2006 New York Code - Credits Against Tax.



 
    §  606.  Credits against tax. (a) Investment tax credit (ITC). * (1) A
  taxpayer shall be allowed  a  credit,  to  be  computed  as  hereinafter
  provided,  against  the  tax  imposed by this article. The amount of the
  credit shall be the per cent provided for hereinbelow of the  investment
  credit  base. The investment credit base is the cost or other basis, for
  federal income tax purposes, of tangible  personal  property  and  other
  tangible  property,  including  buildings  and  structural components of
  buildings, described in paragraph  two  of  this  subsection,  less  the
  amount  of  the  nonqualified nonrecourse financing with respect to such
  property to the extent such  financing  would  be  excludible  from  the
  credit  base  pursuant  to section 46(c)(8) of the internal revenue code
  (treating such property as section thirty-eight property irrespective of
  whether or not it in fact constitutes  section  thirty-eight  property).
  If,  at  the close of a taxable year following the taxable year in which
  such property was placed in service, there is  a  net  decrease  in  the
  amount  of  nonqualified  nonrecourse  financing  with  respect  to such
  property, such net decrease shall be treated as if it were the  cost  or
  other  basis  of  property described in paragraph two of this subsection
  acquired, constructed, reconstructed or erected during the year  of  the
  decrease  in  the  amount  of  nonqualified  nonrecourse  financing. The
  percentage to be used to compute the credit  allowed  pursuant  to  this
  subsection  shall  be  that  percentage appearing in column two which is
  opposite the appropriate period in column  one  in  which  the  tangible
  personal  property  was acquired, constructed, reconstructed or erected,
  as the case may be:
 
   Column 1                              Column 2
  After December 31, 1968 and
  prior to January 1, 1974               one per cent
  After December 31, 1973 and
  prior to January 1, 1978               two per cent
  After December 31, 1977 and
  prior to January 1, 1979               three per cent
  After December 31, 1978 and
  prior to June 1, 1981                  four per cent
  After May 31, 1981 and
  prior to July 1, 1982                  five per cent
  After June 30, 1982 and
  before January 1, 1987                 six per cent
  After December 31, 1986                four per cent, except that in the
                                         case of research and  development
                                         property      the      applicable
                                         percentage shall be seven
 
  Provided, however, that in the case  of  an  acquisition,  construction,
  reconstruction  or  erection  which  was commenced in any one period and
  continued or completed in any subsequent period the credit shall be  the
  sum  of  the portions of the investment credit base attributable to each
  such period, which portion with respect to each  such  period  shall  be
  ascertained by multiplying such investment credit base by a fraction the
  numerator  of  which  shall  be the expenditures paid or incurred during
  such period for such purposes and the denominator of which shall be  the
  total  of  all  expenditures  paid  or  incurred  for  such acquisition,
  construction, reconstruction or erection, multiplied  by  the  allowable
  percentage for each such period.
    * NB Applies to taxable years beginning after December 31, 1986
    (2)  * A credit shall be allowed under this subsection with respect to
  tangible  personal  property  and  other  tangible  property,  including
  buildings and structural components of buildings, which are: depreciable
  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
  code, have a useful life of four years or more, are acquired by purchase
  as  defined  in  section  one  hundred  seventy-nine (d) of the internal
  revenue code, have a situs in this state and are principally used by the
  taxpayer in  the  production  of  goods  by  manufacturing,  processing,
  assembling,   refining,   mining,   extracting,   farming,  agriculture,
  horticulture, floriculture, viticulture or commercial fishing.
    For purposes of this paragraph, manufacturing shall mean  the  process
  of  working raw materials into wares suitable for use or which gives new
  shapes, new quality or new combinations to matter which already has gone
  through  some  artificial  process  by  the  use  of  machinery,  tools,
  appliances  and other similar equipment. Property used in the production
  of goods shall include machinery, equipment or other  tangible  property
  which  is principally used in the repair and service of other machinery,
  equipment or other tangible property used principally in the  production
  of  goods  and  shall  include  all  facilities  used  in the production
  operation, including storage of material to be used in production and of
  the products that are produced.
