Bill Text: NY S02643 | 2017-2018 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Establishes a credit against income tax for the rehabilitation of distressed commercial properties; allows for 30% of the qualified rehabilitation expenditures up to $100,000; requires that to be eligible, the commercial property is located within a distressed commercial area, as identified by each locality through local law, that is deemed an area in need of community renewal due to dilapidation and vacancies; provides that the property which has been substantially rehabilitated is where the qualified rehabilitation expenditures in relation to such building total ten thousand dollars or more.

Spectrum: Moderate Partisan Bill (Republican 5-1)

Status: (Engrossed - Dead) 2018-06-20 - COMMITTED TO RULES [S02643 Detail]

Download: New_York-2017-S02643-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         2643--A
            Cal. No. 751
                               2017-2018 Regular Sessions
                    IN SENATE
                                    January 13, 2017
                                       ___________
        Introduced  by Sens. RANZENHOFER, FELDER, FUNKE, LARKIN, RITCHIE, SERINO
          -- read twice and ordered printed, and when printed to be committed to
          the Committee on Investigations and Government Operations --  reported
          favorably  from  said  committee  and  committed  to  the Committee on
          Finance -- reported favorably from said committee,  ordered  to  first
          and  second  report,  ordered  to a third reading, amended and ordered
          reprinted, retaining its place in the order of third reading
        AN ACT to amend the tax  law,  in  relation  to  establishing  a  credit
          against  income  tax  for  the rehabilitation of distressed commercial
          properties
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Section  606  of  the  tax law is amended by adding a new
     2  subsection (ccc) to read as follows:
     3    (ccc) Credit for rehabilitation of distressed  commercial  properties.
     4  (1)  For taxable years beginning on or after January first, two thousand
     5  seventeen, a taxpayer shall be allowed a credit as hereinafter provided,
     6  against the tax imposed by this article, in an amount  equal  to  thirty
     7  percent of the qualified rehabilitation expenditures made by the taxpay-
     8  er with respect to a qualified distressed commercial property. Provided,
     9  however, the credit shall not exceed one hundred thousand dollars.
    10    (2)  Tax  credits allowed pursuant to this subsection shall be allowed
    11  in the taxable year in which the property is deemed a certified rehabil-
    12  itation.
    13    (3) If the amount of the credit allowable under  this  subsection  for
    14  any  taxable  year  shall  exceed  the taxpayer's tax for such year, the
    15  excess may be carried over to the following year or years,  and  may  be
    16  applied against the taxpayer's tax for such year or years.
    17    (4)  (A)  The  term  "qualified rehabilitation expenditure" means, for
    18  purposes of this subsection, any amount properly chargeable to a capital
    19  account:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06136-02-7
        S. 2643--A                          2
     1    (i) in connection with the certified  rehabilitation  of  a  qualified
     2  distressed commercial property, and
     3    (ii)  for  property  for  which  depreciation would be allowable under
     4  section 168 of the internal revenue code.
     5    (B) Such term shall not include (i) the cost of acquiring any building
     6  or interest therein, (ii) any expenditure attributable to  the  enlarge-
     7  ment  of  an  existing  building, or (iii) any expenditure made prior to
     8  January first, two thousand seventeen or  after  December  thirty-first,
     9  two thousand twenty-two.
    10    (5)  The  term  "certified rehabilitation" means, for purposes of this
    11  subsection, any rehabilitation  of  a  certified  distressed  commercial
    12  property  which has been approved and certified by a local government as
    13  being completed, with a certificate of occupancy issued,  and  that  the
    14  costs  are  consistent with the work completed. Such certification shall
    15  be acceptable as proof that the expenditures related to  such  rehabili-
    16  tation  qualify as qualified rehabilitation expenditures for purposes of
    17  the credit allowed under paragraph one of this subsection.
    18    (6) (A) The term "qualified distressed commercial property" means, for
    19  purposes of this subsection, a distressed  commercial  property  located
    20  within New York state:
    21    (i) which has been substantially rehabilitated,
    22    (ii) which is owned by the taxpayer, and
    23    (iii) which is located within a distressed commercial area, as identi-
    24  fied  by each locality through local law, that is deemed an area in need
    25  of community renewal due to dilapidation and vacancies.
    26    (B) If the distressed commercial property  is  rental  property,  such
    27  property  shall  have  been  more  than thirty percent vacant for twelve
    28  months while actively marketed for lease.
    29    (C) A building shall be treated as having been "substantially rehabil-
    30  itated" if the qualified rehabilitation expenditures in relation to such
    31  building total ten thousand dollars or more.
    32    (7) (A) If the taxpayer disposes of such taxpayer's  interest  in  the
    33  qualified  distressed commercial property, or such property ceases to be
    34  used as a commercial property of  the  taxpayer  within  five  years  of
    35  receiving  the  credit under this subsection, the taxpayer's tax imposed
    36  by this article for the taxable year in which such disposition or cessa-
    37  tion occurs shall be increased by the recapture portion  of  the  credit
