If last week’s explanation of the federal legislative process seemed daunting, I am even more perplexed by the New York State process. It all seems logical, according to the explanation offered on the New York State Senate website (https://www.nysenate.gov/how-bill-becomes-law-1).
The Senate explains that someone has an idea, a bill is drafted, the bill goes through the committee process, the Senate and Assembly pass the bill and the Governor signs it. Let’s compare this to what really happened with the new budget. The Governor had a plan he released sometime in January, the Assembly, Senate and Governor fought about it for several months, the budget was late and temporary measures had to be passed to keep the money flowing. The Senate then left Albany to start its vacation and the Governor, Senate Majority Leader, Senate Independent Democratic Conference Leader, and Assembly Speaker announced an agreement.
I guess our elected representatives will fall in line and vote for the agreed upon deal (when they get back from vacation?) but in the meantime here is a brief overview of some of the more interesting tax related provisions agreed to by the gang of four:
- The “millionaires’ tax” has been extended for another two years. This means the top rate will remain 8.82% through the end of 2020.
- The Governor’s budget director is empowered to develop legislative proposals in response to federal budget cuts. Both houses of the Legislature would have 90 days to offer a counter proposal. If none is offered, the proposal would become final.
- A $200 million trail will be built around the state.
- Middle class tax cuts as well as making tuition at public universities tuition-free for families making up to $125,000.
Notably absent from any discussions is the proposal to subject the transfer of any interest, including a minority interest, in an entity owning real property to the real estate transfer tax. (See the February 21, 2017 SALT TALK, http://blogs.berdonllp.com/salt-talk-nys-proposal-would-have-a-major-impact-on-real-estate-transactions). Word on the street has it the proposal has been dropped until an actual “vote” takes place and the final language of the budget is released, we will have to wait and see.
If you have questions about these provisions, contact me at WBerkowitz@BerdonLLP.com or your Berdon advisor.
Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.