Assemblywoman Paulin: Proposes Legislation For Salt Cap Tax Relief For Partnerships and Fights For Salt Relief For Individual Residents
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This in from Assemblywoman Amy Paulin:
The federal Tax Cuts and Jobs Act of 2017 (the Act) eliminated the full deductibility of state and local taxes (SALT), and capped deductions at $10,000. This law disproportionately hurts Democratic states like New York, where residents’ state and local taxes often exceed $10,000. To fight back I’ve proposed legislation that would make the full SALT deduction available to partnerships and other pass-through entities. The proposal will be considered during the New York State legislative session which begins this month.
Relief for Partnerships
As it stands right now, the SALT cap only applies to deductions paid by individuals, but not by corporations. Since members or shareholders of partnerships typically pay income taxes individually, rather than at the entity level, they are subject to the SALT cap.
My proposed legislation however would allow New York State partnerships and other pass-through business entities to elect to pay a tax to New York State, for which they would get a full federal deduction, with the tax payments offsetting the partners’ New York State income tax. This set-up would be fiscally neutral to New York State, but would allow partners to take the full SALT deduction, which would otherwise be limited to $10,000 if the partners paid their income taxes directly to New York State.
Following the passage of the Act in 2017, several states, including New Jersey and Connecticut, passed similar laws allowing pass-through entities to pay taxes at the entity level, and receive a credit on their state income taxes to offset it, which avoids the SALT cap. On November 9, 2020, the IRS issued a notice which stated that they would allow this arrangement to apply to tax payments made on or after November 9, 2020.
This is an opportunity that should not be missed. Now that the IRS has approved the taxation structure for partnerships and pass-through entities, we should quickly pass my bill and give much needed relief to New Yorkers who have been disproportionately affected by the SALT cap. The legislation will provide a common-sense benefit to New Yorkers - at no cost to New York State - for the 2021 tax year.
Relief for Individual Residents
In 2018 I authored and passed a law that allowed deductions for contributions to charitable reserve funds in order to give relief to residents who had just lost the SALT deduction. The law gave counties, local governments, and public school districts the option to authorize a real property tax credit of up to 95% of the amount of a property owner’s monetary contribution to the reserve funds.
Later in 2018, however, the IRS issued regulations denying that a taxpayer who makes a contribution to a charitable reserve fund could receive a state or local tax credit. A subsequent IRS notice then announced that businesses would be entitled to a full deduction for their contributions, creating an arbitrary distinction between contributions made by businesses, whose full deductibility was preserved, and contributions made by individuals, which were not.
In response to the IRS’ regulations and conflicting positions on charitable reserve funds, I formed and chaired a coalition of counties, cities, towns, villages, and school districts in New York, called the Coalition for the Charitable Contribution Deduction (3CD), and filed a letter with and testified before the Treasury Department and the IRS, requesting the withdrawal of the proposed regulations under the Act which denied a full charitable deduction for donations from individuals to the charitable funds.
In 2019, working with the Village of Scarsdale, a lawsuit was filed against the IRS, with the Village of Scarsdale acting as Plaintiff, seeking to overturn the IRS regulations as arbitrary and capricious, and therefore invalid. I’ve continued to take the lead role in the initiative, asserting that taxpayers should be entitled to the full charitable deduction for their donations to charitable reserve funds and similar vehicles. The lawsuit is ongoing. Together with the 3CD, we are hopeful that the IRS will issue new regulations that conform to established law and internal IRS rulings, and we are continuing our challenge to the regulations in federal court.
It is critically important that we take all of the actions we can to help minimize the impact to residents, many of whom are struggling financially due to the pandemic. The establishment of charitable reserve funds to give a SALT deduction to individual residents, and the allowance of a SALT deduction for partnerships and pass-throughs, would provide tax relief to many New Yorkers right now - at a time when they need it the most.
Santa Recieves Over 600 Letters from Scarsdale Kids
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Scarsdale kids have big expectations for Christmas this year – but are also concerned for Santa’s health, well-being and whereabouts. That’s what we noticed from a sampling of the 600 Letters to Santa received by the Scarsdale Recreation Department this year, addressed to Elf Road on the North Pole.
The letters provide a window on what’s on kids minds during this most unusual year. Many of the kids assured Santa that they had been very good this year – and then detailed the toys, books, make-up, outdoor equipment and electronics they hoped to receive. One girl lamented, “I hope this won’t be the first year I get coal in my stocking,” and apologized to Santa for asking for an expensive night light with blue tooth. Other popular requests were for hover boards, roller blades, paw patrol items, watches, sports jerseys, bikes, craft kits and books. One girl asked for “Great Expectations” by Charles Dickens along with a bookshelf to house it.
The kids displayed much empathy for Santa and others in their families. They asked Santa how he was getting around, how he was feeling and wondered how old he was…. that child guessed “Four years old.” Another asked Santa to bring a present for her mom because “she believes in you and it’s her birthday.”
One of the sweetest requests was for a baby brother.
