On January 15, 2019, New York State Governor Andrew M. Cuomo released his 2019-20 Executive Budget. It contains several potentially important tax proposals, including the following:

Personal Income Tax

  • Extends top personal income tax rates for five years. Extends the top tax bracket under the personal income tax, which is imposed at a rate of 8.82%, for an additional five years through 2024. The top tax bracket was originally set to expire after 2019.

Corporate Income Tax

  • Provides a sourcing rule for GILTI apportionment. Provides for the inclusion in the receipts factor of the net amount of global intangible low-taxed income (“GILTI”) (net of the deduction allowed federally under IRC § 250(a)(1)(B)(i)) included in business income for both Article 9-A and New York City business corporation tax purposes. Net GILTI receipts are included in the denominator of the apportionment fraction, but not in the numerator of the apportionment fraction.
  • Decouples from federal basis in determining whether a manufacturer is a qualified New York State manufacturer. Decouples New York State from the federal basis for property, and substitutes New York State basis, to determine whether a manufacturer that has property both inside and outside of New York State has the requisite $1 million of property in New York State and is therefore a qualified New York manufacturer subject to reduced tax rates (including a zero rate on business income). If enacted, the provision would be applicable to tax years beginning on or after January 1, 2018.
  • Taxes the carried interest income of hedge fund and private equity investors. Taxes the carried interest income of hedge fund and private equity investors as ordinary earned income. This would recharacterize carried interests earned by fund managers as income earned from a trade or business for New York State purposes, and impose a 17% “fairness fee” on that carried interest. The provision would take effect only if Connecticut, Massachusetts, New Jersey, and Pennsylvania enact legislation having substantially the same effect. A similar carried interest proposal was included in the 2018-19 Executive Budget, but was not enacted.

Sales Tax

  • Requires marketplace providers to collect sales tax. Requires a “marketplace provider” to collect sales tax on sales of tangible personal property that it facilitates. A marketplace provider is defined as a person that facilitates the sale of tangible personal property by a marketplace seller by providing the forum, physical or virtual, where the transaction occurs, and collects the purchase price paid by the customer. If enacted, the new law would apply to sales made on or after September 1, 2019. Currently, marketplace providers are not “persons required to collect tax” under the sales tax law. A similar marketplace provider proposal was included in the 2018-19 Executive Budget, but was not enacted.
  • Extends for two years the sales tax exemption for financial institutions for transactions required to be made under the Dodd-Frank Protection Act. Extends the sales tax exemption provided to financial institutions that are required under the Dodd-Frank Protection Act to create subsidiaries and then transfer tangible personal property or services to those subsidiaries an additional two years through June 30, 2021. The exemption is currently set to expire on June 30, 2019.


  • Enacts the Cannabis Regulation and Taxation Act. Creates and amends existing laws to legalize adult-use cannabis and creates a regulatory structure to oversee the sale and taxation of cannabis. It would add a new Article 20-C to the Tax Law to impose a tax on the cultivation of cannabis, and impose two separate taxes on the sale of cannabis by a wholesaler to a retail dispensary.