Bill > A03246

This bill modifies New York State and New York City tax laws regarding gains from qualified opportunity zones (QOZs), which are designated economically distressed areas where investments can receive preferential tax treatment under federal law. The bill removes the current tax exclusion for gains from QOZ investments by adding provisions to several sections of the tax law that will, starting in tax year 2026, require taxpayers to calculate their tax basis as if they had not made the federal QOZ election. Specifically, the bill amends multiple sections of the New York State tax law and the New York City administrative code to eliminate the tax benefit of excluding gains from federal gross income that were previously allowed under section 1400Z-2 of the Internal Revenue Code. These changes mean that taxpayers will no longer be able to exclude QOZ investment gains from their state and city tax calculations, effectively increasing the tax liability for investments in these zones. The bill takes effect immediately but will apply to taxable years beginning on or after January 1, 2026, giving taxpayers and investors advance notice of the upcoming change in tax treatment.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/A3246