By James Nani

Law360 (May 27, 2020, 8:27 PM EDT) -- New York lawmakers advanced bills Wednesday that would offer property tax relief and allow New York City to further decouple from provisions of the federal COVID-19 relief act as the state continues to grapple with fallout from the disease.

The three tax-related bills advanced as part of a larger flurry of action taken by New York lawmakers in their first work on legislation since they passed a budget in early April.

S.B. 8122B would allow localities to pass laws to extend the deadline to July 15 for real property tax abatement applications and renewal applications, according to a bill summary.  While the original Senate bill applied the measures to just New York City, the updated version broadened the policy to all municipalities and made other changes.

The bill, sponsored by Sen. Leroy Comrie, D-Queens, was passed by the Senate on Tuesday by a 62-0 vote. It was then sent to the Assembly, where it replaced its companion bill, A.B. 10241A, sponsored by Assemblywoman Alicia Hyndman, D-Queens, and passed by a 122-0 vote.

A bill justification said filling out real property tax abatement applications and renewal is complex, recent opportunities to get one-on-one help have been canceled and many seniors, who often use the abatements, are choosing to self-quarantine.

"Given the myriad of factors and these extraordinary times, a three-month extension is warranted and the amended version of this bill applies the principle statewide at local option," the bill justification said. 

S.B. 8138B would allow localities to authorize deferred scheduled or installment payments for property tax collection during a declared state of emergency, according to a bill summary. During deferment of payment, no additional interest or penalties would accrue, and once a state disaster emergency was lifted, taxes would be collected in installments, the bill said. The bill, sponsored by Sen. Monica Martinez, D-Brentwood, passed the Senate by a 62-0 vote and was sent to the Assembly for consideration.

"As New York grapples with the many changes necessary to keep New York functioning, this legislation will help property owners by spreading out payments over time and provide relief to taxpayers until the state of emergency is over," a bill justification said. 

S.B. 8411 would allow certain New York City businesses taxes to be decoupled from the federal tax provisions enacted through the federal Coronavirus Aid, Relief, and Economic Security Act . The bill, sponsored by Sen. Robert Jackson, D-Harlem, passed the Senate by a 39-23 vote. It was then sent to the Assembly, where it replaced its companion, A.B. 10519, sponsored by Assembly Ways and Means Committee Chairwoman Helene Weinstein, D-Brooklyn, and passed the Assembly by a 110-34 vote.

The bill would change New York City's administrative code to disallow changes made through the coronavirus aid bill in tax years before Jan. 1, 2021, according to a bill summary. The measure would decouple from the federal law the city's unincorporated business corporation tax, the general corporation tax, the city banking tax and the city business corporation tax, according to a bill summary, and potentially save the city $50 million in the 2020-2021 fiscal year and $25 million in the 2021-2022 fiscal year.

In an emailed statement, Jackson told Law360 that the package of tax-related bills was designed to give some breathing room for individual New Yorkers and their local governments that have been devastated from a financial point of view by the COVID-19 pandemic. COVID-19 is the respiratory ailment that results from the coronavirus.

"The city is already facing a $5.4B shortfall and can't afford to lose any more money. Every little bit counts," Jackson said.

New York and New York City decoupled from certain tax provisions of the coronavirus aid through the state budget in April. The budget decoupled the state's franchise tax and city's business corporation tax and its general corporation tax from changes to deductions for interest payments made in the federal law. The budget also decoupled the state and city from changes to the Internal Revenue Code for personal income taxes, according to a bill summary. 

But other parts of the city's code weren't decoupled from the federal law, according to a bill summary. S.B. 8411 would decouple the city's unincorporated business corporation tax, the general corporation tax, the city banking tax and the city business corporation tax from sections of the coronavirus aid bill dealing with net operating loss deductions and when the deductions can be taken. The measure also decouples those city taxes from federal statutes dealing with how noncorporate taxpayers deduct excess business losses against other types of income and new federal statutes regarding deductions for interest payments on partners in partnerships, a bill summary said.

The property tax bills were introduced around the time lawmakers passed the April budget that pushed for few new tax policies but gave Democratic Gov. Andrew Cuomo wide-ranging power to cut spending amid a projected $10 billion to $15 billion drop in expected tax revenue.

Cuomo's office did not immediately respond to requests for comment Wednesday. Other bill sponsors didn't immediately respond to requests for comment Wednesday.

--Additional reporting by Jaqueline McCool. Editing by Neil Cohen.

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