NY S03557

Establishes a small business savings accounts program administered by the tax commissioner, allowing eligible small businesses to make tax-deductible contributions up to 10 percent of the prior year's gross profits.

Permits tax-free distributions from these accounts when used for worker hiring, job creation, or financial stabilization during specified periods of economic hardship (defined as periods when real GDP decreases or as designated by the commissioner).

Defines eligible small businesses as those with an average of 50 or fewer full-time employees (working at least 40 hours per week) during the preceding calendar year.

Requires contributions to be held in accounts for no longer than 8 years to qualify for preferential tax treatment, and treats non-qualified distributions as taxable income.

Exempts eligible small businesses from state taxes on contributions to and qualified distributions from these accounts, effective for taxable years beginning January 1, 2017, with penalties for funds not used for qualifying purposes.