Bill Text: NY S04906 | 2019-2020 | General Assembly | Introduced
Bill Title: Establishes a credit against income tax for the rehabilitation of distressed residential properties; allows a credit equal to thirty percent of the qualified rehabilitation expenditures made by the taxpayer with respect to a qualified distressed residential property; requires property that qualifies must be constructed prior to January 1, 1962 in a distressed residential or mixed-use neighborhood.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO BUDGET AND REVENUE [S04906 Detail]
Download: New_York-2019-S04906-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 4906 2019-2020 Regular Sessions IN SENATE March 29, 2019 ___________ Introduced by Sens. RANZENHOFER, FUNKE, 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 residential 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 residential 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 residential property. 9 Provided, however, the credit shall not exceed one hundred thousand 10 dollars. 11 (2) Tax credits allowed pursuant to this subsection shall be allowed 12 in the taxable year in which the property is deemed a certified rehabil- 13 itation. 14 (3) If the amount of the credit allowable under this subsection for 15 any taxable year shall exceed the taxpayer's tax for such year, the 16 excess may be carried over to the following year or years, and may be 17 applied against the taxpayer's tax for such year or years. 18 (4) (A) The term "qualified rehabilitation expenditure" means, for 19 purposes of this subsection, any amount properly chargeable to a capital 20 account: 21 (i) in connection with the certified rehabilitation of a qualified 22 distressed residential property, and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10856-01-9S. 4906 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 9 distressed residential property in this subsection, any rehabilitation 10 of a certified distressed residential property which has been approved 11 and certified by a local government as being completed, with a certif- 12 icate of occupancy issued, and that the costs are consistent with the 13 work completed. Such certification shall be acceptable as proof that the 14 expenditures related to such rehabilitation qualify as qualified reha- 15 bilitation expenditures for purposes of the credit allowed under para- 16 graph one of this subsection. 17 (6) (A) The term "qualified residential property" means, for purposes 18 of this subsection, a distressed residential property located within New 19 York state: 20 (i) which has been substantially rehabilitated, 21 (ii) which was constructed prior to January first, nineteen hundred 22 sixty-two, 23 (iii) which is owned by the taxpayer, and 24 (iv) which is located within a distressed residential or mixed-use 25 area, as identified by each locality through local law, that is deemed 26 an area in need of community renewal due to dilapidation and vacancies. 27 (B) If the distressed residential property is rental property, such 28 property shall have been vacant for at least six months while actively 29 marketed for lease. 30 (C) A building shall be treated as having been "substantially rehabil- 31 itated" if the qualified rehabilitation expenditures in relation to such 32 building total ten thousand dollars or more. 33 (7) (A) If the taxpayer disposes of such taxpayer's interest in the 34 qualified distressed residential property, or such property ceases to be 35 used as a residential property of the taxpayer within five years of 36 receiving the credit under this subsection, the taxpayer's tax imposed 37 by this article for the taxable year in which such disposition or cessa- 38 tion occurs shall be increased by the recapture portion of the credit 39 allowed under this subsection for all prior taxable years with respect 40 to such rehabilitation. 41 (B) For purposes of subparagraph (A) of this paragraph, the recapture 42 portion shall be the product of the amount of credit claimed by the 43 taxpayer multiplied by a ratio, the numerator of which is equal to sixty 44 less the number of months the building is owned or used as residential 45 property by the taxpayer and the denominator of which is sixty. 46 (8) Any expenditure for which a credit is claimed under this 47 subsection shall not be eligible for any other credit under this chap- 48 ter. 49 § 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 50 of the tax law is amended by adding a new clause (xliv) to read as 51 follows: 52 (xliv) Credit for rehabilitation Amount of credit 53 of distressed residential under subdivision fifty-three 54 properties under subsection (jjj) of section two hundred ten-BS. 4906 3 1 § 3. Section 210-B of the tax law is amended by adding a new subdivi- 2 sion 53 to read as follows: 3 53. Credit for rehabilitation of distressed residential 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 residential property. 9 Provided, however, the credit shall not exceed one hundred thousand 10 dollars. 11 (2) Tax credits allowed pursuant to this subdivision shall be allowed 12 in the taxable year in which the property is deemed a certified rehabil- 13 itation. 14 (3) If the amount of the credit allowable under this subdivision for 15 any taxable year shall exceed the taxpayer's tax for such year, the 16 excess may be carried over to the following year or years, and may be 17 applied against the taxpayer's tax for such year or years, but shall not 18 exceed twenty-five thousand dollars. 19 (4) (A) The term "qualified rehabilitation expenditure" means, for 20 purposes of this subdivision, any amount properly chargeable to a capi- 21 tal account: 22 (i) in connection with the certified rehabilitation of a qualified 23 residential property, and 24 (ii) for property for which depreciation would be allowable under 25 section 168 of the internal revenue code. 26 (B) Such term shall not include (i) the cost of acquiring any building 27 or interest therein, (ii) any expenditure attributable to the enlarge- 28 ment of an existing building, or (iii) any expenditure made prior to 29 January first, two thousand nineteen or after December thirty-first, two 30 thousand twenty-four. 31 (5) The term "certified rehabilitation" means, for purposes of this 32 subdivision, any rehabilitation of a certified distressed residential 33 property which has been approved and certified by a local government as 34 being completed, with a certificate of occupancy issued, and that the 35 costs are consistent with the work completed. Such certification shall 36 be acceptable as proof that the expenditures related to such rehabili- 37 tation qualify as qualified rehabilitation expenditures for purposes of 38 the credit allowed under paragraph one of this subdivision. 39 (6) (A) The term "qualified residential property" means, for purposes 40 of this subdivision, a distressed residential property located within 41 New York state: 42 (i) which has been substantially rehabilitated, 43 (ii) which was constructed prior to January first, nineteen hundred 44 sixty-two, 45 (iii) which is owned by the taxpayer, and 46 (iv) which is located within a distressed residential or mixed-use 47 area, as identified by each locality through local law, that is deemed 48 an area in need of community renewal due to dilapidation and vacancies. 49 (B) If the distressed residential property is rental property, such 50 property shall have been vacant for at least six months while actively 51 marketed for lease. 52 (C) A building shall be treated as having been "substantially rehabil- 53 itated" if the qualified rehabilitation expenditures in relation to such 54 building total ten thousand dollars or more. 55 (7) (A) If the taxpayer disposes of such taxpayer's interest in the 56 qualified distressed residential property, or such property ceases to beS. 4906 4 1 used as a residential property of the taxpayer within five years of 2 receiving the credit under this subdivision, the taxpayer's tax imposed 3 by this article for the taxable year in which such disposition or cessa- 4 tion occurs shall be increased by the recapture portion of the credit 5 allowed under this subdivision for all prior taxable years with respect 6 to such rehabilitation. 7 (B) For purposes of subparagraph (A) of this paragraph, the recapture 8 portion shall be the product of the amount of credit claimed by the 9 taxpayer multiplied by a ratio, the numerator of which is equal to sixty 10 less the number of months the building is owned or used as residential 11 property by the taxpayer and the denominator of which is sixty. 12 (8) Any expenditure for which a credit is claimed under this subdivi- 13 sion shall not be eligible for any other credit under this chapter. 14 § 4. This act shall take effect immediately and shall apply to taxable 15 years beginning on or after January 1, 2019.