There is a newer version of the New York Consolidated Laws
2006 New York Code - Exemptions And Deductions From Base Rent.
§ 11-704 Exemptions and deductions from base rent. a. The following
shall be exempt from the payment of the tax imposed by this chapter:
1. The state of New York, or any public corporation (including a
public corporation created pursuant to agreement or compact with another
state or the Dominion of Canada), improvement district or other
political subdivision of the state;
2. The United States of America, insofar as it is immune from
taxation;
3. The United Nations or other world-wide international organizations
of which the United States of America is a member;
4. Any corporation, or association, or trust, or community chest, fund
or foundation, organized and operated exclusively for religious,
charitable, or educational purposes, or for the prevention of cruelty to
children or animals, and no part of the net earnings of which inures to
the benefit of any private shareholder or individual and no substantial
part of the activities of which is carrying on propaganda, or otherwise
attempting to influence legislation; provided, however, that nothing in
this paragraph shall include an organization operated for the primary
purpose of carrying on a trade or business for profit, whether or not
all of its profits are payable to one or more organizations described in
this paragraph;
5. Any tenant who would be subject to taxes under this chapter
aggregating not more than one dollar for a tax year with respect to all
taxable premises used by the tenant; and
6. Any tenant located in the "World Trade Center Area," as defined as
follows: the area in the borough of Manhattan bounded by Church Street
on the east starting at the intersection of Liberty Street and Church
Street; running northerly along the center line of Church Street to the
intersection of Church Street and Vesey Street; running westerly along
the center line of Vesey Street to the intersection of Vesey Street and
West Broadway; running northerly along the center line of West Broadway
to the intersection of West Broadway and Barclay Street; running
westerly along the center line of Barclay Street to the intersection of
Barclay Street and Washington Street; running southerly along the center
line of Washington Street to the intersection of Washington Street and
Vesey Street; running westerly along the center line of Vesey Street to
the intersection of Vesey Street and West Street; running southerly
along the center line of West Street to the intersection of West Street
and Liberty Street; running easterly along the center line of Liberty
Street to the intersection of Liberty Street and Washington Street;
running southerly along the center line of Washington Street to the
intersection of Washington Street and Albany Street; running easterly
along the center line of Albany Street to the intersection of Albany
Street and Greenwich Street; running northerly along the center line of
Greenwich Street to Liberty Street; and running easterly along the
center line of Liberty Street to the intersection of Liberty Street and
Church Street.
b. (1) A tenant who uses premises for no more than fourteen days in a
tax year whether or not consecutive, where his or her agreement with his
or her landlord does not require him or her to pay rent for a longer
period shall be exempt from the payment of the tax imposed by this
chapter in respect to the rent paid by him or her for such premises.
(2) A tenant whose base rent, (i) for tax years beginning on or after
June first, nineteen hundred eighty-one and ending on or before May
thirty-first, nineteen hundred eighty-four, is not in excess of four
thousand nine hundred ninety-nine dollars per year, (ii) for the tax
year beginning June first, nineteen hundred eighty-four and ending May
thirty-first, nineteen hundred eighty-five, is not in excess of seven
thousand nine hundred ninety-nine dollars per year, (iii) for tax years
beginning on or after June first, nineteen hundred eighty-five and
ending on or before May thirty-first, nineteen hundred ninety-four, is
not in excess of ten thousand nine hundred ninety-nine dollars per year,
(iv) for the tax year beginning June first, nineteen hundred ninety-four
and ending May thirty-first, nineteen hundred ninety-five, is not in
excess of twenty thousand nine hundred ninety-nine dollars per year, (v)
for the tax year beginning June first, nineteen hundred ninety-five and
ending May thirty-first, nineteen hundred ninety-six, is not in excess
of thirty thousand nine hundred ninety-nine dollars per year, (vi) for
the tax year beginning June first, nineteen hundred ninety-six and
ending May thirty-first, nineteen hundred ninety-seven, is not in excess
of thirty-nine thousand nine hundred ninety-nine dollars per year, (vii)
for tax years beginning on or after June first, nineteen hundred
ninety-seven and ending on or before May thirty-first, two thousand, is
not in excess of ninety-nine thousand nine hundred ninety-nine dollars
per year, calculated without regard to any reduction in base rent
allowed by paragraph two of subdivision h of this section, (viii) for
the period beginning June first, two thousand and ending November
thirtieth, two thousand, is not in excess of ninety-nine thousand nine
hundred ninety-nine dollars per year, calculated without regard to any
reduction in base rent allowed by paragraph two of subdivision h of this
