Daily Tax Report: State

N.Y. Senate Approves Bill to Give Trump Tax Returns to Congress

May 8, 2019, 6:08 PM

New York is one step closer to being able to release President Donald Trump’s state tax returns to Congress.

The Senate May 8 passed legislation (S.5072/A.7194) that—if passed by the Assembly and signed into law by the governor—would create an exemption to current state tax law, authorizing the state Department of Taxation and Finance to share tax returns or return information upon request from a congressional committee. The measure passed the Senate 39-21 according to the unofficial vote count.

The bill’s Assembly sponsor David Buchwald (D) said the Senate’s move could spur action to pass the measure in his chamber. The bill remains in committee but is expected to be discussed by the Democratic majority conference May 13, according to the office of Assembly Speaker Carl Heastie (D).

The bill’s passage in the state Senate comes a day after a New York Times report revealed details of Trump’s tax records from 1985 to 1994. Over a 10-year period, Trump’s businesses lost $1.17 billion, according to the report. He used those business losses to avoid paying income tax for eight of the 10 years.

The White House didn’t immediately respond to a request for comment on the bill. The bill, if passed, would likely be challenged by Trump in court.

Lawmakers kept that in mind while during the creation of the bill, Buchwald said. “The only concern is, is the law on New York’s side? It’s important that we make sure that what we do is effective.”

Democrats in Congress have been pushing for the release of six years of Trump’s personal and business returns. Treasury Secretary Steven Mnuchin on May 6 refused to release the returns. House Ways and Means Committee Chairman Richard Neal (D-Mass.) has suggested that he would sue rather than issue a subpoena to obtain the returns as the battle continues.

Trump’s personal attorney William Consovoy has said it is his client’s right as a citizen to keep his returns private.

Political Move?

New York’s law could provide a vehicle for Congress to obtain Trump’s state returns, which, depending on the detail, experts have said could include federal data.

“New York as the home of the President, and the headquarters for some of his companies, has a unique role and responsibility in that regard to allow Congress to do its constitutionally mandated job,” the bill’s Senate Sponsor Brad Hoylman (D) told reporters May 8.

Opponents to the measure have said the bill is simply a political move by Democrats. Sen. Robert G. Ortt (R), who voted against the measure, said New Yorkers don’t care about the issue, because Trump got elected despite not releasing his returns during the 2016 election.

“This is about 2020,” Ortt said during the bill vote. “This is a great issue politically and it just keeps going.”

Senate Democrats have said the bill isn’t about political targeting because it applies to everyone.

“We as lawmakers make laws to fit circumstances of the day,” Senate Majority Leader Andrea Stewart-Cousins (D) told reporters May 8. “This is a circumstance of the day.”

The law includes some protections against fishing expeditions, authorizing the tax department to provide the return information only upon request of the chairman of the Ways and Means Committee, chairman of the Senate Finance Committee, or the chief of staff of the Joint Committee on Taxation. Tax code Section 6103 gives them that authority.

The request must be for a specified and legitimate legislative purpose, and made only after the committee has made a related request to the Treasury Department, pursuant to federal law. The request must also ensure that the disclosure and inspection of the information will be consistent with the federal law.

To contact the reporter on this story: Keshia Clukey in Albany, N.Y. at kclukey@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Megan Pannone at mpannone@bloombergtax.com

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