Amd §§208, 612 & 1503, Tax L; amd §§11-602, 11-652 & 11-1712, NYC Ad Cd
Relates to treatment of gains from qualified opportunity zones in calculating taxable income; removes exclusion of gains on property in qualified opportunity zones in calculation of income.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2170B
SPONSOR: Dinowitz (MS) TITLE OF BILL:
An act to amend the tax law and the administrative code of the city of
New York, in relation to treatment of gains from qualified opportunity
zones in calculating taxable income
PURPOSE:
To fully decouple NYS and NYC from the federal Opportunity Zone tax
code.
SUMMARY OF PROVISIONS:
Section one amends paragraph (b) of subdivision 9 of section 208 of the
tax law to add a new paragraph 28 to include that "entire net income"
shall be determined without the exclusion, deduction or credit of the
amount of gain excluded from federal gross income for the taxable year
by subparagraph (c) of paragraph (1) of subsection (a) of section
1400Z-2 of the internal revenue code.
Section two amends subdivision 9 of section 208 of the tax law to add a
new paragraph (u) which states that for tax years beginning on or after
January 1, 2024, upon the sale or exchange of property with respect to
which the taxpayer has made the election under subparagraph (c) of para-
graph (1) of subsection (a) of section 1400Z-2 of the internal revenue
code, the basis of such property under this article shall be determined
as if the taxpayer had not made such election.
Section three amends subsection (b) of section 612 of the tax law to add
a new paragraph 44 to include that there shall be added to federal
adjusted gross income the amount of gain excluded from federal gross
income for the taxable year by subparagraph (c) of paragraph (1) of
subsection (a) of section 1400Z-2 of the internal revenue code.
Section four amends section 612 of the tax law to add a new subsection
(y) which states that for tax years beginning on or after January 1,
2024, upon the sale or exchange of property with respect to which the
taxpayer has made the election under subparagraph (c) of paragraph (1)
of subsection (a) of section 1400Z-2 of the internal revenue code, the
basis of such property under this article shall be determined as if the
taxpayer had not made such election.
Section five amends paragraph 2 of subdivision (b) of section 1503 of
the tax law to add a new subparagraph (AA) to include that "entire net
income" shall be determined without the exclusion, deduction or credit
of the amount of gain excluded from federal gross income for the taxable
year by subparagraph (c) of paragraph (1) of subsection (a) of section
1400Z-2 of the internal revenue code.
Section six amends section 1503 of the tax law to add a new subdivision
(d) which states that for tax years beginning on or after January 1,
2024, upon the sale or exchange of property with respect to which the
taxpayer has made the election under subparagraph (c) of paragraph (1)
of subsection (a)'of section 1400Z-2 of the internal revenue code, the
basis of such property under this article shall be determined as if the
taxpayer had not made such election.
Section seven amends paragraph (b) of subdivision 8 of section 11-602 of
the administrative code of the city of New York to add a new paragraph
23 to include that "entire net income" shall be determined without the
exclusion, deduction or credit of the amount of gain excluded from
federal gross income for the taxable year by subparagraph (c) of para-
graph (1) of subsection (a) of section 1400Z-2 of the internal revenue
code.
Section eight amends section 11-602 of the administrative code of the
city of New York to add a new subdivision 11 which states that for tax
years beginning on or after January 1, 2024, upon the sale or exchange
of property with respect to which the taxpayer has made the election
under subparagraph (c) of paragraph (1) of subsection (a) of section
1400Z-2 of the internal revenue code, the basis o f such property under
this article shall be determined as if the taxpayer had not made such
election.
Section nine paragraph (b) of subdivision 8 of section 11-652 of the
administrative code of the city of New York to add a new subparagraph 24
to include that "entire net income" shall not include the amount of gain
excluded from federal gross income for the taxable year by subparagraph
(c) of paragraph (1) of subsection (a) of section 1400Z-2 of the inter-
nal revenue code.
