following applies.
25 (1) Such taxpayer is a party to any criminal investigation being
26 conducted by an agency of the federal government, the state or any poli-
27 tical subdivision thereof in regard to the underreporting or underpay-
28 ment of tax, is a party to any administrative proceeding or civil or
29 criminal litigation which is pending on the date of the taxpayer's
30 application in the bureau of conciliation and mediation services, the
31 division of tax appeals or any court of this state or the United States,
32 relating to any action or failure to act which is the basis for the
33 penalty with respect to which relief is sought. An administrative
34 proceeding or civil litigation shall be deemed not to be pending on the
35 date of the application if the taxpayer withdraws from such proceeding
36 or litigation prior to the waiver of penalty provided for in this
37 section.
38 (2) Such taxpayer has been convicted of a crime relating to a tax that
39 is the basis of the penalty with respect to which relief is sought for
40 any period or assessment for that tax.
41 (3) The taxpayer was eligible to participate in the New York Offshore
42 Voluntary Compliance Initiative established in 2003, and the tax avoid-
43 ance transactions described in subdivision (b) of this section that were
44 used by the taxpayer to underreport or underpay the taxpayer's New York
45 tax liability were all financial arrangements or payment card trans-
46 actions described in the New York Offshore Voluntary Compliance Initi-
47 ative or the Internal Revenue Service's Offshore Voluntary Compliance
48 Initiative set forth in Revenue Procedure 2003-11; provided, that noth-
49 ing in this paragraph shall preclude a taxpayer from participating in
50 the voluntary compliance initiative with regard to transactions that
51 were not the basis for participation in such Offshore Voluntary Compli-
52 ance Initiatives.
53 (k) No refund or credit shall be granted with respect to any penalty
54 paid prior to the time the taxpayer participates in the voluntary
55 compliance initiative established by this section.
S. 995 67 A. 1925
1 (l) If an eligible taxpayer entitled to participate in the voluntary
2 compliance initiative established under this section fails to so partic-
3 ipate and has a deficiency with respect to one or more designated taxes
4 for a taxable year beginning before January 1, 2005 that is attributable
5 to the use of a tax avoidance transaction for such taxable year (or
6 years), then there shall be added to the tax an amount equal to one
7 hundred percent of the interest payable for the period beginning on the
8 last date prescribed by law for the payment of the tax (determined with-
9 out regard to extensions) and ending on the date the notice of deficien-
10 cy is mailed to the taxpayer.
11 (m) In addition to any other authority to examine returns, for the
12 purpose of improving state tax administration, the commissioner of taxa-
13 tion and finance may inquire into the facts and circumstances related to
14 the use of tax avoidance transactions to underreport the tax liabilities
15 for which a taxpayer has participated in the voluntary compliance
16 program under this section. Taxpayers shall cooperate fully with
17 inquiries described in this subdivision. Failure by a taxpayer to fully
18 cooperate in an inquiry described in this subdivision shall render the
19 waiver of penalties under this section null and void and the taxpayer
20 may be assessed any penalties that may apply.
21 (n) The fact of a taxpayer's participation in the voluntary compliance
22 program shall not be considered evidence that the taxpayer in fact
23 engaged in a tax avoidance transaction.
24 (o) For purposes of this section, the returns, forms and other docu-
25 ments filed by taxpayers pursuant to the voluntary compliance initiative
26 established pursuant to this section shall be deemed to be reports and
27 returns
28 (i) subject to the secrecy provisions in the same manner and to the
29 same extent as if such reports or returns were referred to in subdivi-
30 sion 1 of section 202, subdivision 8 of section 211, subsection (e) of
31 section 697, subsection (a) of section 1467, or subdivision (a) of
32 section 1518 of the tax law, and
33 (ii) for purposes of the criminal provisions of article 37 of the tax
34 law.
35 § 12. This act shall take effect immediately; provided, however, that
36 (i) section one of this act shall apply to all disclosure statements
37 described in paragraph 1 of subdivision (a) of section 25 of the tax
38 law, as added by section one of this act, that were required to be filed
39 with the internal revenue service at any time with respect to "listed
40 transactions" as described in such paragraph 1, and shall apply to all
41 disclosure statements described in paragraph 1 of subdivision (a) of
42 section 25 of the tax law, as added by section one of this act, that
43 were required to be filed with the internal revenue service with respect
44 to "reportable transactions" as described in such paragraph 1, other
45 than "listed transactions", in which a taxpayer participated during any
46 taxable year for which the statute of limitations for assessment has not
47 expired as of the date this act shall take effect, and shall apply to
48 returns or statements described in such paragraph 1 required to be filed
49 by taxpayers (or persons as described in such paragraph) with the
50 commissioner of taxation and finance on or after the sixtieth day after
51 this act shall have become a law; and (ii) sections two through four and
52 seven through nine of this act shall apply to any tax liability for
53 which the statute of limitations on assessment has not expired as of the
54 date this act shall take effect.
55 PART R
S. 995 68 A. 1925
1 Section 1. Section 606 of the tax law is amended by adding a new
2 subsection (hh) to read as follows:
3 (hh) STAR cost-of-living credit. (1) Allowance of credit. An eligible
4 taxpayer shall be allowed a credit against the tax imposed by this arti-
5 cle equal to the product of the STAR tax savings the taxpayer is enti-
6 tled to pursuant to subdivision two of section thirteen hundred six-a of
7 the real property tax law and the consumer price index adjustment,
8 provided, however, that in no case shall the sum of the STAR tax savings
9 and the credit exceed the school tax that would otherwise be due.
10 (2) Limitations. (A) For each taxable year no credit shall be allowed
11 under this subsection with respect to any STAR tax savings relating to a
12 school district whose budget enacted in such taxable year is not in
13 compliance with the statutory spending cap set forth in subdivision
14 seven of section two thousand twenty-two of the education law. For
15 purposes of the tax credit authorized by this subsection, such statutory
16 spending cap shall be deemed fully applicable to every school district
17 in the state, whether or not the school district budget is subject to
18 voter approval. The commissioner of education shall notify the commis-
19 sioner by September first of each year of those school districts whose
20 budgets in such year are not in compliance with any such spending cap.
