What's happening
This bill authorizes New York City to add a temporary income tax surcharge on high earners to fund early childhood education programs.
Why it matters
Targets High Earners. This bill allows New York City to temporarily levy an extra income tax only on residents with taxable income over $500,000, meaning it specifically affects high-income individuals, couples, and certain estates/trusts.
Direct Funding for Early Childhood Education. All revenue from this surcharge must be used exclusively for early childhood education programs, ensuring that the funds directly address educational access and quality for young children in the city.
Local Flexibility and Sunset Provision. The city has flexibility to set the surcharge rate lower than the maximum 4.3%, or to adjust rates by filing status and income level. The authority to impose the surcharge is temporary—it must be enacted by the end of 2019 and will automatically expire at the end of 2024.
Segregated Revenue Use. Unlike other city taxes that might support a range of municipal needs or go to the Transitional Finance Authority, this surcharge is strictly earmarked for early childhood education, potentially increasing transparency and public trust in how the new tax revenue is spent.
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Who cares
New York City officials
The bill would authorize a local income tax surcharge dedicated exclusively to city early childhood education programs, provided the city enacted a local law by December 31, 2019.
City residents, estates and trusts with city taxable income over $500,000
They could face a surcharge of up to 4.3% of city taxable income for tax years beginning in 2020, with the authorization expiring December 31, 2024.
Early childhood education providers and advocates
All surcharge revenue, including interest and penalties, would be reserved for supporting city early childhood education programs.
State tax administrators and the state comptroller
They would administer, collect and distribute the surcharge through existing city income tax procedures, with revenue credited to the city’s general fund rather than directed to the New York City Transitional Finance Authority.
Headline styles
Tax Surcharge for Early Education
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2581
2019-2020 Regular Sessions
IN SENATE
January 28, 2019
Introduced by Sen. BAILEY -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law, in relation to authorizing a childhood education surcharge on the personal income tax for cities having a population of one million or more persons; and providing for the repeal of such provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 1304-E to read as follows:
§ 1304-E. Tax surcharge for early childhood education. (a) In addition to the taxes authorized by subsection (a) of section thirteen hundred one of this article, any city having a population of one million or more persons that imposes such taxes is hereby authorized and empowered to adopt and amend local laws imposing in any such city for all taxable years beginning on or after January first, two thousand twenty, a tax surcharge on the city taxable income of every city resident married individuals filing joint returns, resident married individuals filing separate returns, resident surviving spouses, resident heads of households, resident unmarried individuals, and resident estates and trusts, at a rate of up to: If the city taxable income is: the tax surcharge is:
Not over $500,000 0 Over $500,000 4.3 % of city taxable income
(b) A city imposing a tax surcharge pursuant to the authority of this section may, by local law, impose such surcharge at a rate that is less than the percentages set forth in subsection (a) of this section, and may impose such tax at more than one rate depending upon the filing
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05468-01-9
S. 2581 2
status and city taxable income of such city resident individual, estate, or trust.
(c) A tax surcharge imposed pursuant to the authority of this section shall be administered, collected, and distributed by the commissioner in the same manner as the other taxes imposed pursuant to the authority of this article, and all of the provisions of this article, including section thirteen hundred ten of this article, shall apply to the tax surcharge authorized by this section; provided, however, that the provisions of section thirteen hundred thirteen of this article directing payment of taxes to the New York city transitional finance authority shall not apply to any such surcharge.
(d) Notwithstanding any provision of this section or of section thirteen hundred thirteen of this article to the contrary, the total revenue from the tax surcharge imposed pursuant to the authority of this section, including interest and penalties, which the state comptroller is required to pay to the chief fiscal officer of the city imposing the tax surcharge for payment into the treasury of such city shall be credited to the general fund of such city and shall be applied exclusively to or in aid or support of the early childhood education programs of such city.
(e) A local law enacted pursuant to this section shall be applicable only if it has been enacted on or before December thirty-first, two thousand nineteen. A certified copy of such local law shall be mailed by registered mail to the department at its office in Albany within fifteen days of its enactment. However, the department may allow additional time for such certified copy to be mailed if it deems such action to be consistent with its duties under this article.
§ 2. This act shall take effect immediately and shall apply to all tax years commencing on and after January 1, 2020; provided, however, that the provisions of this act shall expire and be deemed repealed December 31, 2024.
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, in relation to authorizing a childhood education surcharge on the personal income tax for cities having a popu- lation of one million or more persons; and providing for the repeal of such provisions upon expiration thereof
Purpose or general idea of bill
This bill authorizes a city of one million or more to adopt local laws providing for a city income tax surcharge for taxpayers making $500,000 or more for aid to early childhood education and after school programs. This tax will sunset after 5 years.
Summary of specific provisions
Section 1. This section amends the tax law by adding a new section, 1304-E.
Subsection (a). This subsection empowers any city of one million or more imposing a tax surcharge for early childhood education programs to adopt and amend a tax surcharge for taxpayers making $500,000 or more on the city taxable income of every city resident individual, estate, -and trust for all taxable years after 2018. This tax will sunset after 5 years.
Subsection (1). This subsection sets the rate up to 4.3%- a 0.424 percentage point increase of the tax upon which the surcharge is based.
Subsection (b). This subsection provides that any city imposing a tax surcharge in accordance with this article may by local law impose such surcharge at a lower rate than the percentages set forth in subsection (1). The city may also impose the city income tax surcharge at more than one rate depending upon the filing status and city taxable income of a city resident.
Subsection (c). This subsection states that the city income tax surcharge imposed by this article shall be administered, collected, and distributed in the same manner as other taxes imposed pursuant to this article. However, the provisions of section 1313 of this article which directs payment of taxes to the New York City transitional finance authority shall not apply to the city income tax surcharge.
Subsection (d). This subsection states that the total revenue, including interest and penalties from the city income tax surcharge, which the state comptroller is required to pay to the chief fiscal officer of the city imposing such surcharge shall be for payment into the city treasury shall be credited to the general fund of such city and applied exclu- sively to or in aid or in support of the early childhood education programs of the city.
Subsection (e). This subsection states that the local law must be enacted on or before December 31, 2017 in order to be applicable. A certified copy of the local law shall be sent by registered mail to the department's Albany office within 15 days of enactment. Additional time
for a copy of the local law to be sent shall be allotted by the depart- ment if deemed consistent with its duties under this article.
Justification
The City's remarkable turnaround in crime-fighting in the mid-to-late 1990s was funded, in part, by a temporary surcharge in the personal income tax. The surcharge ended in 1998. A similar surcharge is now necessary to fund a turnaround in our City's early childhood education programs.
Prior legislative history
2015-16: S.2223 - Referred to investigations and Gov. Operations 2017-18: S.3799 - Referred to Investigations and Gov. Operations
Fiscal implications
None.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.