Two mothers or caregivers made their requests as well.
A 29 year-old named Samantha said she had “kept herself alive”, and “not died,” and wished for “a well-deserved break and $$$ $$$.”
Another caregiver named Lindsay was happy and grateful. She said, “Dear Santa Claus: This year for Christmas I want nothing. I am perfectly satisfied with my life. So instead here are a couple of things I am grateful for. I am grateful for my family, this job, this amazing family I work for, and the sweet kids. I am also grateful for my health and that we all got through COVID. Thank you for Christmas.”
Each letter received an official response from the desk of Santa Claus and assured the senders, “I have already made my list and checked it twice – and guess what? If you’re on the nice list again this year I will be sure to bring you something very speak for being so good.”
Merry merry everyone.
Working From Home? Here's A Way to Have a Virtual Office and a Business Address Without Signing a Lease
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Some businesses are born out of necessity. As a lawyer in New York, Dan Shaked found that he needed an office in Wilmington, Delaware for marketing purposes. Not wanting to spend big bucks on a lease and furniture, he signed up for a virtual office in downtown Wilmington at a fraction of what a full-time office would cost. In addition, his New York law office was located in a shared office space. As he became more familiar with the workspace industry, he realized that this was the future. But it needed some tweaking.
He considered his options. At the time, there were many co-working and executive office suites. Shaked explained, “You could rent a 20,000 square foot office space, partition it into 50 individual offices and rent them out for a profit. But this concept has a very high startup cost, is subject to market conditions, and would have required competition with the likes of WeWork.” Virtual Offices, on the other hand, were underserved. Shaked saw an opportunity to combine the best of both – to provide virtual offices with a few meeting rooms that could be rented by the hour or by the day.
That led to the formation of the first 4Corners Business Center in downtown Brooklyn, opened in September 2014. Today, downtown Brooklyn 4Corners provides virtual offices to over 120 companies including lawyers and many small companies in the technology, construction, cleaning, real estate, finance, and advertising industries. Most of their clients work from home but prefer to have a prestigious business address and to avoid letting their clients know where they live. Brooklyn 4Corners also has three meeting rooms that they rent by the hour/day that customers use for client meetings, job interviews, depositions and even on-location movie shootings. In fact, word had gotten out at the NYU Graduate Film School that the premises were perfect for shooting that “office scene.” Shaked also got a call from a large movie studio to shoot a scene, but could not accommodate the 170 people on set.
In the winter of 2019 Shaked decided it was time to open a second location in his own hometown, Scarsdale, where he lives with his wife and two children. He hired Richard, an old law client, to manage the Brooklyn location and leased space at 14 Harwood Court in Scarsdale, a prestigious old building across the street from the train station with ample parking. Now local business owners can enjoy the prestige of a prime Scarsdale business address at a fraction of the cost of a full-time office.
Here’s what 4Corners can do you for:
-Provide a downtown business address
-Collect your mail and special packages which you can stop by to pick up or have forwarded to you
-Provide a local phone number
-Offer privacy
Shaked says, “We used to market our services as an alternative to a full-time office. However, now that everyone is working from home, we focus on the advantages of privacy and anonymity. After all, do you really want your clients to know where you live? We heard many stories about disgruntled clients showing up at a business owner’s home harassing family members. By simply setting up a virtual office, no one will know where you live; and if clients or potential clients Google your business address, they will assume that you work from a prestigious office complex.”
So if you’re a one man office working from home and would like some additional services, privacy and a Scarsdale business address, click here to find out what 4Corners Business can do for you.
Citizens Nominating Committee Seeks Nominees for Mayor and Village Trustee
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Following its public organizational meeting, the Citizens Nominating Committee seeks Scarsdale residents for the offices of Village Mayor and Village Trustee. All Village residents are invited to seek nomination for Village Mayor and Trustee. Please send your name in by January 1, 2021. Contact any elected member of the CNC (https://www.scarsdaleprocedurecommittee.org/CNC), or inform the CNC Chair, Eric Lichtenstein at 917-864-1122 or [email protected], or CNC Vice Chair, Steve Pass at 917-744-5026 or [email protected].
Warning: Police Are Issuing Summons for Leaf Piles in Streets
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Here's another thing to worrk about. The Scarsdale Police are serving summons’ for leaf piles in the street. We just received the weekly police blotter and see that the police are giving summons for piling leaves in the roadway. These leaves can obstruct traffic and provide dangerous obstacles for drivers and walkers.
According to Village Code, leaves are to be kept on your lawn, not in the street. A memo from the Village says, “All leaves must be raked to the area between the curb or pavement edge and one’s private property line for collection. Additionally, no leaves are to be deposited into any brook, stream, or open watercourse within the Village.”
If they do find a pile of leaves in the street in front of your house, you might receive a summons and the fee is $75.
So if you’re raking, or your landscaper is doing it for you, keep your leaves on your lawn or mulch mow them. Even if your gardener breaks the law, you are responsible and will have to pay the fee.
