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) 2019-03-29 - 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.
                                                                   LBD10856-01-9

        S. 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-B

        S. 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 be

        S. 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.
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