What's happening
This bill repeals the percentage depletion deduction for personal income tax purposes in New York State and makes related technical corrections.
Why it matters
Ends a special tax break for resource extraction. By repealing the percentage depletion deduction, the bill removes a tax advantage long enjoyed by individuals or small businesses with income from mining, oil, gas, or similar natural resource activities, potentially increasing their state income tax liability.
Aligns state tax rules more closely with federal standards. The legislation removes language that allowed for a state-specific depletion calculation, making New York's treatment of resource depletion more consistent with federal tax law and potentially simplifying tax compliance for affected filers.
Could impact investment and resource development decisions. By eliminating this deduction, the bill may reduce incentives for individuals to invest in or operate extractive businesses in New York, potentially shifting investment decisions or affecting the profitability of smaller resource-based enterprises.
Reflects a policy shift away from industry-specific tax preferences. The change signals a broader move by New York State to phase out targeted tax breaks for certain industries in favor of a more uniform tax base, which could have implications for future tax policy debates and budget priorities.
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Who cares
Headline styles
End Depletion Tax Deduction
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 59
No co-sponsors yet.
History
- Print number 4380a
- Amend (t) and recommit to investigations and government operations
- Referred to investigations and government operations
- Referred to investigations and government operations
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.
End Tax Break for Depletion
In Assembly Committee · Ways And Means · Sponsor Michael Cusick
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4380--A
2017-2018 Regular Sessions
IN SENATE
February 10, 2017
Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law and the administrative code of the city of New York, in relation to making technical corrections thereto; to repeal subsection (i) of section 612 of the tax law relating to the elimination of the personal income tax deduction for percentage depletion; and to repeal certain provisions of the tax law relating thereto
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (i) of section 612 of the tax law is REPEALED.
§ 2. Subdivision (i) of section 11-1712 of the administrative code of the city of New York, as amended by chapter 333 of the laws of 1987, is amended to read as follows:
(i) In the case of mines, oil and gas wells and other natural deposits, any allowance for percentage depletion pursuant to section six hundred thirteen or section six hundred thirteen A of the internal revenue code shall be added to federal adjusted gross income. However, with respect to the property as to which such addition to federal adjusted gross income is required, an allowance for depletion shall be subtracted from federal adjusted gross income in the amount that would be deductible under section six hundred eleven of such code if the deduction for an allowance for depletion were computed without reference to such section six hundred thirteen or section six hundred thirteen A. [With respect to the computation of depletion pursuant to this subdivision, the basis for such computation shall be the basis for state income tax purposes provided for in subsection (i) of section six hundred
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00461-02-8
S. 4380--A 2
twelve of the tax law.] The portion of any gain from the sale or other disposition of such property having a higher adjusted basis for city income tax purposes than for federal income tax purposes, that does not exceed such difference in basis, shall be subtracted from federal adjusted gross income.
§ 3. Paragraph 10 of subsection (b) of section 612 of the tax law is REPEALED.
§ 4. Paragraph 13 of subsection (c) of section 612 of the tax law is REPEALED.
§ 5. Subsection 4 of section 618 of the tax law, as amended by section 9 of part C of chapter 25 of the laws of 2009, is amended to read as follows:
(4) There shall be added or subtracted (as the case may be) the modifications described in paragraphs (6)[, (10)], (17), (18), (19), (20), (21), (22), (23), (24), (25), (26), (27), (29), (38) and (39) of subsection (b) and in paragraphs (11)[, (13)], (15), [(19),] (20), (21), (22), (23), (24), (25), (26) and (28) of subsection (c) of section six hundred twelve of this part.
§ 6. Subsection 4 of section 618 of the tax law, as separately amended by section 5 of part HH-1 of chapter 57 of the laws of 2008 and section 9 of part C of chapter 25 of the laws of 2009, is amended to read as follows:
(4) There shall be added or subtracted (as the case may be) the modifications described in paragraphs (6)[, (10)], (17), (18), (19), (20), (21), (22), (23), (24), (25), (26), (27), [(28),] (29), (38) and (39) of subsection (b) and in paragraphs (11)[, (13)], (15), [(19),] (20), (21), (22), (23), (24), (25), (26) and (28) of subsection (c) of section six hundred twelve of this part.
§ 7. This act shall take effect immediately and shall apply to all taxable years beginning on or after January 1, 2018; provided that the amendments to subsection 4 of section 618 of the tax law made by section five of this act shall be subject to the expiration and reversion of such subdivision pursuant to section 8 of chapter 782 of the laws of 1988, as amended, when upon such date the provisions of section six of this act shall take effect.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law and the administrative code of the city of New York, in relation to making technical corrections thereto; to repeal subsection (i) of section 612 of the tax law relating to the elimination of the personal income tax deduction for percentage depletion; and to repeal certain provisions of the tax law relating thereto
Purpose
To eliminate the addback for purposes of the New York State income tax for residents of the federal depletion allowance for mining-related businesses.
Summary of provisions
Section 1 of the bill would repeal subsection (i) of Section 612 of the tax law.
Section 2 amends subdivision (i) of section 11-1712 of the administra- tive code of the city of New York.
Section 3 would repeal paragraph 10 of subsection (b) of section 612 of the tax law.
Section 4 would repeal paragraph 13 of subsection (c) of section 612 of the tax law.
Section 5-6 amend subsection 4 of section 618 of the tax law.
Section 7 provides the effective date.
Justification
Chapter 1 of the laws of 1972 enacted a series of revenue proposals to address the State's fiscal crisis during an extraordinary session of the Legislature called by Governor Rockefeller. Included in the enactments was a provision to require the add-back for purposes of the New York State personal income tax for residents the federal depletion allowance for mining related businesses. The federal depletion allowance reflects the capital-intensive nature of these businesses, and for over 40 years this industry has been denied the benefit of this reduction at the State level. Repeal would insure that those with mining operations would have an incentive to continue to be headquartered within New York.
Legislative history
S4126/A6803A: referred to investigations and government operations/ways and means
Fiscal implications
To be determined.
Effective date
This act shall take apply to all taxable years beginning on or after January first, two thousand eighteen.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.