NY Gen City L § 25-A-12 (2021)
2021 New York Laws GCT - General City Article 2-D - City Personal Income Tax on Residents 25-A-12 - City Adjusted Gross Income of a Resident Individual.

§ 12. City  adjusted  gross  income  of  a  resident  individual.--(a) General.--The city adjusted gross income of a resident individual  means his  federal  adjusted gross income as defined in the laws of the United States for the taxable year, with the modifications  specified  in  this section.  (b)  Modifications  increasing  federal  adjusted gross income.--There shall be added to federal adjusted gross income:  (1) Interest income on obligations of any state other than this  state or  of a political subdivision of any such other state unless created by compact or agreement to which this state is a party;  (2) Interest or dividend income on obligations or  securities  of  any authority,  commission,  or  instrumentality of the United States, which the laws of the United States exempt from federal  income  tax  but  not from state or local income taxes;  (3)  Income  taxes imposed by the city, this state or any other taxing jurisdiction, to the extent deductible in determining  federal  adjusted gross income and not credited against federal income tax;  (4)  Interest  on  indebtedness  incurred  or continued to purchase or carry obligations or securities the income from which is exempt from tax under this local law, to the extent deductible  in  determining  federal adjusted gross income;  (5)  Expenses  paid  or  incurred  during the taxable year for (A) the production or collection of income which is exempt from tax  under  this local  law,  or  (B)  the  management,  conservation  or  maintenance of property held for the production of such  income,  and  the  amortizable bond  premium  for the taxable year on any bond the interest on which is exempt from tax under this local law, to the extent that  such  expenses and  premiums  are  deductible  in  determining  federal  adjusted gross income; and  (6) In the case of a taxpayer who has exercised the election permitted by subdivisions (g) or (h)  of  this  section,  the  amount  or  amounts required  by  said  subdivisions  to  be added to federal adjusted gross income.  (c) Modifications reducing federal adjusted gross income.--There shall be subtracted from federal adjusted gross income:  (1) Interest income on  obligations  of  the  United  States  and  its possessions  to the extent includible in gross income for federal income tax purposes;  (2) Interest or dividend income on obligations or  securities  of  any authority,  commission  or  instrumentality  of the United States to the extent includible in gross income for federal income  tax  purposes  but exempt  from  state  or  local income taxes under the laws of the United States;  (3) Pensions to officers and employees of this state, its subdivisions and agencies, to the extent  includible  in  gross  income  for  federal income tax purposes;  (4)  Interest  or  dividend income on obligations or securities to the extent exempt from income tax under the laws of this  state  authorizing the  issuance  of such obligations or securities but includible in gross income for federal income tax purposes;  (5) The amount of any refund or credit for overpayment of income taxes imposed by the city, the state, or any other taxing jurisdiction, to the extent  properly  included  in  gross  income  for  federal  income  tax purposes;  (6)  Interest  on  indebtedness  incurred  or continued to purchase or carry obligations or securities the income from which is subject to  tax under  this  local law but exempt from federal income tax, to the extent that such interest is not deductible  in  determining  federal  adjusted  gross  income  and  is attributable to a trade or business carried on by the taxpayer;  (7)  Ordinary  and  necessary  expenses  paid  or  incurred during the taxable year for (A) the production or collection  of  income  which  is subject  to tax under this local law but exempt from federal income tax, or (B) the management, conservation or maintenance of property held  for the  production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to  tax  under this  local  law  but exempt from federal income tax, to the extent that such expenses and premiums are not  deductible  in  determining  federal adjusted  gross  income  and  are  attributable  to  a trade or business carried on by the taxpayer;  (8) In the case of a taxpayer who has exercised the election permitted by subdivisions (g) or (h)  of  this  section,  the  amount  or  amounts required  by  said  subdivisions  to be subtracted from federal adjusted gross income;  (9) With respect to gain