21 (B) For purposes of this credit if two or more eligible taxpayers have
22 an interest in real property which qualifies for the school tax relief
23 exemption under subdivision three of section four hundred twenty-five of
24 the real property tax law and file separate returns, such eligible
25 taxpayers can only claim as a credit against the tax imposed by this
26 article the portion of the credit allowed under this subsection equal to
27 their percentage ownership interest in such real property, provided that
28 where such taxpayers are tenants by the entirety or otherwise own an
29 undivided interest in the whole of such property, they will be deemed to
30 own equal shares of such property for purposes of allocating such cred-
31 it.
32 (3) Consumer price index adjustment. For purposes of this subsection,
33 the "consumer price index adjustment" applicable to a taxable year shall
34 be the percentage increase, if any, of the average of the monthly
35 consumer price index for all urban consumers published by the bureau of
36 labor statistics for the twelve-month period ending with the month of
37 June in such taxable year from the average of such monthly consumer
38 price index for the twelve-month period ending with the month of June,
39 two thousand four.
40 (4) Eligible taxpayer. For purposes of this subsection the term
41 "eligible taxpayer" shall mean a taxpayer whose property use meets the
42 requirements set forth in subdivision three of section four hundred
43 twenty-five of the real property tax law.
44 (5) Application of credit. If the amount of the credit allowed under
45 this subsection for any taxable year shall exceed the taxpayer's tax for
46 such year, the excess shall be treated as an overpayment of tax to be
47 credited or refunded in accordance with the provisions of section six
48 hundred eighty-six of this article, provided, however, that no interest
49 shall be paid thereon.
50 § 2. This act shall take effect upon the same date as a chapter of the
51 laws of 2005, entitled "AN ACT to amend the education law, in relation
52 to school district budgets for certain school years" and shall apply to
53 taxable years beginning on or after January 1, 2005.
54 PART S
S. 995 69 A. 1925
1 Section 1. The civil practice law and rules is amended by adding a new
2 section 5519-a to read as follows:
3 § 5519-a. Stay of enforcement for tobacco product master settlement
4 agreement signatories and affiliates. (a) In order to secure and protect
5 the monies received as the result of the master settlement agreement, as
6 defined in section thirteen hundred ninety-nine-oo of the public health
7 law, in civil litigation under any legal theory involving a signatory, a
8 successor to a signatory or any affiliate of a signatory to such agree-
9 ment, the undertaking required during the pendency of all appeals or
10 discretionary reviews by any appellate courts in order to stay the
11 execution of any judgment or order granting legal, equitable or other
12 relief during the entire course of appellate review shall be set pursu-
13 ant to the applicable provisions of law or court rules; provided, howev-
14 er that the total undertaking required of all appellants collectively
15 shall not exceed one hundred million dollars, regardless of the value of
16 the judgment appealed.
17 (b) Notwithstanding the provisions of subdivision (a) of this section,
18 upon proof by a preponderance of the evidence, by an appellee, that an
19 appellant is dissipating assets outside the course of ordinary business
20 to avoid payment of a judgment, a court may require the appellant to
21 post a bond in an amount up to the total amount of the judgment.
22 § 2. This act shall take effect on the thirtieth day after it shall
23 have become a law, and shall apply to any cause of action pending on or
24 filed on or after such effective date.
25 PART T
26 Section 1. (a) Notwithstanding any other law to the contrary, the
27 comptroller of the state of New York, or the applicable covered offi-
28 cial, as the case may be, shall, upon a certificate of the director of
29 the division of the budget and with the written consent of the chief
30 elected officer of the city of New York, or the chief elected officer of
31 a county of the state of New York, as the case may be, pay to the gener-
32 al fund of the state of New York the amounts specified in such certif-
33 icate from any tax revenue, or other payment from a state appropriation,
34 payable to such city or county and not subject to any lien or pledge for
35 the benefit of bondholders of an authority identified in this subdivi-
36 sion or of a state public benefit corporation. The director of the divi-
37 sion of the budget shall limit the amounts subject to deposit in the
38 general fund of the state of New York under this act to the amounts
39 necessary to compensate the state for any reimbursements, refunds, over-
40 payments, adjustments, or other modifications to which the state and
41 such chief elected official may agree. For the purposes of this act,
42 "covered official" includes the chairman of the Nassau county interim
43 finance authority, the chairman of the transitional finance authority,
44 or the chief executive officer of any other state public benefit corpo-
45 ration in possession of funds otherwise payable to the city of New York
46 or a county. For the purposes of this act, "state public benefit corpo-
47 ration" shall mean any public benefit corporation, as defined by section
48 66 of the general construction law, created by interstate compact or at
49 least half of whose members are appointed by the governor.
50 (b) Nothing in this act shall be construed to relieve a county of any
51 obligation or commitment to distribute and pay or allocate net
52 collections under part IV of article 29 of the tax law, regardless of
53 whether such obligation or commitment arises before or after the date
54 this act shall have taken effect, or to preclude a city from exercising
S. 995 70 A. 1925
1 its prior rights under section 1224 of such article. To the extent that
2 a county's net collections have been diminished below a level sufficient
3 to meet any such obligation or commitment as a result of the reductions
4 provided for in this act, such county shall hereby be authorized to use
5 any other funds available to it to meet such obligation or commitment,
6 notwithstanding any law to the contrary.
7 (c) Nothing in this act shall be construed to limit the authority of
8 the commissioner of taxation and finance or the comptroller of the state
9 of New York to make adjustments for overpayments, pursuant to the
10 authority of subdivision (c) of section 1261 of the tax law or similar
11 provisions of the tax law.
12 § 2. This act shall take effect immediately and shall be deemed to
13 have been in full force and effect on and after April 1, 2005.
14 PART U
15 Section 1. Subsection (aa) of section 606 of the tax law, as amended
16 by section 19 of part B of chapter 58 of the laws of 2004, is amended to
17 read as follows:
18 (aa) Long-term care insurance credit. (1) Residents. A taxpayer shall
19 be allowed a credit against the tax imposed by this article equal to
20 twenty percent of the premium paid during the taxable year for long-term
21 care insurance. In order to qualify for such credit, the taxpayer's
22 premium payment must be for the purchase of or for continuing coverage
23 under a long-term care insurance policy that qualifies for such credit
24 pursuant to section one thousand one hundred seventeen of the insurance
25 law. If the amount of the credit allowable under this subsection for any
26 taxable year shall exceed the taxpayer's tax for such year, the excess
27 may be carried over to the following year or years and may be deducted
28 from the taxpayer's tax for such year or years.
