STATE OF NEW YORK
________________________________________________________________________
4618--A
2017-2018 Regular Sessions
IN SENATE
February 22, 2017
___________
Introduced by Sen. HAMILTON -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations -- reported favorably from said committee and commit-
ted to the Committee on Finance -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to establishing business fran-
chise, personal income and insurance franchise tax credits for employ-
er provided or sponsored child care
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 44 to read
2 as follows:
3 § 44. Employer provided or sponsored child care. (a) Definitions. For
4 the purposes of this section, the following terms shall have the follow-
5 ing meanings:
6 (1) "Cost of operation" means any reasonable direct operational costs
7 incurred by an employer as a result of providing employer provided or
8 employer sponsored child care facilities; provided, however, that such
9 term shall exclude the cost of any property that is qualified child care
10 property.
11 (2) "Employer" means a taxpayer who is an employer upon whom taxes are
12 imposed pursuant to article nine-A, twenty-two or thirty-three of this
13 chapter.
14 (3) "Employer provided" means child care offered on the premises of an
15 employer.
16 (4) "Employer sponsored" means a contractual arrangement with a child
17 care facility that is paid for by an employer.
18 (5) "Premises of the employer" means a workplace premises of an
19 employer, within the state, providing the child care, or by one employer
20 providing the child care in the event that the child care property is
21 owned jointly or severally by such employer and one or more employers;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08283-03-7
S. 4618--A 2
1 provided, however, that if such workplace premises are impracticable or
2 otherwise unsuitable for the on-site location of a child care facility,
3 as determined by the office of children and family services, or in
4 cities of one million or more, the city department of health and mental
5 hygiene, such facility may be located within a reasonable distance of
6 the premises of the employer.
7 (6) "Qualified child care property" includes, but is not limited to,
8 amounts expended on land acquisition, improvements, buildings, and
9 building improvements and furniture, fixtures, and equipment, and means
10 all real property and tangible personal property purchased or acquired
11 on or after January first, two thousand eighteen, or which property is
12 first placed in service on or after January first, two thousand eigh-
13 teen, for use exclusively in the construction, expansion, improvement or
14 operation of an employer provided child care facility, but only if:
15 (A) the facility is licensed or commissioned by the office of children
16 services pursuant to section three hundred ninety of the social services
17 law, or in cities of one million or more, the city department of health
18 and mental hygiene pursuant to article forty-seven of the health code of
19 the city of New York.
20 (B) at least ninety-five percent of the children who use the facility
21 are children of employees of:
22 (i) the employer and other employers in the event that the child care
23 property is owned jointly or severally by the employer and one or more
24 other employers; or
25 (ii) a corporation that is a member of the taxpayer's "affiliated
26 group" within the meaning of section 1504(a) of the Internal Revenue
27 Code.
28 (C) the employer has not previously claimed any tax credit for the
29 cost of operation for such qualified child care property placed in
30 service prior to taxable years beginning on or after January first, two
31 thousand eighteen.
32 (b) Allowance of credit. A tax credit against the taxes imposed pursu-
33 ant to articles nine-A, twenty-two and thirty-three of this chapter
34 shall be granted to an employer who provides or sponsors child care for
35 employees. Such tax credit shall be in an amount equal to ten percent of
36 the cost of operation incurred by the employer, and such credit shall
37 not exceed ten thousand dollars less any amounts paid by employees
38 during the taxable year.
39 (c) Conditions and limitations. The tax credit allowed under subdivi-
40 sion (b) of this section shall be subject to the following conditions
41 and limitations:
42 (1) the employer shall certify to the department the names of the
43 employees, the name of the child care provider, the number of children
44 served by care subsidized via this tax credit, the number of children
45 receiving care who are excluded from the tax credit pursuant to para-
46 graph three of this subdivision, and such other information as may be
47 required by the department to ensure that credits are granted only to
48 employers who provide or sponsor approved child care in accordance with
49 this section;
50 (2) only in the case of employer sponsored care, the average credit
51 utilized per child shall not exceed the market rate per child estab-
52 lished by the office of children and family services for the social
53 services district within which child care is provided; and
54 (3) the employer shall not receive any tax credit for care provided to
55 the children of any employee whose annual household income exceeds two
56 hundred thousand dollars. The department shall establish rules and
S. 4618--A 3
1 accounting measures to ensure that any costs of care provided to employ-
2 ees with annual household incomes exceeding two hundred thousand dollars
3 are itemized by the employer and excluded from the tax credit provided
4 to employers pursuant to this section.
5 (d) Election. In addition to the tax credit provided under subdivision
6 (b) of this section, an employer shall be granted a credit against the
7 tax for the taxable year in which the employer first places in service
8 qualified child care property. The credit shall equal twenty percent of
9 the cost of all qualified child care property purchased or acquired by
10 the employer and first placed in service during a taxable year. Such
11 credit shall not exceed twenty thousand dollars.
