STATE OF NEW YORK ________________________________________________________________________ 7464 2017-2018 Regular Sessions IN ASSEMBLY April 26, 2017 ___________ Introduced by M. of A. FARRELL -- read once and referred to the Commit- tee on Ways and Means AN ACT to amend the tax law, the administrative code of the city of New York, chapter 877 of the laws of 1975, chapter 884 of the laws of 1975 and chapter 882 of the laws of 1977, relating to the imposition of certain taxes in the city of New York, in relation to postponing the expiration of certain tax rates and taxes in the city of New York The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 3 of subdivision (a) of section 1212-a of the tax 2 law, as amended by chapter 338 of the laws of 2014, is amended to read 3 as follows: 4 (3) a tax, at the same uniform rate, but at a rate not to exceed four 5 and one-half per centum, in multiples of one-half of one per centum, on 6 the receipts from every sale of any or all of the following services in 7 whole or in part: credit rating, credit reporting, credit adjustment and 8 collection services, including, but not limited to, those services 9 provided by mercantile and consumer credit rating or reporting bureaus 10 or agencies and credit adjustment or collection bureaus or agencies, 11 whether rendered in written or oral form or in any other manner, except 12 to the extent otherwise taxable under article twenty-eight of this chap- 13 ter; notwithstanding the foregoing, collection services shall not 14 include those services performed by a law office or a law and collection 15 office, the maintenance or conduct of which constitutes the practice of 16 law, if the services are performed by an attorney at law who has been 17 duly licensed and admitted to practice law in this state. The local law 18 imposing the taxes authorized by this paragraph may provide for exclu- 19 sions and exemptions in addition to those provided for in such para- 20 graph. Provided, however, that the tax hereby authorized shall not be 21 imposed after November thirtieth, two thousand [~~seventeen~~] twenty. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11242-01-7

A. 7464 2 1 § 2. Subsection (a) of section 1301 of the tax law, as amended by 2 chapter 338 of the laws of 2014, is amended to read as follows: 3 (a) Notwithstanding any other provision of law to the contrary, any 4 city in this state having a population of one million or more inhabit- 5 ants, acting through its local legislative body, is hereby authorized 6 and empowered to adopt and amend local laws imposing in any such city, 7 for taxable years beginning after nineteen hundred seventy-five: 8 (1) a tax on the personal income of residents of such city, at the 9 rates provided for under subsection (a) of section thirteen hundred four 10 of this article for taxable years beginning before two thousand [~~eigh-~~ 11 ~~teen~~] twenty-one, and at the rates provided for under subsection (b) of 12 section thirteen hundred four of this article for taxable years begin- 13 ning after two thousand [~~seventeen~~] twenty, provided, however, that if, 14 for any taxable year beginning after two thousand [~~seventeen~~] twenty, 15 the rates set forth in such subsection (b) are rendered inapplicable and 16 the rates set forth in such subsection (a) are rendered applicable, then 17 the tax for such taxable year shall be at the rates provided under 18 subparagraph (A) of paragraphs one, two and three of such subsection 19 (a), 20 (2) for taxable years beginning after nineteen hundred seventy-six, a 21 separate tax on the ordinary income portion of lump sum distributions of 22 such residents, at the rates provided for herein, such taxes to be 23 administered, collected and distributed by the commissioner as provided 24 for in this article. 25 § 3. Subsection (b) of section 1304 of the tax law, as amended by 26 chapter 338 of the laws of 2014, is amended to read as follows: 27 (b) A tax other than the city separate tax on the ordinary income 28 portion of lump sum distributions imposed pursuant to the authority of 29 section thirteen hundred one of this article shall be determined as 30 follows: 31 (1) Resident married individuals filing joint returns and resident 32 surviving spouses. The tax under this section for each taxable year on 33 the city taxable income of every city resident married individual who 34 makes a single return jointly with his or her spouse under subsection 35 (b) of section thirteen hundred six of this article and on the city 36 taxable income of every city resident surviving spouse shall be deter- 37 mined in accordance with the following table: 38 For taxable years beginning after two thousand [~~seventeen~~] twenty: 39 If the city taxable income is: The tax is: 40 Not over $21,600 1.18% of the city taxable income 41 Over $21,600 but not $255 plus 1.435% of excess 42 over $45,000 over $21,600 43 Over $45,000 but not $591 plus 1.455% of excess 44 over $90,000 over $45,000 45 Over $90,000 $1,245 plus 1.48% of excess 46 over $90,000 47 (2) Resident heads of households. The tax under this section for each 48 taxable year on the city taxable income of every city resident head of a 49 household shall be determined in accordance with the following table: 50 For taxable years beginning after two thousand [~~seventeen~~] twenty:

