Bill Text: NY A01373 | 2019-2020 | General Assembly | Introduced
Bill Title: Provides tax credits for upstate reinvestment zones, for qualified purchases of buildings and qualified rehabilitation expenditures of buildings in such zones; sets credit at 20%.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2020-01-08 - referred to ways and means [A01373 Detail]
Download: New_York-2019-A01373-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 1373 2019-2020 Regular Sessions IN ASSEMBLY January 15, 2019 ___________ Introduced by M. of A. SANTABARBARA, FAHY, PALMESANO -- read once and referred to the Committee on Ways and Means AN ACT to amend the economic development law and the tax law, in relation to tax credits for upstate reinvestment zones The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The economic development law is amended by adding a new 2 article 23 to read as follows: 3 ARTICLE 23 4 UPSTATE REINVESTMENT ZONES 5 Section 460. Power to administer the upstate reinvestment zones tax 6 credit. 7 § 460. Power to administer the upstate reinvestment zones tax credit. 8 (a) The commissioner is authorized to administer the upstate reinvest- 9 ment zones tax credit program to provide tax incentives to businesses 10 for the qualified purchase of a building or buildings or qualified reha- 11 bilitation expenditures in such zone. The commissioner is authorized to 12 allocate up to ten million dollars of tax credits under this program per 13 year. The amount of credit shall be twenty percent of the qualified 14 purchase and qualified rehabilitation expenditures of buildings and 15 rehabilitations, as such amount is computed pursuant to section forty- 16 four of the tax law. 17 (b) Definitions. (1) The term "upstate reinvestment zone" shall mean 18 an area: (i) that, according to the most recent American community 19 survey by the United States census bureau, lies within a census tract 20 with a poverty rate equal to or greater than twenty percent or an unem- 21 ployment rate that is equal to or greater than one and one-half percent 22 times the national average unemployment rate and (ii) is within the 23 incorporated boundaries of a village, town or city having a population 24 of less than one million. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06290-01-9A. 1373 2 1 (2) The term "qualified purchase" shall mean the cost or other basis 2 for federal income tax purposes of acquisition cost of building for 3 which depreciation is allowed under section one hundred sixty-eight of 4 the internal revenue code and which is (i) nonresidential property, (ii) 5 residential property, or (iii) an addition or improvement to property 6 described in subparagraph (i) or (ii) of this paragraph. 7 (3) The term "qualified rehabilitation expenditures" shall mean quali- 8 fied expenditures as defined in paragraph (2) of subsection (c) of 9 section forty-seven of the internal revenue code other than the quali- 10 fied purchase made in paragraph two of this subdivision. 11 (c) Allocation of credits. (1) The aggregate amount of tax credits 12 allowed under this subdivision in any taxable year shall be ten million 13 dollars. Such aggregate amount of credits shall be allocated by the 14 commissioner among taxpayers in the order in which applications are 15 received. If the total amount of allocated credits applied for in any 16 particular year exceeds the aggregate amount of tax credits allowed for 17 such year under this section, such excess shall be treated as having 18 been applied for on the first day of the subsequent year. 19 (2) The commissioner shall promulgate regulations by December thirty- 20 first, two thousand twenty to establish procedures for the allocation of 21 tax credits as required. Such rules and regulations shall include 22 provisions describing the application process, the due dates for such 23 applications, the standards which shall be used to evaluate the applica- 24 tions, the documentation that will be provided to taxpayers to substan- 25 tiate to the commissioner the amount of tax credits allocated to such 26 taxpayers, and such other provisions as deemed necessary and appropri- 27 ate. Notwithstanding any other provisions to the contrary in the state 28 administrative procedure act, such rules and regulations may be adopted 29 on an emergency basis if necessary to meet such December thirty-first, 30 two thousand twenty deadline. 31 (d) In order to be eligible for the tax credits, a taxpayer must 32 submit an application (in a form prescribed by the commissioner) to the 33 commissioner. The commissioner shall establish guidelines and criteria 34 for a designation of upstate reinvestment zones. 