29 (2) Nonresidents and part-year residents. In the case of a nonresident
30 taxpayer or a part-year resident taxpayer, the credit determined under
31 this subsection shall be limited to the amount determined by multiplying
32 the amount of such credit by the New York source fraction as set forth
33 in paragraph three of subsection (e) of section six hundred one of this
34 article. The credit as so limited shall be applied as provided in para-
35 graph one of this subsection.
36 § 2. This act shall take effect immediately and shall apply to taxable
37 years beginning on or after January 1, 2005.
38 PART V
39 Section 1. Subdivisions 2, 4, 5, 6, 8 and 9 of section 187-b of the
40 tax law, subdivisions 2 and 8 as added by section 127 of part A of chap-
41 ter 389 of the laws of 1997, subdivisions 4, 5, 6 and 9 as amended by
42 section 1 of part D of chapter 60 of the laws of 2004, subparagraphs (i)
43 and (ii) of paragraph (a) of subdivision 8 as amended and subdivision 8
44 as renumbered by chapter 597 of the laws of 2002, are amended and a new
45 subdivision 6-a is added to read as follows:
46 2. Electric vehicles. The credit under this section for electric vehi-
47 cles shall equal [fifty percent of the incremental cost of any such] ten
48 percent of the cost of any electric vehicle
49 (a) which is registered in this state and
50 (b) for which a credit is allowed under section thirty of the internal
51 revenue code (determined without regard to the limitations prescribed in
52 subsection (b) or the elections prescribed in subsection (d) of such
S. 995 71 A. 1925
1 section, including the election with respect to section one hundred
2 seventy-nine of such code),
3 (c) provided, however, the credit with respect to any such vehicle
4 shall not exceed five thousand dollars for vehicles with a gross vehicle
5 weight rating of less than ten thousand pounds, and ten thousand dollars
6 per vehicle for all other vehicles.
7 4. Clean-fuel vehicle refueling property. The credit under this
8 section for clean-fuel vehicle refueling property shall equal fifty
9 percent of the cost of any such property
10 (a) which is located in this state and
11 (b) for which a deduction is allowed under section one hundred seven-
12 ty-nine-A of the internal revenue code (determined without regard to the
13 limitations prescribed in paragraph two of subsection (b) of such
14 section or the election referred to in subsection (e) of such section
15 with respect to section one hundred seventy-nine of such code), but not
16 including clean-fuel refueling property relating to a qualified hybrid
17 vehicle as such vehicle is defined in subparagraph (E) of paragraph six
18 of subsection (p) of section six hundred six of this chapter; provided,
19 however, the amount of the credit allowed for any taxable year shall not
20 exceed five hundred thousand dollars for each facility using clean-fuel
21 vehicle refueling property and the total aggregate amount allowed per
22 taxpayer shall not exceed five hundred thousand dollars.
23 5. Qualified hybrid vehicles. (a) The credit under this section for
24 qualified hybrid vehicles having a gross vehicle weight rating of ten
25 thousand pounds or more shall equal [two] four thousand dollars per
26 vehicle registered in this state and placed in service on or before
27 December thirty-first, two thousand six.
28 (b) The credit under this section for qualified hybrid vehicles having
29 a gross vehicle weight rating of less than ten thousand pounds shall
30 equal two thousand dollars per vehicle; provided, however, that the
31 credit shall be allowed only if such vehicle is registered in this state
32 and placed in service on or before December thirty-first, two thousand
33 five.
34 6. Definitions. (a) The term "electric vehicle" means a qualified
35 electric vehicle within the meaning of subsection (c) of section thirty
36 of the internal revenue code.
37 (b) The [terms] term "clean-fuel vehicle property" [and "clean-fuel
38 vehicle refueling property" mean] means any such property which is qual-
39 ified within the meaning of [subsections] subsection (c) [and (d),
40 respectively,] of section one hundred seventy-nine-A of the internal
41 revenue code, but such terms shall not include clean-fuel vehicle prop-
42 erty [or clean-fuel vehicle refueling property] relating to a qualified
43 hybrid vehicle as such vehicle is defined in subparagraph (E) of para-
44 graph six of subsection (p) of section six hundred six of this chapter.
45 (c) The term "clean-fuel vehicle refueling property" means any such
46 property which is qualified within the meaning of subsection (d) of
47 section one hundred seventy-nine-A of the internal revenue code, but
48 such term shall not include clean-fuel vehicle refueling property relat-
49 ing to a qualified hybrid vehicle.
50 (d) The term "clean-fuel" means natural gas, liquefied petroleum gas,
51 hydrogen, electricity, and any other fuel which is at least eighty-five
52 percent, singly or in combination, methanol, ethanol, any other alcohol,
53 or ether.
54 [(d) The term "incremental cost" shall mean the excess of the cost of
55 an electric vehicle over the cost of a gasoline-powered vehicle which is
56 similar in size and style.]
S. 995 72 A. 1925
1 (e) The term "qualified hybrid vehicle" shall have the same meaning as
2 provided for under subparagraph (E) of paragraph six of subsection (p)
3 of section six hundred six of this chapter.
4 6-a. Biofuel production. (a) The credit under this section for biofuel
5 production shall equal fifty percent of the costs incurred during the
6 taxable year in connection with the production for sale of a minimum of
7 ten thousand gallons of biofuel, including any costs incurred to
8 construct or renovate a facility to produce biofuel, and the costs for
9 the storage of biofuel which is incidental to such production. In no
10 event shall the credit allowed to the taxpayer under this subdivision
11 exceed one million dollars for the taxable year.
12 (b) For purposes of this paragraph, the term "biofuel" shall include
13 biodiesel and ethanol. The term "biodiesel" shall mean a fuel comprised
14 exclusively of mono-alkyl esters of long chain fatty acids derived from
15 vegetable oils or animal fats, designated B100, which meets the specifi-
16 cations of American Society of Testing and Materials designation D
17 6751-02. The term "ethanol" shall mean ethyl alcohol manufactured in the
18 United States and its territories and sold:
19 (i) for fuel use and which has been rendered unfit for beverage use in
20 a manner and which is produced at a facility approved by the federal
21 bureau of alcohol, tobacco and firearms for the production of ethanol
22 for fuel, or
23 (ii) as denatured ethanol used by blenders and refiners which has been
24 rendered unfit for beverage use.