A. 7464 3 1 If the city taxable income is: The tax is: 2 Not over $14,400 1.18% of the city taxable income 3 Over $14,400 but not $170 plus 1.435% of excess 4 over $30,000 over $14,400 5 Over $30,000 but not $394 plus 1.455% of excess 6 over $60,000 over $30,000 7 Over $60,000 $830 plus 1.48% of excess 8 over $60,000 9 (3) Resident unmarried individuals, resident married individuals 10 filing separate returns and resident estates and trusts. The tax under 11 this section for each taxable year on the city taxable income of every 12 city resident individual who is not a city resident married individual 13 who makes a single return jointly with his or her spouse under 14 subsection (b) of section thirteen hundred six of this article or a city 15 resident head of household or a city resident surviving spouse, and on 16 the city taxable income of every city resident estate and trust shall be 17 determined in accordance with the following table: 18 For taxable years beginning after two thousand [~~seventeen~~] twenty: 19 If the city taxable income is: The tax is: 20 Not over $12,000 1.18% of the city taxable income 21 Over $12,000 but not $142 plus 1.435% of excess 22 over $25,000 over $12,000 23 Over $25,000 but not $328 plus 1.455% of excess 24 over $50,000 over $25,000 25 Over $50,000 $692 plus 1.48% of excess 26 over $50,000 27 § 4. Subsection (a) of section 1304-B of the tax law, as amended by 28 chapter 338 of the laws of 2014, is amended to read as follows: 29 (a) (1) In addition to any other taxes authorized by this article, any 30 city imposing such taxes is hereby authorized and empowered to adopt and 31 amend local laws imposing in any such city for each taxable year begin- 32 ning after nineteen hundred ninety but before two thousand [~~eighteen~~] 33 twenty-one, an additional tax on the city taxable income of every city 34 resident individual, estate and trust, to be calculated for each taxable 35 year as follows: (i) for each taxable year beginning after nineteen 36 hundred ninety but before nineteen hundred ninety-nine, at the rate of 37 fourteen percent of the sum of the taxes for each such taxable year 38 determined pursuant to section thirteen hundred four and section thir- 39 teen hundred four-A of this article; and (ii) for each taxable year 40 beginning after nineteen hundred ninety-eight, at the rate of fourteen 41 percent of the tax for such taxable year determined pursuant to such 42 section thirteen hundred four. 43 (2) Notwithstanding paragraph one of this subsection, for each taxable 44 year beginning after nineteen hundred ninety-nine but before two thou- 45 sand [~~eighteen~~] twenty-one, any city imposing such additional tax may by 46 local law impose such tax at a rate that is less than fourteen percent 47 and may impose such tax at more than one rate depending upon the filing 48 status and city taxable income of such city resident individual, estate 49 or trust. 50 (3) A local law enacted pursuant to paragraph two of this subsection 51 shall be applicable with respect to any taxable year only if it has been 52 enacted on or before July thirty-first of such year. A certified copy of 53 such local law shall be mailed by registered mail to the department at

