New York Senate Bill S08746

New York 2025-2026 Regular Session

• Introduced: 1/8/26
• Refer: 1/8/26

Caption

Provides that receipts from other services and other business receipts, taxpayers, and combined groups including members, engaged in providing professional employer organization services shall include with such receipts amounts received with respect to wages, benefits, and other employee expenses disbursed to or for the benefit of a client's worksite employees and the related employment taxes if the amounts received are included in the calculation of the business income base or the combined business income base, respectively.

Impact

The implementation of S08746 is expected to significantly affect how PEOs calculate their taxable income, especially in relation to the treatment of employee compensation. By mandating that specific employee-related amounts be reported as part of the business income base, the bill is aiming to create a more uniform approach for these entities operating within New York. This could result in increased tax revenue from these organizations as they align their financial reporting with the new stipulations outlined in the bill.

Summary

Bill S08746 aims to amend the existing tax law regarding the calculation of receipts for taxpayers and combined groups that provide professional employer organization (PEO) services. The primary focus of the bill is on how these businesses report receipts from services that are not specifically addressed in previous subdivisions of the tax law. Importantly, the bill stipulates that these receipts must include amounts received with respect to wages, benefits, and other employee expenses disbursed to clients' worksite employees, as well as the related employment taxes, as long as they are included in the business income base calculation.

Contention

As is often the case with tax law amendments, the bill may face contention among stakeholders. Advocates for the bill may argue that it brings clarity and consistency to the tax obligations of PEOs, potentially leveling the playing field across similar businesses. However, oppositional viewpoints may arise from those concerned that this could lead to increased financial burdens on PEOs, affecting their ability to provide competitive services. Moreover, there could be concerns from businesses employing PEOs who may face increased costs as a result of changes in how these organizations report and pay taxes.