Bill Text: NY S04905 | 2019-2020 | General Assembly | Introduced


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 4-1)

Status: (Introduced) 2019-03-29 - REFERRED TO BUDGET AND REVENUE [S04905 Detail]

Download: New_York-2019-S04905-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          4905
                               2019-2020 Regular Sessions
                    IN SENATE
                                     March 29, 2019
                                       ___________
        Introduced  by Sens. RANZENHOFER, FELDER, FUNKE, RITCHIE, SERINO -- read
          twice and ordered printed, and when printed to  be  committed  to  the
          Committee on Budget and Revenue
        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 (jjj) to read as follows:
     3    (jjj)  Credit  for rehabilitation of distressed commercial properties.
     4  (1) For taxable years beginning on or after January first, two  thousand
     5  nineteen,  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 provided that
    17  the total amount of the credit applied against the taxpayer's tax for  a
    18  given year shall not exceed twenty-five thousand dollars.
    19    (4)  (A)  The  term  "qualified rehabilitation expenditure" means, for
    20  purposes of this subsection, any amount properly chargeable to a capital
    21  account:
    22    (i) in connection with the certified  rehabilitation  of  a  qualified
    23  distressed commercial property, and
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10859-01-9

        S. 4905                             2
     1    (ii)  for  property  for  which  depreciation would be allowable under
     2  section 168 of the internal revenue code.
     3    (B) Such term shall not include (i) the cost of acquiring any building
     4  or  interest  therein, (ii) any expenditure attributable to the enlarge-
     5  ment of an existing building, or (iii) any  expenditure  made  prior  to
     6  January first, two thousand nineteen or after December thirty-first, two
     7  thousand twenty-four.
     8    (5)  The  term  "certified rehabilitation" means, for purposes of this
     9  subsection, any rehabilitation  of  a  certified  distressed  commercial
    10  property  which has been approved and certified by a local government as
    11  being completed, with a certificate of occupancy issued,  and  that  the
    12  costs  are  consistent with the work completed. Such certification shall
    13  be acceptable as proof that the expenditures related to  such  rehabili-
    14  tation  qualify as qualified rehabilitation expenditures for purposes of
    15  the credit allowed under paragraph one of this subsection.
    16    (6) (A) The term "qualified distressed commercial property" means, for
    17  purposes of this subsection, a distressed  commercial  property  located
    18  within New York state:
    19    (i) which has been substantially rehabilitated,
    20    (ii) which is owned by the taxpayer, and
    21    (iii) which is located within a distressed commercial area, as identi-
    22  fied  by each locality through local law, that is deemed an area in need
    23  of community renewal due to dilapidation and vacancies.
    24    (B) If the distressed commercial property  is  rental  property,  such
    25  property  shall  have  been  more  than thirty percent vacant for twelve
    26  months while actively marketed for lease.
    27    (C) A building shall be treated as having been "substantially rehabil-
    28  itated" if the qualified rehabilitation expenditures in relation to such
    29  building total ten thousand dollars or more.
    30    (7) (A) If the taxpayer disposes of such taxpayer's  interest  in  the
    31  qualified  distressed commercial property, or such property ceases to be
    32  used as a commercial property of  the  taxpayer  within  five  years  of
    33  receiving  the  credit under this subsection, the taxpayer's tax imposed
    34  by this article for the taxable year in which such disposition or cessa-
    35  tion occurs shall be increased by the recapture portion  of  the  credit
    36  allowed  under  this subsection for all prior taxable years with respect
    37  to such rehabilitation.
    38    (B) For purposes of subparagraph (A) of this paragraph, the  recapture
    39  portion  shall  be  the  product  of the amount of credit claimed by the
    40  taxpayer multiplied by a ratio, the numerator of which is equal to sixty
    41  less the number of months the building is owned or  used  as  commercial
    42  property by the taxpayer and the denominator of which is sixty.
    43    (8)  Any  expenditure  for  which  a  credit  is  claimed  under  this
    44  subsection shall not be eligible for any other credit under  this  chap-
    45  ter.
    46    §  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
    47  of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
    48  follows:
    49  (xliv) Credit for rehabilitation      Amount of credit under
    50  of distressed commercial properties   subdivision fifty-three
    51  under subsection (jjj)                of section two hundred ten-B
    52    §  3. Section 210-B of the tax law is amended by adding a new subdivi-
    53  sion 53 to read as follows:
    54    53. Credit for rehabilitation of distressed commercial properties. (1)
    55  For taxable years beginning on or  after  January  first,  two  thousand
    56  nineteen,  a taxpayer shall be allowed a credit as hereinafter provided,

