Relates to authorizing small business tax-deferred savings accounts

Title of bill

An act to amend the tax law, in relation to authorizing the creation of small business tax-deferred savings accounts

Purpose

This bill would establish a small business tax-deferred savings account that would enable funds to be designated for facility improvements or for procurement of machinery or equipment.

Summary of provisions

Sections 1 and 2 amend the Tax law governing Franchise Tax on Business Corporations by adding new provisions of law allowing for deposits into a small business tax-deferred savings account to be tax-exempt. Withdrawals from such an account, for the identified purposes, would be considered taxable minus any interest which has accrued.

Section 3 and 4 amends the Tax law governing Personal Income Taxes by adding a new paragraph and subparagraph to allow for deposits into a small business tax-deferred savings account to be tax-exempt. Withdrawals from such an account, for the identified purposes, would be considered taxable minus any interest which has accrued.

Section 5 sets forth the effective date.

Justification

Small businesses play a vital role in New York State's economy. By establishing a small business tax deferred savings account, these small businesses will be afforded an opportunity to reinvest into their operations, thereby enhancing efficiency as well as sustaining and growing their workforce.

Legislative history

This is a new bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2017.