On August 3, 2010, the New York State Senate approved an $869 million revenue bill, S.6610C/A 9710D (the "Revenue Bill"), which was the last major bill necessary to complete the legislative work on the state's Fiscal 2010-2011 Budget. Through a combination of new and increased taxes, fees and tax credit deferrals, the Revenue Bill will provide more than $1 billion in increased state revenues for Fiscal 2011, and even higher net revenues for the state in subsequent years. The Revenue Bill will provide $160 million in increased tax revenues for New York City.
The Senate voted along party lines, but eliminated a controversial proposal to tax the carried interests of nonresident fund managers who work in New York. In July, the Assembly approved a measure imposing state tax on carried interests of nonresident fund managers, but many state leaders opposed such a measure, claiming it would prompt fund managers to move their offices to other, more tax-friendly states, such as Connecticut. As a result, the Senate did not include the carried interest measure in the Revenue Bill. (See prior Mayer Brown Legal Update, July 7, 2010, “New York State Seeks to Recharacterize a Nonresident Partner’s ‘Carried’ Interest”). The Revenue Bill includes an increase in the New York City personal income tax rates for residents with taxable income greater than $500,000.
The Revenue Bill includes a number of business-related revenue and tax credit changes, which include:
For more information regarding the changes included in the Revenue Bill, or any other matter raised in this Legal Update, please contact or . Learn more about our Tax Transactions & Consulting and Private Investment Fund practices.
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