State & Local Tax Alert

Transcription

1 State & Local Tax Alert Breaking state and local tax developments from Grant Thornton LLP New York State Enacts FY15-16 Budget Legislation Providing Extensive New York State and City Tax Reform On April 13, Governor Andrew Cuomo signed the final version of the FY15-16 New York State (State) budget legislation which he described as the hardest budget negotiation he has dealt with since taking office. 1 Taxpayers expecting the legislation to be adopted at the very end of the first quarter for tax provision purposes as it did last year were given an early April Fool s as the bills were not presented to the governor until the early hours of the morning on April 1. The budget includes substantial revisions to the New York City (City) tax regime as well as technical clarifications and expansion of the sweeping State tax reform legislation passed last year. The City reforms comprise what City officials described as the largest tax overhaul since the 1940s, although many of the changes simply retroactively conform to the State reforms that went into effect on January 1, The revenue-neutral tax reforms are intended to provide tax relief for local and small business taxpayers while increasing taxes for larger established businesses as well as those located outside the City. New York State Corporate Income Tax Reform The FY15-16 budget bill contains a number of technical corrections to the corporate tax changes enacted pursuant to last year s State legislation, most of which go into effect for tax years beginning January 1, A few of the more significant changes are highlighted below. Investment Income Last year s legislation changed the definition of investment capital. 2 Specifically, the legislation introduced a tax exemption for income from investment capital, which was defined as investments in stock held for more than six consecutive months, but not held for sale to customers. This year s bill further restricts the definition of investment capital to include only stocks that: Satisfy the definition of a capital asset under Internal Revenue Code (IRC) Section 1221 at all times the taxpayer owned such stock during the taxable year; Are held by the taxpayer for investment for more than one year; Release date May 7, 2015 States New York Issue/Topic Multiple Taxes Contact details Matthew DiDonato New York - Manhattan T E matthew.didonato@us.gt.com Raymond T. Melone Iselin T E raymond.melone@us.gt.com Art Burkard New York - Manhattan T E art.burkard@us.gt.com Spiro Dorizas New York - Melville T E spiro.dorizas@us.gt.com Howard Polonetsky New York - Manhattan T E howard.polonetsky@us.gt.com John O Brien New York - Melville T E john.obrien@us.gt.com Mark R. Danbom New York - Manhattan T E mark.danbom@us.gt.com Jamie C. Yesnowitz Washington, DC T E jamie.yesnowitz@us.gt.com Chuck Jones Chicago T E chuck.jones@us.gt.com Lori Stolly Cincinnati T E lori.stolly@us.gt.com 1 Ch. 59 (A.B / S.B. 2009); Ch. 60 (A.B / S.B. 4610), Laws N.Y. TAX LAW 208.5(a)..

2 Grant Thornton LLP - 2 The disposition of which are, or would be, treated by the taxpayer as generating longterm capital gains or losses under the IRC; For stocks acquired on or after January 1, 2015, at any time after the close of the day in which they are acquired, have never been held for sale to customers in the regular course of business; and Before the close of the day on which the stock was acquired, are clearly identified in the taxpayer s records as stock held for investment in the same manner as required under IRC Section 1236(A)(1) for the stock of a dealer in securities to be eligible for capital gain treatment (whether or not the taxpayer is a dealer of securities subject to Section 1236), provided, however, that for stock acquired prior to October 1, 2015 that was not subject to Section 1236(A), such identification in the taxpayer s records must occur before October 1, A rule was also added that limits investment income determined without regard to allowable interest deductions to 8 percent of the taxpayer s entire net income. 4 For taxpayers that elect to reduce their investment income by the 40 percent election, the 40 percent election is applied after the 8 percent limitation. 5 Moreover, the recently adopted legislation does not change the treatment of stock in a unitary corporation, stock in a corporation included in a combined reporting group with the taxpayer, and stock issued by the taxpayer, which continue to be excluded from the definition of investment capital. 6 Economic Nexus An economic nexus standard was enacted last year by the State, which created a franchise tax and metropolitan tax (MTA) surcharge filing requirement for corporations that derive $1 million or more of receipts from any activity in the State using customer-based sourcing. 7 A corporation that is part of a combined group and has receipts derived from the State of less than $1 million but more than $10,000 satisfies the threshold requirement for combined reporting if the State receipts of all group members who individually exceed $10,000 equal $1 million or more in the aggregate. This year s bill clarifies that when aggregating a combined group s receipts for purposes of determining economic nexus, only corporations that are part of a unitary group and satisfy the ownership test of more than 50 percent under N.Y. Tax Law Section 210-C are considered. 8 Additionally, the revised nexus provisions will exclude corporations that are not permitted to be included in the State combined filing group for Article 9-A (e.g.., Article 9, Article 33, S corporations, alien corporations without effectively connected income, etc.) from the nexus analysis. 9 3 Id. 4 N.Y. TAX LAW 208.6(a). 5 N.Y. TAX LAW 208.6(b). 6 N.Y. TAX LAW 208.5(a). 7 N.Y. TAX LAW 209.1(b); 209-B.1(a). 8 N.Y. TAX LAW 209.1(d); 209-B.1(d). 9 N.Y. TAX LAW 209.1(d)(iii); 209-B.1(d)(iii).