25 (c) This credit shall not apply in taxable years beginning after
26 December thirty-first, two thousand nine.
27 8. Credit recapture. (a) Vehicles.
28 (i) If, within three full years from the date an electric vehicle,
29 qualified hybrid vehicle or a vehicle of which clean-fuel vehicle prop-
30 erty is a part is placed in service, such electric vehicle, qualified
31 hybrid vehicle or clean-fuel vehicle property ceases to be qualified, a
32 recapture amount must be added back in the tax year in which such cessa-
33 tion occurs.
34 (ii) Cessation of qualification. (A) An electric vehicle ceases to be
35 qualified if
36 (1) it is modified by the taxpayer so that it no longer is powered
37 primarily by electricity, or
38 (2) the taxpayer receiving the credit under this section sells or
39 disposes of the vehicle and knows or has reason to know that the vehicle
40 will be so modified.
41 (B) A qualified hybrid vehicle ceases to be qualified if
42 (1) it is modified by the taxpayer so that it no longer meets the
43 requirements of a qualified hybrid vehicle as defined in subparagraph
44 (E) of paragraph six of subsection (p) of section six hundred six of
45 this chapter, or
46 (2) the taxpayer receiving the credit under this section sells or
47 disposes of the vehicle and knows or has reason to know that the vehicle
48 will be so modified.
49 (C) Clean-fuel vehicle property ceases to be qualified if
50 (1) the vehicle of which it is a part is modified by the taxpayer so
51 that it may no longer be propelled by a clean-burning fuel, or
52 (2) the vehicle otherwise ceases to qualify as property defined in
53 subsection (c) of section one hundred seventy-nine-A of the internal
54 revenue code, or
S. 995 73 A. 1925
1 (3) the taxpayer receiving the credit under this section sells or
2 disposes of the vehicle and knows or has reason to know that the vehicle
3 will be used in a manner described in clause one or two of this item.
4 (iii) Recapture amount. The recapture amount is equal to the credit
5 allowable under this section multiplied by:
6 (A) one hundred percent, if the cessation of qualification occurs
7 within the first full year after the date the vehicle is placed in
8 service,
9 (B) sixty-six and two-thirds percent, if the cessation of qualifica-
10 tion occurs within the second full year after the date the vehicle is
11 placed in service, or
12 (C) thirty-three and one-third percent, if the cessation of qualifica-
13 tion occurs within the third full year after the date the vehicle is
14 placed in service.
15 (b) Clean-fuel vehicle refueling property. (i) If, at any time before
16 the end of its recovery period, clean-fuel vehicle refueling property
17 ceases to be qualified, a recapture amount must be added back in the
18 year in which such cessation occurs.
19 (ii) Cessation of qualification. Clean-fuel vehicle refueling property
20 ceases to be qualified if
21 (A) the property no longer qualifies as property described in
22 [subsection (d) of section one hundred seventy-nine-A of the internal
23 revenue code] subdivision six of this section, or
24 (B) fifty percent or more of the use of the property in a taxable year
25 is other than in a trade or business in this state, or
26 (C) the taxpayer receiving the credit under this section sells or
27 disposes of the property and knows or has reason to know that the prop-
28 erty will be used in a manner described in clause (A) or (B) of this
29 subparagraph.
30 (iii) Recapture amount. The recapture amount is equal to the credit
31 allowable under this section multiplied by a fraction, the numerator of
32 which is the total recovery period for the property minus the number of
33 recovery years prior to, but not including, the recapture year, and the
34 denominator of which is the total recovery period.
35 9. Termination. [This] Except as otherwise provided, this section
36 shall not apply to property placed in service in taxable years beginning
37 after December thirty-first, two thousand [four] six.
38 § 2. Paragraphs (a), (b), (d), (e), (f), (h) and (i) of subdivision 24
39 of section 210 of the tax law, paragraph (a) as amended by section 1 of
40 part J of chapter 63 of the laws of 2000, paragraph (b) as amended by
41 section 1 of part R of chapter 407 of the laws of 1999, paragraph (h) as
42 added by section 128 of part A of chapter 389 of the laws of 1997,
43 subparagraph (i) of paragraph (a) and clause (A) of subparagraph (i) of
44 paragraph (h) as amended, subclause 3 of clause (B) of subparagraph (i)
45 of paragraph (h) as added and paragraph (h) as relettered by chapter 597
46 of the laws of 2002, subparagraph (ii) of paragraph (a) as amended by
47 section 2 of part D, paragraphs (d), (e), (f) and (i) as amended by
48 section 3 of part D of chapter 60 of the laws of 2004, are amended and a
49 new paragraph (f-1) is added to read as follows:
50 (a) General. (i) A taxpayer shall be allowed a credit, to be computed
51 as hereinafter provided, against the tax imposed by this article, for
52 electric vehicles, qualified hybrid vehicles, clean-fuel vehicle proper-
53 ty and clean-fuel vehicle refueling property placed in service during
54 the taxable year. Provided, however, that the credit provided for by
55 this subdivision with respect to electric vehicles shall not be allowed
56 to a gas corporation or an electric corporation as defined in subdivi-
S. 995 74 A. 1925
1 sions eleven and thirteen, respectively, of section two of the public
2 service law, or a gas and electric corporation as described in section
3 sixty-four of the public service law, where such corporation is subject
4 to the supervision of the department of public service.
5 (ii) For purposes of this subdivision, the term "governmental unit"
6 means the United States, any state or political subdivision thereof, any
7 possession of the United States, or any agency or instrumentality of any
8 of the foregoing. For taxable years beginning in two thousand through
9 two thousand [four] six, in the case of electric vehicles, or clean-fuel
10 vehicle property which is installed in or manufactured as part of a
11 motor vehicle, where such vehicles are sold or first leased during the
12 taxable year to a governmental unit, a credit shall be allowed, to be
13 computed as hereinafter provided, against the tax imposed by this arti-
14 cle, provided that (A) with respect to such vehicles first sold or
15 leased to a governmental unit during taxable years beginning in two
16 thousand and two thousand one, the taxpayer executes a written contract
17 with such governmental unit on or before December thirty-first, nineteen
18 hundred ninety-nine for such sale or lease of such vehicles, and (B) as
19 a result of the production, manufacture or installation activities
20 relating to such vehicles, at least twenty-five new full-time jobs,
21 excluding those of general executive officers, are created in this
22 state. The total amount of credit for both electric vehicles and clean-
23 fuel vehicle property allowable to a taxpayer under this subparagraph
24 for taxable years beginning in two thousand and two thousand one, taken
25 in the aggregate, shall not exceed two million five hundred thousand
26 dollars, and with respect to such vehicles first sold or leased to a
27 governmental unit during taxable years [beginning in] two thousand two[,
28 two thousand three and] through two thousand [four] six, the amount of
29 credit for both electric vehicles and clean-fuel vehicle property shall
30 not exceed two million five hundred thousand in the case of each of such
31 years two thousand two[, two thousand three and] through two thousand
32 [four] six.
