New York State

9-27-21

September 2021

What was your month like?

If you’re a transactional professional – a class in which I include those who advise clients on the purchase and sale of businesses and investment assets, as well as those who assist clients in developing and implementing estate plans – it may be that the Earth’s 24-hour day, not to mention your own physical limitations, are preventing you from satisfying all your obligations as thoroughly and as quickly as you would like.[i]
Continue Reading Tax Hikes, Senator Manchin, and Effective Dates – OH MY!

NH vs MA

Last week, the U.S. Supreme Court denied New Hampshire’s request that the Court exercise its original jurisdiction under the Constitution[i] to hear and resolve a conflict involving the taxation by Massachusetts of income earned by certain residents of the Granite State.[ii]Continue Reading Like a Good Neighbor, New York is Still Free to Tax You – Sorry for the Inconvenience

Not Just Income Tax

Approximately two weeks ago, Gov. Cuomo and the New York State Legislature agreed upon a budget for the State’s 2021-2022 fiscal year. Although most businesses and their owners have understandably focused their attention on the increased personal and corporate income taxes[i] enacted under the budget legislation, there are several other provisions of which they should not lose sight.[ii]Continue Reading N.Y.’s Real Estate Transfer Tax, the 2022 Budget, and Responsible Person Liability

New York’s Governor Cuomo is having a bad 2021. Some may attribute this to his hubris or to karma; others may point to an emboldened, and now veto-proof,[i] progressive State Legislature; many will claim that Mr. Cuomo is paying the price for being out of touch with the electorate. Whatever the reason, his fall from “political grace” has been precipitous, and it has had immediate[ii] consequences for tax policy in New York, as manifested in the $212 billion budget agreement (the “Bill”) that the Governor announced last week.
Continue Reading New York Is Getting Out of the Zone, the Qualified Opportunity Zone, That Is

The New York state budget deal announced yesterday includes a workaround of the temporary federal limit on state and local tax deductions (the SALT cap). The provision was part of Gov. Cuomo’s initial budget proposal in January, and it comes at a time when many Democrats are calling on Pres. Biden to include the elimination of the SALT cap as part of his recently announced infrastructure proposal.

The SALT cap was added to the Internal Revenue Code as part of the Tax Cuts and Jobs Act (TCJA) in 2017. It is scheduled to lapse after 2025. Until then, however, joint filers may not claim more than $10,000 in itemized deductions for state and local tax payments for purposes of determining their federal income tax liability. This can be burdensome for New York residents, especially after the budget’s tax rate increases are enacted.

Last November, the IRS issued guidance in which it described an approved form of workaround based upon an entity-level state tax.

The New York budget provision is modeled on the above-referenced IRS notice, and would allow pass-through businesses to pay taxes at the entity level. The entity-level tax would be offset by a corresponding individual income tax credit.
Continue Reading New York Budget Deal Includes SALT Cap Workaround

According to Justice Learned Hand, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Stated differently, taxpayers have the right to pay only the amount of tax legally due.

Having said that, taxpayers have, over the years, demonstrated varying degrees of aversion to their tax obligations – especially in high-tax states like New York. Those New York taxpayers who are willing to “roll the dice” are hopefully aware of the associated audit risk, but many of them may be ignorant of the exposure they face from New York’s False Claims Act.Continue Reading Thinking About ‘Avoiding’ NY Tax Increases? Then Think About the False Claims Act

Are the rich making enough of a contribution to society? Are they bearing their fair share of taxes? Many New York legislators don’t think so.

Following the elections of November 2020, the State’s Democratic party secured a veto-proof supermajority not only in the Assembly, but also in the Senate.[i] This development was significant because, until then, the State’s chief executive, Governor Cuomo – ironically, also a Democrat – had been the major obstacle standing in the way of tax increases on the State’s businesses and on its wealthier residents.Continue Reading New York is Poised for Some Significant Tax Increases