3 Grant Thornton LLP - 3 Sourcing of Marked-to-Market Financial Instruments Last year s budget created a simplifying convention in which taxpayers were given the option to make an annual and irrevocable election to use a fixed amount of 8 percent of all net income from qualified financial instruments in the apportionment numerator in lieu of using customer-based sourcing. 10 Qualified financial instruments were defined as instruments marked to market under IRC Section 475 or 1256, except for those secured by real property. 11 The FY15-16 legislation expands the definition to certain instruments referenced in the sourcing rules applicable to financial transactions provided the taxpayer has marked to market the same financial instruments. Such qualified financial instruments include the following types: Loans not secured by real property; Federal, state, and municipal debt; Asset-backed securities and other government agency debt; Corporate bonds; Stock or partnership interests that are not investment capital; Physical commodities; and Other financial instruments. 12 If the taxpayer has in the taxable year marked to market a financial instrument of any of the types listed above, any financial instrument of that same type that has not been marked to market by the taxpayer is also a qualified financial instrument for the taxable year. 13 In addition to the newly added default sourcing for certain qualified financial instruments when the fixed 8 percent election is not made, the FY15-16 legislation clarifies that only the net marked to market income, gain or loss, is to be included in the apportionment factor. 14 Loans secured by real property still do not qualify for the 8 percent qualified financial instrument election. 15 The legislation now includes a definition for loans secured by real property and includes loans in which 50 percent or more of the collateral used to secure the loan, at the time the loan was entered into, consists of real property. 16 Qualified New York Manufacturers Effective with tax years beginning on or after January 1, 2014, qualified New York manufacturers are subject to the zero percent business income tax rate. 17 A qualified New York manufacturer is a manufacturer that meets the New York-located property test (property eligible for the investment tax credit with an adjusted basis of at least $1 million or all real and personal property located in New York) and is principally engaged in 10 N.Y. TAX LAW 210-A N.Y. TAX LAW 210-A.5(a). 12 Id. 13 Id. 14 N.Y. TAX LAW 210-A.5(a)(1). 15 N.Y. TAX LAW 210-A.5(a). 16 N.Y. TAX LAW 210-A.5(a)(2)(A)(v). 17 N.Y. TAX LAW 210.1(a)(vi).

4 Grant Thornton LLP - 4 manufacturing activities. A taxpayer that does not satisfy the principally engaged in manufacturing test may still qualify as a New York manufacturer, if the taxpayer employs more than 2,500 employees in the State and has adjusted basis of at least $100 million. 18 The FY15-16 legislation s technical correction restricts the types of property eligible in the principally engaged in manufacturing test. 19 Specifically, eligible property now includes property principally used in in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing. 20 Lastly, the FY15-16 legislation clarifies that the qualified manufacturer test is applied at the combined return level, meaning that even if a corporation may qualify on its own, no member of the corporation s combined group can qualify if that corporation is part of a combined group that does not meet the test on a combined basis. 21 Net Operating Losses The computation and application of net operating losses (NOLs) was previously revised for tax years beginning on or after January 1, Prior to 2015, NOLs were applied before apportionment and were carried forward or backward in conjunction with federal NOLs. NOLs are now computed on a post-apportionment basis with a prior net operating loss (PNOL) conversion subtraction available for NOL carryforwards that were generated prior to the effective date of the law change. The FY15-16 bill includes technical corrections that provide new ordering rules for purposes of applying NOL deductions. Taxpayers are now required to first carry an NOL back three years preceding the loss year (with the exception that no loss can be carried back to years beginning before 2015). 23 The NOL must be carried back to the earliest of the three preceding years and if not entirely used up, it must be carried back to the second preceding year and then the first preceding year. After the application of the carryback rules, any unused NOL may be carried forward for up to 20 years. Moreover, the legislation adds an election to irrevocably forgo the three-year carryback of NOLs. 24 This election is necessary for each year a new NOL is generated, and applies to all members of a combined group. There were a number of other technical corrections included in this year s budget, including further clarification of investment income, sourcing rules for special industries, and sales tax provisions. New York City Corporate Income Tax Reform The most significant City reforms generally fall into two overlapping categories: (i) changes made to more closely conform to State corporate tax law such as the merging of the City s 18 Id. 19 Id. 20 Id. As amended, the statute specifically references a particular investment tax credit provision. See N.Y. TAX LAW 210-B.1(b)(i)(A). 21 Id. 22 N.Y. TAX LAW 210.1(a)(viii), (ix). 23 N.Y. TAX LAW 210.1(a)(ix)(4). 24 N.Y. TAX LAW 210.1(a)(ix)(7).