33 (b) Electric vehicles. The credit under this subdivision for electric
34 vehicles shall equal [fifty percent of the incremental cost of any such]
35 ten percent of the cost of any electric vehicle and the credit under
36 this subdivision for electric vehicles sold or leased to a governmental
37 unit shall equal [fifty percent of the incremental cost of producing any
38 such] ten percent of the cost of any electric vehicle
39 (i) which is registered in this state or, in the case of electric
40 vehicles sold or leased to a governmental unit, which are manufactured
41 in this state, and
42 (ii) for which a credit is allowed under section thirty of the inter-
43 nal revenue code (determined without regard to the limitations
44 prescribed in subsection (b) or the elections prescribed in subsection
45 (d) of such section, including the election with respect to section one
46 hundred seventy-nine of such code or, in the case of electric vehicles
47 sold or leased to a governmental unit, without regard to paragraph three
48 of subsection (d) of such section insofar as it relates to property used
49 by governmental units),
50 (iii) provided, however, the credit with respect to any such vehicle
51 shall not exceed five thousand dollars.
52 (d) Clean-fuel vehicle refueling property. The credit under this
53 subdivision for clean-fuel vehicle refueling property shall equal fifty
54 percent of the cost of any such property
55 (i) which is located in this state and
S. 995 75 A. 1925
1 (ii) for which a deduction is allowed under section one hundred seven-
2 ty-nine-A of the internal revenue code (determined without regard to the
3 limitations prescribed in paragraph two of subsection (b) of such
4 section or the election referred to in subsection (e) of such section
5 with respect to section one hundred seventy-nine of such code), but not
6 including clean-fuel vehicle refueling property relating to a qualified
7 hybrid vehicle as such vehicle is defined in subparagraph (E) of para-
8 graph six of subsection (p) of section six hundred six of this chapter;
9 provided, however, the amount of the credit allowed for any taxable year
10 shall not exceed five hundred thousand dollars for each facility using
11 clean-fuel vehicle refueling property and the total aggregate amount
12 allowed per taxpayer shall not exceed five hundred thousand dollars.
13 (e) Qualified hybrid vehicles. (i) The credit under this subdivision
14 for qualified hybrid vehicles having a gross vehicle weight rating of
15 ten thousand pounds or more shall equal [two] four thousand dollars per
16 vehicle registered in this state and placed in service on or before
17 December thirty-first, two thousand six.
18 (ii) The credit under this section for qualified hybrid vehicles
19 having a gross vehicle weight rating of less than ten thousand pounds
20 shall equal two thousand dollars per vehicle; provided, however, the
21 credit shall be allowed only if such vehicle is registered in this state
22 and placed in service on or before December thirty-first, two thousand
23 five.
24 (f) Definitions. (i) The term "electric vehicle" means a qualified
25 electric vehicle within the meaning of subsection (c) of section thirty
26 of the internal revenue code.
27 (ii) The [terms] term "clean-fuel vehicle property" [and "clean-fuel
28 vehicle refueling property" mean] means any such property which is qual-
29 ified within the meaning of [subsections] subsection (c) [and (d),
30 respectively,] of section one hundred seventy-nine-A of the internal
31 revenue code, but such terms shall not include clean-fuel vehicle prop-
32 erty [or clean-fuel vehicle refueling property] relating to a qualified
33 hybrid vehicle as such vehicle is defined in subparagraph (E) of para-
34 graph six of subsection (p) of section six hundred six of this chapter.
35 (iii) The term "clean-fuel vehicle refueling property" means any such
36 property which is qualified within the meaning of subsection (d) of
37 section one hundred seventy-nine-A of the internal revenue code, but
38 such term shall not include clean-fuel vehicle refueling property relat-
39 ing to a qualified hybrid vehicle.
40 (iv) The term "clean-fuel" means natural gas, liquefied petroleum gas,
41 hydrogen, electricity, and any other fuel which is at least eighty-five
42 percent, singly or in combination, methanol, ethanol, any other alcohol,
43 or ether.
44 [(iv) The term "incremental cost" shall mean the excess of the cost of
45 an electric vehicle over the cost of a gasoline-powered vehicle which is
46 similar in size and style.]
47 (v) The term "qualified hybrid vehicle" shall have the same meaning as
48 provided for under subparagraph (E) of paragraph six of subsection (p)
49 of section six hundred six of this chapter.
50 (f-1) Biofuel production. (i) The credit under this subdivision for
51 biofuel production shall equal fifty percent of the costs incurred
52 during the taxable year in connection with the production for sale of a
53 minimum of ten thousand gallons of biofuel, including any costs incurred
54 to construct or renovate a facility to produce biofuel, and the costs
55 for the storage of biofuel which is incidental to such production. In no
S. 995 76 A. 1925
1 event shall the credit allowed to the taxpayer under this paragraph
2 exceed one million dollars for the taxable year.
3 (ii) For purposes of this paragraph, the term "biofuel" shall include
4 biodiesel and ethanol. The term "biodiesel" shall mean a fuel comprised
5 exclusively of mono-alkyl esters of long chain fatty acids derived from
6 vegetable oils or animal fats, designated B100, which meets the specifi-
7 cations of American Society of Testing and Materials (ASTM) designation
8 D 6751-02. The term "ethanol" shall mean ethyl alcohol manufactured in
9 the United States and its territories and sold:
10 (A) for fuel use and which has been rendered unfit for beverage use in
11 a manner and which is produced at a facility approved by the ATF for the
12 production of ethanol for fuel, or
13 (B) as denatured ethanol used by blenders and refiners which has been
14 rendered unfit for beverage use.
