A federal tax reform that gives businesses a bonus depreciation allowance for certain assets will also save New York businesses on their state taxes because state policy is linked with the federal code and will not "decouple," Governor Pataki has told central New York manufacturers. That would mean a savings on state taxes of up to $300 million for New York State taxpayers.
The Governor made his remarks at the annual dinner of the Manufacturers Association of Central New York (MACNY) in Syracuse April 24. Nearly 700 business leaders in central New York attended the dinner.
Business Council President Daniel B. Walsh had urged the Governor not to decouple in a November 8 letter.
"It is essential that New York conform with any federal changes, to avoid losing ground to competing states," Walsh wrote.
New York State tax policy is now "coupled" with the federal governments on many issues, including the depreciation rules changed by the recent economic-stimulus law passed in Washington. That law permits federal taxpayers to take, retroactively, an additional 30 percent bonus depreciation allowance in the year certain assets are placed in service.
Because New York tax policy is coupled with federal tax policy, the same tax reduction automatically will apply to state taxpayers as well unless lawmakers decouple.
In his remarks at the dinner, the Governor also said that:
- The administration is working to develop further workers' compensation reforms. Additional workers' comp reform is a top legislative priority of The Business Council. Specifically, The Council is urging lawmakers to allow up to 500 weeks of benefits in cases of partial impairment not covered by scheduled benefits. Most states already offer benefits for a set period of time in such cases; New York has no limit. The Council also supports the adoption of objective medical guidelines for determining the degree of disability in such cases.
- The final state budget should include funding for high-tech Centers of Excellence. The Council also lists such investments in collaborative high-tech R&D among its top legislative priorities.
- The final state budget would continue to provide for enhancements to the Empire Zone program. Empire Zones are regions in which employers that invest to create jobs can receive significant incentives. Senate Majority Leader Joseph Bruno has already proposed a $400 million expansion of the Empire Zone program, which The Council strongly supports.