New York Millionaire’s Tax Extension Approved

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By Gerald B. Silverman

New York’s so-called millionaire’s tax will be extended for two years under a bill ( A. 3009-C) expected to be signed shortly by Gov. Andrew M. Cuomo (D).

The bill, which gained final legislative approval by the state Senate on April 9, would also revive a property tax break for developers of affordable housing in New York City, create a 4 percent tax on ride-hailing services and continue scheduled tax cuts for middle-income New Yorkers.

The 343-page omnibus budget bill, as expected, doesn’t include a proposal by Cuomo to require online marketplaces like Amazon.com Inc. and eBay Inc. to collect sales tax when they facilitate sales to New Yorkers from sellers in and outside of the state. The measure is essentially dead for the current legislative session.

The revenue bill is the final part of the $153.1 billion state budget for fiscal year 2017-18, which began April 1.

Millionaire’s Tax

The millionaire’s tax, which was set to expire Dec. 31, establishes a rate of 8.82 percent for single filers earning more than $1 million and married couples earning more than $2.1 million. The tax is expected to raise $3.4 billion in FY 2017-18.

Cuomo said 45,000 taxpayers, including half who are nonresidents, will continue to pay the higher rate.

The bill keeps in place a scheduled reduction in personal income tax (PIT) rates for taxpayers with incomes between $40,000 and $300,000.

In 2018, PIT rates for taxpayers with incomes between $40,000 and $150,000 will drop to 6.45 percent from 6.85 percent. The rate for those earning between $150,000 and $300,000 will drop to 6.65 percent from 6.85 percent.

Cuomo said the tax cuts, when fully effective, will save taxpayers $6.6 billion over four years and cover more than 4.4 million New Yorkers.

Ride-Hailing Tax

The bill also imposes a 4 percent tax on rides from companies like Uber Technologies Inc. and Lyft Inc.

Other highlights in the bill include:

  •  revival of a property tax abatement (known as 421-a) for developers of affordable housing in parts of New York City;
  •  an additional itemized deduction for union dues not included in federal itemized deductions; and
  •  a requirement that local governments consider plans to consolidate services in order to reduce property taxes.

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y., at GSilverman@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Text of A. 3009-C is at http://src.bna.com/nMx.

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