STATE OF NEW YORK
________________________________________________________________________
5644
2025-2026 Regular Sessions
IN SENATE
February 26, 2025
___________
Introduced by Sen. BAILEY -- read twice and ordered printed, and when
printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to establishing a MWBE or
SDVOBE subcontractor tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 210-B of the tax law is amended by adding a new
2 subdivision 61 to read as follows:
3 61. MWBE or SDVOBE subcontractor tax credit. (a) Allowance of credit.
4 For taxable years beginning on or after January first, two thousand
5 twenty-six, an eligible taxpayer shall be allowed a credit, to be
6 computed as provided in this subdivision, against the tax imposed by
7 this article, for awarding a professional services, trades, or supplier
8 subcontract to a qualified subcontractor in furtherance of a state
9 contract. The taxpayer may claim the credit in the year in which payment
10 is made by the eligible taxpayer to the qualified subcontractor for the
11 performance of such subcontract. If the taxpayer claims the credit
12 allowed under this section, the taxpayer may not use the awarding of a
13 subcontract to a qualified subcontractor that is the basis for this
14 credit in the basis of any other credit allowed under this article.
15 (b) Definitions. (i) The term "qualified subcontractor" shall mean a
16 minority or woman-owned business enterprise certified pursuant to arti-
17 cle fifteen-A of the executive law or a service-disabled veteran-owned
18 business enterprise certified pursuant to article three of the veterans'
19 services law that maintains their headquarters within New York state.
20 (ii) The term "eligible taxpayer" shall mean a contractor that awards
21 a subcontract to a qualifying subcontractor in furtherance of a state
22 contract.
23 (iii) The term "state contract" shall mean a contract for the purchase
24 by the state of goods, property, or services or for the construction of
25 any building or structure for the state, which contract is executed by
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10258-01-5
S. 5644 2
1 any department, board, bureau, commission, or agency of the state, or by
2 any officer, official, employee, or agent thereof.
3 (c) Contractor prohibition. A contractor shall not discharge a
4 contract with a subcontractor and hire a qualifying subcontractor solely
5 for the purpose of qualifying for this credit unless the previous
6 contractor has been removed for reasons not under the control of the
7 contractor.
8 (d) Amount of credit. The amount of credit shall be thirty-five
9 percent of the total amount of payments made by the eligible taxpayer to
10 a qualifying subcontractor in the taxable year in which such credit is
11 claimed.
12 (e) Carryovers. The credit allowed under this subdivision for any
13 taxable year shall not reduce the tax due for such year to less than the
14 amount prescribed in paragraph (d) of subdivision one of section two
15 hundred ten of this article. However, if the amount of credit allowable
16 under this subdivision for any taxable year reduces the tax to such
17 amount or if the taxpayer otherwise pays tax based on the fixed dollar
18 minimum amount, any amount of credit not deductible in such taxable year
19 may be carried over to the following three years and may be deducted
20 from the taxpayer's tax for such year or years.
21 § 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
22 of the tax law is amended by adding a new clause (lii) to read as
23 follows:
24 (lii) MWBE or SDVOBEAmount of credit under subdivision
25 subcontractor taxsixty-one of section two hundred
26 credit under subsection (qqq)ten-B
27 § 3. Section 606 of the tax law is amended by adding a new subsection
28 (qqq) to read as follows:
29 (qqq) MWBE or SDVOBE subcontractor tax credit. (1) Allowance of cred-
30 it. For taxable years beginning on or after January first, two thousand
31 twenty-six, an eligible taxpayer shall be allowed a credit, to be
32 computed as provided in this section, against the tax imposed by this
33 article, for awarding a professional services, trades, or supplier
34 subcontract to a qualified subcontractor in furtherance of a state
35 contract. The taxpayer may claim the credit in the year in which payment
36 is made by the eligible taxpayer to the qualified subcontractor for the
37 performance of such subcontract. If the taxpayer claims the credit
38 allowed under this subsection, the taxpayer may not use the awarding of
39 a subcontract to a qualified subcontractor that is the basis for this
40 credit in the basis of any other credit allowed under this article.
41 (2) Definitions. (A) The term "qualified subcontractor" shall mean a
42 minority or woman-owned business enterprise certified pursuant to arti-
43 cle fifteen-A of the executive law or a service-disabled veteran-owned
44 business enterprise certified pursuant to article three of the veterans'
45 services law.
46 (B) The term "eligible taxpayer" shall mean a contractor that awards a
47 subcontract to a qualifying subcontractor in furtherance of a state
48 contract.
49 (C) The term "state contract" shall mean a contract for the purchase
50 by the state of goods, property, or services or for the construction of
51 any building or structure for the state, which contract is executed by
52 any department, board, bureau, commission, or agency of the state, or by
53 any officer, official, employee, or agent thereof or on New York state
54 capital infrastructure projects where a public benefit is derived
55 through license or utilization of state-owned lands.
S. 5644 3
1 (3) Contractor prohibition. A contractor shall not discharge a
2 contract with a subcontractor and hire a qualifying subcontractor solely
3 for the purpose of qualifying for this credit.
4 (4) Amount of credit. The amount of credit shall be thirty-five
5 percent of the total amount of payments made by the eligible taxpayer to
6 a qualifying subcontractor in the taxable year in which such credit is
7 claimed.
8 (5) Application of credit. If the amount of the credit allowable under
9 this subsection for any taxable year exceeds the taxpayer's tax for such
10 year, the excess shall be treated as an overpayment of tax to be credit-
11 ed or refunded as provided in section six hundred eighty-six of this
12 article, provided, however, that no interest shall be paid thereon.
13 § 4. This act shall take effect immediately.