    * NB Applies to property to which the amendments made by  section  201
  of Public Law 99-514 apply
    (A)  A  credit  shall be allowed under this subsection with respect to
  tangible  personal  property  and  other  tangible  property,  including
  buildings and structural components of buildings, which are: depreciable
  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
  code, have a useful life of four years or more, are acquired by purchase
  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
  revenue code, have a situs in this state and are (i) principally used by
  the  taxpayer  in  the production of goods by manufacturing, processing,
  assembling,  refining,   mining,   extracting,   farming,   agriculture,
  horticulture,  floriculture,  viticulture  or  commercial  fishing, (ii)
  industrial  waste  treatment  facilities  or   air   pollution   control
  facilities, used in the taxpayer's trade or business, (iii) research and
  development  property,  (iv)  principally used in the ordinary course of
  the taxpayer's trade or business as a broker  or  dealer  in  connection
  with the purchase or sale (which shall include but not be limited to the
  issuance, entering into, assumption, offset, assignment, termination, or
  transfer)  of  stocks,  bonds  or other securities as defined in section
  four hundred seventy-five (c)(2) of the Internal  Revenue  Code,  or  of
  commodities  as  defined in section 475(e) of the Internal Revenue Code,
  (v) principally used in the ordinary course of the taxpayer's  trade  or
  business  of  providing  investment  advisory  services  for a regulated
  investment company as defined in section eight hundred fifty-one of  the
  Internal  Revenue Code, or lending, loan arrangement or loan origination
  services to customers in connection with the  purchase  or  sale  (which
  shall  include  but  not  be  limited  to  the  issuance, entering into,
  assumption, offset, assignment, termination, or transfer) of  securities
  as  defined  in section four hundred seventy-five (c)(2) of the Internal
  Revenue Code, or (vi) principally used as a  qualified  film  production
  facility  including  qualified film production facilities having a situs
  in an empire zone designated as such pursuant to article  eighteen-B  of
  the general municipal law, where the taxpayer is providing three or more
  services  to  any  qualified film production company using the facility,
  including such services as a studio lighting  grid,  lighting  and  grip
  equipment,  multi-line  phone  service, broadband information technology
  access, industrial scale electrical capacity,  food  services,  security
  services, and heating, ventilation and air conditioning. For purposes of
  clauses  (iv)  and  (v)  of  this  subparagraph, property purchased by a
  taxpayer affiliated with a regulated  broker  or  dealer  is  allowed  a
  credit  under  this subsection if the property is used by its affiliated
  regulated broker or dealer in accordance with this subsection. Provided,
  however,  a taxpayer shall not be allowed the credit provided by clauses
  (iv) and (v) of this subparagraph unless all or a substantial portion of
  the  employees  performing  the  administrative  and  support  functions
  resulting  from  or related to the qualifying uses of such equipment are
  located in this state. For purposes of this subsection, the term "goods"
  shall not include electricity.
    (B) For purposes of this paragraph, the  following  definitions  shall
  apply:
    (i) Manufacturing shall mean the process of working raw materials into
  wares  suitable  for  use  or which gives new shapes, new quality or new
  combinations to matter which already has gone  through  some  artificial
  process  by  the  use  of machinery, tools, appliances and other similar
  equipment. Property used  in  the  production  of  goods  shall  include
  machinery,  equipment  or  other  tangible property which is principally
  used in the repair and service of other machinery,  equipment  or  other
  tangible  property used principally in the production of goods and shall
  include all facilities  used  in  the  production  operation,  including
  storage  of  material  to be used in production and of the products that
  are produced.
    (ii) Research and development property shall mean  property  which  is
  used  for  purposes  of  research and development in the experimental or
  laboratory sense. Such purposes shall  not  be  deemed  to  include  the
  ordinary  testing  or  inspection  of  materials or products for quality
  control,  efficiency  surveys,  management  studies,  consumer  surveys,
  advertising,  promotions,  or  research  in  connection  with  literary,
  historical or similar projects.
    (iii)  Industrial  waste  treatment  facilities  shall  mean  property
  constituting   facilities   for   the   treatment,   neutralization   or
  stabilization of  industrial  waste  and  other  wastes  (as  the  terms
  "industrial  waste" and "other wastes" are defined in section 17-0105 of
  the environmental conservation law) from a point  immediately  preceding
  the  point  of  such  treatment,  neutralization or stabilization to the
  point of disposal, including  the  necessary  pumping  and  transmitting
  facilities,  but  excluding  such  facilities  installed for the primary
  purpose of salvaging materials which are  usable  in  the  manufacturing
  process or are marketable.
    (iv) Air pollution control facilities shall mean property constituting
  facilities which remove, reduce, or render less noxious air contaminants
  emitted from an air contamination source (as the terms "air contaminant"
  and  "air  contamination  source"  are defined in section 19-0107 of the
  environmental conservation law) from a point immediately  preceding  the
  point  of such removal, reduction or rendering to the point of discharge
  of air, meeting emission standards as established by the  department  of
  environmental  conservation, but excluding such facilities installed for
  the primary purpose of salvaging  materials  which  are  usable  in  the
  manufacturing  process  or are marketable and excluding those facilities
  which rely for their efficacy on dilution, dispersion or assimilation of
  air contaminants in the ambient air  after  emission.  Such  term  shall
  further  include flue gas desulfurization equipment and attendant sludge
  disposal facilities, fluidized bed boilers, precombustion coal  cleaning
  facilities  or  other  facilities  that conform with this subsection and
  which comply with the provisions of the State  Acid  Deposition  Control
  Act  set  forth  in  title nine of article nineteen of the environmental
  conservation law.
    (v)  For  purposes  of  this  paragraph,  the  terms  "qualified  film
  production  facility" and "qualified film production company" shall have
  the same meaning as in section twenty-four of this chapter.
    (C)  However,  such credit shall be allowed with respect to industrial
  waste treatment facilities and air pollution control facilities only  on
  condition  that  such  facilities  have  been  certified  by  the  state
  commissioner   of   environmental   conservation   or   his   designated
  representative,  pursuant  to  subdivision  one  of  section  17-0707 or
  subdivision one of section 19-0309  of  the  environmental  conservation
  law,  as  complying  with  applicable  provisions  of  the environmental
  conservation law, the public health law, the  state  sanitary  code  and
  codes, rules, regulations, permits or orders issued pursuant thereto.
