New York State Governor Andrew M. Cuomo has released the 2016-2017 Executive Budget. Among the relatively low-key tax proposals being made this year are the following:
- Conform the New York State and City tax filing deadlines for corporations and partnerships to the new deadlines put in place for federal income tax purposes. (Part Q)
- Reduce the Article 9-A income tax rate for small businesses from 6.5% to 4% beginning in 2017, and expand the personal income tax small business subtraction modification for members, partners or shareholders of LLCs, partnerships and S corporations that meet the definition of a “small business.” (Part R)
- Amend the definition of “qualified financial instruments” (“QFIs”) for New York State and City corporate income tax purposes to ensure that taxpayers are able to claim the exemption for “other exempt income” with respect to stock in subsidiaries that are not included in a New York combined return, even though the taxpayer makes a fixed 8% sourcing election for its QFI income. (Part P)
- Provide a non-refundable tax credit of 50% of NYS Thruway tolls paid through E-ZPass accounts for both businesses and individuals (in the case of individuals who pay at least $50 annually in NYS Thruway tolls), with a 100% credit available for farm vehicles. (Part T)
- Permit hotel room remarketers to claim an exemption from New York State sales tax and New York City hotel room occupancy tax for their purchases of hotel room occupancies that in turn are supplied to the remarketers’ customers. Currently, room remarketers must seek a credit or refund of the tax paid to the hotel operators. (Part X)
- Eliminate charitable contributions and activities as a factor in determining domicile for estate tax purposes (similar to the rule for State and City personal income tax purposes). (Part Y)
The deadline for enactment of the budget is April 1, 2016.