It’s official. Governor Cuomo has released his proposed 2017 – 2018 Executive Budget. And yes, the extension of the “millionaire’s tax” through 2020, is front and center. The Division of the Budget press release in the “Highlights” section refers to it as “Extends tax rate on millionaires – 45,000 taxpayers impacted, 50% non-residents.” Should the term “non-residents” be replaced with “non-voters?”
The proposal also takes aim at continuing to limit the charitable contribution deduction for those with adjusted gross income (AGI) over $10 million. Charitable contributions for those with adjusted gross income over $1 million are limited to 50% of the federal deduction. Those with AGI over $10 million are presently limited to 25%. The 25% limit, set to expire at the end of 2017, would be permanently extended.
Some of the other highlights of the proposal include the following:
- Amendment of the Alcoholic Beverage Control Law to allow the sale of alcoholic beverages in movie theaters
- Permit property owners to make partial payments against their property tax bills
- Require New York State S corporation conformity with federal S corporation status
- Effectively eliminate the ability of a nonresident taxpayer to treat the sale of a partnership interest as intangible and not subject to New York tax
- Eliminate the ability of related entities to establish leasing companies in order to minimize upfront sales tax payments
- Impose the real estate transfer tax on the transfer of a minority interest in an entity that owns real property that equals or exceeds 50% of the value of all assets
- Close several other perceived loopholes in the real estate transfer tax and mansion tax
As of now, the proposed budget is just that; proposed. As usual, we will have to be patient to see what provisions make it through the legislative process. As the budget process moves forward, if you have questions, 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.