Requires the commissioner of taxation and finance to cooperate with investigations by certain committees of the United States Congress under certain circumstances.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7194A
SPONSOR: Buchwald TITLE OF BILL: An act to amend the tax law and the administrative
code of the city of New York, in relation to requiring the commissioner
of taxation and finance to cooperate with investigations by certain
committees of the United States Congress under certain circumstances
PURPOSE::
The purpose of this bill is to enable the New York State Commissioner of
Taxation and Finance to provide tax reports and returns to Congressional
committees requesting such information consistent with existing princi-
ples of federal law.
SUMMARY OF SPECIFIC PROVISIONS::
Section 1 of the bill names the bill the "Tax Returns Release Under
Specific Terms Act" (aka, the TRUST Act).
Section 2 of the bill amends section 697 of the Tax Law (Personal Income
Tax) to add a new subsection authorizing the Commissioner of the Depart-
ment of Taxation and Finance to share state income tax reports and
returns upon the written request of the Chairperson of the U.S. House
Ways & Means Committee, the U.S. Senate Finance Committee, and the Joint
Committee on Taxation.
The new subsection provides that such request must be accompanied by
certification that the tax returns have been requested for a specified
and legitimate legislative purpose, that the requesting committee has
made a written request to the U.S. Secretary of the Treasury for related
federal returns or return information and that the returns will be
treated by the requesting committee in a manner consistent with federal
law authorizing the same committees to request and receive federal
income tax returns from the U.S. Treasury. The bill also provides for
the redaction of a limited amount of highly personally sensitive infor-
mation like social security numbers and bank account numbers that is not
required for the Congressional committee to review the tax information
contained in the reports or returns.
Section 3 of the bill adds similar language to section 202 of the Tax
Law (Corporation Tax).
Section 4 of the bill adds similar language to section 211 of the Tax
Law (Franchise Tax on Business Corporations).
Section 5 of the bill adds similar language to section 314 of the Tax
Law (Tax on Petroleum Businesses).
Section 6 of the bill adds similar language to section 437 of the Tax
Law (Taxes on Alcoholic Beverages).
Section 7 of the bill adds similar language to section 491 of the Tax
Law (Excise Tax on the Sale of Medical Marijuana).
Section 8 of the bill adds similar language to section 499 of the Tax
Law (Excise Tax on the Sale of Opioids).
Section 9 of the bill adds similar language to section 514 of the Tax
Law (Highway Use Tax).
Section 10 of the bill adds similar language to section 994 of the Tax
Law (Estate Tax).
Section 11 of the bill adds similar language to section 1146 of the Tax
Law (Sales and Compensating Use Taxes).
Section 12 of the bill adds similar language to section 1287 of the Tax
Law (Tax on Medallion Taxicab Trips in the Metropolitan Commuter Trans-
portation District).
Section 13 of the bill adds similar language to section 1296 of the Tax
Law (State Assessment Fee on Transportation Network Prearranged Trips).
Section 14 of the bill adds similar language to section 1299-f of the
Tax Law (Congestion Surcharge).
Section 15 of the bill adds similar language to section 1418 of the Tax
Law (Real Estate Transfer Tax).
Section 16 of the bill adds similar language to section 1518 of the Tax
Law (Franchise Taxes on Insurance Corporations).
Section 17 of the bill adds similar language to section 1555 of the Tax
Law (Tax on Independently Procured Insurance).
Section 18 of the bill adds similar language to section 11-1797 of the
New York City Administrative Code (City Personal Income Tax on Resi-
dents).
Section 19 of the bill sets the effective date.
JUSTIFICATION::
Since 1924, federal tax law has allowed the U.S. House Ways & Means
Committee, the U.S. Senate Finance Committee, and the Joint Committee on
Taxation to obtain and inspect the federal income tax information of any
taxpayer via a written request to the U.S. Secretary of the Treasury or
his or her designee. (See Internal Revenue Code § 6103(f)). While feder-
al law provides a clear, unqualified right for the Congressional commit-
tees to request and receive such returns, a Congressional inquiry could
be aided or supplemented by New York state tax return information.
Currently, New York law provides no legal mechanism for the state to
assist a Congressional committee exercising its tax oversight function
pursuant to I.R.C. § 6103(f). New York's various tax privacy laws (e.g.,
Section 697(e) of the Tax Law) generally prohibit the New York State
Department of Taxation & Finance from sharing tax returns or tax return
information, unless there is an exception written into statute. Existing
New York law authorizes the Department to share state tax return infor-
mation with the U.S. Treasury Department and other states' tax depart-
ments for the purposes of tax-related investigations (see, e.g. Section
697(f) of the Tax Law). This legislation would extend similar authori-
zation to the Department for sharing state tax reports and returns with
the aforementioned Congressional committees.
This proposal authorizes the Commissioner of the Department of Taxation
and Finance to furnish state tax returns or return information upon
written request of the chairperson of the U.S: House Ways & Means
Committee, the U.S. Senate Finance Committee, or the Joint Committee on
Taxation. The Commissioner shall only share such information if the
written request certifies that (1) the returns or return information are
being requested for a specified and legitimate legislative purpose, (2)
the requesting committee has made a related request to the U.S. Treasury
Department pursuant to I.R.C. 6103(f), and (3) the returns and/or
return information will be treated consistent with federal law for the
purposes of inspection and/or disclosure by the committee. As with the
existing exceptions to the general tax privacy law, the discretion to
share the information ultimately rests with the Commissioner. The
Congressional tax-related committees play an important role in over-
sight of tax administration, tax policy, and the federal agencies
responsible for implementing laws within the committees' jurisdiction.
If those committees determine that New York State could provide informa-
tion helpful to the execution of those oversight duties, it makes sense
to establish a legal mechanism for the State to do so.
LEGISLATIVE HISTORY::
This is a new bill.
FISCAL IMPLICATIONS::
None
IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS:
None
EFFECT ON FINES, TERMS OF IMPRISONMENT OR OTHER PENAL SANCTIONS: None
EFFECTIVE DATE::
This act shall take effect immediately; provided, however, that: (a) the
amendments to section 491 of the tax law made by section seven of this
act shall not affect the repeal of such section and shall be deemed to
be repealed therewith; and (b) the amendments to section 499 of the tax
law made by section eight of this act shall take effect on the same date
and in the same manner as section 1 of part xx of chapter 59 of the laws
of 2019 takes effect.
EXPLANATION OF THE AMENDMENT:
Sections 1, 7 and 8 have been added to add a name to this bill and to
address additional tax laws. Other sections have been renumbered accord-
ingly.
Additional changes to the bill language went from authorizing the
Commissioner of Taxation and Finance to share information to the
Congressional committee to requiring the Commissioner of Taxation and
Finance to share information to the Congressional committee. Technical
changes have been made to conform language with existing statutory
terminology.
