To our friends in New York: there is pending in New York a bill (Senate Bill S8921A) that would end the state’s tax break which runs parallel to the Federal Qualified Small Business (QSB) under Section 1202 of the Internal Revenue Code. Under Section 1202, favorable tax treatment is extended to investors in businesses which satisfy the definition of “Qualified Small Business. The New York proposal would “decouple” the state tax treatment from the favorable Federal tax approach and add the gain to the investors’ gross income. If, for whatever reason, S8921A is made effective – – as of January 1, 2025 no less – – New York investors may be looking at an unwelcome hit to their net ROIs for some deals.
Trouble for Early-stage New York Investors?
