What's happening
This bill exempts water-works corporations from the business income tax, requiring tax savings to be used to reduce water rates.
Why it matters
Shifting tax burden. By exempting water-works corporations from business income tax, the bill could potentially reduce the operating costs for these companies, but it also means the state will collect less revenue from this sector—potentially shifting the tax burden to other businesses or requiring spending cuts elsewhere.
Water rate oversight and enforcement challenges. The legislation requires that tax savings be used to reduce or offset water rates, but it may be difficult for regulators to ensure companies fully pass on all tax savings to consumers, raising concerns about transparency and enforcement.
Impact on investment and infrastructure. Lower operating costs for water-works corporations could free up capital for infrastructure improvements, but depending on how savings are allocated, it could also reduce incentives for long-term investment if the primary focus becomes rate reduction rather than modernization.
Broader precedent. Exempting an entire utility sector from business income taxes could prompt calls for similar exemptions from other utilities or essential service providers, potentially leading to wider changes in state tax policy.
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Who cares
Headline styles
Zero Tax for Water Companies
Plain English, a few words. Used as the page title.
Sponsors
3 Co-sponsors
History
- Referred to budget and revenue
- Referred to budget and revenue
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.
Eliminate Water Utility Income Tax
In Assembly Committee · Ways And Means · Sponsor Charles Lavine
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4231
2019-2020 Regular Sessions
IN SENATE
March 5, 2019
Introduced by Sens. KAMINSKY, HARCKHAM, MAYER -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to the business income base for water-works corporations
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of paragraph (a) of subdivision 1 of section 210 of the tax law, as amended by section 10 of part T of chapter 59 of the laws of 2015, is amended to read as follows:
For taxable years beginning before January first, two thousand sixteen, the amount prescribed by this paragraph shall be computed at the rate of seven and one-tenth percent of the taxpayer's business income base. For taxable years beginning on or after January first, two thousand sixteen, the amount prescribed by this paragraph shall be six and one-half percent of the taxpayer's business income base. The taxpayer's business income base shall mean the portion of the taxpayer's business income apportioned within the state as hereinafter provided. However, in the case of a small business taxpayer, as defined in paragraph (f) of this subdivision, the amount prescribed by this paragraph shall be computed pursuant to subparagraph (iv) of this paragraph and in the case of a manufacturer, as defined in subparagraph (vi) of this paragraph, the amount prescribed by this paragraph shall be computed pursuant to subparagraph (vi) of this paragraph, and, in the case of a qualified emerging technology company, as defined in subparagraph (vii) of this paragraph, the amount prescribed by this paragraph shall be computed pursuant to subparagraph (vii) of this paragraph, and in the case of a water-works corporation, as defined in subparagraph (x) of this paragraph, the amount prescribed by this paragraph shall be computed pursuant to subparagraph (x) of this paragraph.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
S LBD10360-02-9
S. 4231 2
§ 2. Paragraph (a) of subdivision 1 of section 210 of the tax law is amended by adding a new subparagraph (x) to read as follows:
(x) for taxable years beginning on or after January first, two thousand twenty, the amount prescribed by this paragraph for a taxpayer which is a water-works corporation, shall be computed at the rate of zero percent of the taxpayer's business income base. The term "waterworks corporation" shall have the same meaning as in subdivision twenty-seven of section two of the public service law. Any tax savings attributable to this subparagraph shall be used to reduce current water rates and offset future water rate increases.
§ 3. This act shall take effect immediately.
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 the busi- ness income base for water-works corporations
Purpose
Amends the Tax Law to provide a state income tax exemption for water- works corporations.
Summary of provisions
Section 1 requires water-works corporations to have taxes computed pursuant to subparagraph (x) of section 210 of the Tax Law.
Section 2 provides a state income tax exemption for water-works corpo- rations.
Justification
Private water utilities serve approximately 4% of New Yorkers; the remaining 96% of New Yorkers are served by public water systems. Private water utilities must pay income and property taxes, which are costs that are legally passed through to customers in rates. This has contributed to significantly higher water utility rates for private water utility customers, compared to those on public systems. For exam- ple, 33% to 59% of NYAW utility bill pays for property taxes, and 17% to 23% of the Suez utility bill pays for property taxes.
This legislation provides a State Income Tax Exemption for private water utilities. This legislation will have a minimal budget impact given that water utilities have not been paying income taxes under the Manufactur- ing Tax Credit that was recently amended to exclude water utilities. In effect, this bill will keep the status quo and avoid another water util- ity rate increase. All savings that result from the legislation must be used to reduce current water rates and offset future water rate increases for customers.
Legislative history
New bill
Fiscal implications
$4.4M/year in lost future revenue to NYS
Effective date
Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.