Section ten amends subdivision 8 of section 11-652 of the administrative
code of the city of New York to add a new paragraph (Li) which states
that for tax years beginning on or after January 1, 2024, upon the sale
or exchange of property with respect to which the taxpayer has made the
election under subparagraph (c) of paragraph (1) of subsection (a) of
section 1400Z-2 of the internal revenue code, the basis of such property
under this article shall be determined as if the taxpayer had not made
such election.
Section eleven amends subdivision (b) of section 11-1712 of the adminis-
trative code of the city of New York to add a new paragraph 40 to
include that there shall be added to federal adjusted gross income the
amount of gain excluded from federal gross income for the taxable year
by subparagraph (c) of paragraph (1) of subsection (a) of section
1400Z-2 of the internal revenue code.
Section twelve amends section 11-1712 of the administrative code of the
city of New York to add a new subdivision (w) which states that for tax
years beginning on or after January 1, 2024, upon the sale or exchange
of property with respect to which the taxpayer has made the election
under subparagraph (c) of paragraph (1) of subsection (a) of section
1400Z-2 of the internal revenue code, the basis of such property under
this article shall be determined as if the taxpayer had not made such
election.
Section thirteen sets the effective date.
JUSTIFICATION:
The FY21 New York State Budget partially decoupled the NYS and NYC tax
laws from the federal Opportunity Zone program, which will save the
state hundreds of millions of dollars. However, it is imperative that
the Exclusion (10 year) Benefit also be decoupled. Although this benefit
has no fiscal to the State for several years, it is imperative that we
fully decouple the program from our state's tax laws now.
PRIOR LEGISLATIVE HISTORY:
2023: Passed Senate; Died in Ways & Means (Assembly)
2022: Passed Senate; Died in Ways & Means (Assembly)
2021: Died in Budget & Revenue; Died in Ways & Means (Assembly)
FISCAL IMPLICATIONS:
The bill will prevent a loss in tax revenue to the state.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2024.
STATE OF NEW YORK
________________________________________________________________________
2170--B
2023-2024 Regular Sessions
IN ASSEMBLY
January 23, 2023
___________
Introduced by M. of A. DINOWITZ, THIELE, REYES, MITAYNES, L. ROSENTHAL,
GALLAGHER, STECK, GLICK, CARROLL, FAHY, KELLES, MAMDANI, KIM, BURGOS,
SEAWRIGHT, CUNNINGHAM, RAGA, CRUZ, WALLACE, OTIS, SOLAGES, SHRESTHA,
HEVESI, SEPTIMO, PAULIN, SHIMSKY, EPSTEIN, BURDICK, O'DONNELL,
FORREST, LEVENBERG, GONZALEZ-ROJAS, ANDERSON, BORES, STIRPE, ARDILA --
Multi-Sponsored by -- M. of A. SIMON -- read once and referred to the
Committee on Ways and Means -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
recommitted to the Committee on Ways and Means in accordance with
Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the tax law and the administrative code of the city of
New York, in relation to treatment of gains from qualified opportunity
zones in calculating taxable income
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (b) of subdivision 9 of section 208 of the tax
2 law is amended by adding a new subparagraph 28 to read as follows:
3 (28) the amount of gain excluded from federal gross income for the
4 taxable year by subparagraph (C) of paragraph (1) of subsection (a) of
5 section 1400Z-2 of the internal revenue code.
6 § 2. Subdivision 9 of section 208 of the tax law is amended by adding
7 a new paragraph (u) to read as follows:
8 (u) For tax years beginning on or after January first, two thousand
9 twenty-four, upon the sale or exchange of property with respect to which
10 the taxpayer has made the election under subparagraph (C) of paragraph
11 (1) of subsection (a) of section 1400Z-2 of the internal revenue code,
12 the basis of such property under this article shall be determined as if
13 the taxpayer had not made such election.
14 § 3. Subsection (b) of section 612 of the tax law is amended by adding
15 a new paragraph 44 to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01221-05-4
A. 2170--B 2
1 (44) the amount of gain excluded from federal gross income for the
2 taxable year by subparagraph (C) of paragraph (1) of subsection (a) of
3 section 1400Z-2 of the internal revenue code.