5 Grant Thornton LLP - 5 bank franchise tax into the general corporate tax; and (ii) changes made to expand the corporate tax base for corporations outside the City such as the adoption of mandatory combined reporting for unitary businesses and market-based sourcing of revenue for apportionment purposes. The City tax reform provisions will not apply to S corporations, 25 and will not impact the City s unincorporated business tax (UBT), which applies to pass-through entities. The most significant approved changes, which are effective retroactively to January 1, 2015, are discussed below. Tax Rates While the tax rate for corporations remains 8.85 percent, a graduated system was added which reduces the tax rate for corporations with less than $3 million of allocated business income. 26 Further, a 9 percent bracket was added for a financial corporation, which is defined as a corporation or a combined group of corporations with more than $100 billion of assets as reported on its end-of-year balance sheet which also: o Allocates more than 50 percent of the receipts under provisions related to financial instruments included in the denominator of its receipts fraction for the taxable year; or o Is itself or is included in a combined group in which more than 50 percent of the total assets reflected on its balance sheet at year-end are held by one or more corporations that are a bank, savings and loan, thrift, broker/dealer, or a number of other specified financial entities. 27 The business capital base is still based on 0.15 percent of business capital allocated to the City. 28 However, the cap on the tax from business capital has been increased from $1 million to $10 million. 29 Small taxpayers may receive some benefit, as the City tax on business capital now excludes the first $10,000 of tax due on the capital base. 30 While the State is phasing out the capital base tax over a six-year period, 31 the City has not adopted provisions to eliminate the alternative capital base tax. The fixed dollar minimum tax remains the same for corporations with City receipts of up to $50 million, as the tax progressively increases from $25 to $5, However, five new brackets are added which increase the fixed dollar minimum tax for corporations with more than $50 million of City receipts, up to a 25 S corporations will continue to be subject to the former general corporation tax rules and remain subject to the costs of performance sourcing rules instead of the new customer-based sourcing rules. 26 N.Y.C. ADMIN. CODE (1)(e)(1), (j). 27 N.Y.C. ADMIN. CODE (1)(e)(1)(i). 28 N.Y.C. ADMIN. CODE (1)(e)(1)(ii)(A). 29 N.Y.C. ADMIN. CODE (1)(e)(1)(ii)(E). 30 N.Y.C. ADMIN. CODE (1)(e)(1)(ii)(D). 31 N.Y. TAX LAW 210.1(b). 32 N.Y.C. ADMIN. CODE (1)(e)(1)(iv).