35 (e) If, after reviewing the application submitted by the taxpayer, the 36 commissioner determines that such qualified purchase of the building or 37 qualified rehabilitation expenditures were made in an upstate reinvest- 38 ment zone, then the commissioner shall issue the taxpayer a certificate 39 of eligibility that establishes the taxpayer as a qualified taxpayer. 40 § 2. The tax law is amended by adding a new section 44 to read as 41 follows: 42 § 44. Upstate reinvestment zones tax credit. (a) A taxpayer shall be 43 allowed a credit, to be computed as hereinafter provided, against the 44 tax imposed by articles nine-A and twenty-two of this chapter for the 45 development to upstate reinvestment zones including, but not limited to, 46 the qualified purchase of buildings and qualified rehabilitation expend- 47 itures of buildings in such zones where at least fifty percent of the 48 square footage of such buildings, at the time of purchase or rehabili- 49 tation, is vacant or otherwise unused. The amount of the credit shall be 50 twenty percent of the qualified purchase and qualified rehabilitation 51 expenditures of buildings and rehabilitations in such zones with such 52 credit subject to restrictions set forth in subdivision (d) of this 53 section. This credit will not be allowed if the qualified purchase of 54 buildings and qualified rehabilitation expenditures of buildings that 55 are the basis for this credit are included in the calculation of another 56 credit claimed by the taxpayer under this chapter.A. 1373 3 1 (b) For the purpose of this section, the term "qualified purchase" 2 shall mean the cost or other basis for federal income tax purposes of 3 acquisition cost of building for which depreciation is allowed under 4 section one hundred sixty-eight of the internal revenue code and which 5 is (1) nonresidential property, (2) residential property, or (3) an 6 addition or improvement to property described in paragraph (1) or (2) of 7 this subdivision. The term "qualified rehabilitation expenditures" 8 shall mean qualified expenditures as defined in paragraph (2) of 9 subsection (c) of section forty-seven of the internal revenue code. 10 (c) For the purpose of this section, the term "upstate reinvestment 11 zones" shall mean an area: (i) that, according to the most recent Amer- 12 ican community survey by the United States census bureau, lies within a 13 census tract with a poverty rate equal to or greater than twenty percent 14 or an unemployment rate that is equal to or greater than one and one- 15 half percent times the national average unemployment rate and (ii) is 16 within the incorporated boundaries of a village, town or city having a 17 population of less than one million. 18 (d) The sum of all tax credits granted pursuant to the provisions of 19 this section shall not exceed five hundred thousand dollars for any one 20 taxpayer including such party's affiliates and related entities for a 21 taxable year. If the taxpayer is a partner in a partnership, member of 22 a limited liability company or shareholder of a New York S corporation, 23 then the annual limit by the preceding sentence shall be applied at the 24 entity level, so that the aggregate credit allowed to all the partners, 25 members or shareholders of each such entity in the taxable year does not 26 exceed the five hundred thousand dollar annual limit. 27 (e) (1) The aggregate amount of tax credits allowed under this 28 section, in any taxable year shall be ten million dollars. Such aggre- 29 gate amount of credits shall be allocated by the commissioner of econom- 30 ic development among taxpayers in the order in which applications are 31 received. If the total amount of allocated credits applied for in any 32 particular year exceeds the aggregate amount of tax credits allowed for 33 such year under this section, such excess shall be treated as having 34 been applied for on the first day of the subsequent year. 35 (2) The commissioner of the department of economic development shall 36 promulgate regulations by December thirty-first, two thousand twenty to 37 establish procedures for the allocation of tax credits as required 38 pursuant to section four hundred sixty of the economic development law. 39 Such rules and regulations shall include provisions describing the 40 application process, the due dates for such applications, the standards 41 which shall be used to evaluate the applications, the documentation that 42 will be provided to taxpayers to substantiate to the department the 43 amount of tax credits allocated to such taxpayers, and such other 44 provisions as deemed necessary and appropriate. 