section, (ix) for the period beginning December first, two thousand and
ending May thirty-first, two thousand one, is not in excess of one
hundred forty-nine thousand nine hundred ninety-nine dollars per year,
calculated without regard to any reduction in base rent allowed by
paragraph two of subdivision h of this section, and (x) for tax years
beginning on or after June first, two thousand one, is not in excess of
two hundred forty-nine thousand nine hundred ninety-nine dollars per
year, calculated without regard to any reduction in base rent allowed by
paragraph two of subdivision h of this section, shall be exempt from the
payment of the tax imposed by this chapter with respect to such rent,
provided, however, that where the base rent of such tenant is for a
period of less than one year, such base rent shall, for purposes of this
paragraph, be determined as if it had been on an equivalent basis for
the entire year; and provided, further, that for purposes of
subparagraphs (viii) and (ix) of this paragraph, base rent for the
period specified in each of such subparagraphs shall be separately
annualized as if it had been on an equivalent basis for an entire year,
irrespective of the actual base rent for the tax year including the
period specified in such subparagraph. Notwithstanding the preceding
sentence, (xi) a tenant whose base rent for the tax year beginning June
first, nineteen hundred eighty-four and ending May thirty-first,
nineteen hundred eighty-five, is at least eight thousand dollars per
year, but not in excess of ten thousand nine hundred ninety-nine dollars
per year, shall be exempt from the payment of the tax imposed by this
chapter with respect to such rent for the period beginning December
first, nineteen hundred eighty-four and ending May thirty-first,
nineteen hundred eighty-five, and (xii) a tenant whose base rent for the
tax year beginning June first, nineteen hundred ninety-five and ending
May thirty-first, nineteen hundred ninety-six, is at least thirty-one
thousand dollars per year, but not in excess of thirty-nine thousand
nine hundred ninety-nine dollars per year, shall be exempt from the
payment of the tax imposed by this chapter with respect to such rent for
the period beginning September first, nineteen hundred ninety-five and
ending May thirty-first, nineteen hundred ninety-six.
c. Base rent shall be reduced by the amount of the taxpayer's rent
for, or reasonably ascribable to, the taxpayer's own use of the
premises:
1. As premises used for railroad transportation purposes.
2. As premises used for air transportation purposes.
3. As piers insofar as such premises are used in interstate or foreign
commerce.
4. Which are located in, upon, above or under any public street,
highway or other public place, and which are defined as special
franchise property in the real property tax law.
5. Which are taxed pursuant to subchapter one of chapter twenty-two-A
or chapter twenty of this title to the extent that such premises are
subject to, and during the period that they are subject to, such tax.
6. Which are taxed pursuant to subdivision b or c of section 11-1005
of chapter ten of this title.
7. Which are advertising signs, advertising space, vending machines or
newsstands within or attached to stations, platforms, stairways,
entranceways, passageways, mezzanines or tracks of a rapid transit
subway or elevated railroad operated by the New York city transit
authority when the rent of the tenant or of the tenant's landlord is
payable to such authority.
8. As premises used for omnibus transportation purposes.
9. As premises used for retail sales purposes where such premises are
located in the area in the borough of Manhattan bounded by Murray Street
on the north starting at the intersection of West Street and Murray
Street; running easterly along the center line of Murray Street,
connecting through City Hall Park with the center line of Frankfort
Street and running easterly along the center lines of Frankfort and
Dover Streets to the intersection of Dover Street and South Street;
running southerly along the center line of South Street to Peter Minuit
Plaza; connecting through Peter Minuit Plaza to the center line of State
Street and running northwesterly along the center line of State Street
to the intersection of State Street and Battery Place; running westerly
along the center line of Battery Place to the intersection of Battery
Place and West Street; and running northerly along the center line of
West Street to the intersection of West Street and Murray Street. Any
tax lot which is partly located inside such area shall be deemed to be
entirely located inside such area.
d. A tenant who uses taxable premises for renting to others for
residential purposes to the extent of seventy-five per centum or more of
the rentable floor space shall be exempt from the tax imposed by this
chapter in respect to the rent paid for such premises from the time that
construction thereof commences, provided, however, that this paragraph
shall not be applicable to hotels, apartment hotels or lodging houses as
defined in former title V of chapter forty-six of the code.
e. (1) A tenant who uses taxable premises for a dramatic or musical
arts performance for less than four weeks where there is no indication
prior to or at the time that such performance commences that the
performance is intended to continue for less than four weeks shall be
exempt from the tax imposed by this chapter with respect to the rent
paid for such taxable premises.
