NYC 9/11 Public Portal Document
Flynn, Barbara
From: [email protected]
Sent: Tuesday, November 13, 2001 2:51 PM
To: [email protected]; [email protected]
Cc: [email protected]; [email protected];
[email protected]; [email protected]; piscitellia%busctr%
[email protected]
Subject: fwd: Federal Stimulus Package
Please see the attached FYI.
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From: Schupperl@CommExec@Centre, on 11/13/01 2:50 PM:
To: EristoffA@CommExec@Centre
Cc: HymanM@CommExec@Centre
Several provisions in the House and Senate stimulus bills related to
depreciation deductions will result in a significant revenue loss to the City
unless we decouple from those provisions.
The bill that passed in the House would allow firms to immediately deduct 30
percent of the cost of new capital investments (excluding real estate) rather
than following the current depreciation schedule that could extend up to 20
years. This incentive would apply for purchases over the next three yearrs.
The effect of the bill is to accelerate depreciation deductions into the
first year as an incentive to buy new equipment or similar property. The
Center on Budget and Policy Priorities estimates the cost to the State at
$700 million a year for the next three years. We are working on an estimate
for the City and I expect the number to be quite large.
TheSenate bill, approved by the Finance Committee, is smaller. It would
provide a special "bonus depreciation", allowing firms to deduct 10 percent
of the cost of new investments made over the next year. The Center's
estimate of loss for the State is $270 million. The Senate bill also
includes another provision that would allow firms to postpone the recognition
of income from insurance proceeds if the proceeds are used to-purchase
replacement property. I believe this will also result in a sizeable loss to
the City if we do not decouple from this provision.
The only option is to get the State Legislature to decouple the City GCT, UBT
, Bank Tax and Personal Income Tax from these provisions. We are contacting o
the Statato see if they have a position on this issue, but I'm pretty sure
they will want to do the same .
Visit the NYC Department of Finance online at www.nyc.gov/finance
NYC-WTC 000137026
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