Bill > S00695

This bill establishes a tax-deferred savings account program for small businesses, allowing them to set aside money for facility improvements or equipment procurement with specific tax benefits. Under the proposed legislation, small businesses (as defined by the economic development law) can deposit funds into a special savings account at a banking organization, and these deposits will be tax-exempt. When businesses withdraw funds from these accounts, there are specific tax implications: if the withdrawals are used for the intended purposes of facility improvements or equipment procurement, they are treated favorably. However, if funds are withdrawn for other purposes, the business will be required to include the withdrawal (excluding interest income) in their taxable income, with an additional 10% penalty for non-qualifying uses. The bill applies to both corporate and personal income tax, providing a mechanism for small businesses to save and invest in their growth while receiving tax incentives. The provisions will take effect for taxable years beginning on or after January 1, 2026, giving businesses time to prepare for and understand the new savings account framework.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S695