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History
- Print number 6236a
- Amend and recommit to investigations and government operations
- Notice of committee consideration - requested
- Referred to investigations and government operations
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Provides for an additional franchise tax on certain life insurance policies
In Assembly Committee · Ways And Means · Sponsor Marcos Crespo
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to providing an additional franchise tax on certain life insurance policies
Purpose
Provides for an additional franchise tax on certain life insurance policies.
Summary of provisions
Section 1. Imposes a fifty-percent (50%) tax on every company that has a corporate franchise, or does business, or has employees or owns or leases property, or maintains an office in this state and that receives benefits from life insurance policies obtained on its employees and/or retirees. Requires records to be kept in a form as the Commissioner of Taxation and Finance may require. Provides that the Commissioner of Taxation and Finance may consent to the destruction of such records within three years or require that such records be kept longer than three years.
Section 2. Effective Date
Justification
New York State currently faces an unprecedented multi-billion dollar deficit. The Governor has called for drastic spending cuts totaling several billion dollars to many worthy programs in the State Office for the Aging, the Department of Health, SUNY and CUNY, to name a few. Unfortunately, little has been done to find sources of revenue to mitigate New York State's dire fiscal circumstances.
As New York State faces its worse fiscal crisis since the Great Depression, corporations are reaping huge financial benefits from life insurance policies they take out on their employees and or retirees. Corporate owned life insurance, better known as "dead peasants" or "janitors" insurance, is a life insurance policy that is taken out on low-level employees, often without the knowledge or consent of the employee, and whose families are not named as beneficiaries when the employee or retiree dies. When the employee or retiree dies, these tax free benefits are collected by the employer. Furthermore, companies frequently use these policies to pay for retirement benefits and other perks for their top executives. Companies that supposedly engage in the practice of purchasing these policies include Wal-Mart, Dow Chemical, Proctor & Gamble and Walt Disney.
One tragic example of this practice is that of a 48 year old assistant manager at Wal-Mart who died of a massive heart attack. The man's widow became the lead plaintiff in a class action suit after she learned that Wal-Mart collected $300,000 from a life insurance policy it owned on him.
This bill would impose a 50% tax on all benefits received by companies in New York State who take out life insurance policies on their employees or retirees.
Legislative history
New bill.
Fiscal implications
None.
Effective date
On or after January 1, 2011.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.