Bill > S03340

This bill modifies how gains from Qualified Opportunity Zones (QOZs) are treated for tax purposes in New York State and New York City. Specifically, the bill removes the tax exclusion for gains from QOZ investments starting in tax years beginning on or after January 1, 2026. Qualified Opportunity Zones are designated economically distressed areas where investments can receive preferential tax treatment under federal law (section 1400Z-2 of the Internal Revenue Code). The bill amends multiple sections of New York State tax law and the New York City administrative code to ensure that for tax years starting in 2026, when a taxpayer sells or exchanges property in a QOZ where they previously made a special tax election, the property's tax basis will be calculated as if they had never made that election. This effectively means that taxpayers will no longer be able to exclude gains from QOZ investments from their state and city taxable income, effectively eliminating the state-level tax benefit that previously mirrored the federal QOZ investment incentive.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S3340