15 (iii) This credit shall not apply in taxable years beginning after
16 December thirty-first, two thousand nine.
17 (h) Credit recapture. (i) Vehicles. (A) If, within three full years
18 from the date an electric vehicle, qualified hybrid vehicle or a vehicle
19 of which clean-fuel vehicle property is a part is placed in service,
20 such electric vehicle, qualified hybrid vehicle or clean-fuel vehicle
21 property ceases to be qualified, a recapture amount must be added back
22 in the tax year in which such cessation occurs.
23 (B) Cessation of qualification. (1) An electric vehicle ceases to be
24 qualified if
25 (I) it is modified by the taxpayer so that it no longer is powered
26 primarily by electricity, or
27 (II) the taxpayer receiving the credit under this subdivision sells or
28 disposes of the vehicle and knows or has reason to know that the vehicle
29 will be so modified.
30 (2) Clean-fuel vehicle property ceases to be qualified if
31 (I) the vehicle of which it is a part is modified by the taxpayer so
32 that it may no longer be propelled by a clean-burning fuel, or
33 (II) the vehicle otherwise ceases to qualify as property defined in
34 subsection (c) of section one hundred seventy-nine-A of the internal
35 revenue code, or
36 (III) the taxpayer receiving the credit under this subdivision sells
37 or disposes of the vehicle and knows or has reason to know that the
38 vehicle will be used in a manner described in subitem (I) or (II) of
39 this item.
40 (3) A qualified hybrid vehicle ceases to be qualified if
41 (I) it is modified by the taxpayer so that it no longer meets the
42 requirements of a qualified hybrid vehicle as defined in subparagraph
43 (E) of paragraph six of subsection (p) of section six hundred six of
44 this chapter, or
45 (II) the taxpayer receiving the credit under this subdivision sells or
46 disposes of the vehicle and knows or has reason to know that the vehicle
47 will be so modified.
48 (C) Recapture amount. The recapture amount is equal to the credit
49 allowable under this subdivision multiplied by:
50 (1) one hundred percent, if the cessation of qualification occurs
51 within the first full year after the date the vehicle is placed in
52 service,
53 (2) sixty-six and two-thirds percent, if the cessation of qualifica-
54 tion occurs within the second full year after the date the vehicle is
55 placed in service, or
S. 995 77 A. 1925
1 (3) thirty-three and one-third percent, if the cessation of qualifica-
2 tion occurs within the third full year after the date the vehicle is
3 placed in service.
4 (ii) Clean-fuel vehicle refueling property. (A) If, at any time before
5 the end of its recovery period, clean-fuel vehicle refueling property
6 ceases to be qualified, a recapture amount must be added back in the
7 year in which such cessation occurs.
8 (B) Cessation of qualification. Clean-fuel vehicle refueling property
9 ceases to be qualified if
10 (1) the property no longer qualifies as property described in
11 [subsection (d) of section one hundred seventy-nine-A of the internal
12 revenue code] paragraph (f) of this subdivision, or
13 (2) fifty percent or more of the use of the property in a taxable year
14 is other than in a trade or business in this state, or
15 (3) the taxpayer receiving the credit under this subdivision sells or
16 disposes of the property and knows or has reason to know that the prop-
17 erty will be used in a manner described in item one or two of this
18 clause.
19 (C) Recapture amount. The recapture amount is equal to the credit
20 allowable under this subdivision multiplied by a fraction, the numerator
21 of which is the total recovery period for the property minus the number
22 of recovery years prior to, but not including, the recapture year, and
23 the denominator of which is the total recovery period.
24 (i) Termination. [Subparagraph] Except as otherwise provided, subpara-
25 graph (i) of paragraph (a) of this subdivision shall not apply to prop-
26 erty placed in service in taxable years beginning after December thir-
27 ty-first, two thousand [four] six and subparagraph (ii) of paragraph (a)
28 of this subdivision shall not apply to property sold or first leased in
29 taxable years beginning after December thirty-first, two thousand [four]
30 six.
31 § 3. Paragraphs 2, 4, 5, 6, 8 and 9 of subsection (p) of section 606
32 of the tax law, paragraphs 2 and 8 as added by section 129 of part A of
33 chapter 389 of the laws of 1997, paragraphs 4, 5, 6 and 9 as amended by
34 section 4 of part D of chapter 60 of the laws of 2004, clauses (i) and
35 (ii) of subparagraph (A) of paragraph 8 as amended and paragraph 8 as
36 renumbered by chapter 597 of the laws of 2002, are amended and a new
37 paragraph 6-a is added to read as follows:
38 (2) Electric vehicles. The credit under this subsection for electric
39 vehicles shall equal [fifty percent of the incremental cost of any such]
40 ten percent of the cost of any electric vehicle
41 (A) which is registered in this state and
42 (B) for which a credit is allowed under section thirty of the internal
43 revenue code (determined without regard to the limitations prescribed in
44 subsection (b) or the elections prescribed in subsection (d) of such
45 section, including the election with respect to section one hundred
46 seventy-nine of such code),
47 (C) provided, however, the credit with respect to any such vehicle
48 shall not exceed five thousand dollars for vehicles with a gross vehicle
49 weight rating of less than ten thousand pounds, and ten thousand dollars
50 per vehicle for all other vehicles.
51 (4) Clean-fuel vehicle refueling property. The credit under this
52 subsection for clean-fuel vehicle refueling property shall equal fifty
53 percent of the cost of any such property
54 (A) which is located in this state and
55 (B) for which a deduction is allowed under section one hundred seven-
56 ty-nine-A of the internal revenue code (determined without regard to the
S. 995 78 A. 1925
1 limitations prescribed in paragraph two of subsection (b) of such
2 section or the election referred to in subsection (e) of such section
3 with respect to section one hundred seventy-nine of such code), but not
4 including clean-fuel vehicle refueling property relating to a qualified
5 hybrid vehicle as such vehicle is defined in subparagraph (E) of para-
6 graph six of this subsection; provided, however, the amount of the cred-
7 it allowed for any taxable year shall not exceed five hundred thousand
8 dollars for each facility using clean-fuel vehicle refueling property
9 and the total aggregate amount allowed per taxpayer shall not exceed
10 five hundred thousand dollars.