45 (f) The credit allowed under this section for any taxable year shall 46 not reduce the tax due for such year to less than the amount prescribed 47 in paragraph (d) of subdivision one of section two hundred ten of this 48 chapter. Provided, however, that if the amount of the credit allowable 49 under this section for any taxable year reduces the tax to such amount, 50 the excess shall be treated as an overpayment of tax to be credited or 51 refunded in accordance with the provisions of section one thousand 52 eighty-six of this chapter. Provided further, the provisions of 53 subsection (c) of section one thousand eighty-eight of this chapter 54 notwithstanding, no interest shall be paid thereon. 55 (g) The taxpayer may be required to attach to its tax return its 56 certificate of eligibility issued by the commissioner of economic devel-A. 1373 4 1 opment pursuant to section four hundred sixty of the economic develop- 2 ment law. 3 (h) Where the building which was the basis for the allowance of the 4 credit provided for under this section is sold before the close of the 5 recapture period, the taxpayer shall add back, in the taxable year in 6 which such building was sold, the credit recapture amount. The credit 7 recapture amount is the product of the credit amount claimed and the 8 recapture percentage in accordance with the following table. 9 If the building is sold within The recapture percentage 10 (i) One full year after placed in 100 11 service 12 (ii) One full year after the close of the 80 13 period described in paragraph (i) 14 (iii) One full year after the close of the 60 15 period described in paragraph (ii) 16 (iv) One full year after the close of the 40 17 period described in paragraph (iii) 18 (v) One full year after the close of the 20 19 period described in paragraph (iv) 20 (i) Cross-references. For application of the credit provided for in 21 this section, see the following provisions of this chapter: 22 (1) Article 9A: section 210-B, subdivision 53. 23 (2) Article 22: section 606, subsection (i), paragraph (1), subpara- 24 graph (B), clause (xliv). 25 (3) Article 22: section 606, subsection (jjj). 26 § 3. Section 210-B of the tax law is amended by adding a new subdivi- 27 sion 53 to read as follows: 28 53. Upstate reinvestment zones tax credit. (a) Allowance of credit. A 29 taxpayer shall be allowed a credit, to be computed as provided in 30 section forty-four of this chapter, against the tax imposed by this 31 article. 32 (b) Application of credit. The credit allowed under this subdivision 33 for any taxable year may not reduce the tax due for such year to less 34 than the amount prescribed in paragraph (d) of subdivision one of 35 section two hundred ten of this article. However, if the amount of cred- 36 it allowed under this subdivision for any taxable year reduces the tax 37 to such amount, any amount of credit thus not deductible in such taxable 38 year will be treated as an overpayment of tax to be credited or refunded 39 in accordance with the provisions of section one thousand eighty-six of 40 this chapter. Provided, however, the provisions of subsection (c) of 41 section one thousand eighty-six of this chapter notwithstanding, no 42 interest will be paid thereon. 43 § 4. Section 606 of the tax law is amended by adding a new subsection 44 (jjj) to read as follows: 45 (jjj) Upstate reinvestment zones tax credit. (a) Allowance of credit. 46 A taxpayer shall be allowed a credit, to be computed as provided in 47 section forty-four of this chapter, against the tax imposed by this 48 article. 49 (b) Application of credit. If the amount of the credit allowed under 50 this subsection exceeds the taxpayer's tax for the taxable year, any 51 amount of credit not deductible in that taxable year will be treated as 52 an overpayment of tax to be credited or refunded in accordance with the 53 provisions of section six hundred eighty-six of this article. Provided, 54 however, no interest will be paid thereon.A. 1373 5 1 § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 2 of the tax law is amended by adding a new clause (xliv) to read as 3 follows: 4 (xliv) Upstate reinvestment Amount of the credit under 5 zones credit under subdivision fifty-three of section 6 subsection (jjj) two hundred ten-B 7 § 6. This act shall take effect immediately and apply to taxable years 8 beginning on or after January 1, 2021. The commissioner of taxation and 9 finance is authorized to issue regulations and guidance necessary to 10 implement this act on or before the effective date.