A. 7464 4 1 its office in Albany within fifteen days of its enactment. However, the 2 department may allow additional time for such certified copy to be 3 mailed if it deems such action to be consistent with its duties under 4 this article. 5 § 5. Paragraph E of subdivision 1 of section 11-604 of the administra- 6 tive code of the city of New York, as amended by chapter 338 of the laws 7 of 2014, is amended to read as follows: 8 E. For taxable years beginning on or after January first, nineteen 9 hundred seventy-eight but before January first, two thousand [~~eighteen~~] 10 twenty-one, the tax imposed by subdivision one of section 11-603 of this 11 subchapter shall be, in the case of each taxpayer: 12 (a) whichever of the following amounts is the greatest: 13 (1) an amount computed, for taxable years beginning before nineteen 14 hundred eighty-seven, at the rate of nine per centum, and for taxable 15 years beginning after nineteen hundred eighty-six, at the rate of eight 16 and eighty-five one-hundredths per centum, of its entire net income or 17 the portion of such entire net income allocated within the city as here- 18 inafter provided, subject to any modification required by paragraphs (d) 19 and (e) of subdivision three of this section, 20 (2) an amount computed at one and one-half mills for each dollar of 21 its total business and investment capital, or the portion thereof allo- 22 cated within the city, as hereinafter provided, except that in the case 23 of a cooperative housing corporation as defined in the internal revenue 24 code, the applicable rate shall be four-tenths of one mill, 25 (3) an amount computed, for taxable years beginning before nineteen 26 hundred eighty-seven, at the rate of nine per centum, and for taxable 27 years beginning after nineteen hundred eighty-six, at the rate of eight 28 and eighty-five one-hundredths per centum, on thirty per centum of the 29 taxpayer's entire net income plus salaries and other compensation paid 30 to the taxpayer's elected or appointed officers and to every stockholder 31 owning in excess of five per centum of its issued capital stock minus 32 fifteen thousand dollars (subject to proration as hereinafter provided) 33 and any net loss for the reported year, or on the portion of any such 34 sum allocated within the city as hereinafter provided for the allocation 35 of entire net income, subject to any modification required by paragraphs 36 (d) and (e) of subdivision three of this section, provided, however, 37 that for taxable years beginning on or after July first, nineteen 38 hundred ninety-six, the provisions of paragraph H of this subdivision 39 shall apply for purposes of the computation under this clause, or 40 (4) for taxable years ending on or before June thirtieth, nineteen 41 hundred eighty-nine, one hundred twenty-five dollars, for taxable years 42 ending after June thirtieth, nineteen hundred eighty-nine and beginning 43 before two thousand nine, three hundred dollars, and for taxable years 44 beginning after two thousand eight: 45 If New York city receipts are: Fixed dollar minimum tax is: 46 Not more than $100,000 $25 47 More than $100,000 but not over $250,000 $75 48 More than $250,000 but not over $500,000 $175 49 More than $500,000 but not over $1,000,000 $500 50 More than $1,000,000 but not over $5,000,000 $1,500 51 More than $5,000,000 but not over $25,000,000 $3,500 52 Over $25,000,000 $5,000 53 For purposes of this clause, New York city receipts are the receipts 54 computed in accordance with subparagraph two of paragraph (a) of subdi- 55 vision three of this section for the taxable year. For taxable years 56 beginning after two thousand eight, if the taxable year is less than

