New York State Tax Reform Commission Issues Final Report: New York State Tax Reform and Fairness Commission Recommends Merging Bank Tax into Corporate Franchise Tax, Streamlining Corporate Audit Process, Increasing Estate Tax Exemption, Eliminating GST Tax, Reinstating Gift Tax and Closing “DING” Trust LoopholeSullivan & Cromwell LLP - November 22, 2013
On November 11, 2013, the New York State Tax Reform and Fairness Commission issued its final report (the “Commission” and the “Report”, respectively) recommending changes to New York’s tax system, including changes to its franchise, sales, estate and personal income taxes. The Commission was charged by Governor Andrew Cuomo with developing revenue-neutral policy options to modernize the current tax system with the goals of increasing its simplicity, fairness, economic competitiveness and affordability. Some of the most significant elements of the corporate tax reform package include the merger of the bank tax into the corporate franchise tax, expanded application of economic nexus, and adoption of water’s-edge unitary reporting. The Report proposes an estate and gift tax reform package that would increase the estate tax exemption, repeal the generation-skipping transfer tax, reinstate the gift tax and close a perceived loophole in the income tax treatment of certain resident trusts.