Provides that receipts from other services and other business receipts, taxpayers, and combined groups including members, engaged in providing professional employer organization services shall include with such receipts amounts received with respect to wages, benefits, and other employee expenses disbursed to or for the benefit of a client's worksite employees and the related employment taxes if the amounts received are included in the calculation of the business income base or the combined business income base, respectively.
Summary
Bill A03141 amends the New York tax law to include receipts from professional employer organizations (PEOs) in the calculation of business income for tax purposes. Specifically, it allows PEOs to include amounts received for wages, benefits, and other employee expenses disbursed to worksite employees in their apportionment fraction. This change aims to clarify how these receipts are treated under the tax law, ensuring that they are accounted for in both the numerator and denominator of the apportionment fraction based on the location of the customer.
Impact
The bill's passage will affect how PEOs report their income for tax purposes, potentially leading to changes in tax liabilities for these organizations. By including employee-related expenses in the calculation of business income, it aligns the tax treatment of PEOs with their operational realities. This could result in increased compliance costs for PEOs as they adjust their accounting practices to align with the new requirements.
Sentiment
The sentiment around Bill A03141 has been largely positive, as evidenced by the unanimous votes in the Assembly and a strong majority in the Senate. The discussions indicate a recognition of the need for clarity in tax law regarding PEOs, and the bill has received favorable recommendations from the relevant committees.
Contention
While the bill has garnered broad support, there may be some contention regarding the implications for tax revenue and the administrative burden it places on PEOs. Some legislators expressed concerns about whether the inclusion of these receipts might lead to unintended consequences for tax collections or create complexities in compliance for smaller PEOs.
Same As
Provides that receipts from other services and other business receipts, taxpayers, and combined groups including members, engaged in providing professional employer organization services shall include with such receipts amounts received with respect to wages, benefits, and other employee expenses disbursed to or for the benefit of a client's worksite employees and the related employment taxes if the amounts received are included in the calculation of the business income base or the combined business income base, respectively.
Provides that receipts from other services and other business receipts, taxpayers, and combined groups including members, engaged in providing professional employer organization services shall include with such receipts amounts received with respect to wages, benefits, and other employee expenses disbursed to or for the benefit of a client's worksite employees and the related employment taxes if the amounts received are included in the calculation of the business income base or the combined business income base, respectively.
Provides that receipts from other services and other business receipts, taxpayers, and combined groups including members, engaged in providing professional employer organization services shall include with such receipts amounts received with respect to wages, benefits, and other employee expenses disbursed to or for the benefit of a client's worksite employees and the related employment taxes if the amounts received are included in the calculation of the business income base or the combined business income base, respectively.
Providing for the apportionment of business income by the single sales factor and the apportionment of financial institution income by the receipts factor, deductions from income when using the single sales factor and receipts factor, the decrease in corporate income tax rates determining when sales other than tangible personal property are made in the state and excluding sales of a unitary business group of electric and natural gas public utilities.
Clarifies the eligibility of an employment agency for status as a small business for division of minority and women's business development programs by changing the basis from number of employees to annual receipts.
Clarifies the eligibility of an employment agency for status as a small business for division of minority and women's business development programs by changing the basis from number of employees to annual receipts.
Clarifies the eligibility of an employment agency for status as a small business for division of minority and women's business development programs by changing the basis from number of employees to annual receipts.