(2) (i) Notwithstanding any other provision of law to the contrary, a
tenant who uses taxable premises for the production and performance of a
theatrical work shall be exempt from the tax imposed by this chapter
with respect to the rent paid for such taxable premises for a period not
exceeding fifty-two weeks beginning on the date that the production of
such theatrical work commences, provided, however, that this
subparagraph shall not apply to any theatrical work the production of
which commenced prior to June first, nineteen hundred ninety-five.
(ii) For purposes of this paragraph, the term "theatrical work" shall
mean a performance or repetition thereof in a theater of a live dramatic
performance (whether or not musical in part) that contains sustained
plots or recognizable thematic material, including so-called legitimate
theater plays or musicals, dramas, melodramas, comedies, compilations,
farces or reviews, provided that such performance is intended to be open
to the public for at least two weeks. The term "theatrical work" shall
not include performances of any kind in a roof garden, cabaret or
similar place, circuses, ice skating shows, aqua shows, variety shows,
magic shows, animal acts, concerts, industrial shows or similar
performances, or radio or television performances, whether or not such
performances are pre-recorded for later broadcast.
f. (1) A tenant who is an eligible business and has obtained the
certifications required by paragraph four of this subdivision shall be
permitted to reduce his or her base rent for particular premises to
which he or she has relocated by an amount determined by multiplying
such base rent by a fraction the numerator of which is the number of
eligible aggregate employment shares maintained by such tenant with
respect to such premises in the tax year for which such tenant claims
the reduction and the denominator of which is a number equal to the
number of aggregate employment shares maintained by such tenant in such
premises in the tax year for which such tenant claims the reduction
allowed by this subdivision, provided, however, that such denominator
shall not exceed the highest number of aggregate employment shares
maintained by such tenant in such premises in any of the tax years
described below which commence prior to or concurrently with the tax
year for which such tenant claims the reduction allowed by this
subdivision: (i) the tax year during which such tenant relocates to such
particular premises; and (ii) each of the three tax years immediately
succeeding the tax year during which such tenant relocates to such
premises. Base rent for a particular premises may be reduced as provided
in this subdivision for the tax year during which the tenant relocates
to such premises and for any of the twelve immediately succeeding tax
years during which the tenant maintains eligible aggregate employment
shares with respect to such premises, provided, however, that there
shall be no such reduction with respect to base rent for any part of the
tax year preceding the date of relocation to such premises, and
provided, further, however, in the twelfth succeeding tax year there
shall be a reduction only with respect to base rent for the period
(commencing on the first day of such tax year) equal to the difference
between the total number of days in the tax year of relocation and the
number of days in such tax year of relocation commencing with and
following the date of relocation, and provided, further, that there
shall be no such reduction with respect to premises used for retail
activity or hotel services.
(2) (i) For purposes of this subdivision, the terms "eligible area,"
"eligible aggregate employment shares," "relocate," "retail activity"
and "hotel services" shall have the meanings ascribed by section 22-621
of the code, provided that whenever the term "taxable year" appears in
such section 22-621, such term shall be read as "tax year," as the term
"tax year" is defined in subdivision twelve of section 11-701 of this
chapter except when the taxable year referred to is the taxable year
immediately preceding the taxable year during which such tenant
relocates.
(ii) For purposes of this subdivision, the term "eligible business"
shall have the meaning ascribed by section 22-621 of the code, provided
that such term shall in addition include any person subject to a tax
imposed under subchapter four of chapter six of this title and any
person who is an insurance corporation as defined in section one
thousand five hundred of the tax law, which: (A) has been conducting
substantial business operations at one or more business locations
outside the eligible area for the twenty-four consecutive months
immediately preceding the taxable year during which such eligible
business relocates; and (B) on or after May twenty-seventh, nineteen
hundred eighty-seven relocates all or part of such business operations;
and (C) on or after May twenty-seventh, nineteen hundred eighty-seven
first enters into a lease for the premises to which it relocates or a
parcel on which will be constructed such premises.
(3) The reduction allowed by this subdivision may be claimed on an
estimated basis on the returns filed for the tax periods ending on the
last days of August, November and February of each year if, and to the
extent, permitted by regulations promulgated by the commissioner of
finance.
