S 5644: Establishes a tax credit for contractors who award a subcontract to MWBE or SDVOBE subcontractors in furtherance of a state contract.

  
  STATE OF NEW YORK ________________________________________________________________________ 5644 2025-2026 Regular Sessions  IN SENATE February 26, 2025 ___________ Introduced by Sen. BAILEY -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue AN ACT to amend the tax law, in relation to establishing a MWBE or SDVOBE subcontractor tax credit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 210-B of the tax law is amended by adding a new 2 subdivision 61 to read as follows: 3 61. MWBE or SDVOBE subcontractor tax credit. (a) Allowance of credit. 4 For taxable years beginning on or after January first, two thousand 5 twenty-six, an eligible taxpayer shall be allowed a credit, to be 6 computed as provided in this subdivision, against the tax imposed by 7 this article, for awarding a professional services, trades, or supplier 8 subcontract to a qualified subcontractor in furtherance of a state 9 contract. The taxpayer may claim the credit in the year in which payment 10 is made by the eligible taxpayer to the qualified subcontractor for the 11 performance of such subcontract. If the taxpayer claims the credit 12 allowed under this section, the taxpayer may not use the awarding of a 13 subcontract to a qualified subcontractor that is the basis for this 14 credit in the basis of any other credit allowed under this article. 15 (b) Definitions. (i) The term "qualified subcontractor" shall mean a 16 minority or woman-owned business enterprise certified pursuant to arti- 17 cle fifteen-A of the executive law or a service-disabled veteran-owned 18 business enterprise certified pursuant to article three of the veterans' 19 services law that maintains their headquarters within New York state. 20 (ii) The term "eligible taxpayer" shall mean a contractor that awards 21 a subcontract to a qualifying subcontractor in furtherance of a state 22 contract. 23 (iii) The term "state contract" shall mean a contract for the purchase 24 by the state of goods, property, or services or for the construction of 25 any building or structure for the state, which contract is executed by EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10258-01-5 
 S. 5644 2 1 any department, board, bureau, commission, or agency of the state, or by 2 any officer, official, employee, or agent thereof. 3 (c) Contractor prohibition. A contractor shall not discharge a 4 contract with a subcontractor and hire a qualifying subcontractor solely 5 for the purpose of qualifying for this credit unless the previous 6 contractor has been removed for reasons not under the control of the 7 contractor. 8 (d) Amount of credit. The amount of credit shall be thirty-five 9 percent of the total amount of payments made by the eligible taxpayer to 10 a qualifying subcontractor in the taxable year in which such credit is 11 claimed. 12 (e) Carryovers. The credit allowed under this subdivision for any 13 taxable year shall not reduce the tax due for such year to less than the 14 amount prescribed in paragraph (d) of subdivision one of section two 15 hundred ten of this article. However, if the amount of credit allowable 16 under this subdivision for any taxable year reduces the tax to such 17 amount or if the taxpayer otherwise pays tax based on the fixed dollar 18 minimum amount, any amount of credit not deductible in such taxable year 19 may be carried over to the following three years and may be deducted 20 from the taxpayer's tax for such year or years. 21 § 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 22 of the tax law is amended by adding a new clause (lii) to read as 23 follows: 24 (lii) MWBE or SDVOBE Amount of credit under subdivision 25 subcontractor tax sixty-one of section two hundred 26 credit under subsection (qqq) ten-B 27 § 3. Section 606 of the tax law is amended by adding a new subsection 28 (qqq) to read as follows: 29 (qqq) MWBE or SDVOBE subcontractor tax credit. (1) Allowance of cred- 30 it. For taxable years beginning on or after January first, two thousand 31 twenty-six, an eligible taxpayer shall be allowed a credit, to be 32 computed as provided in this section, against the tax imposed by this 33 article, for awarding a professional services, trades, or supplier 34 subcontract to a qualified subcontractor in furtherance of a state 35 contract. The taxpayer may claim the credit in the year in which payment 36 is made by the eligible taxpayer to the qualified subcontractor for the 37 performance of such subcontract. If the taxpayer claims the credit 38 allowed under this subsection, the taxpayer may not use the awarding of 39 a subcontract to a qualified subcontractor that is the basis for this 40 credit in the basis of any other credit allowed under this article. 41 (2) Definitions. (A) The term "qualified subcontractor" shall mean a 42 minority or woman-owned business enterprise certified pursuant to arti- 43 cle fifteen-A of the executive law or a service-disabled veteran-owned 44 business enterprise certified pursuant to article three of the veterans' 45 services law. 46 (B) The term "eligible taxpayer" shall mean a contractor that awards a 47 subcontract to a qualifying subcontractor in furtherance of a state 48 contract. 49 (C) The term "state contract" shall mean a contract for the purchase 50 by the state of goods, property, or services or for the construction of 51 any building or structure for the state, which contract is executed by 52 any department, board, bureau, commission, or agency of the state, or by 53 any officer, official, employee, or agent thereof or on New York state 54 capital infrastructure projects where a public benefit is derived 55 through license or utilization of state-owned lands. 
 S. 5644 3 1 (3) Contractor prohibition. A contractor shall not discharge a 2 contract with a subcontractor and hire a qualifying subcontractor solely 3 for the purpose of qualifying for this credit. 4 (4) Amount of credit. The amount of credit shall be thirty-five 5 percent of the total amount of payments made by the eligible taxpayer to 6 a qualifying subcontractor in the taxable year in which such credit is 7 claimed. 8 (5) Application of credit. If the amount of the credit allowable under 9 this subsection for any taxable year exceeds the taxpayer's tax for such 10 year, the excess shall be treated as an overpayment of tax to be credit- 11 ed or refunded as provided in section six hundred eighty-six of this 12 article, provided, however, that no interest shall be paid thereon. 13 § 4. This act shall take effect immediately.