NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2385
SPONSOR: Paulin TITLE OF BILL:
An act to amend part EEE of chapter 59 of the laws of 2018, relating to
an online application system for taxpayers to submit claims for
reimbursements of certain payments, in relation to state reimbursements
for interest on federal tax liability resulting from real property tax
law changes enacted in 2018
PURPOSE:
To ensure that New York State property taxpayers do not bear the risk,
no matter how small, of interest charges on federal tax liabilities
resulting from real property tax changes enacted by the State of New
York in 2018.
SUMMARY OF PROVISIONS:
Section one of the bill expands to real property law changes (in partic-
ular the charitable deduction program that provides credits against
local property taxes) the new state program that has the Department of
Taxation and Finance reimburse New Yorkers' payments of interest on
underpayments of federal tax liability that arise from the taxpayer's
reliance on amendments to the tax law enacted in 2018. The interest
liability coverage would begin for tax year 2018, the first year in
which the property tax credits are available.
Section two sets the effective date.
JUSTIFICATION:
As part of the 2018 state budget, New York established the ability for
New Yorkers to make charitable contributions to New York State as well
as to local governments and school districts, which would entitle the
donors to, respectively, state income tax credits or local property tax
credits. The legislation established that New York State would cover any
interest charged by the federal government as a result of state tax law
changes in 2018. However, this provision seemingly does not cover any
interest charged to New Yorkers by the federal government in connection
with the charitable funds established by local governments and school
districts. This bill addresses that omission.
IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS:
None.
EFFECT ON FINES, TERMS OF IMPRISONMENT OR OTHER PENAL SANCTIONS:
None.
LEGISLATIVE HISTORY:
A.6018, 2021 and 2022, referred to ways and means/ S.1010, 2021 and
2022, referred to finance
A.115, 2019 and 2020, referred to ways and means/ S.6878 Gaughran, 2019
and 2020, referred to finance
2018: A.10543 - Referred to Ways and Means
FISCAL IMPLICATIONS:
Expected to be none to the state, given the confidence we have in the
ability of New Yorkers to successfully claim federal tax deductions for
these donations to local governments and schools. Positive fiscal impli-
cations to local governments and school districts to the extent this
interest guarantee encourages property taxpayers to make these charita-
ble contributions.
EFFECTIVE DATE:
This bill shall take effect immediately, and shall be deemed to have
been in full force on and after April 1, 2018.
