Section 1301-B. City separate tax on the ordinary income portion of lump sum distributions

(a) Imposition of separate tax. The city separate tax  on the ordinary income  portion  of  a  lump  sum  distribution  imposed
  pursuant  to  the  authority  of  this article shall be imposed for each
  taxable year on the ordinary income portion of a lump  sum  distribution
  of  every  resident  individual,  estate or trust of such city which has
  made an election of lump sum treatment under subsection (e)  of  section
  four hundred two of the internal revenue code.
    (b)  Amount of separate tax. The amount of tax imposed pursuant to the
  authority of subsection (a) for any taxable  year  shall  be  an  amount
  equal to five times the tax which would be imposed at the rate set forth
  in  paragraph three of subsection (a) or (b) of section thirteen hundred
  four of this article, whichever may be applicable, if the recipient were
  an individual referred to in such subsection and the city taxable income
  referred to were an amount equal to one-fifth of the excess of:
    (1) the total taxable amount of the  lump  sum  distribution  for  the
  taxable year, over
    (2) the minimum distribution allowance.
    (c)  Minimum distribution allowance. For purposes of this section, the
  minimum  distribution  allowance  shall  be  that  which  is  calculated
  according  to  subparagraph  (C)  of  paragraph one of subsection (e) of
  section four hundred two of the internal revenue code.
    (d) Liability for tax. The recipient of a lump sum distribution  shall
  be liable for the tax imposed pursuant to the authority of this section.
    (e) Multiple distributions and distributions of annuity contracts. For
  purposes of this section the rules concerning multiple distributions and
  distributions  of  annuity  contracts  as  specified by paragraph two of
  subsection (e) of section four hundred two of the internal revenue  code
  shall  be  applicable,  except  that  references  to the "tax imposed by
  paragraph (1) (A)" shall be deemed to be references to the city separate
  tax on the ordinary income portion of a lump sum distribution authorized
  by this article,  and  except  that  only  lump  sum  distributions  (or
  portions  thereof) and distributions of annuity contracts subject to the
  city  separate  tax  on  the  ordinary  income  portion  of   lump   sum
  distributions  authorized  by this article shall be included, and except
  that references to the secretary shall be deemed to be references to the
  tax commission.
    (f) Definitions and special rules. For purposes of this  section,  the
  following  provisions  shall  apply,  to  the  extent  applicable to the
  taxpayer's federal tax on lump sum distributions:  (1)  the  definitions
  and  special  rules  as specified in paragraph four of subsection (e) of
  section four hundred two of the  internal  revenue  code;  and  (2)  the
  special  rules  relating to (A) individuals who have attained the age of
  fifty before January first, nineteen hundred eighty-six and (B)  capital
  gains,  as  specified  in  paragraphs  three,  four,  five  and  six  of
  subsection (h) of section eleven hundred twenty-two of  the  tax  reform
  act  of nineteen hundred eighty-six as enacted by public law 99-514, but
  (i) in the event that paragraph three of such subsection is  applicable,
  clause (ii) of subparagraph (B) of such paragraph shall be applied using
  a  rate of one and seventy-two hundredths percent, and (ii) in the event
  that paragraph five of such subsection is applicable, the  words  "five"
  and "one-fifth" in subsection (b) of this section shall be read as "ten"
  and  "one-tenth", respectively, and subsection (b) of this section shall
  be applied by using the rate of  tax  specified  in  subsection  (a)  of
  section  thirteen  hundred  four  as  such  subsection was in effect for
  taxable years beginning in nineteen hundred eighty-six.
    (g) Credits. The credits against tax authorized  under  this  article,
  except  for  the credit under subsection (a) of section thirteen hundred

  ten, shall not be allowed against the city separate tax on the  ordinary
  income  portion  of  lump  sum  distributions  imposed  pursuant  to the
  authority of this article.
    * NB Applies to amounts distributed after 1986