6 Grant Thornton LLP - 6 maximum of $200,000 for corporations with more than $1 billion of City receipts. 33 A preferential income tax rate of percent will be instituted for qualified small City manufacturing corporations with less than $10 million of allocated business income (without taking into account the PNOL conversion subtraction). 34 City manufacturers with allocated income between $10 million and $20 million will receive a partially reduced rate dependent on income. 35 However, manufacturers may lose some of the benefits of the reduced City manufacturer tax rates of their unallocated business income in excess of $20 million. 36 Manufacturers with unallocated business income in excess of $40 million will be subject to the 8.85 percent tax rate. 37 Tax Base The FY budget legislation conforms the City s general corporate net income tax base to the State s corporate net income tax base under Article 9-A. 38 The term business income is defined as entire net income from all sources minus investment income and other exempt income. 39 Investment income means income, including capital gains in excess of capital losses, from investment capital (using the same definition as the State), to the extent included in computing entire net income, less, in the discretion of the Commissioner of Finance, any interest deductions allowable in computing entire net income which are directly or indirectly attributable to investment capital or investment income. 40 However, investment income cannot exceed entire net income. If the amount of interest deductions exceeds investment income, the excess of these deductions over investment income must be added back to entire net income. 41 In lieu of deducting interest deductions from investment income, taxpayers can elect to reduce total investment income by 40 percent. 42 Economic Nexus The City did not adopt the State s economic nexus provisions. 43 However, the City does apply economic nexus to credit card banks in the case where certain market thresholds are met. 44 Customer-Based Sourcing 33 Id. 34 N.Y.C. ADMIN. CODE (1)(k)(1). 35 N.Y.C. ADMIN. CODE (1)(k)(2). 36 N.Y.C. ADMIN. CODE (1)(k)(3). 37 Id. 38 N.Y.C. ADMIN. CODE N.Y.C. ADMIN. CODE (7). 40 N.Y.C. ADMIN. CODE (5)(a)(i). 41 N.Y.C. ADMIN. CODE (5)(a)(ii). 42 N.Y.C. ADMIN. CODE (5)(b). 43 See N.Y.C. ADMIN. CODE N.Y.C. ADMIN. CODE (1)(c).

7 Grant Thornton LLP - 7 As the City will continue to phase in single sales factor sourcing, with full implementation in tax years starting on or after January 1, 2018, 45 it will further shift the tax burden from corporations with substantial City property and payroll to corporations with significant presence outside the City by adopting market-based sourcing of receipts from items other than the sales of tangible personal property. 46 There are customer-based sourcing rules enacted in the budget legislation for a number of different revenue streams including sales of digital products, various financial transactions, advertising, and other industry-specific receipts. 47 For receipts that are not specifically addressed, the rules direct that the taxpayer source receipts to the City if the location of the customer is within the City. 48 A hierarchy of sourcing rules is used to determine the location of a customer, beginning with where the benefit of the receipt was received. 49 The State adopted these customer-based sourcing rules in last year s budget. 50 Qualified New York City Manufacturer As noted above, certain City manufacturers may obtain the benefit of a lower corporation tax rate. However, certain qualifications must be met to be considered a qualified New York manufacturing corporation, including having qualified property in the City, the adjusted basis of which at the end of the tax year is at least $1 million or more than 50 percent of the manufacturer s real and personal property that is located in the City. 51 For these purposes, property includes tangible personal property and other tangible property, such as buildings and structural components of buildings, that: (1) is depreciable under IRC Section 167; (2) is acquired by purchase as defined in IRC Section 179(D); (3) has a useful life of four years or more; (4) is located in the City; and (5) is principally used by the taxpayer in the production of goods by manufacturing. 52 For City purposes, the term manufacturing includes the process of working raw materials into wares suitable for use, or giving new shapes, qualities, or combinations to matter which has already gone through some artificial processes. 53 This definition for a qualified City manufacturer is different than that of a qualified State manufacturer. 54 RAR Reporting The FY15-16 bill includes a subtle change to the rules for reporting changes or corrections to federal income or State change to income (commonly known as RARs ). 55 For tax years prior to 2015, changes to the allocation of income or capital were not allowed to be made when reporting federal changes to income. The new rules now permit both the City 45 N.Y.C. ADMIN. CODE (3)(a)(10). 46 N.Y.C. ADMIN. CODE N.Y.C. ADMIN. CODE (1)-(9). 48 N.Y.C. ADMIN. CODE (10)(a). 49 N.Y.C. ADMIN. CODE (10)(b). 50 N.Y. TAX LAW 210-A. 51 N.Y.C. ADMIN. CODE (1)(k)(4)(ii). 52 N.Y.C. ADMIN. CODE (1)(k)(5). 53 N.Y.C. ADMIN. CODE (1)(k)(4). 54 See N.Y. TAX LAW 210.1(a)(vi). 55 N.Y.C. ADMIN. CODE (3)(g).