(4) No tenant shall be authorized to receive a reduction in base rent
subject to tax under the provisions of this subdivision, until the
premises with respect to which it is claiming a reduction in base rent
meet the requirements in the definition of eligible premises and until
it has obtained a certification of eligibility from the mayor or an
agency designated by the mayor, and an annual certification from the
mayor or an agency designated by the mayor as to the number of eligible
aggregate employment shares maintained by such tenant which may qualify
for obtaining a base rent reduction for the tenant's tax year. Any
written documentation submitted to the mayor or such agency or agencies
in order to obtain any such certification shall be deemed a written
instrument for purposes of section 175.00 of the penal law. Application
fees for such certifications shall be determined by the mayor or such
agency or agencies. No certification of eligibility shall be issued to
an eligible business on or after July first, nineteen hundred
ninety-nine unless such business meets the requirements of either
subparagraph (a) or (b) below:
(a) (1) prior to such date such business has purchased, leased or
entered into a contract to purchase or lease particular premises or a
parcel on which will be constructed such premises or already owned such
premises or parcel;
(2) prior to such date improvements have been commenced on such
premises or parcel which improvements will meet the requirements of
subdivision (e) of section 22-621 of this code relating to expenditures
for improvements;
(3) prior to such date such business submits a preliminary application
for a certification of eligibility to such mayor or such agency or
agencies with respect to a proposed relocation to such particular
premises; and
(4) such business relocates to such particular premises not later than
thirty-six months or, in a case in which the expenditures made for the
improvements specified in clause two of this subparagraph are in excess
of fifty million dollars within seventy-two months from the date of
submission of such preliminary application; or
(b) (1) not later than June thirtieth, two thousand two, such business
has purchased, leased or entered into a contract to purchase or lease
particular premises wholly contained in a building in which at least an
aggregate of forty per centum or two hundred thousand square feet,
whichever is less, of the nonresidential floor area of such building has
been purchased or leased by a business or businesses which meet or will
meet the requirements of subparagraph (a) of this paragraph with respect
to such floor area and which are or will become certified as eligible to
receive a credit under section 22-622 of this code with respect to such
floor area;
(2) not later than June thirtieth, two thousand two, such business
submits a preliminary application for a certification of eligibility to
such mayor or such agency or agencies with respect to a proposed
relocation to such particular premises; and
(3) not later than June thirtieth, two thousand two, such business
relocates to such particular premises.
Any tenant subject to a tax imposed under chapter five, or subchapter
two or three of chapter six, of this title obtaining a certification of
eligibility pursuant to subdivision (b) of section 22-622 of the code
shall be deemed to have obtained the certification of eligibility
required by this paragraph.
g. Whenever the rent paid by a tenant for his or her occupancy of
taxable premises is measured in whole or in part by the gross receipts
from the tenant's sales within such place, the tenant's rent, to the
extent paid on the basis of such gross receipts, shall be deemed not to
exceed fifteen percent of such gross receipts.
h. (1) In the case of any taxable premises located in the borough of
Manhattan north of the center line of ninety-sixth street or in the
boroughs of the Bronx, Brooklyn, Queens and Staten Island, the base rent
for such premises shall be reduced by ten percent for the period
beginning on January first, nineteen hundred eighty-six and ending May
thirty-first, nineteen hundred eighty-seven, by twenty percent for the
period beginning June first, nineteen hundred eighty-seven and ending
May thirty-first, nineteen hundred eighty-nine, and by thirty percent
for the period beginning June first, nineteen hundred eighty-nine and
ending August thirty-first, nineteen hundred ninety-five, such reduction
to be made after all other exemptions and deductions authorized by this
chapter have been taken. For periods beginning September first, nineteen
hundred ninety-five and thereafter, a tenant of taxable premises located
in that part of the city specified in the preceding sentence shall be
exempt from the payment of the tax imposed by this chapter with respect
to the rent for such taxable premises.
(2) In the case of any taxable premises located in the borough of
Manhattan south of the center line of ninety-sixth street, the base rent
for such premises shall be reduced by (i) fifteen percent for the period
beginning March first, nineteen hundred ninety-six and ending May
thirty-first, nineteen hundred ninety-six, (ii) twenty-five percent for
the period beginning June first, nineteen hundred ninety-six and ending
August thirty-first, nineteen hundred ninety-eight, and (iii)
thirty-five percent for periods beginning September first, nineteen
hundred ninety-eight and thereafter, such reduction to be made after all
other exemptions and deductions authorized by this chapter have been
taken.
i. (1) (a) (i) For purposes of, and to the extent relevant to, this
subdivision, the following terms shall, except to the extent hereinafter
modified, have the definitions assigned to such terms in section four
hundred ninety-nine-a of the real property tax law, and such definitions
shall apply with the same force and effect as if they had been set forth
in full in this subdivision: "abatement zone," "aggregate floor area,"
"applicant," "department of finance," "eligible building," "eligibility
period," "eligible premises," "expansion premises," "expansion tenant,"
"governmental agency," "landlord," "lease commencement date," "mixed-use
building," "new tenant," "person," "relocation area," "renewal tenant,"
"rent commencement date," "subtenant" and "tenant."
