Recent legislation that has affected tax expenditures

Recent legislation that has affected tax expenditures

State legislation enacted in recent years has resulted in the addition, deletion, or modification of various provisions in the report this year. The changes are as follows:

Additions

• Residential energy storage systems and the service of installing such systems are exempt from sales tax effective June 1, 2024. Certain sales of electricity generated by such equipment are also exempt. This provision expires on June 1, 2026.
• For tax years 2024 and 2025, a new refundable commercial security credit is available to taxpayers subject to tax under Articles 9, 9-A, and 22. The credit is administered by the Division of Criminal Justice Services and is capped at $5 million annually. To participate, a business entity must submit a complete application to the Division of Criminal Justice Services by October 31 of each year.
• For tax years 2025 through 2027, a new refundable newspaper and broadcast media jobs program credit is available to taxpayers subject to tax under Articles 9-A and 22. The credit is administered by Empire State Development and is capped at $30 million per year, with $4 million devoted to the new job creation component and $26 million devoted to the existing jobs component.
• A one-time additional payment of the Empire State Child Credit was issued in 2024 to taxpayers who timely filed their personal income tax returns and were allowed the credit in tax year 2023. The payment ranged from 25 percent to 100 percent of the 2023 credits value depending on income.

Modifications

• The sales tax exemption for certain vending machine sales of candy, juice, soft drinks and bottled water was extended through May 31, 2025.
• The sales and use tax exemption for specific sales of property or services between certain financial institutions and their subsidiaries is extended through June 30, 2025, or to June 30, 2028, if such sales are made pursuant to a contract entered into before June 30, 2025.
• Effective September 5, 2024, qualified withdrawals from a New York 529 plan are expanded to include those used for the repayment of principal and interest for certain qualified education loans or a rollover to a Roth IRA.
• For individuals with New York adjusted gross income over $10 million, total itemized deductions under the State and New York City personal income taxes are limited to 25% of charitable contributions deductions allowed under the Internal Revenue Code. This provision has been extended for five years through tax years beginning before January 1, 2030.
• For taxable years beginning on or after January 1, 2024, the nonrefundable Life Insurance Company Guaranty Corporation credit has been renamed the Life and Health Insurance Company Guaranty Corporation credit. The amended credit has been expanded to include eligible health insurers and the calculation has been simplified. For assessments issued in 2024 and later, eligible insurers will receive a certificate of tax credit specifying the amount that can be claimed for the year. Transition provisions allow any unused credit related to assessments issued in 2023 and earlier to be claimed in taxable years beginning on or after January 1, 2024.