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A11051 Summary:

BILL NOA11051
 
SAME ASSAME AS S08831
 
SPONSORRules (Paulin)
 
COSPNSRSolages, Carroll, Simon, Dinowitz
 
MLTSPNSR
 
Amd 292, Tax L
 
Establishes that any income included pursuant to section 512(a)(7) of the internal revenue code shall be subtracted from federal unrelated business taxable income.
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A11051 Actions:

BILL NOA11051
 
06/01/2018referred to ways and means
06/13/2018reported referred to rules
06/14/2018reported
06/14/2018rules report cal.238
06/14/2018ordered to third reading rules cal.238
06/18/2018REFERRED TO RULES
06/18/2018passed assembly
06/18/2018delivered to senate
06/18/2018REFERRED TO RULES
06/19/2018SUBSTITUTED FOR S8831
06/19/20183RD READING CAL.1887
06/19/2018PASSED SENATE
06/19/2018RETURNED TO ASSEMBLY
11/26/2018delivered to governor
12/07/2018signed chap.369
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A11051 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A11051
 
SPONSOR: Rules (Paulin)
  TITLE OF BILL: An act to amend the tax law, in relation to unrelated business taxable income of a taxpayer   PURPOSE: To correct an unintended new tax for unrelated business taxable income which was inadvertently created by recent changes made in the Federal Internal Revenue Code.   SUMMARY OF PROVISIONS: Section 1 amends paragraph 4 of subdivision (a) of section 292 of the Tax Law to subtract from the federal unrelated business taxable income any amount which is included therein solely by reason of internal Reven- ue Code section 512(a)(7). Section 2 effective date.   EXISTING LAW: Tax Law 292(a) currently provides for an exclusion of income derived from the application of IRC 501(m)(2)(A).   JUSTIFICATION: Substantial amendments were made to the Internal Revenue Code which became effective on January 1, 2018. One of these changes was to provide for an unrelated business tax (UBIT) on any amount a non-profit employer has paid or incurred for commuter benefits such as transit or parking. New York law currently imposes a state tax of 9% of UBIT whenever feder- al law does. As a result, without this legislation, New York will auto- matically follow the new federal statute, imposing this additional 9% tax on not-for-profits. This unintended new tax could divert millions of dollars from the nonprofit sector each year. This bill excludes the payments for transportation costs such as mass transit, commuter and parking fees paid to employees from this tax imposition. The revenue that will be diverted to the state from nonprofits was unintentional, and these funds were not considered in the SFY 2018-19 Budget. The work performed by not-for-profit employees, and the compensation paid to them, including transportation benefits, certainly advances the purposes and mission of the not-for-profit. Should this new tax be enforced, it is certain that not-for profits will have fewer funds to perform their mission serving New Yorkers across the state, and some will undoubtedly be forced to close.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: None. The tax that is addressed in this bill was not contemplated in the State Budget process.   EFFECTIVE DATE: Immediately, and shall apply to taxable years beginning on and after January 1, 2018.
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