NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6179
SPONSOR: DiPietro TITLE OF BILL:
An act to amend the tax law, in relation to placing a limit upon the
personal income tax by the state of New York
PURPOSE OR GENERAL IDEA OF BILL:
This bill imposes a cap on the levy collected by the personal income tax
by New York State. In the event the cap is exceeded, rebate checks will
be mailed to all New York taxpayers. This bill seeks to prevent any
future tax levy increases over a certain allowable growth factor while
making New York's income tax more progressive over time.
SUMMARY OF PROVISIONS:
Section 1 establishes a cap on the levy of the personal income tax and
establishes a rebate check program if receipts exceed this levy cap.
Section 2 states that this act shall take effect immediately.
DIFFER-
ENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
JUSTIFICATION:
In New York, income taxes account for more revenue than any other type
of tax. At the same time, the income tax is one of the most burdensome
taxes. It takes money directly out of consumers' paychecks, disincentiv-
izing work and reducing consumption.
The average New Yorker pays far too much in income taxes. It is no acci-
dent that New York State has lagged in job .creation and been a leader
in out-of-state migration while zero income tax states like Texas. and
Florida have seen an influx of both businesses and individuals. This
bill seeks to prevent further increases to New York State's income taxes
by capping the total income tax levy at the 2013-14 fiscal year amounts
plus a growth factor.
Importantly, this growth factor is a value that is historically smaller
than the increase in total income from state taxpayers. This will result
in income taxes consuming less and less as a percentage of the New York
economy every year. With incomes rising faster than the rate of
inflation, this bill will provide the impetus for government to reduce
tax rates every year in order to stay under the cap.
If, however, no agreements to reduce tax rates are made during a given
year, this bill automatically makes the income tax code more progressive
by providing a rebate to each taxpayer of an equal amount, up to the
amount they paid in taxes, for the total amount of income tax revenue in
excess of the cap. If a taxpayer making $40,000 receives.a $500 tax
rebate, a taxpayer making $40,000,000 would receive the same $500 tax
rebate. In the absence of other reform, this bill does not create a tax
cut for just the wealthy or just the middle class, but instead of an
equal tax rebate for all taxpayers. This bill will send the signal that
New York is committed to controlling the growth of its income tax and
will not use reform of the tax code to disguise a net tax increase.
Small businesses, many of which are subject to the income tax, need
certainty to make intelligent investments in personnel and equipment.
This bill will give them confidence that New York will not change the
economic rules on small businesses year to year.
This bill will also ensure that all New Yorkers will share in the pros-
perity as incomes grow. As the number of individuals making high,
incomes increases, all taxpayers will see their yearly rebate checks
grow.
PRIOR LEGISLATIVE HISTORY:
A. 10283:2017-2018
A5382 S 863 2019-2020
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
none
EFFECTIVE DATE:
This act shall take effect immediately
STATE OF NEW YORK
________________________________________________________________________
6179
2023-2024 Regular Sessions
IN ASSEMBLY
April 3, 2023
___________
Introduced by M. of A. DiPIETRO -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, in relation to placing a limit upon the
personal income tax by the state of New York
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new section 608 to read
2 as follows:
3 § 608. Limit upon the personal income tax levy by the state of New
4 York.
5 1. Unless otherwise provided by law, the amount of personal income
6 taxes that may be levied by or on behalf of the state of New York shall
7 not exceed the tax levy limit established pursuant to this section.
8 2. When used in this section:
9 (a) "Allowable levy growth factor" for all fiscal years that begin
10 after two thousand twenty-three shall be the higher of: (i) one and two
11 one-hundredths; or (ii) the sum of ninety-nine one-hundredths plus the
12 inflation factor.
13 (b) "Available carryover" means the amount by which the tax levy for
14 the prior fiscal year was below the tax levy limit for such fiscal year,
15 if any, but no more than an amount that equals one and one-half percent
16 of the tax levy limit for such fiscal year.
17 (c) "Coming fiscal year" means the fiscal year of the state government
18 for which a tax levy limit shall be determined pursuant to this section.
19 (d) "Inflation factor" means the quotient of: (i) the average of the
20 national consumer price indexes determined by the United States depart-
21 ment of labor for the twelve-month period ending six months prior to the
22 start of the coming fiscal year minus the average of the national
23 consumer price indexes determined by the United States department of
24 labor for the twelve-month period ending six months prior to the start
25 of the prior fiscal year, divided by: (ii) the average of the national
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07581-01-3
A. 6179 2
1 consumer price indexes determined by the United States department of
2 labor for the twelve-month period ending six months prior to the start
3 of the prior fiscal year, with the result expressed as a decimal to four
4 places.
5 (e) "Prior fiscal year" means the fiscal year of the state immediately
6 preceding the coming fiscal year.
7 (f) "Tax levy limit" means the amount of taxes authorized to be levied
8 by or on behalf of the state pursuant to this section for fiscal years
9 beginning after two thousand twenty-three.
10 (g) "Tax" or "taxes" means personal income taxes levied by or on
11 behalf of the state.
12 3. (a) Subject to the provisions of subdivision five of this section,
13 beginning with the fiscal year that begins after two thousand twenty-
14 three, the state shall not adopt a budget that requires a tax levy that
15 is greater than the tax levy limit for the coming fiscal year.
16 (b) The state shall calculate the tax levy limit applicable to the
17 coming fiscal year which shall be determined as follows:
18 (i) Ascertain the total amount of taxes levied for the prior fiscal
19 year.
20 (ii) Multiply the result by the allowable levy growth factor.
21 (iii) Add the available carryover, if any.
22 4. In the event the state's actual tax levy for a given fiscal year
23 exceeds the tax levy limit by more than one percent of the tax levy
24 limit, the state shall rebate the total amount that the actual tax levy
25 exceeds the tax levy limit so that each individual filer receives a
26 rebate of equal amount rounded down to the nearest cent, provided that
27 no individual shall receive a rebate of a greater amount than the income
28 taxes paid during the same fiscal year. These rebates shall be mailed
29 in the form of checks payable to the filing individual no later than the
30 first of September following the end of each fiscal year.
31 5. In the event the state's actual tax levy for a given fiscal year
32 exceeds the tax levy limit as established pursuant to this section by
33 less than one percent of the tax levy limit, the state shall place the
34 excess amount of the levy in reserve in accordance with such require-
35 ments as the state comptroller may prescribe, and shall use such funds
36 and any interest earned thereon to offset the tax levy for the ensuing
37 fiscal year.
38 § 2. This act shall take effect immediately.
