Imposes a surcharge on taxpayers in an amount equal to the disparity between federal taxation rates that apply to income derived from labor and income derived from capital gains.
STATE OF NEW YORK
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10120
IN ASSEMBLY
March 12, 2020
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Introduced by M. of A. KIM -- read once and referred to the Committee on
Ways and Means
AN ACT to amend the tax law, in relation to the taxation of investment
income
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative intent. The legislature finds that the state of
2 New York taxes income derived from capital gains at the same rate as
3 income derived from labor and, like most other states, does not offer
4 preferential tax rates for income derived from capital gains, as
5 compared to the tax rates for income derived from labor. Whereas the
6 federal government currently taxes long term capital gains at a rate
7 that is substantially lower than the rate of taxation that applies to
8 income from labor. The people of the state of New York wish to correct
9 for the imbalance of taxation rates on long term capital gains and labor
10 at the federal level unless and until the federal government equalizes
11 these rates. It is the intent of the legislature that this act amends
12 New York's tax law to provide needed revenue through the taxation of
13 investment income from wealthy individuals.
14 § 2. Subsection (c) of section 612 of the tax law is amended by adding
15 a new paragraph 43 to read as follows:
16 (43) (a) For taxable years commencing on or after January first, two
17 thousand twenty, the department shall conduct an annual review to deter-
18 mine the disparity between federal income tax rates on ordinary income
19 and federal income tax rates on capital gains, as well as the types of
20 income taxed at capital gains rates, and shall publish its findings. For
21 taxable years commencing on or after January first, two thousand twen-
22 ty-one, there is imposed a surcharge on the share of a taxpayer's New
23 York taxable income that is taxed at preferential federal capital gains
24 rates in an amount equal to the difference between the federal ordinary
25 income tax rate and the federal capital gains tax rate for such taxpay-
26 er, based on the brackets in section 1 of the internal revenue code.
27 The surcharge shall be in addition to any other tax, fee or surcharge
28 for which the taxpayer is liable.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15388-02-0
A. 10120 2
1 (b) Each taxpayer subject to the surcharge pursuant to subparagraph
2 (a) of this paragraph shall file a return with the department in such
3 form and containing such information as the department may prescribe.
4 Such return shall accurately set forth the amount of the net gain calcu-
5 lated pursuant to subparagraph (a) of this paragraph for the preceding
6 taxable year and the amount of the taxpayer's surcharge liability for
7 such year. A person required to file a return shall, without assess-
8 ment, notice or demand, pay any surcharge due thereon to the department
9 on or before the date specified in state law, determined without regard
10 to any extension of time for filing the return.
11 (c) If any person fails to pay the amount of the surcharge reported
12 due on a return within the time specified, there shall be imposed a
13 penalty equal to twenty percent of such amount due and unpaid. Such
14 amount shall bear interest at the rate of two percent per month or frac-
15 tion thereof, from the due date of such surcharge until the date of
16 payment.
17 (d) The department may adopt rules and regulations to implement the
18 provisions of this section.
19 (e) At the close of each fiscal year the comptroller is authorized to
20 record as revenue for such fiscal year the amount of the surcharge
21 imposed under the provisions of this paragraph that is received by the
22 department.
23 § 3. This act shall take effect immediately.