On March 15, 2023, the two houses of the New York State Legislature released their respective amendments (Senate Bills S.4008 and S.4009, Assembly Bills A.3008 and A.3009, collectively the Amendments) to New York Governor Kathy Hochul’s Fiscal Year 2024 Executive Budget (the Budget Bill) (see our prior legal alert). While the Amendments make notable changes to the Budget Bill, outlined below, which tax proposals the Amendments do not include is equally important to the future of New York’s tax climate.

Notable Tax Proposals Not Included in the Amendments

• Changes to the treatment of GILTI: The Amendments do not include earlier proposals to expand the state’s taxation of Global Intangible Low-Taxed Income (GILTI) set out in A.3690 and S.1980, as well as in a proposal from the NYS Black, Puerto Rican, Hispanic and Asian Legislative Caucus (the Assembly Caucus Proposal).
  • A.3690 and S.1980, both still pending in their respective house committees, propose to increase the percentage of GILTI subject to franchise tax from 5% to 50%, with a commensurate increase for GILTI included in a corporate taxpayer’s sales factor denominator. The Assembly Caucus Proposal, without as much detail as the pending bills, similarly advocates for an increase in the amount of GILTI subject to tax.
    • New York currently affords a deduction from the franchise tax base for 95% of a corporation’s GILTI (treated as “exempt CFC income”), without application of the deductions in I.R.C. Section 250 for...