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History
- Print number 3276a
- Amend and recommit to investigations and government operations
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S3276A
Title of bill
An act to amend the tax law, in relation to the deduction for stock options
Purpose
This legislation would specify that the deduction can only be based on the price of the stock at the time of issuance of the option, not the price of the stock when sold.
Summary of provisions
The Tax Law is amended by adding a new paragraph 21 to paragraph (b) of subdivision 9 of section 208.
Justification
Currently, there is a loophole in the Federal Tax Code which allows for a corporation to take a tax deduction based on the price of a previously given stock option when it is sold, rather than the price when it was issued. Specifically, many corporations have given stock options at a set value to executives within their company instead of cash bonus payments. If the stock increased in value and the compensated executives sold their stocks at a higher price than the original value, the corpo- ration would then be eligible for a tax deduction based on the higher price rather than the lower original price. As with many taxes, New York State is currently coupled with the Federal Tax Code on this issue. It is unclear how much New York State is currently losing because of the loophole.
The legislative solution to this loophole, is to specify at what term in the issuance of the stock options a corporation may take a compensation deduction.
Fiscal implications
The current tax loophole is estimated to cost the Federal Government approximately $2.5 billion annually which would increase New York State revenue by an undetermined amount. Additionally, the fiscal impact of this legislation may greatly increase in the future as the compensation packages on Wall Street rely less on cash bonuses and more on stock options.
Effective date
This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2014.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.