derived from the sale or other disposition of any property acquired prior to July first, nineteen  hundred  sixty-six, except  property described in subsections one and four of section twelve hundred  twenty-one  of  the  internal  revenue  code,  the   difference between--  (a)  the amount of the taxpayer's federal adjusted gross income or, in the case of an estate or trust, the taxpayer's taxable income, and  (b) the amount of the taxpayer's federal adjusted gross income or,  in the  case  of  an  estate  or  trust,  the taxpayer's taxable income (if smaller than the amount described in (a)) computed  as  if  the  federal adjusted  basis  of  such  property (on the sale or other disposition of which gain was derived) on the date of the sale or other disposition had been equal to either (i) its fair market value on July  first,  nineteen hundred  sixty-six or the date of its sale or other disposition prior to July first, nineteen hundred sixty-six, plus or minus all adjustments to basis made with respect to such property for federal income tax purposes for periods on and after July first, nineteen hundred sixty-six or  (ii) the  amount  realized  from its sale or disposition, whichever is lower; provided,  however,  that  the  total  modification  provided  by   this subparagraph  shall  not  exceed  the  amount  described in (i), (ii) or (iii)--  (i) if the taxpayer's federal adjusted gross  income  reflects  a  net gain  from  the  sale  or other disposition of property, except property described  in  subsections  one  and  four  of  section  twelve  hundred twenty-one  of  the  internal revenue code, the amount of such gain plus one thousand dollars,  (ii) if the taxpayer's federal adjusted gross income  reflects  a  net loss  from  the  sale  or other disposition of property, except property described  in  subsections  one  and  four  of  section  twelve  hundred twenty-one  of  the  internal  revenue  code,  the  amount  by which one thousand dollars exceeds such loss,  (iii) if the taxpayer's federal adjusted gross income reflects neither a net gain nor a  net  loss  from  the  sale  or  other  disposition  of property,  other  than property described in subsections one and four of section twelve hundred twenty-one of  the  internal  revenue  code,  one thousand dollars.  (d)  Modification for city fiduciary adjustment.--There shall be added to or subtracted from federal adjusted gross income (as the case may be) the taxpayer's share, as beneficiary of an estate or trust, of the  city fiduciary adjustment determined under section nineteen.  (e)  Partners.--The amounts of modifications required to be made under this section by a partner, which relate to items of income,  gain,  loss  or  deduction  of  a  partnership,  shall  be  determined  under section seventeen.  (f)  Husband  and  wife.--If  husband and wife determine their federal income tax on a joint return  but  determine  their  city  income  taxes separately,  they  shall  determine  their  city  adjusted gross incomes separately  as  if  their  federal  adjusted  gross  incomes  had   been determined separately.  (g)  Optional  modifications.--At  the  election of the taxpayer there shall also be subtracted from federal adjusted gross  income  either  or both  of  the  items  set  forth  in  paragraphs  one  and  two  of this subdivision, except that only one of such items shall be subtracted with respect to any one item of property.  (1) Depreciation with respect to any property  such  as  described  in paragraph   three   of   this   subdivision,  not  exceeding  twice  the depreciation allowed with respect  to  the  same  property  for  federal income  tax  purposes.  Such  modification  shall  be  allowed only upon condition that  any  depreciation  allowed  with  respect  to  the  same property  in determining federal adjusted gross income shall be added to federal adjusted gross income pursuant to paragraph six  of  subdivision (b)  of  this  section.  The total of all deductions allowed pursuant to this paragraph in any taxable year or years with respect to any property shall not exceed its cost or other basis.  (2) Expenditures paid or incurred during  the  taxable  year  for  the construction,  reconstruction,  erection  or acquisition of any property such as described in paragraph three of this subdivision which  is  used or  to  be  used  for  purposes  of  research  and  development  in  the experimental or laboratory sense. Such purposes shall not be  deemed  to include  the ordinary testing or inspection of materials or products for quality  control,  efficiency  surveys,  management  studies,   consumer surveys,   advertising,   promotions  or  research  in  connection  with literary, historical or similar projects.  