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Department of Taxation and Finance

Response to the federal Tax Cuts and Jobs Act

The passage of the federal Tax Cuts and Jobs Act (TCJA) will have a significant impact on the economy and tax system of New York State. New York State has taken several actions in response to the passage of the federal bill, which are outlined below.

Preliminary report on the Tax Cuts and Jobs Act of 2017

In January, the Tax Department released a preliminary report to the Governor to outline options for New York State tax reform in response to the TCJA.  The report is divided into four sections.

  • Part I outlines a proposal to increase charitable giving in New York State;
  • Part II discusses various options for reducing the New York State’s reliance on the personal income tax and adopting an employer compensation expense tax, including the possibility of a voluntary employer opt-in system;
  • Part III outlines options for consideration of an unincorporated business tax; and
  • Part IV discusses the impacts of the TCJA on New York State’s tax system and potential responses.

Actions taken in the FY 2019 Enacted Budget

The Division of the Budget released a summary of certain actions contained in the Enacted Budget (Chapter 59 of 2018). The FY 2019 Budget:

  • creates a new state-operated Charitable Gifts Trust Fund to accept donations for the purposes of improving health care and public education in New York State;
  • authorizes local governments to establish charitable gift reserve funds and to offer real property tax credits to incentivize contributions; and
  • allows employers to opt-in to a new Employer Compensation Expense Program (ECEP).

Discussion draft of an unincorporated business tax (UBT)

Following up on the options outlined in Part III of the preliminary report, the Tax Department has released a discussion draft of legislation imposing an unincorporated business tax (UBT), including a summary document highlighting key provisions of the draft.

This discussion draft puts forward a statewide UBT for public consideration and comment. The draft would apply a new business tax on partnerships doing business in New York State, while creating a corresponding tax credit for individual and corporate partners of those partnerships.

The purpose of this discussion draft is to allow interested parties the opportunity to provide feedback on both the general concept of a statewide UBT and the specific details involved in the design and implementation of such a tax. To that end, the discussion draft is annotated to note areas for potential comment.

The Tax Department welcomes your input on the draft, and respectfully asks for responses by July 16, 2018.  Please send comments to

UBT discussion resources