8 Grant Thornton LLP - 8 and the taxpayer to alter the allocation of income or capital when reporting or assessing on federal changes to income, even if the change in allocation results in additional tax or a refund. New York City Bank Tax The City has adopted most of the State s changes relating to banking corporations formerly taxable under Article 32. Banks formerly subject to the New York City Bank Tax are (for tax years beginning on and after January 1, 2015) subject to the General Corporation Tax. 56 The City has adopted receipts sourcing rules equivalent to the State s rules for the sourcing for loans and financial instruments. 57 It has also provided for subtractions for community banks and small thrifts with less than $8 billion in assets. 58 Similar to the State, banks with less than $8 billion in assets that maintained a captive real estate investment trust (REIT) as of April 1, 2014, are permitted a REIT subtraction equal to 160 percent of the REIT s federal dividend paid deduction. 59 For the next several years, until the City completes its phase-in to a single sales factor apportionment methodology, banks will discover that they will now be required to calculate a City property factor. This will be an entirely new requirement for banks that have historically used a double-weighted deposits factor, as banking corporations are absorbed into the same City tax regime as all other corporations. Mandatory Combined Reporting The City, much like the State, has encountered several challenges to its combined reporting rules that have been in place since The new rules require combined reporting for any taxpayer that: Owns or controls either directly or indirectly more than 50 percent of the voting power of the capital stock of one or more other corporations; Owns or controls more than 50 percent of the voting power of the capital stock of which is owned or controlled either directly or indirectly by one or more other corporations; or Owns or controls more than 50 percent of the voting power of the capital stock of which and the capital stock of one or more other corporations, is owned or controlled, directly or indirectly, by the same interests; and Is engaged in a unitary business with those corporations. 60 In our SALT Alert for the Astoria Financial Corp. ruling, 61 we predicted that the irrelevancy of substantial intercompany transaction and distortion determinations for tax years after 2014 would force the State and the courts to put a larger emphasis on unitary relationships 56 N.Y.C. ADMIN. CODE (a). 57 N.Y.C. ADMIN. CODE (5). 58 N.Y.C. ADMIN. CODE (8)(q). 59 N.Y.C. ADMIN. CODE (8)(r). 60 N.Y.C. ADMIN. CODE (2)(a). 61 New York City Tax Appeals Tribunal, Administrative Law Judge Division, TAT(H)10-35(BT), Oct. 29, 2014.

9 Grant Thornton LLP - 9 when considering combined reporting requirements. 62 Although the City had not yet revised its provisions to more closely resemble the State law changes when the ruling was issued, we noted that when the State revised its distortion rules and adopted the substantial intercompany transaction requirement for tax years beginning on or after January 1, 2007, the City retroactively enacted similar rules in The elimination of the substantial intercorporate transaction and distortion tests should make combined reporting determinations easier for both the City and taxpayers. While the new rules do not define what constitutes a unitary business, this concept has been previously explored in the City s Division of Tax Appeal level forums as well as the U.S. Supreme Court and is generally characterized as a group of businesses which possess functional integration, centralized management and economies of scale. 63 The City combined reports will also include captive REITs and regulated investment companies (RICs), combinable insurance companies, and alien corporations that are treated as domestic corporations under IRC Section 7701 or have effectively connected income for the taxable year. 64 NOLs The City is changing the way it calculates and applies NOLs, as the State did last year. Under the prior City law, NOLs were applied before apportionment and were subject to various limitations on usage including a limitation not to exceed the federal NOL deduction. The new rules compute NOLs after apportionment, with the deduction limited to reducing tax on allocated income to the higher of the tax on capital or the fixed dollar minimum amount. 65 Like the State, the City budget legislation provides for a PNOL conversion subtraction, with a one-time revocable election to deduct 50 percent of the PNOL in each of the 2015 and 2016 tax years, and a separate election to waive the carryback period for NOLs generated in tax years beginning on or after January 1, Commentary The City corporate income tax reforms follow the State s lead by shifting more of the corporate income tax burden to out-of-state taxpayers. Now is an excellent time for State and City taxpayers to revisit their sales sourcing methodology and documentation. Not only has there been a fundamental shift in the way that both the State and City will source several different revenue streams, but the definitions of many items of revenue also have been altered or clarified. Once taxpayers obtain a fuller understanding on how the City sources different revenue streams, there may be additional factors to consider such as 62 For more information on this ruling, see GT SALT Alert: New York City Tax Appeals Tribunal Finds Subsidiary Properly Excluded from Combined City Bank Tax Returns. 63 See American Banknote Corp., New York City Tax Appeals Tribunal, TAT(E)03-31(GC), TAT(E)03-32(GC), TAT(E)03-33(GC), Nov. 14, 2008, citing MeadWestvaco Corp. v. Illinois Department of Revenue, 553 U.S. 16 (2008); Matter of Panavision, Inc., New York State Tax Appeals Tribunal, June 6, See also Container Corp. of America v. Franchise Tax Board, 463 U.S. 159, 166 (1983). 64 N.Y.C. ADMIN. CODE (2)(b). 65 N.Y.C. ADMIN. CODE (3). 66 N.Y.C. ADMIN. CODE (2).