(ii) For purposes of this subdivision, the definitions assigned by
clause (i) of this subparagraph to the terms "eligible premises,"
"expansion tenant," "landlord," "new tenant" and "renewal tenant" shall
be modified as follows:
(A) whenever the term "eligible building" appears in any of such
definitions, such term, notwithstanding anything to the contrary, shall
be deemed to include an eligible government-owned building and, for
purposes of subparagraph (b-2) of paragraph two of subdivision i of this
section, a non-residential or mixed-use building located south of the
center line of Canal Street in the borough of Manhattan, regardless of
when it received its initial certificate of occupancy or initial
temporary certificate of occupancy and regardless of when it was
constructed and shall be deemed to include an eligible government-owned
building; and
(B) a reference in any of such definitions to a lease which meets the
eligibility requirements of section four hundred ninety-nine-c of the
real property tax law shall be deemed to include, in the case of a lease
of premises in an eligible government-owned building, a lease which
meets the eligibility requirements of paragraph four of this
subdivision.
(b) When used in this subdivision, the following terms shall mean or
include:
(i) "Eligible government-owned building." A building that would be an
eligible building, as such term is defined in section four hundred
ninety-nine-a of the real property tax law, but for the fact that it is
owned by a governmental agency.
(ii) "Eligible taxable premises." Taxable premises that are eligible
premises or expansion premises.
(iii) "Eligible tenant." A tenant with respect to whose lease of
eligible taxable premises there has been issued a certificate of
abatement or a certificate of eligibility.
(iv) "Base year." The twelve-month period that commences on the rent
commencement date.
(v) "Base rent for the base year." The total base rent for eligible
taxable premises for the base year, determined without regard to the
special reduction allowed by this subdivision.
(vi) "Certificate of abatement." The certificate of abatement issued
pursuant to section four hundred ninety-nine-d of the real property tax
law.
(vii) "Certificate of eligibility." The certificate of eligibility
issued pursuant to paragraph five of this subdivision.
(2) (a) An eligible tenant of eligible taxable premises shall be
allowed a special reduction in determining the taxable base rent for
such eligible taxable premises. Such special reduction shall be allowed
with respect to the rent for such eligible taxable premises for a period
not exceeding sixty months or, with respect to a lease commencing on or
after April first, nineteen hundred ninety-seven with an initial lease
term of less than five years, but not less than three years, for a
period not exceeding thirty-six months, commencing on the rent
commencement date applicable to such eligible taxable premises,
provided, however, that in no event shall any special reduction be
allowed for any period beginning after March thirty-first, two thousand
thirteen. Notwithstanding the preceding sentence, with respect to a
lease commencing on or after July first, two thousand five for eligible
premises as defined in paragraph (c) of subdivision ten of section four
hundred ninety-nine-aa of the real property tax law, such special
reduction shall be allowed with respect to the rent for such eligible
taxable premises for a period not exceeding one hundred twenty months,
commencing on the rent commencement date applicable to such eligible
taxable premises, provided, however, that in no event shall any special
reduction be allowed for any period beginning after June thirtieth, two
thousand ten. For purposes of applying such special reduction, the base
rent for the base year shall, where necessary to determine the amount of
the special reduction allowable with respect to any number of months
falling within a tax period, be prorated by dividing the base rent for
the base year by twelve and multiplying the result by such number of
months.
(b) Except as provided in subparagraphs (b-1) and (b-2) of this
paragraph, the amount of the special reduction allowed by this
subdivision shall be determined as follows:
(i) For the base year the amount of such special reduction shall be
equal to the base rent for the base year.
(ii) For the first and second twelve-month periods following the base
year the amount of such special reduction shall be equal to the lesser
of (A) the base rent for each such twelve-month period or (B) the base
rent for the base year.
(iii) For the third twelve-month period following the base year the
amount of such special reduction shall be equal to two-thirds of the
lesser of (A) the base rent for such twelve-month period or (B) the base
rent for the base year.
(iv) For the fourth twelve-month period following the base year the
amount of such special reduction shall be equal to one-third of the
lesser of (A) the base rent for such twelve-month period or (B) the base
rent for the base year.