4 § 4. Section 612 of the tax law is amended by adding a new subsection
5 (y) to read as follows:
6 (y) Qualified opportunity zones. For tax years beginning on or after
7 January first, two thousand twenty-four, upon the sale or exchange of
8 property with respect to which the taxpayer has made the election under
9 subparagraph (C) of paragraph (1) of subsection (a) of section 1400Z-2
10 of the internal revenue code, the basis of such property under this
11 article shall be determined as if the taxpayer had not made such
12 election.
13 § 5. Paragraph 2 of subdivision (b) of section 1503 of the tax law is
14 amended by adding a new subparagraph (AA) to read as follows:
15 (AA) the amount of gain excluded from federal gross income for the
16 taxable year by subparagraph (C) of paragraph (1) of subsection (a) of
17 section 1400Z-2 of the internal revenue code.
18 § 6. Section 1503 of the tax law is amended by adding a new subdivi-
19 sion (d) to read as follows:
20 (d) For tax years beginning on or after January first, two thousand
21 twenty-four, upon the sale or exchange of property with respect to which
22 the taxpayer has made the election under subparagraph (C) of paragraph
23 (1) of subsection (a) of section 1400Z-2 of the internal revenue code,
24 the basis of such property under this article shall be determined as if
25 the taxpayer had not made such election.
26 § 7. Paragraph (b) of subdivision 8 of section 11-602 of the adminis-
27 trative code of the city of New York is amended by adding a new subpara-
28 graph 23 to read as follows:
29 (23) the amount of gain excluded from federal gross income for the
30 taxable year by subparagraph (C) of paragraph (1) of subsection (a) of
31 section 1400Z-2 of the internal revenue code.
32 § 8. Section 11-602 of the administrative code of the city of New York
33 is amended by adding a new subdivision 11 to read as follows:
34 11. For tax years beginning on or after January first, two thousand
35 twenty-four, upon the sale or exchange of property with respect to which
36 the taxpayer has made the election under subparagraph (C) of paragraph
37 (1) of subsection (a) of section 1400Z-2 of the internal revenue code,
38 the basis of such property under this article shall be determined as if
39 the taxpayer had not made such election.
40 § 9. Paragraph (b) of subdivision 8 of section 11-652 of the adminis-
41 trative code of the city of New York is amended by adding a new subpara-
42 graph 24 to read as follows:
43 (24) the amount of gain excluded from federal gross income for the
44 taxable year by subparagraph (C) of paragraph (1) of subsection (a) of
45 section 1400Z-2 of the internal revenue code.
46 § 10. Subdivision 8 of section 11-652 of the administrative code of
47 the city of New York is amended by adding a new paragraph (u) to read as
48 follows:
49 (u) For tax years beginning on or after January first, two thousand
50 twenty-four, upon the sale or exchange of property with respect to which
51 the taxpayer has made the election under subparagraph (C) of paragraph
52 (1) of subsection (a) of section 1400Z-2 of the internal revenue code,
53 the basis of such property under this article shall be determined as if
54 the taxpayer had not made such election.
A. 2170--B 3
1 § 11. Subdivision (b) of section 11-1712 of the administrative code of
2 the city of New York is amended by adding a new paragraph 40 to read as
3 follows:
4 (40) the amount of gain excluded from federal gross income for the
5 taxable year by subparagraph (C) of paragraph (1) of subsection (a) of
6 section 1400Z-2 of the internal revenue code.
7 § 12. Section 11-1712 of the administrative code of the city of New
8 York is amended by adding a new subdivision (w) to read as follows:
9 (w) For tax years beginning on or after January first, two thousand
10 twenty-four, upon the sale or exchange of property with respect to which
11 the taxpayer has made the election under subparagraph (C) of paragraph
12 (1) of subsection (a) of section 1400Z-2 of the internal revenue code,
13 the basis of such property under this article shall be determined as if
14 the taxpayer had not made such election.
15 § 13. This act shall take effect immediately and shall apply to taxa-
16 ble years beginning on or after January 1, 2024.