10 Grant Thornton LLP - 10 whether to make the election to source qualified financial instruments at 8 percent rather than using the standard apportionment rules. There are also decisions to be made regarding NOLs. Taxpayers need to examine their pre-2015 NOLs to determine if it is beneficial to quickly deduct PNOLs in 2015 and 2016 at 50 percent per year, or alternatively utilize the PNOL more slowly, 1/10 over the next 20 years. This is an important decision, as any portion of PNOL not used in 2015 and 2016 under the 50 percent election is forfeited unless a timely revocation is made. While one of the overall themes of the City rule changes was compliance simplification, this does not necessarily mean that all taxpayers will see a reduced compliance burden. Consider, for example, an out-of-state partnership with a mix of corporate pass-through partners. Due to the differences in sourcing rules for pass-through entities as compared to corporations, partnerships will now need to prepare two sets of sales apportionment data, one using market-based sourcing and another based on the previously used costs of performance method. Another consequence of this difference is the further complication of the already complex credit for UBT paid by corporate partners. In certain fact patterns, the possibility exists for a permanent trapping of these credits that will never get utilized by corporate partners. Perhaps the most glaring difference between the two jurisdictions is the lack of an economic nexus standard in the City reforms. Mayor Bill de Blasio s proposal, which included the adoption of economic nexus, was left out of the final version of the State budget legislation. Out-of-state taxpayers should be mindful that this could create a situation in which they will have income tax nexus in the State for the first time in 2015 under the new rules, but may not establish nexus in the City despite significant revenue from City customers, provided the City s economic nexus for issuers of credit cards is not applicable. It is interesting to note that the budget bill originally included several expansive State sales and use tax provisions which ultimately were not adopted. A proposal was made to further extend the concept of sales tax nexus to include marketplace providers (companies that operate online auction and shopping Web site platforms). This proposal would have required certain Internet platforms to collect New York sales tax on sales made by remote marketplace sellers that sell on the platform, regardless of whether the seller had New York nexus. Furthermore, the governor s originally proposed budget bill considered removing intercompany transaction exclusions from sales tax relating to organizations, reorganizations, acquisitions, dispositions and liquidations. The importance and focus placed on these exclusions has been particularly magnified in New York due to the constrained nature of the State s occasional sale exemption. The elimination of this unique exclusion for corporate and partnership transactions would have given rise to significant sales and use tax liabilities for many taxpayers. While not adopted, taxpayers should be mindful that these far-reaching pieces of sales and use tax legislation may surface in future legislative sessions. It is noteworthy that the budget legislation provides relief from potential increased New York sales tax compliance

11 Grant Thornton LLP - 11 burdens and increased New York sales tax liabilities arising from the Dodd-Frank mandated reorganizations for financial institutions. 67 Finally, sales and use tax benefits were provided in the final budget legislation for the purchase and use in New York of expensive boats 68 and general aviation aircraft. 69 The information contained herein is general in nature and based on authorities that are subject to change. It is not intended and should not be construed as legal, accounting or tax advice or opinion provided by Grant Thornton LLP to the reader. This material may not be applicable to or suitable for specific circumstances or needs and may require consideration of nontax and other tax factors. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Grant Thornton LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, re-keying or using any information storage and retrieval system without written permission from Grant Thornton LLP. This document supports the marketing of professional services by Grant Thornton LLP. It is not written tax advice directed at the particular facts and circumstances of any person. Persons interested in the subject of this document should contact Grant Thornton or their tax advisor to discuss the potential application of this subject matter to their particular facts and circumstances. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed. 67 N.Y. TAX LAW 1115(jj). Note that there are two versions of this new statutory subdivision. The exemption related to Dodd-Frank was added by A.B. 3009, Part UU, N.Y. TAX LAW 1115(jj); 1118(13). Note that there are two versions of N.Y. TAX LAW 1115(jj). The exemption for expensive boats was added by A.B. 3009, Part SS, N.Y. TAX LAW 1115(a)(21-a).