Highlights of New York State 2024-2025 fiscal year budget

Businesses should review budget changes, including energy storage exemptions and commercial security tax credits, to see how they’re affected.

New York Gov. Kathy Hochul recently signed into law bills necessary to enact the state’s 2024-2025 fiscal year budget. Highlights of some key provisions from S8308C/A8808C (Chapter 58 of the Laws of 2024) and S9309B/A8809B (Chapter 59 of the Laws of 2024) are summarized below.

Exemptions related to residential energy storage systems equipment and electricity

The exempted storage equipment is like a battery and is used in conjunction with residential solar energy systems equipment, which has been exempt since 2005.

  • Section 1115 of the New York State tax law provides an exemption from sales tax for receipts from retail sales of such equipment. Equipment for purposes of this exemption is defined as “an arrangement or combination of components installed in a residence that stores electricity for use at a later time to provide heating, cooling, hot water and/or electricity.” (See S8308C/A8808C, Part PP)
  • Section 1115 also provides an exemption for receipts from the sale of electricity by a person primarily engaged in the sale of this equipment and/or electricity generated by the equipment pursuant to a specific written agreement. (See S8308C/A8808C, Part PP)

The new exemptions went into effect June 1, 2024, and will expire June 1, 2026.

Extension of itemized deduction limitation for charitable contributions

  • For taxable years beginning after 2009 and ending before 2030, the New York itemized deduction for charitable contributions for an individual whose New York adjusted gross income is over $10 million will be limited to 25% of the charitable contribution deduction allowed under Internal Revenue Code section 170. (See S9309B/A8809B, Part A )

Prior to this amendment, the limitation applied to taxable years ending before 2025.

Restrictions on issuing additional notices of deficiency

Sections 689(d)(4) and 1089(d)(4) of the tax law (related to personal income tax and corporation tax, respectively) have been amended to prohibit issuing additional notices of deficiency for a tax return, if a petition for that return has been filed, except in case of fraud or with respect to federal changes or corrections required to be reported. (See S9309B/A8809B Part D )

This is effective for taxable years beginning on or after Jan. 1, 2024. For periods prior to this, the restriction applied to the taxable year.

Commercial security tax credit

For taxable years beginning on or after Jan. 1, 2024, and before Jan. 1, 2026, qualified Article 9, 9-A, or 22 taxpayers may claim a credit of $3,000 for each retail location located in New York State. (See S9309B/A8809B, Part E)

To be eligible for the credit, a business must:

  • have 50 or fewer total employees,
  • operate one or more physical retail locations open to the public,
  • incur costs related to protection against retail theft of goods through retail theft prevention measures (e.g., security officers, cameras, lighting, locks, alarms)
    • cumulative costs for business with 25 or fewer employees must exceed $4,000
    • cumulative costs for business with more than 25 employees must exceed $6,000
  • apply to the Division of Criminal Justice Services for a certificate of tax credit, and
  • attach proof of receipt of its certificate of tax credit to its return. 

What does CohnReznick think?

This year’s budget bill had a small number of changes and is not as impactful to many businesses as prior legislative changes have been. Nonetheless, businesses should review these changes and reach out to their tax advisors for more information, as needed.

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Corey Rosenthal

JD, Principal, Practice Leader, State and Local Tax (SALT) Services

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Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.