11 (5) Qualified hybrid vehicle. (A) The credit under this subsection for
12 qualified hybrid vehicles having a gross vehicle weight rating of ten
13 thousand pounds or more shall equal [two] four thousand dollars per
14 vehicle registered in this state and placed in service on or before
15 December thirty-first, two thousand six.
16 (B) The credit under this subsection for qualified hybrid vehicles
17 having a gross vehicle weight rating of less than ten thousand pounds
18 shall equal two thousand dollars per vehicle; provided, however, the
19 credit shall be allowed only if such vehicle is registered in this state
20 and placed in service on or before December thirty-first, two thousand
21 five.
22 (6) Definitions. (A) The term "electric vehicle" means a qualified
23 electric vehicle within the meaning of subsection (c) of section thirty
24 of the internal revenue code.
25 (B) The [terms] term "clean-fuel vehicle property" [and "clean-fuel
26 vehicle refueling property" mean] means any such property which is qual-
27 ified within the meaning of [subsections] subsection (c) [and (d),
28 respectively,] of section one hundred seventy-nine-A of the internal
29 revenue code, but such [terms] term shall not include clean-fuel vehicle
30 property [or clean-fuel vehicle refueling property] relating to a quali-
31 fied hybrid vehicle as such vehicle is defined in subparagraph (E) of
32 this paragraph.
33 (C) The term "clean-fuel vehicle refueling property" means any such
34 property which is qualified within the meaning of subsection (d) of
35 section one hundred seventy-nine-A of the internal revenue code, but
36 such term shall not include clean-fuel vehicle refueling property relat-
37 ing to a qualified hybrid vehicle.
38 (D) The term "clean-fuel" means natural gas, liquefied petroleum gas,
39 hydrogen, electricity, and any other fuel which is at least eighty-five
40 percent, singly or in combination, methanol, ethanol, any other alcohol,
41 or ether.
42 [(D) The term "incremental cost" shall mean the excess of the cost of
43 an electric vehicle over the cost of a gasoline-powered vehicle which is
44 similar in size and style.]
45 (E) The term "qualified hybrid vehicle" means a motor vehicle, as
46 defined in section one hundred twenty-five of the vehicle and traffic
47 law, other than an electric vehicle (as such term is defined in subpara-
48 graph (A) of this paragraph), that:
49 (i) draws propulsion energy from both
50 (a) an internal combustion engine (or heat engine that uses combusti-
51 ble fuel); and
52 (b) an energy storage device; and
53 (ii) employs a regenerative vehicle braking system that recovers waste
54 energy to charge such energy storage device.
55 (6-a) Biofuel production. (A) The credit under this subsection for
56 biofuel production shall equal fifty percent of the costs incurred
S. 995 79 A. 1925
1 during the taxable year in connection with the production for sale of a
2 minimum of ten thousand gallons of biofuel, including any costs incurred
3 to construct or renovate a facility to produce biofuel, and the costs
4 for the storage of biofuel which is incidental to such production. In no
5 event shall the credit allowed to the taxpayer under this paragraph
6 exceed one million dollars for the taxable year.
7 (B) For purposes of this subparagraph, the term "biofuel" shall include
8 biodiesel and ethanol. The term "biodiesel" shall mean a fuel comprised
9 exclusively of mono-alkyl esters of long chain fatty acids derived from
10 vegetable oils or animal fats, designated B100, which meets the specifi-
11 cations of American Society of Testing and Materials designation D
12 6751-02. The term "ethanol" shall mean ethyl alcohol manufactured in the
13 United States and its territories and sold:
14 (i) for fuel use and which has been rendered unfit for beverage use in
15 a manner and which is produced at a facility approved by the federal
16 bureau of alcohol, tobacco and firearms for the production of ethanol
17 for fuel, or
18 (ii) as denatured ethanol used by blenders and refiners which has been
19 rendered unfit for beverage use.
20 (C) This credit shall not apply in taxable years beginning after
21 December thirty-first, two thousand nine.
22 (8) Credit recapture. (A) Vehicles. (i) If, within three full years
23 from the date an electric vehicle, qualified hybrid vehicle or a vehicle
24 of which clean-fuel vehicle property is a part is placed in service,
25 such electric vehicle, qualified hybrid vehicle or clean-fuel vehicle
26 property ceases to be qualified, a recapture amount must be added back
27 in the tax year in which such cessation occurs.
28 (ii) Cessation of qualification. (I) An electric vehicle ceases to be
29 qualified if
30 (a) it is modified by the taxpayer so that it no longer is powered
31 primarily by electricity, or
32 (b) the taxpayer receiving the credit under this subsection sells or
33 disposes of the vehicle and knows or has reason to know that the vehicle
34 will be so modified.
35 (II) A qualified hybrid vehicle ceases to be qualified if
36 (a) it is modified by the taxpayer so that it no longer meets the
37 requirements of a qualified hybrid vehicle as defined in subparagraph
38 (E) of paragraph six of this subsection.
39 (b) the taxpayer receiving the credit under this subsection sells or
40 disposes of the vehicle and knows or has reason to know that the vehicle
41 will be so modified.
42 (III) Clean-fuel vehicle property ceases to be qualified if
43 (a) the vehicle of which it is a part is modified by the taxpayer so
44 that it may no longer be propelled by a clean-burning fuel, or
45 (b) the vehicle otherwise ceases to qualify as property defined in
46 subsection (c) of section one hundred seventy-nine-A of the internal
47 revenue code, or
48 (c) the taxpayer receiving the credit under this subsection sells or
49 disposes of the vehicle and knows or has reason to know that the vehicle
50 will be used in a manner described in subclause (a) or (b) of this item.
51 (iii) Recapture amount. The recapture amount is equal to the credit
52 allowable under this subsection multiplied by:
53 (I) one hundred percent, if the cessation of qualification occurs
54 within the first full year after the date the vehicle is placed in
55 service,
S. 995 80 A. 1925
1 (II) sixty-six and two-thirds percent, if the cessation of qualifica-
2 tion occurs within the second full year after the date the vehicle is
3 placed in service, or
4 (III) thirty-three and one-third percent, if the cessation of quali-
5 fication occurs within the third full year after the date the vehicle is
6 placed in service.
7 (B) Clean-fuel vehicle refueling property. (i) If, at any time before
8 the end of its recovery period, clean-fuel vehicle refueling property
9 ceases to be qualified, a recapture amount must be added back in the
10 year in which such cessation occurs.