    38  allowed  under  this subsection for all prior taxable years with respect
    39  to such rehabilitation.
    40    (B) For purposes of subparagraph (A) of this paragraph, the  recapture
    41  portion  shall  be  the  product  of the amount of credit claimed by the
    42  taxpayer multiplied by a ratio, the numerator of which is equal to sixty
    43  less the number of months the building is owned or  used  as  commercial
    44  property by the taxpayer and the denominator of which is sixty.
    45    (8)  Any  expenditure  for  which  a  credit  is  claimed  under  this
    46  subsection shall not be eligible for any other credit under  this  chap-
    47  ter.
    48    §  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
    49  of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
    50  follows:
    51  (xliv) Credit for rehabilitation      Amount of credit under
    52  of distressed commercial properties   subdivision fifty-three
    53  under subsection (ccc)                of section two hundred ten-B
    54    §  3. Section 210-B of the tax law is amended by adding a new subdivi-
    55  sion 53 to read as follows:
        S. 2643--A                          3
     1    53. Credit for rehabilitation of distressed commercial properties. (1)
     2  For taxable years beginning on or  after  January  first,  two  thousand
     3  seventeen, a taxpayer shall be allowed a credit as hereinafter provided,
     4  against  the  tax  imposed by this article, in an amount equal to thirty
     5  percent of the qualified rehabilitation expenditures made by the taxpay-
     6  er with respect to a qualified distressed commercial property. Provided,
     7  however, the credit shall not exceed one hundred thousand dollars.
     8    (2)  Tax credits allowed pursuant to this subdivision shall be allowed
     9  in the taxable year in which the property is deemed a certified rehabil-
    10  itation.
    11    (3) If the amount of the credit allowable under this  subdivision  for
    12  any  taxable  year  shall  exceed  the taxpayer's tax for such year, the
    13  excess may be carried over to the following year or years,  and  may  be
    14  applied against the taxpayer's tax for such year or years, but shall not
    15  exceed twenty-five thousand dollars.
    16    (4)  (A)  The  term  "qualified rehabilitation expenditure" means, for
    17  purposes of this subdivision, any amount properly chargeable to a  capi-
    18  tal account:
    19    (i)  in  connection  with  the certified rehabilitation of a qualified
    20  commercial property, and
    21    (ii) for property for which  depreciation  would  be  allowable  under
    22  section 168 of the internal revenue code.
    23    (B) Such term shall not include (i) the cost of acquiring any building
    24  or  interest  therein, (ii) any expenditure attributable to the enlarge-
    25  ment of an existing building, or (iii) any  expenditure  made  prior  to
    26  January  first,  two  thousand seventeen or after December thirty-first,
    27  two thousand twenty-two.
    28    (5) The term "certified rehabilitation" means, for  purposes  of  this
    29  subdivision,  any  rehabilitation  of  a certified distressed commercial
    30  property which has been approved and certified by a local government  as
    31  being  completed,  with  a certificate of occupancy issued, and that the
    32  costs are consistent with the work completed. Such  certification  shall
    33  be  acceptable  as proof that the expenditures related to such rehabili-
    34  tation qualify as qualified rehabilitation expenditures for purposes  of
    35  the credit allowed under paragraph one of this subdivision.
    36    (6) (A) The term "qualified distressed commercial property" means, for
    37  purposes  of  this subdivision, a distressed commercial property located
    38  within New York state:
    39    (i) which has been substantially rehabilitated,
    40    (ii) which is owned by the taxpayer, and
    41    (iii) which is located within a distressed commercial area, as identi-
    42  fied by each locality through local law, that is deemed an area in  need
    43  of community renewal due to dilapidation and vacancies.
    44    (B)  If  the  distressed  commercial property is rental property, such
    45  property shall have been more than  thirty  percent  vacant  for  twelve
    46  months while actively marketed for lease.
    47    (C) A building shall be treated as having been "substantially rehabil-
    48  itated" if the qualified rehabilitation expenditures in relation to such
    49  building total ten thousand dollars or more.
    50    (7)  (A)  If  the taxpayer disposes of such taxpayer's interest in the
    51  qualified distressed commercial property, or such property ceases to  be
    52  used  as  a  commercial  property  of  the taxpayer within five years of
    53  receiving the credit under this subdivision, the taxpayer's tax  imposed
    54  by this article for the taxable year in which such disposition or cessa-
    55  tion  occurs  shall  be increased by the recapture portion of the credit
        S. 2643--A                          4
     1  allowed under this subdivision for all prior taxable years with  respect
     2  to such rehabilitation.
     3    (B)  For purposes of subparagraph (A) of this paragraph, the recapture
     4  portion shall be the product of the amount  of  credit  claimed  by  the
     5  taxpayer multiplied by a ratio, the numerator of which is equal to sixty
     6  less  the  number  of months the building is owned or used as commercial
     7  property by the taxpayer and the denominator of which is sixty.
     8    (8) Any expenditure for which a credit is claimed under this  subdivi-
     9  sion shall not be eligible for any other credit under this chapter.
    10    § 4. This act shall take effect immediately and shall apply to taxable
    11  years beginning on or after January 1, 2017.