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A03152 Summary:

COSPNSRGottfried, O'Donnell, Colton, Glick, Walker, Reyes, Barron, Epstein
Amd 612, Tax L
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.
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A03152 Text:

                STATE OF NEW YORK
                               2021-2022 Regular Sessions
                   IN ASSEMBLY
                                    January 22, 2021
        Introduced by M. of A. KIM, GOTTFRIED, O'DONNELL, COLTON, GLICK, WALKER,
          REYES,  BARRON,  EPSTEIN -- 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
          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-one,  the  department shall conduct an annual review to
    18  determine the disparity between federal income  tax  rates  on  ordinary
    19  income  and  federal  income  tax rates on capital gains, as well as the
    20  types of income taxed at capital gains  rates,  and  shall  publish  its
    21  findings.  For  taxable  years commencing on or after January first, two
    22  thousand twenty-two, there is imposed a surcharge  on  the  share  of  a
    23  taxpayer's New York taxable income that is taxed at preferential federal
    24  capital  gains  rates  in  an amount equal to the difference between the
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 3152                             2
     1  federal ordinary income tax rate and the federal capital gains tax  rate
     2  for  such  taxpayer,  based on the brackets in section 1 of the internal
     3  revenue code.  The surcharge shall be in addition to any other tax,  fee
     4  or surcharge for which the taxpayer is liable.
     5    (b)  Each  taxpayer  subject to the surcharge pursuant to subparagraph
     6  (a) of this paragraph shall file a return with the  department  in  such
     7  form  and  containing  such information as the department may prescribe.
     8  Such return shall accurately set forth the amount of the net gain calcu-
     9  lated pursuant to subparagraph (a) of this paragraph for  the  preceding
    10  taxable  year  and  the amount of the taxpayer's surcharge liability for
    11  such year.  A person required to file a return  shall,  without  assess-
    12  ment,  notice or demand, pay any surcharge due thereon to the department
    13  on or before the date specified in state law, determined without  regard
    14  to any extension of time for filing the return.
    15    (c)  If  any  person fails to pay the amount of the surcharge reported
    16  due on a return within the time specified,  there  shall  be  imposed  a
    17  penalty  equal  to  twenty  percent  of such amount due and unpaid. Such
    18  amount shall bear interest at the rate of two percent per month or frac-
    19  tion thereof, from the due date of such  surcharge  until  the  date  of
    20  payment.
    21    (d)  The  department  may adopt rules and regulations to implement the
    22  provisions of this section.
    23    (e) At the close of each fiscal year the comptroller is authorized  to
    24  record  as  revenue  for  such  fiscal  year the amount of the surcharge
    25  imposed under the provisions of this paragraph that is received  by  the
    26  department.
    27    § 3. This act shall take effect immediately.
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