A. 7464 5 1 twelve months, the amount prescribed by this clause shall be reduced by 2 twenty-five percent if the period for which the taxpayer is subject to 3 tax is more than six months but not more than nine months and by fifty 4 percent if the period for which the taxpayer is subject to tax is not 5 more than six months. If the taxable year is less than twelve months, 6 the amount of New York city receipts for purposes of this clause is 7 determined by dividing the amount of the receipts for the taxable year 8 by the number of months in the taxable year and multiplying the result 9 by twelve, plus; 10 (b) an amount computed at the rate of three-quarters of a mill for 11 each dollar of the portion of its subsidiary capital allocated within 12 the city as hereinafter provided. 13 In the case of a taxpayer which is not subject to tax for an entire 14 year, the exemption allowed in clause three of subparagraph (a) of this 15 paragraph shall be prorated according to the period such taxpayer was 16 subject to tax. Provided, however, that this paragraph shall not apply 17 to taxable years beginning after December thirty-first, two thousand 18 [~~seventeen~~] twenty. For the taxable years specified in the preceding 19 sentence, the tax imposed by subdivision one of section 11-603 of this 20 subchapter shall be, in the case of each taxpayer, determined as speci- 21 fied in paragraph A of this subdivision, provided, however, that the 22 provisions of paragraphs G and H of this subdivision shall apply for 23 purposes of the computation under clause three of subparagraph (a) of 24 such paragraph A. 25 § 6. The opening paragraph of section 11-1701 of the administrative 26 code of the city of New York, as amended by chapter 338 of the laws of 27 2014, is amended to read as follows: 28 A tax is hereby imposed on the city taxable income of every city resi- 29 dent individual, estate and trust determined in accordance with the 30 rates set forth in subdivision (a) of this section for taxable years 31 beginning before two thousand [~~eighteen~~] twenty-one, and in accordance 32 with the rates set forth in subdivision (b) of this section for taxable 33 years beginning after two thousand [~~seventeen~~] twenty. Provided, howev- 34 er, that if, for any taxable year beginning after two thousand [~~seven-~~ 35 ~~teen~~] twenty, the rates set forth in such subdivision (b) are rendered 36 inapplicable and the rates set forth in such subdivision (a) are 37 rendered applicable, then the tax for such taxable year shall be at the 38 rates provided under subparagraph (A) of paragraphs one, two and three 39 of such subdivision (a). 40 § 7. Subdivision (b) of section 11-1701 of the administrative code of 41 the city of New York, as amended by chapter 338 of the laws of 2014, is 42 amended to read as follows: 43 (b) Rate of tax. A tax imposed pursuant to this section shall be 44 determined as follows: 45 (1) Resident married individuals filing joint returns and resident 46 surviving spouses. The tax under this section for each taxable year on 47 the city taxable income of every city resident married individual who 48 makes a single return jointly with his or her spouse under subdivision 49 (b) of section 11-1751 of this title and on the city taxable income of 50 every city resident surviving spouse shall be determined in accordance 51 with the following table: 52 For taxable years beginning after two thousand [~~seventeen~~] twenty: 53 If the city taxable income is: The tax is: 54 Not over $21,600 1.18% of the city taxable income 55 Over $21,600 but not $255 plus 1.435% of excess

A. 7464 6 1 over $45,000 over $21,600 2 Over $45,000 but not $591 plus 1.455% of excess 3 over $90,000 over $45,000 4 Over $90,000 $1,245 plus 1.48% of excess 5 over $90,000 6 (2) Resident heads of households. The tax under this section for each 7 taxable year on the city taxable income of every city resident head of a 8 household shall be determined in accordance with the following table: 9 For taxable years beginning after two thousand [~~seventeen~~] twenty: 10 If the city taxable income is: The tax is: 11 Not over $14,400 1.18% of the city taxable income 12 Over $14,400 but not $170 plus 1.435% of excess 13 over $30,000 over $14,400 14 Over $30,000 but not $394 plus 1.455% of excess 15 over $60,000 over $30,000 16 Over $60,000 $830 plus 1.48% of excess 17 over $60,000 18 (3) Resident unmarried individuals, resident married individuals 19 filing separate returns and resident estates and trusts. The tax under 20 this section for each taxable year on the city taxable income of every 21 city resident individual who is not a married individual who makes a 22 single return jointly with his or her spouse under subdivision (b) of 23 section 11-1751 of this title or a city resident head of a household or 24 a city resident surviving spouse, and on the city taxable income of 25 every city resident estate and trust shall be determined in accordance 26 with the following table: 27 For taxable years beginning after two thousand [~~seventeen~~] twenty: 28 If the city taxable income is: The tax is: 29 Not over $12,000 1.18% of the city taxable income 30 Over $12,000 but not $142 plus 1.435% of excess 31 over $25,000 over $12,000 32 Over $25,000 but not $328 plus 1.455% of excess 33 over $50,000 over $25,000 34 Over $50,000 $692 plus 1.48% of excess 35 over $50,000 36 § 8. Paragraph 1 of subdivision (a) of section 11-1704.1 of the admin- 37 istrative code of the city of New York, as amended by chapter 338 of the 38 laws of 2014, is amended to read as follows: 39 (1) In addition to any other taxes imposed by this chapter, there is 40 hereby imposed for each taxable year beginning after nineteen hundred 41 ninety but before two thousand [~~eighteen~~] twenty-one, an additional tax 42 on the city taxable income of every city resident individual, estate and 43 trust, to be calculated for each taxable year as follows: (i) for each 44 taxable year beginning after nineteen hundred ninety but before nineteen 45 hundred ninety-nine, at the rate of fourteen percent of the sum of the 46 taxes for each such taxable year determined pursuant to section 11-1701 47 and section 11-1704 of this subchapter; and (ii) for each taxable year 48 beginning after nineteen hundred ninety-eight, at the rate of fourteen 49 percent of the tax for such taxable year determined pursuant to such 50 section 11-1701.

