Weekly Round-Up: New York’s Overhaul of Tax System Receives Mixed Reviews

New York’s fiscal year 2014-15 state budget signed April 1 contains, according to Gov. Andrew Cuomo (D), provisions for “cutting and simplifying business taxes,” and calls for “the most significant improvements to New York's business tax system in nearly three decades,” Bloomberg BNA Correspondent John Herzfeld writes in this week’s issue of the Bloomberg BNA Weekly State Tax Report.

In a statement welcoming the tax changes, Heather C. Briccetti, president of the state Business Council, said: “The broad-based tax reductions and reforms included in the budget—the most significant New York has seen in decades—will improve our tax climate relative to other states and promote investment and jobs in key economic sectors throughout the state.”

However, Karen Scharff, executive director of Citizen Action of New York criticized the bill, according to Herzfeld’s article. “While we were able to beat back some of the worst tax breaks for the super-rich, Cuomo's bailout for Wall Street banks—which will cost New Yorkers over $300 million a year—made it through, as did other tax breaks for the wealthy.”

A provision in the budget ends the state banking tax, placing banks under the general corporate income tax, Herzfeld writes.

The budget reduces the state's corporate franchise tax rate from 7.1 percent to 6.5 percent, the lowest rate since 1968, Cuomo said.   

Over six years beginning in 2016, the state will phase out the corporate capital base calculation, a tax on corporate assets owned in New York that “discourages corporations from placing capital in the state,” Cuomo also said.

Other changes impact the state’s estate and property taxes.

For a complete look at the changes contained in the budget, check outHerzfeld’s article here.

Bloomberg BNA will provide an in-depth analysis of the budget in an April 18th webinar, “New York’s Corporate Tax Reform Package A Game Changer for Businesses,”  featuring Jeffrey S. Reed, of Mayer Brown LLP, and Kendall Houghton, and Matthew Hedstrom, of Alston & Bird LLP.

In other developments…

Annual State-Local Tax Burden Rankings , by the Tax Foundation

Inside the New York Budget Bill – Corporate Tax Reform Enacted , by McDermott Will & Emery

Sutherland SALT Shaker : March 2014 Digest

First Quarter State and Local Tax Developments , by PwC

Compiled by Priya D. Nair

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