Bill Text: NY A02291 | 2021-2022 | General Assembly | Amended

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Bill Title: Relates to authorizing small business tax-deferred savings accounts.

Spectrum: Slight Partisan Bill (Republican 3-1)

Status: (Introduced - Dead) 2022-04-04 - print number 2291a [A02291 Detail]

Download: New_York-2021-A02291-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         2291--A

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                    January 14, 2021
                                       ___________

        Introduced  by  M. of A. STERN, DURSO, RA -- Multi-Sponsored by -- M. of
          A. GOODELL -- read once and referred to  the  Committee  on  Ways  and
          Means  -- recommitted to the Committee on Ways and Means in accordance
          with Assembly Rule 3, sec. 2 -- committee  discharged,  bill  amended,
          ordered reprinted as amended and recommitted to said committee

        AN  ACT  to  amend  the  economic  development  law  and the tax law, in
          relation to authorizing the creation of  small  business  tax-deferred
          savings accounts

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The economic development law is amended  by  adding  a  new
     2  section 138-a to read as follows:
     3    §  138-a.  Small  business tax-deferred savings accounts.  1. A "small
     4  business taxpayer" or "small business" shall have the  same  meaning  as
     5  defined in section one hundred thirty-one of this article and shall meet
     6  the  requirements  of  paragraph  (f)  of subdivision one of section two
     7  hundred ten of the tax law.
     8    2. Any small business shall be authorized to establish with any finan-
     9  cial organization a small business tax-deferred savings account  and  to
    10  make  deposits  into  and withdrawals from such account. For purposes of
    11  this  section,  "financial  organization"  shall  mean  an  organization
    12  authorized  to  do  business  in  the state of New York and (a) which is
    13  licensed or chartered by the department of financial  services,  (b)  is
    14  chartered  by  an agency of the federal government, or (c) is subject to
    15  the jurisdiction and regulation of the securities and  exchange  commis-
    16  sion of the federal government.
    17    3.  The  amount  deposited into such tax-deferred savings accounts and
    18  any interest earned on such deposits shall be subject to the  provisions
    19  of  subparagraph  twenty-one  of  paragraph  (a)  of subdivision nine of
    20  section two hundred eight and paragraph forty-three of subsection (c) of

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00218-03-2
        A. 2291--A                          2

     1  section six hundred twelve of the tax law, unless such amounts are with-
     2  drawn and expended for a purpose other than a qualifying purpose.
     3    4.  For  the  purposes of this act, a qualifying purpose shall include
     4  small business taxpayer expenditures (a) for tangible personal  property
     5  or     other  tangible  property, including but not limited to buildings
     6  and structural components of buildings, that are principally used in the
     7  ordinary course of the  taxpayer's  trade  or  business  and  (b)  other
     8  expenditures  deemed  appropriate  by the department, which will improve
     9  the competitiveness and productivity of a small business and results  in
    10  the creation or retention of full-time jobs.
    11    5. The monies deposited into such tax-deferred savings accounts during
    12  any taxable year may not exceed five thousand dollars.
    13    6.  On  or  before April first, two thousand twenty-three and annually
    14  thereafter, the department, in consultation with the department of taxa-
    15  tion and finance, shall report on the number of small business taxpayers
    16  utilizing this program, the aggregate amount deposited for which  a  tax
    17  credit  was  claimed,  the  average aggregate amount on deposit in small
    18  business savings accounts, the amount of qualifying  and  non-qualifying
    19  withdrawals, and any other such data deemed necessary and appropriate by
    20  the department.
    21    §  2.  Paragraph (a) of subdivision 9 of section 208 of the tax law is
    22  amended by adding a new subparagraph 23 to read as follows:
    23    (23) any amount deposited into a small business  tax-deferred  savings
    24  account  created   pursuant to section one hundred thirty-eight-a of the
    25  economic development law, and any  interest  earned  on  such  deposits,
    26  provided that any amount withdrawn for a non-qualifying purpose shall be
    27  included  in  the  entire net income for the tax year in which the with-
    28  drawal was made.
    29    § 3. Subsection (c) of section 612 of the tax law is amended by adding
    30  a new paragraph 46 to read as follows:
    31    (46) any amount deposited into a small business  tax-deferred  savings
    32  account  created   pursuant to section one hundred thirty-eight-a of the
    33  economic development law, and any  interest  earned  on  such  deposits,
    34  provided that any amount withdrawn for a non-qualifying purpose shall be
    35  included  in  the  entire net income for the tax year in which the with-
    36  drawal was made.
    37    § 4. The department of taxation and finance, in consultation with  the
    38  department of economic development, shall review and analyze all statis-
    39  tical  data  available for such purposes of determining the economic and
    40  revenue impact associated with this act. Such data shall be included  in
    41  an  annual  report  that  shall also include, but not be limited to, the
    42  number of small business taxpayers utilizing this program,  the  average
    43  aggregate amount on deposit, the qualifying expenses claimed, any quali-
    44  fying  expenses  deemed  inappropriate  and  any  other such data deemed
    45  necessary and appropriate by the department. Such annual report shall be
    46  posted on the websites of the department of taxation and finance and the
    47  department of economic development, and transmitted to the governor, the
    48  temporary president of the  senate,  the  senate  minority  leader,  the
    49  speaker of the assembly and the assembly minority leader.
    50    §  5. Rules and regulations. The department of taxation and finance in
    51  consultation with the department  of  economic  development,  is  hereby
    52  authorized  to  promulgate  rules and regulations in accordance with the
    53  state administrative procedure act that are  necessary  to  fulfill  the
    54  purposes  of this act. Such regulations shall include but not be limited
    55  to deadlines for establishing a  small  business  tax  deferred  savings
    56  account,  standard  procedures  and forms to be utilized in the program,
        A. 2291--A                          3

     1  and any other such regulations deemed  necessary  to  promote  the  full
     2  utilization  of  this  program.  Such  rules  and  regulations  shall be
     3  completed within 180 days after the effective date of this act.
     4    §  6. This act shall take effect on the first of April next succeeding
     5  the date on which it shall have become a law.