A. 7464 7 1 § 9. Subdivision (a) of section 11-2002 of the administrative code of 2 the city of New York, as amended by chapter 338 of the laws of 2014, is 3 amended to read as follows: 4 (a) There are hereby imposed and there shall be paid sales taxes at 5 the rate of four and one-half percent on receipts from every sale of the 6 services of beauty, barbering, hair restoring, manicuring, pedicuring, 7 electrolysis, massage services and similar services, and every sale of 8 services by weight control salons, health salons, gymnasiums, turkish 9 and sauna bath and similar establishments and every charge for the use 10 of such facilities, whether or not any tangible personal property is 11 transferred in conjunction therewith; but excluding services rendered by 12 a physician, osteopath, dentist, nurse, physiotherapist, chiropractor, 13 podiatrist, optometrist, ophthalmic dispenser or a person performing 14 similar services licensed under title eight of the education law, as 15 amended, and excluding such services when performed on pets and other 16 animals, as authorized by subdivision (a) of section twelve hundred 17 twelve-A of the tax law. Provided, however, that the tax hereby imposed 18 shall not be imposed after November thirtieth, two thousand [~~seventeen~~] 19 twenty. 20 § 10. The opening paragraph of subdivision (a) of section 11-2040 of 21 the administrative code of the city of New York, as amended by chapter 22 338 of the laws of 2014, is amended to read as follows: 23 There is hereby imposed within the city and there shall be paid a tax 24 at the rate of four and one-half percent upon the receipts from every 25 sale, except for resale, of the following services, provided, however, 26 that the tax hereby imposed shall not be imposed after November thirti- 27 eth, two thousand [~~seventeen~~] twenty, on receipts from sales of the 28 services specified in paragraph one of this subdivision: 29 § 11. Section 4 of chapter 877 of the laws of 1975, relating to the 30 imposition of certain taxes in the city of New York, as amended by chap- 31 ter 338 of the laws of 2014, is amended to read as follows: 32 § 4. This act shall expire on December 31, [~~2017~~] 2020, provided, 33 however, that it is hereby declared to be the express intention of the 34 legislature that the provisions of sections two and three of this act, 35 except with respect to the enforcement and collection of any tax arising 36 thereunder, shall remain in full force and effect only until the date of 37 such expiration, at which time the provisions of law amended by this act 38 shall be continued in full force and effect as they existed prior to the 39 enactment of this act. 40 § 12. Section 6 of chapter 884 of the laws of 1975, relating to the 41 imposition of certain taxes in the city of New York, as amended by chap- 42 ter 338 of the laws of 2014, is amended to read as follows: 43 § 6. This act shall expire on December 31, [~~2017~~] 2020, provided, 44 however, that it is hereby declared to be the express intention of the 45 legislature that the provisions of sections two, three and four of this 46 act, except with respect to the enforcement and collection of any tax 47 arising thereunder, shall remain in full force and effect only until the 48 date of such expiration, at which time the provisions of law amended by 49 this act shall be continued in full force and effect as they existed 50 prior to the enactment of this act. 51 § 13. Section 2 of chapter 882 of the laws of 1977, relating to the 52 imposition of certain taxes in the city of New York, as amended by chap- 53 ter 338 of the laws of 2014, is amended to read as follows: 54 § 2. This act shall expire on December 31, [~~2017~~] 2020, provided, 55 however, that it is hereby declared to be the express intention of the 56 legislature that the provisions of section one of this act, except with

A. 7464 8 1 respect to the enforcement and collection of any tax arising thereunder, 2 shall remain in full force and effect only until the date of such expi- 3 ration, at which time the provisions of law amended by this act shall be 4 continued in full force and effect as they existed prior to the enact- 5 ment of this act. 6 § 14. This act shall take effect immediately.

Extends the imposition of certain taxes in the city of New York

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