11 (ii) Cessation of qualification. Clean-fuel vehicle refueling property
12 ceases to be qualified if
13 (I) the property no longer qualifies as property described in
14 [subsection (d) of section one hundred seventy-nine-A of the internal
15 revenue code] subparagraph (C) of paragraph six of this subsection, or
16 (II) fifty percent or more of the use of the property in a taxable
17 year is other than in a trade or business in this state, or
18 (III) the taxpayer receiving the credit under this subsection sells or
19 disposes of the property and knows or has reason to know that the prop-
20 erty will be used in a manner described in item (I) or (II) of this
21 clause.
22 (iii) Recapture amount. The recapture amount is equal to the credit
23 allowable under this subsection multiplied by a fraction, the numerator
24 of which is the total recovery period for the property minus the number
25 of recovery years prior to, but not including, the recapture year, and
26 the denominator of which is the total recovery period.
27 (9) Termination. [This] Except as otherwise provided, this subsection
28 shall not apply to property placed in service in taxable years beginning
29 after December thirty-first, two thousand [four] six.
30 § 4. This act shall take effect immediately and shall apply to taxable
31 years beginning on or after January 1, 2005.
32 PART W
33 Section 1. Paragraphs (b), (c) and (d) of subdivision 1 of section 424
34 of the tax law, paragraph (b) as amended by chapter 490 of the laws of
35 1993 and paragraphs (c) and (d) as amended by chapter 170 of the laws of
36 1994, are amended to read as follows:
37 (b) [Eighteen and ninety-three hundredths] One dollar and six cents
38 per gallon upon still wines, except cider containing more than three and
39 two-tenths per centum of alcohol by volume, upon which the tax shall be
40 three and seventy-nine hundredths cents per gallon;
41 (c) [Eighteen and ninety-three hundredths] One dollar and six cents
42 per gallon upon artificially carbonated sparkling wines, except arti-
43 ficially carbonated sparkling cider containing more than three and two-
44 tenths per centum of alcohol by volume, upon which the tax shall be
45 three and seventy-nine hundredths cents per gallon;
46 (d) [Eighteen and ninety-three hundredths] One dollar and six cents
47 per gallon upon natural sparkling wines, except natural sparkling cider
48 containing more than three and two-tenths per centum of alcohol by
49 volume, upon which the tax shall be three and seventy-nine hundredths
50 cents per gallon;
51 § 2. (a) If, prior to the effective date of section one of this act, a
52 contract of sale of wine subject to the increased taxes imposed by
53 section one of this act shall have been made, and delivery thereof
54 pursuant to such contract is made within the state on or after such
S. 995 81 A. 1925
1 effective date, such wine shall be subject to taxes under article 18 of
2 the tax law, as amended by this act, at the time of delivery.
3 (b) In order to subject wines in this state on the effective date of
4 section one of this act to the increased taxes imposed by section one of
5 this act, there is hereby imposed on each manufacturer, wholesaler or
6 retailer, as defined in the alcoholic beverage control law, including
7 those registered as distributors under article 18 of the tax law, a
8 special floor tax at the rates shown hereunder with respect to certain
9 wines in their possession or under their control on the effective date
10 of section one of this act, for purposes of sale in the state. The rate
11 of such floor tax shall be:
12 (1) On still wines, other than cider, eighty-seven and seven
13 hundredths cents per gallon;
14 (2) On artificially carbonated sparkling wines, other than artificial-
15 ly carbonated sparkling cider, eighty-seven and seven hundredths cents
16 per gallon; and
17 (3) On natural sparkling wines, other than natural sparkling cider,
18 eighty-seven and seven hundredths cents per gallon.
19 Such tax shall not be payable, however, with respect to: (A) the first
20 264 gallons of wine in the possession or control of any such manufactur-
21 er, wholesaler or retailer (including distributors under article 18 of
22 the tax law) on such date, or (B) wine upon which the tax imposed by
23 section 424 of the tax law has not yet been imposed thereon and which is
24 in the possession or control of any distributor registered under Article
25 18 of the tax law. The floor tax hereunder shall be due and payable to
26 the commissioner of taxation and finance as follows: At least 25 percent
27 shall be paid on the twentieth day of the first month which is at least
28 60 days after the date section one of this act becomes effective and the
29 remainder shall be paid on the twentieth day of the first month which is
30 at least 180 days after such effective date. Provided, however, if the
31 liability for the floor tax hereunder is 500 dollars or less, the entire
32 amount shall be due and payable in full on such twentieth day of the
33 first month which is at least 60 days after the date such section
34 becomes effective.
35 (c) All taxes, interest and penalties collected or received by the
36 commissioner of taxation and finance under the taxes imposed by this
37 section shall be deposited and disposed of pursuant to section 171-a of
38 the tax law.
39 (d) Except as provided in this section, all the provisions of article
40 18 of the tax law and all the provisions of article 37 of the tax law
41 applicable to such article 18 shall be applicable to the taxes imposed
42 by this section.
43 (e) The commissioner of taxation and finance is hereby authorized to
44 prescribe such terms and conditions as such commissioner deems advisable
45 and require such reports as such commissioner deems necessary to effec-
46 tuate the provisions of this section.
47 § 3. This act shall take effect June 1, 2005; provided, however, that,
48 if this act shall not have become a law by May 1, 2005, this act shall
49 take effect on the first day of the first month which is at least thirty
50 days after the date that this act shall have become a law; and,
51 provided, further, that the commissioner of taxation and finance shall
52 be authorized on and after the date this act shall have become a law to
53 adopt and amend any rules or regulations and issue any procedures, forms
54 or instructions necessary to implement the provisions of this act on its
55 effective date.
S. 995 82 A. 1925
1 § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
2 sion, section or part of this act shall be adjudged by any court of
3 competent jurisdiction to be invalid, such judgment shall not affect,
4 impair, or invalidate the remainder thereof, but shall be confined in
5 its operation to the clause, sentence, paragraph, subdivision, section
6 or part thereof directly involved in the controversy in which such judg-
7 ment shall have been rendered. It is hereby declared to be the intent of
8 the legislature that this act would have been enacted even if such
9 invalid provisions had not been included herein.
10 § 3. This act shall take effect immediately provided, however, that
11 the applicable effective date of Parts A through W of this act shall be
12 as specifically set forth in the last section of such Parts.