(b-1) The amount of the special reduction allowed by this subdivision
with respect to a lease commencing on or after April first, nineteen
hundred ninety-seven with an initial lease term of less than five years,
but not less than three years, shall be determined as follows:
(i) For the base year the amount of such special reduction shall be
equal to the base rent for the base year.
(ii) For the first twelve-month period following the base year the
amount of such special reduction shall be equal to two-thirds of the
lesser of (A) the base rent for such twelve-month period or (B) the base
rent for the base year.
(iii) For the second twelve-month period following the base year the
amount of such special reduction shall be equal to one-third of the
lesser of (A) the base rent for such twelve-month period or (B) the base
rent for the base year.
(b-2) The amount of the special reduction allowed by this subdivision
with respect to a lease other than a sublease commencing between July
first, two thousand five and June thirtieth, two thousand nine with an
initial or renewal lease term of at least five years shall be determined
as follows:
(i) For the base year the amount of such special reduction shall be
equal to the base rent for the base year.
(ii) For the first, second, third and fourth twelve-month periods
following the base year the amount of such special reduction shall be
equal to the lesser of (A) the base rent for each such twelve-month
period or (B) the base rent for the base year.
(c) For purposes of determining (i) whether a tenant is, pursuant to
the provisions of paragraph two of subdivision b of this section, exempt
from payment of the tax imposed by this chapter with respect to the base
rent for eligible taxable premises or (ii) whether, and the extent to
which, a tenant is eligible for the credit allowed pursuant to the
provisions of section 11-704.3 of this chapter with respect to eligible
taxable premises, the term "base rent" as used in such provisions shall
be the base rent as determined prior to the allowance of any special
reduction allowed by this subdivision.
(d) Notwithstanding anything to the contrary, for purposes of this
subdivision, expansion premises shall be treated as separate and
distinct from any other premises of the expansion tenant in the same
eligible building.
(3) The special reduction allowed by this subdivision shall be allowed
commencing on the rent commencement date; however, if the date of the
certificate of abatement or certificate of eligibility is later than the
rent commencement date, the tenant shall not, in the first instance,
claim the special reduction on any return required to be filed for a tax
period ending prior to the date of such certificate of abatement or
certificate of eligibility. If the date of such certificate of abatement
or certificate of eligibility falls in a tax period subsequent to the
tax period in which the rent commencement date falls, but both such
dates fall within the same tax year, the special reduction that was not
claimed in the first instance for any period preceding the date of such
certificate of abatement or certificate of eligibility shall be
reflected in the final return for the tax year. If the date of the
certificate of abatement or certificate of eligibility falls in the tax
year following the tax year in which the rent commencement date falls,
an amended final return shall be filed for such earlier tax year in
which shall be reflected any special reduction allowable for such tax
year; in addition, the final return for such later tax year shall
reflect any special reduction that was not claimed in the first instance
for any period in such tax year preceding the date of the certificate of
abatement or certificate of eligibility.
(4) (a) With respect to premises located in an eligible
government-owned building, no special reduction shall be allowed under
this subdivision unless:
(i) the landlord enters into a lease for eligible premises with a new
tenant or a renewal tenant and:
(A) the lease commencement date is within the eligibility period; and
(B) (I) if, by the sixtieth day following the rent commencement date,
such new or renewal tenant employs fifty or fewer employees in the
eligible premises, the initial lease term is for a period of at least
five years, provided, however, that with respect to a lease commencing
on or after July first, nineteen hundred ninety-six if, by the sixtieth
day following the rent commencement date, such new or renewal tenant
employs one hundred twenty-five or fewer employees in the eligible
premises, the initial lease term is for a period of at least five years,
and provided, further, that with respect to a lease commencing on or
after April first, nineteen hundred ninety-seven if, by the sixtieth day
following the rent commencement date, such new or renewal tenant employs
one hundred twenty-five or fewer employees in the eligible premises, the
initial lease term is for a period of at least three years, or (II) if,
by the sixtieth day following the rent commencement date, such new or
renewal tenant employs more than fifty employees in the eligible
premises, the initial lease term is for a period of at least ten years,
provided, however, that with respect to a lease commencing on or after
July first, nineteen hundred ninety-six if, by the sixtieth day
following the rent commencement date, such new or renewal tenant employs
more than one hundred twenty-five employees in the eligible premises,
the initial lease term is for a period of at least ten years; or
(ii) the landlord enters into a lease with an expansion tenant for
expansion premises and:
(A) the lease commencement date is within the eligibility period;
(B) if the expansion premises are located in the eligible building
previously occupied by such expansion tenant, the lease term for the
premises in the eligible building previously occupied by such expansion
tenant will expire no earlier than the expiration date of the initial
lease term for the expansion premises, provided that where such
