NYC-WTC_000195490

NYC 9/11 Public Portal Document

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Court and the Appellate Division found COMPONENTS OF INCOME tr that the law violated the Privileges and New York City Resident Returns—Tax Year 1998 rs Immunities Clause and the Commerce 1< I Clause of the United States Constitution. Wages 67.9% r< The courts also ruled against the City, finding that the law did not violate State Interest Incom? 3.8% / 1

L' constitutional home rule requirements. Capital Gains 11.9% f The decisions were appealed by the State and City to the Court of Appeals, Business Income 2.8% ti

I the State’s highest court. On April 4, L 2000, the Court of Appeals upheld the Dividend Income 2.6% a lower court’s decisions. This decision a Other , 11.0% Ja activated the provision in the State’s V MiMMIiailHWI

legislation to extend the repeal to out-of- state nonresidents, retroactive to July 1, Source: NYC Department of Finance, Office of TaX/Policy C 1999. / ■

SHARE OF LIABILITY ( As part of New York State’s budget t Tax Year 1998 I- for fiscal year 2000-2001, the State took New York City Resident Returns t III several actions which reduced both State 70 ----------- --- ------- 1- c iu and City liability. In order /to reduce the i 60 marriage penalty, the State increased the standard deduction for married families 50 ( filing jointly from $13,000 to $13,400 in I 40 tax year 2001, to $14,200 in tax year 1 2002, and to $14,600 thereafter. The g 30 ■

^20 State also enacted a college tuition I benefit, granted either through a refundable credit (which does not affect the City return) or an itemized deduction 10 0 Less than 10 10-25 , 25-50 50-75 ■m I75-100 100+ (which does), for college tuition Income Class ($ OOOs) expenses paid by resident taxpayers on Source: NYC Department ofFinance, Office of Tax Policy ( behalf of the taxpayer,/ the taxpayer’s spouse, or dependents/ who enroll or NUMBER OF FILERS - attend a qualified institution of higher Tax Year 1998 learning. The credit arid deduction are New York City Resident Returns available for undergraduate Study. The 1,000 - ---------- -------- —f. /ii allowable itemized deduction is limited 111 to $10,1)00 of tuition expenses and is I 800 phased ip over four years. For 2001, 25 IfH percentl of the tuition expense is I 600 deductible, reaching 100 percent iri 2004. I 400

Distribution of Liability: A sample of 1998 tax returns reveals that the 1 mil majority of resident returns were filed by 0 Less than 10 10-2525-50 50-75 75-100 100+ taxpayers with adjusted gross income ' Income Class ($ OOOs) less than $50,000 (see charts on this Source: NYC Deparpnent of Finance, Office of Tax Policy page). However, the 24 percent of

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NYC-WTC_000195549