12 (e) Carryover. The tax credit allowed under subdivision (d) of this
13 section shall be subject to the following conditions and limitations:
14 (1) any such credit claimed in any taxable year but not used in such
15 taxable year may be carried forward for three years from the close of
16 such taxable year. The sale, merger, acquisition or bankruptcy of any
17 employer shall not create new eligibility for the credit in any succeed-
18 ing taxpayer;
19 (2) in no event shall the amount of any such tax credit, including any
20 carryover of such credit from a prior taxable year, exceed fifty percent
21 of the employer's tax liability as determined without regard to any
22 other credits; and
23 (3) for every year in which an employer claims such credit, the
24 employer shall attach a schedule, whose form and structure shall be
25 established by the department, to the employer's tax return setting
26 forth the following information with respect to such tax credit:
27 (A) a description of the child care facility;
28 (B) the amount of qualified child care property acquired during the
29 taxable year and the cost of such property;
30 (C) the amount of tax credit claimed for the taxable year;
31 (D) the amount of qualified child care property acquired in prior
32 taxable years and the cost of such property;
33 (E) any tax credit utilized by the employer in prior taxable years;
34 (F) the amount of tax credit carried over from prior years;
35 (G) the amount of tax credit utilized by the employer in the current
36 taxable year;
37 (H) the amount of tax credit to be carried forward to subsequent tax
38 years; and
39 (I) a description of any recapture event occurring during the taxable
40 year, a calculation of the resulting reduction in tax credits allowable
41 for the recapture year and future taxable years, and a calculation of
42 the resulting increase in tax for the recapture year.
43 (f) Recapture.
44 (1) If the taxpayer disposes of the qualified child care property, or
45 if such property ceases to be a qualified child care property except
46 for:
47 (A) any transfer by reason of death;
48 (B) any transfer between spouses or incident to divorce;
49 (C) any transaction to which section 381(a) of the internal revenue
50 code applies;
51 (D) any change in the form of conducting the employer's trade or busi-
52 ness so long as the property is retained by such trade or business as
53 qualified child care property and the employer retains a substantial
54 interest in such trade or business; or
55 (E) any accident or casualty, the taxpayer's tax imposed by this arti-
56 cle for the taxable year in which such disposition or cessation occurs
S. 4618--A 4
1 shall be increased by the recapture portion of the credit allowed under
2 paragraph two of this subdivision for all prior taxable years.
3 (2) For purposes of paragraph one of this subdivision, the recapture
4 portion shall reduce the credit otherwise allowable under subdivision
5 (d) of this section, but shall not, at any point, reduce the tax credit
6 below zero. Any excess of the recapture amount shall result in an equiv-
7 alent increase in the tax imposed under this section.
8 (g) Rules. The commissioner shall promulgate any rules and regulations
9 necessary to implement and administer the provisions of this section.
10 (h) Cross-references. For the application of the credit provided in
11 this section, see the following provisions of this chapter:
12 (1) article 9-A: section 210-B, subdivision 28;
13 (2) article 22: section 606, subsection (ccc);
14 (3) article 33: section 1511, subdivision (dd).
15 § 2. Section 210-B of the tax law is amended by adding a new subdivi-
16 sion 28 to read as follows:
17 28. Employer provided or sponsored child care credit. (a) Allowance of
18 credit. A taxpayer will be allowed a credit, to be computed as provided
19 in section forty-four of this chapter, against the taxes imposed by this
20 article.
21 (b) Application of credit. The credit allowed under this subdivision
22 for any taxable year will not reduce the tax due for such year to less
23 than the amount prescribed in paragraph (d) of subdivision one of
24 section two hundred ten of this article. However, if the amount of cred-
25 it allowed under this subdivision for any taxable year reduces the tax
26 to such amount or if the taxpayer otherwise pays tax based on the fixed
27 dollar minimum amount, any amount of credit thus not deductible in such
28 taxable year will be treated as an overpayment of tax to be credited or
29 refunded in accordance with the provisions of section one thousand
30 eighty-six of this chapter. Provided, however, the provisions of
31 subsection (c) of section one thousand eighty-eight of this chapter
32 notwithstanding, no interest will be paid thereon.
33 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
34 of the tax law is amended by adding a new clause (xliv) to read as
35 follows:
36 (xliv) EmployerAmount of credit
37 provided or sponsoredunder subdivision
38 child care credittwenty-eight of
39 under subsectionsection two hundred
40 (ccc)ten-B
41 § 4. Section 606 of the tax law is amended by adding a new subsection
42 (ccc) to read as follows:
43 (ccc) Employer provided or sponsored child care credit. (1) Allowance
44 of credit. A taxpayer shall be allowed a credit, to be computed as
45 provided in section forty-four of this chapter, against the tax imposed
46 by this article.
47 (2) Application of credit. If the amount of the credit allowed under
48 this subsection for any taxable year exceeds the taxpayer's tax for such
49 year, the excess will be treated as an overpayment of tax to be credited
50 or refunded in accordance with the provisions of section six hundred
51 eighty-six of this article, provided, however, that no interest will be
52 paid thereon.
53 § 5. Section 1511 of the tax law is amended by adding a new subdivi-
54 sion (dd) to read as follows:
S. 4618--A 5
1 (dd) Employer provided or sponsored child care credit. (1) Allowance
2 of credit. A taxpayer will be allowed a credit, to be computed as
3 provided in section forty-four of this chapter, against the taxes
4 imposed by this article.
5 (2) Application of credit. The credit allowed under this subdivision
6 for any taxable year will not reduce the tax due for such year to less
7 than the minimum tax fixed by this article. However, if the amount of
8 credit allowed under this subdivision for any taxable year reduces the
9 tax to such amount, any amount of credit thus not deductible in such
10 taxable year will be treated as an overpayment of tax to be credited or
11 refunded in accordance with the provisions of section one thousand
12 eighty-six of this chapter. Provided, however, the provisions of
13 subsection (c) of section one thousand eighty-eight of this chapter
14 notwithstanding, no interest will be paid thereon.
15 § 6. This act shall take effect immediately.