expansion tenant occupies premises in the eligible building under more
than one lease, the foregoing provision of this subclause shall be
applied with reference to the lease for the premises containing the
largest amount of square feet, provided, however, that this subclause
shall not apply to a lease commencing on or after July first, nineteen
hundred ninety-six; and
(C) (I) if, by the sixtieth day following the rent commencement date,
such expansion tenant employs fifty or fewer employees in the eligible
building in which the expansion premises are located, the initial lease
term for the expansion premises is for a period of at least five years,
provided, however, that with respect to a lease commencing on or after
July first, nineteen hundred ninety-six if, by the sixtieth day
following the rent commencement date, such expansion tenant employs one
hundred twenty-five or fewer employees in the expansion premises, the
initial lease term for the expansion premises is for a period of at
least five years, and provided, further, that with respect to a lease
commencing on or after April first, nineteen hundred ninety-seven if, by
the sixtieth day following the rent commencement date, such expansion
tenant employs one hundred twenty-five or fewer employees in the
expansion premises, the initial lease term for the expansion premises is
for a period of at least three years, or (II) if, by the sixtieth day
following the rent commencement date, such expansion tenant employs more
than fifty employees in such eligible building, the initial lease term
for the expansion premises is for a period of at least ten years,
provided, however, that with respect to a lease commencing on or after
July first, nineteen hundred ninety-six if, by the sixtieth day
following the rent commencement date, such expansion tenant employs more
than one hundred twenty-five employees in the expansion premises, the
initial lease term for the expansion premises is for a period of at
least ten years.
(b) Notwithstanding anything in this subdivision to the contrary, with
respect to premises located in an eligible government-owned building, no
certificate of eligibility shall be issued and no special reduction
shall be allowed under this subdivision if:
(i) the tenant has relocated to such premises from any area in the
borough of Manhattan north of the center line of 96th street or from any
portion of the boroughs of the Bronx, Brooklyn, Queens, or Staten
Island; or
(ii) the lease for such premises provides that during the initial
lease term required under subparagraph (a) of this paragraph either the
landlord or the tenant may terminate such lease prior to the expiration
of such required initial lease term, provided that such lease may
provide that either the landlord or the tenant may terminate such lease
if (A) the other party is in default of any of such party's obligations
under the lease, (B) the eligible premises are damaged or destroyed by
fire or other casualty, (C) the eligible premises are rendered unusable
for any reason not attributable to any act or failure to act of either
tenant or landlord or (D) the eligible premises are acquired by eminent
domain.
(c) For purposes of this paragraph, the expiration date of a lease
shall be determined by the expiration date set forth in such lease,
without giving effect to any rights of the landlord or the tenant to
terminate such lease prior to the expiration date set forth therein.
(5) (a) (i) With respect to premises located in an eligible
government-owned building, an application for a certificate of
eligibility entitling a tenant to claim the special reduction allowed by
this subdivision shall be filed by such tenant with the department of
finance on or after the date on which the lease for the eligible
premises is executed by the landlord and tenant but in no event more
than one hundred eighty days following the later of the rent
commencement date or the date that chapter four of the laws of nineteen
hundred ninety-five became a law, and no such certificate of eligibility
shall be issued unless such application is filed within such time.
(ii) Notwithstanding clause (i) of this subparagraph and any other
provision of law to the contrary, with respect to a lease commencing on
or after July first, nineteen hundred ninety-six in premises located in
an eligible government-owned building, an application for a certificate
of eligibility entitling a tenant to claim the special reduction allowed
by this subdivision shall be filed by such tenant with the department of
finance on or after the date on which the lease for the eligible
premises is executed by the landlord and tenant but in no event more
than one hundred eighty days following the rent commencement date or
sixty days following the date that the chapter of the laws of nineteen
hundred ninety-seven that added this clause became a law, whichever is
later, and no such certificate of eligibility shall be issued unless
such application is filed within such time.
(b) In addition to any other information required by the department of
finance, such application for a certificate of eligibility shall include
(i) an abstract of the lease for the eligible taxable premises, which
shall include the lease commencement date, the rent commencement date
and the expiration date of such lease, (ii) a statement as to the number
of persons employed by the tenant in the eligible taxable premises and,
where applicable, in the eligible building containing such premises, by
the sixtieth day following the rent commencement date, (iii) a statement
as to the location of all office or retail space in the city occupied by
the tenant prior to the execution of the lease for the eligible taxable
premises and the commencement and expiration dates of all leases for
such office or retail space located in the abatement zone. Such
application shall also state that the tenant agrees to comply with and
be subject to such rules as may be issued from time to time by the
department of finance.
