Relates to authorizing small business tax-deferred savings accounts.
Impact
The proposed bill is designed to enhance the economic environment for small businesses by providing them with a financial tool that allows for tax-deferred savings. By allowing contributions of up to $5,000 per taxable year, the bill seeks to encourage small business growth and retention of full-time jobs. It presents a structured way to support small businesses in managing their finances while complying with state tax requirements. An annual report from the Department of Taxation and Finance is mandated to review the program's success, contributing to ongoing adjustments in implementation as needed.
Summary
Assembly Bill A07991 introduces the concept of small business tax-deferred savings accounts in the state of New York. This legislation amends existing economic development and tax laws, allowing small businesses to establish these accounts with financial organizations. The primary aim is to facilitate better financial management for small businesses by enabling them to save money tax-deferred for specific qualifying expenditures such as purchasing tangible property necessary for their operations and improving their overall competitiveness.
Reporting
The bill also establishes an accountability framework that mandates the Department of Taxation and Finance to report back on the program's uptake and its economic impact. This transparency may serve to enhance trust in the legislation’s efficacy and lead to adjustments if the uptake among small businesses is lower than anticipated. Overall, A07991 represents a significant step towards supporting small business financial management in New York.
Contention
While the bill aims to bolster small business sustainability, it may face scrutiny over how effectively it addresses the varied needs of different small businesses across the state. Notably, discussions around the cap on deposit amounts may lead to debates regarding the adequacy of this limit for businesses with varying operational scales. Additionally, regional disparities in access to qualified financial organizations that meet the bill's criteria could raise concerns about equitable opportunities for small businesses.
Relates to authorizing small business tax-deferred savings accounts for the purpose of improving facilities of such business and for procurement of machinery or equipment.
Relates to extending the benefits of the STAR program to small businesses; defines small business as a business which employs one hundred persons or less.