STATE OF NEW YORK ________________________________________________________________________ 1727 2023-2024 Regular Sessions IN ASSEMBLY January 20, 2023 ___________ Introduced by M. of A. DINOWITZ, SEAWRIGHT, GLICK, CRUZ, EPSTEIN, REYES, THIELE, HEVESI, PAULIN, L. ROSENTHAL, SIMON, STECK, KIM, DARLING, FAHY, MITAYNES, GALLAGHER, BURDICK, SEPTIMO, KELLES, MAMDANI, FORREST -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law and the administrative code of the city of New York, in relation to investment income The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "opportu- 2 nity zone tax break elimination act". 3 § 2. Paragraph (a) of subdivision 6 of section 208 of the tax law, as 4 amended by section 5 of part T of chapter 59 of the laws of 2015, is 5 amended to read as follows: 6 (a) (i) The term "investment income" means income, including capital 7 gains in excess of capital losses, from investment capital, to the 8 extent included in computing entire net income, less, (A) in the 9 discretion of the commissioner, any interest deductions allowable in 10 computing entire net income which are directly or indirectly attribut- 11 able to investment capital or investment income, (B) any capital gains 12 deferred or excluded under 26 U.S.C. §1400-z-2, provided, however, that 13 in no case shall investment income exceed entire net income. (ii) If the 14 amount of interest deductions subtracted under subparagraph (i) of this 15 paragraph exceeds investment income, the excess of such amount over 16 investment income must be added back to entire net income. (iii) If the 17 taxpayer's investment income determined without regard to the interest 18 deductions subtracted under subparagraph (i) of this paragraph comprises 19 more than eight percent of the taxpayer's entire net income, investment 20 income determined without regard to such interest deductions cannot 21 exceed eight percent of the taxpayer's entire net income. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01166-01-3

A. 1727 2 1 § 3. Paragraph (a) of subdivision 5 of section 11-652 of the adminis- 2 trative code of the city of New York, as added by section 1 of part D of 3 chapter 60 of the laws of 2015, is amended to read as follows: 4 (a) (i) The term "investment income" means income, including capital 5 gains in excess of capital losses, from investment capital, to the 6 extent included in computing entire net income, less, (A) in the 7 discretion of the commissioner of finance, any interest deductions 8 allowable in computing entire net income which are directly or indirect- 9 ly attributable to investment capital or investment income, (B) any 10 capital gains deferred or excluded under 26 U.S.C §1400-z-2, provided, 11 however, that in no case shall investment income exceed entire net 12 income. 13 (ii) If the amount of interest deductions subtracted under subpara- 14 graph (i) of this paragraph exceeds investment income, the excess of 15 such amount over investment income must be added back to entire net 16 income. 17 (iii) If the taxpayer's investment income determined without regard to 18 the interest deductions subtracted under subparagraph (i) of this para- 19 graph comprises more than eight percent of the taxpayer's entire net 20 income, investment income determined without regard to such interest 21 deductions cannot exceed eight percent of the taxpayer's entire net 22 income. 23 § 4. This act shall take effect immediately and shall apply to taxable 24 years beginning on and after January 1, 2023.

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