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Noonan’s Notes Blog

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Noonan’s Notes Blog is written by a team of Hodgson Russ tax attorneys led by the blog’s namesake, Tim Noonan. Noonan’s Notes Blog regularly provides analysis of and commentary on developments in the world of New York and multistate tax law. Noonan's Notes Blog is a winner of CreditDonkey's Best Tax Blogs Award 2017.

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Timothy Noonan 
Ariele Doolittle
Joseph Endres
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Elizabeth Pascal 
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Showing 6 posts from April 2019.

Federal Court Rules Refunded NYS Brownfield Tax Credits Are Taxable Federally

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New York’s Brownfield Cleanup Program (“BCP”) is one of the more effective tax-based incentive programs offered by the state.  The BCP allows participants to remediate a contaminated piece of real property in exchange for tax credits that can total up to 50% of the qualified remediation costs incurred to clean the property, and 24% of the qualified construction costs incurred to develop the property after it has been remediated.  These tax credits can be the difference between a lucrative development and one that is economically unfeasible. 

A Two Percent Property Tax Cap But No Pied-A-Terre Tax in New York: Gov. Andrew Cuomo's Recently Released Fiscal Year 2020 Budget

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Governor Cuomo announced that New York lawmakers passed the $175.5 billion FY 2020 Budget (the “Final Bill”) on April 1, 2019.  There’s a lengthy list of spending packages in the budget as described here but I’m circling back to two real property tax issues. Although Gov. Cuomo floated the idea of a pied-a terre tax on large mansions which I wrote about here, and an increased real estate transfer tax on conveyances where the consideration “for the entire conveyance” is $5 million or more, which my colleagues wrote about here, neither of these items made the final cut. Instead, the budget features: a permanent property tax increase cap of 2% and a “mansion tax,” a variation of the proposed pied-a terre tax. The State Assembly and State Senate on March 31 approved the budget’s revenue bill (S. 1509-C/A. 2009-C) soon after legislative leaders and Gov. Andrew Cuomo reached an eleventh-hour agreement on the state budget, one day before the start of the fiscal year.

Report on Executive Budget FY 2020

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On April 1, Governor Cuomo announced that New York lawmakers passed the $175.5 billion FY 2020 Budget (the “Final Bill”).  The Final Bill (S. 1509-C / A. 2009-C) is available here.  As of this writing, it has not been signed by the Governor.  We have been following the evolution of the budget since Governor Cuomo released his proposal on January 15th, which we covered here.   The tax and revenue highlights of the Final Bill, along with the omissions or differences from the Governor’s original proposals, are summarized below.  Other aspects of the Final Bill, including criminal justice reform, MTA reforms, and changes to the Public Authority Law, are not discussed. 

New York’s High Court Halts Wynne Challenges

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Last week, New York’s highest court issued a disappointing blow to our New York “Wynne challenges,” the two cases brought to challenge the double taxation scheme that applies to taxpayers who are dual residents in New York and another state. In both cases, Chamberlain and Edelman (previously covered here), we argued that the U.S. Supreme Court’s 2015 decision in Comptroller v. Wynne upended New York’s prior precedent on this issue (Tamagni v. Tax Appeals Tribunal). But the Court declined to hear the taxpayers’ appeals from the lower court decisions, and did so by way of two two-sentence orders with no analysis or explanation.

NY Tax Minutes: Marketplace Sales Tax, Corp. Franchise Regs

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This article originally appeared in Law360 and is reprinted with permission.

As we finalize this month’s column, it appears that budget season here in New York state has finally come to a close, with the Governor and Legislature agreeing, on March 31, 2019, to a new $175 billion budget. The agreement came one day before the deadline for an on-time budget in order to meet the state’s next fiscal year, which begins April 1 In a March 31, 2019 press release,[1] Gov. Andrew Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie announced a plan that includes:

Decoupling for Trusts and Estates and Other Disallowances Included in Last Minute Revisions to Budget Bill

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On March 31st  an agreement was announced on the FY 2020 Budget. We wrote about the tax related highlights of the budget proposal when it was released back in January. We also recently commented here about the mismatch between the treatment of itemized deductions for individuals versus trusts. Recent guidance from the Tax Department clarified that individuals could itemize deductions at the state level even if they took the standard deduction on their federal return and could take deductions for items disallowed at the federal level. Initially, this seemed to only apply to only individuals, and not trusts and estates.

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