The Assistant Majority Leader and Vice-Chair of the Taxation Committee, Republican Tom Phillips from Manhattan, introduced a tax reform bill in Committee on Monday.
“It is basically a full repeal of the LLC exemptions that are on the books right now,” said Phillips. “It would make it retroactive to January 1 of 2017. It’s a starting point in a conversation.”
Even though such a retroactive action would need to happen relatively quickly to get money going into the state’s coffers, it still needs to be discussed and debated, according to Phillips.
“We, I think, recognize, that we are going to have to restructure the tax code to refill the lost revenue that we’re facing at the Statehouse,” said Phillips. “This is a first start in a conversation that will probably take quite awhile to find final resolution.”
The so-called LLC exemption will not fix everything, either, said Phillips.
“I see this as a building block,” said Phillips. “I think there are going to be other components. Whether that’s the income tax, or other ideas that will be thrown out for consideration.”
Multiple members of the committee said that it would be difficult for them to support retroactive action if it is not taken swiftly so that business owners can know what their tax situation is for as much of the year as possible.
“I think you have a lot of new members of the House and the Senate that ran on the platform of, it’s time to get this issue fixed,” said Phillips. “I think it’s not entirely an issue of lost revenue. I think a lot of people see it as an issue of tax equity.”
Phillips noted that the committee did not talk about any potential impact the Supreme Court’s school funding adequacy decision might have on the budget going forward.
“I think all the legislators understand that is an issue that will deserve its own consideration once that ruling is issued,” said Phillips. “As the vice-chair, I certainly understand that’s going to have to be part of this larger conversation.”
The Supreme Court has not, as yet, given any indication as to when it might rule on that case.