Such  modification  shall  be allowed  only  on  condition  that,  for  the  taxable  years,  and  all succeeding years, any deductions allowed for federal income tax purposes on account of such expenditures or on account  of  depreciation  of  the same  property,  except to the extent that its basis may be attributable to factors other than such  expenditures,  shall  be  added  to  federal adjusted  gross  income  pursuant to paragraph six of subdivision (b) of this section, or in case a modification is allowable  pursuant  to  this paragraph  for  only  a  part  of such expenditures, on condition that a proportionate part of any such deductions allowed for federal income tax purposes be added to federal adjusted  gross  income.  With  respect  to property  which  is used or to be used for research and development only in part, or during only  part  of  its  useful  life,  the  modification allowable pursuant to this paragraph shall be limited to a proportionate part  of the expenditures relating thereto. If a modification shall have been allowed pursuant  to  this  paragraph  for  all  or  part  of  such expenditures with respect to any property, and such property is used for purposes  other  than  research and development to a greater extent than originally reported, the taxpayer shall report such use  in  his  return for the first taxable year during which it occurs, and the administrator may recompute the tax for the year or years for which such deduction was allowed,   and  may  assess  any  additional  tax  resulting  from  such recomputation within the  time  fixed  by  subdivision  (c)  of  section sixty-three of this local law.  (3)  Such modifications shall be allowed only with respect to tangible property  which  is  depreciable  pursuant  to   section   one   hundred sixty-seven of the internal revenue code, having a situs in the city and used  in  the  taxpayer's  trade  or  business,  (A)  the  construction,  reconstruction or erection of which is completed after  June  thirtieth, nineteen  hundred  sixty-six, and then only with respect to that portion of the basis thereof or  the  expenditures  relating  thereto  which  is properly  attributable  to such construction, reconstruction or erection after June thirtieth, nineteen hundred sixty-six, or (B) acquired  after June  thirtieth,  nineteen  hundred  sixty-six by purchase as defined in section one hundred seventy-nine (d) of the internal  revenue  code,  if the original use of such property commenced with the taxpayer, commenced in the city and commenced after such date.  (4)  If  the  modifications allowable for any taxable year pursuant to this subdivision exceed  the  taxpayer's  city  adjusted  gross  income, determined  without  the allowance of such modifications, the excess may be carried over to the following  taxable  year  or  years  and  may  be subtracted from federal adjusted gross income for such year or years.  (5)  In  any  taxable year when property is sold or otherwise disposed of, with respect to which a modification has been  allowed  pursuant  to paragraph  one  or  two  of this subdivision, the basis of such property shall be adjusted to reflect the modifications so allowed,  and  if  the basis  as  so  adjusted  is  lower  than  the adjusted basis of the same property for federal income  tax  purposes,  there  shall  be  added  to federal  adjusted gross income the amount of the difference between such adjusted bases; but if such gain  or  loss  is  considered  a  long-term capital  gain  or loss for federal income tax purposes, the amount to be added shall be limited to fifty percent of the difference  between  such adjusted bases.  (h)    Optional    modification    for    waste   treatment   facility expenditures.--At the election of the  taxpayer,  there  shall  also  be subtracted  from  federal  adjusted  gross  income  expenditures paid or incurred during the taxable year for the  construction,  reconstruction, erection or improvement of industrial waste treatment facilities and air pollution control facilities.  (1)  (A)  The  term "industrial waste treatment facilities" shall mean facilities  for  the  treatment,  neutralization,  or  stabilization  of industrial  waste  (as the term "industrial waste" is defined in section twelve hundred two  of  the  State  public  health  law)  from  a  point immediately  preceding  the  point  of such treatment, neutralization or stabilization to the point of disposal, including the necessary  pumping and transmitting facilities, but excluding such facilities installed for the  primary  purpose  of  salvaging  materials  which are usable in the manufacturing process or are marketable.  (B) The term "air pollution control facilities" shall mean  facilities which  remove,  reduce,  or render less noxious air contaminants emitted from an air contamination source (as the  terms  "air  contaminant"  and "air  contamination  source"  are  defined  in  section  twelve  hundred sixty-seven of the state public health law)  from  a  point  immediately preceding the point of such removal, reduction or rendering the point of discharge  of  air, meeting emission standards as established by the air pollution control board, but excluding such facilities installed for the primary  purpose  of  salvaging  materials  which  are  usable  in   the manufacturing  process  or are marketable and excluding those facilities which rely for their efficacy on dilution, dispersion or assimilation of air contaminants in the ambient air after emmission.  (2) Such modifications shall be allowed only  (A) with respect to tangible property which is  depreciable,  pursuant to  section one hundred sixty-seven of the internal revenue code, having a situs in the city and used in the taxpayer's trade  or  business,  the construction,  reconstruction,  erection or improvement of which, in the case of industrial waste treatment facilities, is initiated on or  after  July  first,  nineteen hundred sixty-six, and only for expenditures paid or incurred prior to January first,  nineteen  hundred  seventy-two,  or which,  in the case of air pollution control facilities, is initiated on or after July first, nineteen hundred sixty-six, and  (B) on condition that such facilities have been certified by the state commissioner of health or his designated representative, pursuant to the state  public  health law, as complying with the provisions of the state public health law, the state sanitary code and regulations,  permits  or orders promulgated pursuant thereto, and  (C)  on condition that for the taxable year and all succeeding taxable years, any deductions allowed for federal income tax purposes  for  such expenditures  or  for  depreciation  of the same property, except to the extent that its basis may be attributable to  factors  other  than  such expenditures,  be  added  to  federal  adjusted gross income pursuant to paragraph six  of  subdivision  (b)  of  this  section,  or  in  case  a modification  is allowable pursuant to this paragraph for only a part of such expenditures, on condition that a proportionate amount of any  such deductions  allowed  for federal income tax purposes be added to federal adjusted gross income, and  (D) where the election provided for  in  subdivision  (g)  of  section twelve has not been exercised in respect to the same property.  (3)  (A)  If  expenditures in respect to an industrial waste treatment facility or an air pollution control facility have  been  allowed  as  a modification  as provided herein and if within ten years from the end of the taxable year in which such modification was allowed such property or any part thereof is used for the primary purpose of salvaging  materials which  are  usable  in  the manufacturing process or are marketable, the taxpayer shall report such change of use in its  return  for  the  first taxable year during which it occurs, and the administrator may recompute the  tax  for the year or years for which such modification was allowed, and may assess any additional  tax  resulting  from  such  recomputation within  the  time fixed by paragraph eight of subdivision (c) of section sixty-three.  (B) If a modification is allowed as herein provided  for  expenditures paid  or  incurred  during  any taxable year on the basis of a temporary certificate of compliance issued pursuant to  the  state  public  health law,  and  if  the  taxpayer  fails to obtain a permanent certificate of compliance upon completion of the facilities with respect to which  such temporary certificate was issued, the taxpayer shall report such failure in  its  report  for  the  taxable year during which such facilities are completed, and the administrator may recompute the tax for the  year  or years  for  which  such  modification  was  allowed,  and may assess any additional tax resulting from such recomputation within the  time  fixed by paragraph eight of subdivision (c) of section sixty-three.  (4)  In  any  taxable year when property is sold or otherwise disposed of, with respect to which a modification has been  allowed  pursuant  to this paragraph, such modification shall be disregarded in computing gain or  loss,  and the gain or loss on the sale or other disposition of such property shall be the gain or loss  entering  into  the  computation  of federal adjusted gross income for such taxable year.