The 2017-18 legislative session officially opened on Jan. 4, 2017 and recessed on June 21, 2017. It is instructive to review what passed before the June recess, what failed to pass and what lies ahead when the session resumes in January 2018. Among the most noteworthy measures are the following:

1. Nonresident Income Tax Loopholes Closed (Enacted April 10, 2017), New York A.3009-C/S.2009-C (2017):

Co-operative Shares Included in Definition of Real Property When Determining New York Source Income. New York Tax Law §631 imposes a personal income tax on a nonresident's New York source income. New York source income is defined to include gains from the sale of real property or co-operative apartment interests located in New York. N.Y. Tax Law §631(b). Real property located in the state was further defined to include interests in certain legal entities¹ if the value of the real property located in New York was at least 50 percent of the entity's value. N.Y. Tax Law §631(b)(1)(A)(1). Notably, this rule omitted co-operative apartment shares from the definition of real property. This enabled a nonresident to exclude from source income the gain from the sale of a New York co-operative apartment that was held in an entity. However, the 2017-18 Executive Budget, signed by Gov. Andrew M. Cuomo on April 10, 2017, revises the definition of “real property located in this state” to include ownership interests in entities that own co-operative shares. Accordingly, if more than 50 percent of an entity's value consists of co-operative apartment shares, gains from the sale of an ownership interest in that entity will be taxable to a nonresident as source income. The changes apply to tax years beginning on or after Jan. 1, 2017.