STATE OF NEW YORK ________________________________________________________________________ 29 2021-2022 Regular Sessions IN SENATE (Prefiled) January 6, 2021 ___________ Introduced by Sens. KAPLAN, ADDABBO, AKSHAR, BRESLIN, RAMOS, SKOUFIS -- 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 rate and expanding the small business subtraction modification The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraph (iv) of paragraph (a) of subdivision 1 of 2 section 210 of the tax law, as amended by section 12 of part A of chap- 3 ter 59 of the laws of 2014, is amended to read as follows: 4 (iv) (A) for taxable years beginning before January first, two thou- 5 sand sixteen, if the business income base is not more than two hundred 6 ninety thousand dollars the amount shall be six and one-half percent of 7 the business income base; if the business income base is more than two 8 hundred ninety thousand dollars but not over three hundred ninety thou- 9 sand dollars the amount shall be the sum of (1) eighteen thousand eight 10 hundred fifty dollars, (2) seven and one-tenth percent of the excess of 11 the business income base over two hundred ninety thousand dollars but 12 not over three hundred ninety thousand dollars and (3) four and thirty- 13 five hundredths percent of the excess of the business income base over 14 three hundred fifty thousand dollars but not over three hundred ninety 15 thousand dollars; 16 (B) for taxable years beginning on or after January first, two thou- 17 sand twenty-two, if the business income base is not more than two 18 hundred ninety thousand dollars the amount shall be four percent of the 19 business income base; if the business income base is more than two 20 hundred ninety thousand dollars but not over three hundred ninety thou- 21 sand dollars the amount shall be the sum of (1) eleven thousand six 22 hundred dollars, (2) six and one-half percent of the excess of the busi- 23 ness income base over two hundred ninety thousand dollars but not over EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01185-01-1

S. 29 2 1 three hundred ninety thousand dollars and (3) eighteen and thirteen 2 hundredths percent of the excess of the business income base over three 3 hundred fifty thousand dollars but not over three hundred ninety thou- 4 sand dollars; 5 § 2. Paragraph 39 of subsection (c) of section 612 of the tax law, as 6 added by section 1 of part Y of chapter 59 of the laws of 2013, is 7 amended to read as follows: 8 (39) (A) In the case of a taxpayer who is a small business or a 9 taxpayer who is a member, partner, or shareholder of a limited liability 10 company, partnership, or New York S corporation, respectively, that is a 11 small business, who or which has business income and/or farm income as 12 defined in the laws of the United States, an amount equal to [~~three~~] 13 fifteen percent of the net items of income, gain, loss and deduction 14 attributable to such business or farm entering into federal adjusted 15 gross income, but not less than zero[~~, for taxable years beginning after~~ 16 ~~two thousand thirteen, an amount equal to three and three-quarters~~ 17 ~~percent of the net items of income, gain, loss and deduction attribut-~~ 18 ~~able to such business or farm entering into federal adjusted gross~~ 19 ~~income, but not less than zero, for taxable years beginning after two~~ 20 ~~thousand fourteen, and an amount equal to five percent of the net items~~ 21 ~~of income, gain, loss and deduction attributable to such business or~~ 22 ~~farm entering into federal adjusted gross income, but not less than~~ 23 ~~zero, for taxable years beginning after two thousand fifteen~~]. 24 (B) (i) For the purposes of this paragraph, the term small business 25 shall mean: (I) a sole proprietor [~~or a farm business~~] who employs one 26 or more persons during the taxable year and who has net business income 27 or net farm income of less than two hundred fifty thousand dollars, or 28 (II) a limited liability company, partnership or New York S corporation 29 that during the taxable year employs one or more persons and has New 30 York gross business income attributable to a non-farm business that is 31 greater than zero but less than one million five hundred thousand 32 dollars or net farm income attributable to a farm business that is 33 greater than zero but less than two hundred fifty thousand dollars. 34 (ii) For purposes of this paragraph, the term New York gross business 35 income shall mean: (I) in the case of a limited liability company or a 36 partnership New York source gross income as defined in subparagraph (B) 37 of paragraph three of subsection (c) of section six hundred fifty-eight 38 of this article, and, (II) in the case of a New York S corporation, New 39 York receipts included in the numerator of the apportionment factor 40 determined under section two hundred ten-A of this chapter for the taxa- 41 ble year. 42 (C) To qualify for this modification in relation to a non-farm small 43 business that is a limited liability company, partnership or New York S 44 corporation, the taxpayer's income attributable to the net business 45 income from its ownership interests in non-farm limited liability compa- 46 nies, partnerships or New York S corporations must be less than two 47 hundred fifty thousand dollars. 48 § 3. This act shall take effect immediately and shall apply to taxable 49 years beginning on or after January 1, 2022.

Relates to the business income base rate

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