NY State Senate Approves Bill to Prevent Tax Hit Caused by New Federal Tax Law

The New York State Senate Tuesday passed a Bill, cleared by the House, seeking to avoid a possible $1.5 Billion hike in State Taxes resulting from the New Federal Tax Act. The State action would do nothing about changing the Provision in the Federal Tax Act that would severely Restrict the Federal Deductibility of State and Local Property and Income Taxes. New York Gov. Cuomo announced separately he is planning to alter its Tax Code to address those Changes.

Because the State Tax Code is tied to the Federal One, a number of actions taken by the Feds will Automatically drive up some State Taxes paid by New Yorkers unless the State takes specific action to stop it. To address the situation, the Senate passed a Bill to Link the State Tax Code to the Federal One in effect Before Congress passed the Tax Act in December.

“Without passage of this bill and its subsequent decoupling of the state and federal tax codes, millions of taxpayers would be taxed again at the state level as a result of actions taken in Washington, D.C.,” said Senate Majority Leader John Flanagan (R-2nd District). “We will not allow that to happen.“

Michael Whyland, spokesman for Assembly Speaker Carl Heastie, said that “there are many things we are still learning about the federal tax bill and we want to look at this issue in the context of the overall budget, not only this year but also how it affects future budgets.”

Added Sen. Fred Akshar (R-52nd District): “If you want to complain about Washington, run for Congress. People elected you to do their business here in New York.”

Cuomo in his statement said the State Tax Department recently issued a Report, a day after his Budget Plan was unveiled, detailing many of the “devastating impacts” of the new federal tax code, including the “negative consequences of having a tax code closely coupled with the federal tax system.” "As each day passes, we continue to discover new ways that this disastrous federal Republican tax bill hurts New Yorkers and tips the scale in favor of the wealthy and corporations,” Cuomo said.









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