The New York State Senate advanced a package of tax proposals affecting corporations and high-income earners in its One-House budget resolution released this week. The measures, backed by State Senator Andrew Gounardes, include raising the corporate tax rate to 9% and ending a sales tax exemption for certain gold purchases.
Gounardes said the proposals are intended to fund state programs as federal support for health care, food assistance, and housing declines. The measures also would move parts of New York’s tax code away from certain federal provisions enacted during the Trump administration.
The proposed corporate tax change would raise New York’s top corporate tax rate from 7.25% to 9% for businesses with income above $5 million. The Senate has not released an estimate of the additional revenue the increase would generate.
The package also would raise state income taxes by 0.5% for taxpayers at the highest income levels. The Senate resolution does not specify the income threshold for that increase or provide projections for affected taxpayers.
Another proposal would eliminate the sales tax exemption for purchases of gold bars, bullion, and other precious metals valued at $1,000 or more. Those transactions are currently exempt from sales tax in New York.
If the exemption is removed, gold purchases would be taxed like other goods. In New York City, the combined state and local sales tax rate is 8.875%, which would add nearly $900 in tax to a $10,000 gold purchase.
Gounardes has highlighted the exemption publicly and said it mainly benefits wealthy investors. The proposal would apply the same sales tax treatment to those purchases as to other retail transactions.
Three of the six proposals would decouple parts of New York’s tax code from federal law. That would allow the state to maintain different tax treatment from the federal government in those areas.
One proposal would decouple New York from the federal expansion of the Qualified Small Business Stock exemption. Gounardes said the provision largely benefits venture capitalists and high-income investors who can exclude capital gains from taxation.
Another proposal would decouple New York from federal business expensing rules that allow companies to immediately deduct certain capital investments. Under the state proposal, businesses would instead follow different depreciation schedules for New York tax purposes.
The package also would reduce the pass-through entity tax credit. The PTET allows business owners to shift income taxes from the individual level to the entity level and was created after the 2017 federal cap on state and local tax deductions.
The Senate’s inclusion of the measures in its one-house budget marks the chamber’s opening position in negotiations with the Assembly and Governor Kathy Hochul. One-house budgets are each chamber’s first formal response to the governor’s executive budget proposal.
The Senate and Assembly released separate budget resolutions this week with differences across several policy areas beyond taxation. Both chambers left out Hochul’s proposed car insurance reforms and differed on transit proposals including robotaxi pilots and free bus programs.
Hochul has not publicly commented on Gounardes’ tax proposals. Her office did not respond to requests for comment.
Gounardes said the additional revenue could help fund programs including universal child care. New York does not currently provide universal child care, though subsidy programs are available for some low-income families.
For corporations with New York income above $5 million, the proposed rate increase would raise the tax burden on that income by 24%. A company with $10 million in New York taxable income currently pays $725,000 in state corporate tax at the 7.25% rate. At a 9% rate, that liability would increase to $900,000.
Businesses below the $5 million threshold would continue to pay the current 7.25% corporate tax rate. The proposed increase would apply only to businesses above that level.
For high-income individuals, the additional 0.5% would be added to New York’s existing graduated income tax structure. The top rate is currently 10.9% for income above $25 million. The proposal would raise that top marginal rate to 11.4%.
Ending the precious metals exemption would affect purchases of $1,000 or more involving gold, silver, platinum, and similar assets. The change could affect both individual buyers and dealers.
The decoupling provisions would require businesses operating in multiple states to use different tax calculations for federal and New York filings. Accounting firms and tax software providers also would need to update systems to reflect the separate treatment.
Business groups had not yet released public statements on the proposals at the time of the report. No positions from chambers of commerce, industry associations, or economic policy organizations opposing the measures were included.
The Senate and Assembly must now reconcile their one-house budgets and negotiate with the governor on a final spending plan. New York’s fiscal year begins April 1, giving lawmakers about three weeks to complete budget talks.
Under the state constitution, New York must enact a balanced budget. Any spending increases must be offset by higher revenue or spending reductions elsewhere.
If the proposals are approved during negotiations and signed into law, most would take effect in the 2027 tax year. The decoupling provisions also would require the state to continue reviewing future federal tax changes to determine whether to conform or diverge.
Source: Sen. Gounardes’ Proposals to Close Tax Loopholes Included in Senate One-House Budget | The New York State Senate