(c) The department of finance shall issue a certificate of eligibility
upon determining that an application filed pursuant to this paragraph
meets the requirements set forth in this subdivision, provided, however,
that no such certificate of eligibility shall be issued if any payments
in lieu of taxes, water or sewer charges or other lienable charges are
due and owing with respect to such eligible government-owned building at
the time such application is pending, unless such payments in lieu of
taxes or charges are at such time being paid in timely installments
pursuant to a written agreement with the department of finance or other
appropriate agency.
(d) The burden of proof shall be on the tenant to show by clear and
convincing evidence that the requirements for granting a certificate of
eligibility have been satisfied. The department of finance shall have
the authority to require that statements in connection with applications
pursuant to this paragraph be made under oath.
(e) The department of finance may provide by rule for the payment by
tenants of premises in eligible government-owned buildings of reasonable
administrative charges or fees necessary to defray expenses in
connection with the determination of initial and continuing eligibility
for the special reduction allowed by this subdivision.
(6) (a) If an eligible tenant (i) sublets any portion of the eligible
taxable premises to any other person, or (ii) otherwise ceases to occupy
or use any portion of the premises as eligible taxable premises, such
tenant shall, immediately upon the occurrence of any such event, cease
to be eligible for the special reduction allowed by this subdivision
with respect to the portion of the premises which is sublet or which
ceases to be occupied or used by such tenant as eligible taxable
premises, and for any period following the occurrence of any such event,
the special reduction otherwise allowed by this subdivision shall be
reduced by an amount determined by multiplying the amount of such
special reduction by the percentage of the premises which is sublet or
which has ceased to be occupied or used as eligible taxable premises.
Such tenant shall give written notice of the occurrence of any such
event to the department of finance within thirty days thereof. If the
tenant fails to give such notice, an assessment of any additional tax
that may become due as a result of the occurrence of any such event may
be made at any time, notwithstanding anything in section 11-717 of this
chapter to the contrary.
(b) Notwithstanding anything in this chapter to the contrary, a tenant
claiming the special reduction allowed by this subdivision shall file a
return for each tax period with respect to which such special reduction
is claimed. Each such return shall contain a certification by the
tenant, in such form as the department of finance may prescribe, to the
effect that such tenant meets all the requirements of this subdivision,
and no special reduction shall be allowed if such return does not
contain such certification by such tenant.
(c) If any special reduction allowed under this subdivision was
obtained by a tenant as a result of having made a false or misleading
statement as to a material fact or having omitted to state any material
fact necessary in order to make such statement not false or misleading,
no such special reduction shall be allowed and any additional tax that
becomes due as a result of such disallowance may be assessed at any
time, notwithstanding anything in section 11-717 of this chapter to the
contrary. In addition, the department of finance may declare any such
tenant to be ineligible to claim any special reduction under this
subdivision in the future with respect to the same or any other
premises.
7. A determination by the department of finance pursuant to
subdivision six of section four hundred ninety-nine-f of the real
property tax law to deny, terminate or revoke any abatement applied for
or granted pursuant to title four of article four of the real property
tax law based on the relationship between the landlord and the tenant
shall not be dispositive of whether such tenant is eligible for a
special reduction under this subdivision. The department of finance may
determine that such tenant is eligible for a special reduction under
this subdivision and may issue a certificate of eligibility to such
tenant in accordance with the procedures and pursuant to the standards
applicable to a tenant of premises located in an eligible
government-owned building, provided, however, that any application filed
pursuant to paragraph five of this subdivision by a tenant whose
application for a certificate of abatement pursuant to title four of
article four of the real property tax law was denied by the department
of finance pursuant to subdivision six of section four hundred
ninety-nine-f of the real property tax law based on the relationship
between the landlord and the tenant, or by a tenant whose application
for a certificate of abatement pursuant to title four of article four of
the real property tax law was granted by the department of finance, but
whose abatement was terminated or revoked by the department of finance
pursuant to subdivision six of section four hundred ninety-nine-f of the
real property tax law based on the relationship between the landlord and
the tenant, may be deemed by the department of finance to have been
filed on the date the application for such certificate of abatement was
filed. This paragraph shall only apply to leases commencing on or after
April first, nineteen hundred ninety-seven.
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