What's happening
This bill creates tax credits for businesses contracting with minority and women-owned enterprises for goods or services.
Why it matters
Encourages broader economic inclusion by incentivizing non-minority- and non-women-owned businesses to partner with minority- and women-owned enterprises, potentially driving more private-sector opportunities for these underrepresented groups.
Targets contracts not already covered by existing affirmative action laws, expanding support to business relationships that might otherwise be overlooked by government diversity requirements.
Limits the credit to a portion (one-third) of eligible expenditures and further caps the total credit to 5% of payments received from government contracts, balancing the incentive with safeguards against excessive tax benefits.
Could lead to increased competitiveness and capacity-building among minority- and women-owned businesses as they gain more access to mainstream supply chains and government-related opportunities.
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Who cares
Government contractors that are not minority- or women-owned
The bill would offer business franchise and personal income tax credits equal to one-third of qualifying payments to minority- or women-owned businesses, capped at five percent of receipts from government contracts.
Minority- and women-owned businesses
The credits would give eligible customers an incentive to buy their goods or services under contracts not subject to Article 15-A or other affirmative-action laws.
State agencies, state authorities and local governments
Payments they make to contractors for goods or services would determine the cap on those contractors’ credits.
Headline styles
Tax Credit for MWBE Contracts
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
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.
Tax Credits for Diverse Contracts
In Assembly Committee · Ways And Means · Sponsor Crystal Peoples-Stokes
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
845
2019-2020 Regular Sessions
IN SENATE
January 9, 2019
Introduced by Sen. BENJAMIN -- 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 establishing business franchise and personal income tax credits for certain businesses which contract with the state or political subdivisions thereof and in unrelated contracts, also with minority and women-owned business enterprises
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 210-B of the tax law is amended by adding a new subdivision 28 to read as follows:
28. Minority and women-owned business employment incentive credit. (a) General. A taxpayer shall be allowed a credit, to be computed as provided in this subdivision, against the tax imposed by this article for a certain portion of the consideration paid to a minority or womenowned business enterprise pursuant to a contract for the provision of goods or services. The credit provided for in this subdivision shall be allowed with respect to the tax year in which the consideration is paid to the minority or women-owned business enterprise.
(b) Definitions. For the purposes of this subdivision, the following terms shall mean:
(i) "Government agency" means a state agency or a state authority as defined in subdivision eleven of section three hundred ten of the executive law, or a political subdivision as defined in subdivision one of section one hundred of the general municipal law.
(ii) "Minority or women-owned business enterprise" means a minorityowned business enterprise as defined in subdivision seven of section three hundred ten of the executive law or a women-owned business enterprise as defined in subdivision fifteen of section three hundred ten of the executive law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04724-01-9
S. 845 2
(c) Computation. The credit authorized by this subdivision shall be equal to one-third of all expenditures paid by the taxpayer to a minority or women-owned business enterprise pursuant to a contract for the provision of goods and services during the tax year, provided that such contract was not subject to the provisions of article fifteen-A of the executive law or any other provision of law relating to the affirmative action, and the taxpayer is not a minority or women-owned business enterprise. Furthermore, the amount of such credit shall not exceed five percent of all consideration paid to the taxpayer during the tax year pursuant to contracts with government agencies for the provision of goods or services.
§ 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xliv) to read as follows: (xliv) Minority and Amount of credit women-owned business under subdivision employment incentive twenty-eight of credit under section two subsection (jjj) hundred ten-B
§ 3. Section 606 of the tax law is amended by adding a new subsection (jjj) to read as follows:
(jjj) Minority and women-owned business employment incentive credit. (1) General. A taxpayer shall be allowed a credit to be computed as provided in this subsection, against the tax imposed by this article for a certain portion of the consideration paid to a minority or women-owned business enterprise pursuant to a contract for the provision of goods or services. The credit provided for in this subsection shall be allowed with respect to the tax year in which the consideration is paid to the minority or women-owned business enterprise.
(2) Definitions. For the purposes of this subsection, the following terms shall mean:
(i) "Government agency" means a state agency or a state authority as defined in subdivision eleven of section three hundred ten of the executive law, or a political subdivision as defined in subdivision one of section one hundred of the general municipal law.
(ii) "Minority or women-owned business enterprise" means a minorityowned business enterprise as defined in subdivision seven of section three hundred ten of the executive law or a women-owned business enterprise as defined in subdivision fifteen of section three hundred ten of the executive law.
(3) Computation. The credit authorized by this subsection shall be equal to one-third of all expenditures paid by the taxpayer to a minority or women-owned business enterprise pursuant to a contract for the provision of goods and services during the tax year, provided that such contract was not subject to the provisions of article fifteen-A of the executive law or any other provision of law relating to affirmative action, and the taxpayer is not a minority or women-owned business enterprise. Furthermore, the amount of such credit shall not exceed five percent of all consideration paid to the taxpayer during the tax year pursuant to contracts with government agencies for the provision of goods or services.
§ 4. This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to tax years commencing on or after such date.
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 establishing business fran- chise and personal income tax credits for certain businesses which contract with the state or political subdivisions thereof and in unre- lated contracts, also with minority and women-owned business enterprises
Purpose
Establishes business franchise and personal income tax credits for a portion of the consideration paid under a contract with a minority or women-owned business.
Summary of provisions
Section 1 amends section 210-B the tax law by adding a new subdivision 28 creating a business franchise tax credit for businesses that contract with both the state and, in a separate and unrelated transaction, with a women or minority owned business.
Sections 2 and 3 establish a personal income tax credit for tax payers who contract with both the state and, in a separate and unrelated trans- action, with a women or minority owned business.
Section 4 establishes the effective date.
Existing law
Current law does not provide incentive for private companies to contract MWBEs.
Justification
New York has been a longtime leader in the promotion of minority and women owned business enterprises ("MWBEs"). The core goals of the State's efforts are 1) equality of economic opportunities for MWBEs and 2) elimination of barriers to their participation in state contracts. The problem is that the State has focused on the latter as the sole means of achieving the former.
In order to help build fully self-sustaining minority and women owned businesses, the State must also do its part to encourage private enti- ties to contract with MWBEs. This legislation would incentivize the private sector to build long-term business relationships with MWBEs by offering business franchise and personal income tax credits for compa- nies and individuals that contract with both MWBEs and the State. State contracts are critical for initial growth, but insufficient for long- term success. This legislation would help build grow existing MWBEs while paving the way for the next generation.
Legislative history
2017-18: S319/A.2190 2015-2016: S.1114 2013-2014: S.37 2011-12: S.6754
Fiscal implications
To be determined
Local fiscal implications
None
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to tax years commencing on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.