N.Y. Tax Law § 1301-b: City separate tax on the ordinary income portion of lump sum distributions

§ 1301-B. City separate tax on the ordinary income portion of lump sum

distributions. (a) Imposition of separate tax. The city separate tax on

the ordinary income portion of a lump sum distribution imposed pursuant

to the authority of this article shall be imposed for each taxable year

on the ordinary income portion of a lump sum distribution of every

resident individual, estate or trust of such city which has made an

election of lump sum treatment under subsection (e) of section four

hundred two of the internal revenue code.

(b) Amount of separate tax. The amount of tax imposed pursuant to the

authority of subsection (a) for any taxable year shall be an amount

equal to five times the tax which would be imposed at the rate set forth

in paragraph three of subsection (a) or (b) of section thirteen hundred

four of this article, whichever may be applicable, if the recipient were

an individual referred to in such subsection and the city taxable income

referred to were an amount equal to one-fifth of the excess of:

(1) the total taxable amount of the lump sum distribution for the

taxable year, over

(2) the minimum distribution allowance.

(c) Minimum distribution allowance. For purposes of this section, the

minimum distribution allowance shall be that which is calculated

according to subparagraph (C) of paragraph one of subsection (e) of

section four hundred two of the internal revenue code.

(d) Liability for tax. The recipient of a lump sum distribution shall

be liable for the tax imposed pursuant to the authority of this section.

(e) Multiple distributions and distributions of annuity contracts. For

purposes of this section the rules concerning multiple distributions and

distributions of annuity contracts as specified by paragraph two of

subsection (e) of section four hundred two of the internal revenue code

shall be applicable, except that references to the "tax imposed by

paragraph (1) (A)" shall be deemed to be references to the city separate

tax on the ordinary income portion of a lump sum distribution authorized

by this article, and except that only lump sum distributions (or

portions thereof) and distributions of annuity contracts subject to the

city separate tax on the ordinary income portion of lump sum

distributions authorized by this article shall be included, and except

that references to the secretary shall be deemed to be references to the

tax commission.

(f) Definitions and special rules. For purposes of this section, the

following provisions shall apply, to the extent applicable to the

taxpayer's federal tax on lump sum distributions: (1) the definitions

and special rules as specified in paragraph four of subsection (e) of

section four hundred two of the internal revenue code; and (2) the

special rules relating to (A) individuals who have attained the age of

fifty before January first, nineteen hundred eighty-six and (B) capital

gains, as specified in paragraphs three, four, five and six of

subsection (h) of section eleven hundred twenty-two of the tax reform

act of nineteen hundred eighty-six as enacted by public law 99-514, but

(i) in the event that paragraph three of such subsection is applicable,

clause (ii) of subparagraph (B) of such paragraph shall be applied using

a rate of one and seventy-two hundredths percent, and (ii) in the event

that paragraph five of such subsection is applicable, the words "five"

and "one-fifth" in subsection (b) of this section shall be read as "ten"

and "one-tenth", respectively, and subsection (b) of this section shall

be applied by using the rate of tax specified in subsection (a) of

section thirteen hundred four as such subsection was in effect for

taxable years beginning in nineteen hundred eighty-six.

(g) Credits. The credits against tax authorized under this article,

except for the credit under subsection (a) of section thirteen hundred

ten, shall not be allowed against the city separate tax on the ordinary

income portion of lump sum distributions imposed pursuant to the

authority of this article.