        S. 4905                             3
     1  against the tax imposed by this article, in an amount  equal  to  thirty
     2  percent of the qualified rehabilitation expenditures made by the taxpay-
     3  er with respect to a qualified distressed commercial property. Provided,
     4  however, the credit shall not exceed one hundred thousand dollars.
     5    (2)  Tax credits allowed pursuant to this subdivision shall be allowed
     6  in the taxable year in which the property is deemed a certified rehabil-
     7  itation.
     8    (3) If the amount of the credit allowable under this  subdivision  for
     9  any  taxable  year  shall  exceed  the taxpayer's tax for such year, the
    10  excess may be carried over to the following year or years,  and  may  be
    11  applied against the taxpayer's tax for such year or years, provided that
    12  the  total amount of the credit applied against the taxpayer's tax for a
    13  given year shall not exceed twenty-five thousand dollars.
    14    (4) (A) The term "qualified  rehabilitation  expenditure"  means,  for
    15  purposes  of this subdivision, any amount properly chargeable to a capi-
    16  tal account:
    17    (i) in connection with the certified  rehabilitation  of  a  qualified
    18  commercial property, and
    19    (ii)  for  property  for  which  depreciation would be allowable under
    20  section 168 of the internal revenue code.
    21    (B) Such term shall not include (i) the cost of acquiring any building
    22  or interest therein, (ii) any expenditure attributable to  the  enlarge-
    23  ment  of  an  existing  building, or (iii) any expenditure made prior to
    24  January first, two thousand nineteen or after December thirty-first, two
    25  thousand twenty-four.
    26    (5) The term "certified rehabilitation" means, for  purposes  of  this
    27  subdivision,  any  rehabilitation  of  a certified distressed commercial
    28  property which has been approved and certified by a local government  as
    29  being  completed,  with  a certificate of occupancy issued, and that the
    30  costs are consistent with the work completed. Such  certification  shall
    31  be  acceptable  as proof that the expenditures related to such rehabili-
    32  tation qualify as qualified rehabilitation expenditures for purposes  of
    33  the credit allowed under paragraph one of this subdivision.
    34    (6) (A) The term "qualified distressed commercial property" means, for
    35  purposes  of  this subdivision, a distressed commercial property located
    36  within New York state:
    37    (i) which has been substantially rehabilitated,
    38    (ii) which is owned by the taxpayer, and
    39    (iii) which is located within a distressed commercial area, as identi-
    40  fied by each locality through local law, that is deemed an area in  need
    41  of community renewal due to dilapidation and vacancies.
    42    (B)  If  the  distressed  commercial property is rental property, such
    43  property shall have been more than  thirty  percent  vacant  for  twelve
    44  months while actively marketed for lease.
    45    (C) A building shall be treated as having been "substantially rehabil-
    46  itated" if the qualified rehabilitation expenditures in relation to such
    47  building total ten thousand dollars or more.
    48    (7)  (A)  If  the taxpayer disposes of such taxpayer's interest in the
    49  qualified distressed commercial property, or such property ceases to  be
    50  used  as  a  commercial  property  of  the taxpayer within five years of
    51  receiving the credit under this subdivision, the taxpayer's tax  imposed
    52  by this article for the taxable year in which such disposition or cessa-
    53  tion  occurs  shall  be increased by the recapture portion of the credit
    54  allowed under this subdivision for all prior taxable years with  respect
    55  to such rehabilitation.

        S. 4905                             4
     1    (B)  For purposes of subparagraph (A) of this paragraph, the recapture
     2  portion shall be the product of the amount  of  credit  claimed  by  the
     3  taxpayer multiplied by a ratio, the numerator of which is equal to sixty
     4  less  the  number  of months the building is owned or used as commercial
     5  property by the taxpayer and the denominator of which is sixty.
     6    (8)  Any expenditure for which a credit is claimed under this subdivi-
     7  sion shall not be eligible for any other credit under this chapter.
     8    § 4. This act shall take effect immediately and shall apply to taxable
     9  years beginning on or after January 1, 2019.
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