    * (3)  A  taxpayer shall not be allowed a credit under this subsection
  with respect to any property described in paragraph two hereof  if  such
  property  qualifies  for the modification allowed under either paragraph
  three or paragraph four of subsection (g) of section six hundred  twelve
  whether  or  not  such  amount  shall  have  been  subtracted. Provided,
  however, with respect to property which  qualifies  for  a  modification
  under  either clause (A), (B) or (C) of paragraph four of subsection (g)
  because such property was ordered on or  before  December  thirty-first,
  nineteen  hundred  sixty-eight, but with respect to which no expenditure
  has been paid or incurred at  such  date,  the  taxpayer  may  elect  to
  subtract  the amount allowable under clauses (A), (B) or (C) or may take
  the credit provided by this subsection, but not both.
    * NB Applies to taxable years prior to December 31, 1986
    * (3) A taxpayer shall not be allowed a credit under  this  subsection
  with respect to any property described in clause (i) of subparagraph (B)
  of  paragraph two hereof if such property qualifies for the modification
  allowed under either paragraph three or paragraph four of subsection (g)
  of section six hundred twelve whether or not such amount shall have been
  subtracted. Provided, however, with respect to property which  qualifies
  for a modification under either clause (A), (B) or (C) of paragraph four
  of  subsection  (g)  because  such  property  was  ordered  on or before
  December thirty-first, nineteen hundred sixty-eight, but with respect to
  which no expenditure has  been  paid  or  incurred  at  such  date,  the
  taxpayer  may  elect to subtract the amount allowable under clauses (A),
  (B) or (C) or may take the credit provided by this subsection,  but  not
  both.
    * NB Applies to taxable years beginning after December 31, 1986
    (4)  A  taxpayer  shall  not be allowed a credit under this subsection
  with respect to tangible personal property and other tangible  property,
  including  buildings  and  structural  components of buildings, which it
  leases to any other person or corporation except where a taxpayer leases
  property to an affiliated regulated broker  or  dealer  that  uses  such
  property  in  accordance  with clause (iv) or (v) of subparagraph (A) of
  paragraph  two  of  this  subsection.  For  purposes  of  the  preceding
  sentence, any contract or agreement to lease or rent or for a license to
  use  such  property  shall  be considered a lease. Provided, however, in
  determining whether a taxpayer shall be  allowed  a  credit  under  this
  subsection with respect to such property, any election made with respect
  to  such  property  pursuant  to  the  provisions  of paragraph eight of
  subsection (f) of  section  one  hundred  sixty-eight  of  the  internal
  revenue  code,  as  such  paragraph was in effect for agreements entered
  into prior to January first,  nineteen  hundred  eighty-four,  shall  be
  disregarded. For purposes of this paragraph, the use of a qualified film
  production  facility by a qualified film production company shall not be
  considered a lease of such facility to such company.
    * (5) If the amount of credit allowable under this subsection for  any
  taxable  year  shall exceed the taxpayer's tax for such year, the excess
  may be carried over to the following year or years and may  be  deducted
  from  the  taxpayer's  tax for such year or years, provided, however, in
  lieu  of  carrying  over any such excess, a taxpayer who qualifies as an
  owner of a new business for purposes of paragraph ten of this subsection
  may, at his option, receive such excess as a  refund.  Any  refund  paid
  pursuant  to  this  paragraph  shall  be  deemed  to  be  a refund of an
  overpayment of tax as provided in section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    * NB Applies to taxable years prior to December 31, 1986
    * (5) If the amount of credit allowable under this subsection for  any
  taxable  year  shall exceed the taxpayer's tax for such year, the excess
  allowed for a taxable year commencing prior to January  first,  nineteen
  hundred  eighty-seven may be carried over to the following year or years
  and may be deducted from the taxpayer's tax for such year or years,  but
  in  no  event  shall  such  credit  be  carried  over  to  taxable years
  commencing on or after January first, nineteen hundred ninety-seven, and
  any amount of credit allowed for a taxable year commencing on  or  after
  January  first, nineteen hundred eighty-seven and not deductible in such
  year may be carried over to the ten taxable years  next  following  such
  taxable  year  and may be deducted from the taxpayer's tax for such year
  or years. In lieu of carrying over  any  such  excess,  a  taxpayer  who
  qualifies as an owner of a new business for purposes of paragraph ten of
  this subsection may, at his option, receive such excess as a refund. Any
  refund paid pursuant to this paragraph shall be deemed to be a refund of
  an  overpayment  of tax as provided in section six hundred eighty-six of
  this article, provided, however, that no interest shall be paid thereon.
    * NB Applies to taxable years beginning after December 31, 1986
    * (6) At the option of the taxpayer, air or  water  pollution  control
  facilities which qualify for elective modifications under subsection (h)
  of  section  six  hundred twelve, or research and development facilities
  which qualify for elective modifications under paragraphs two  and  four
  of  subsection  (g)  of  section  six  hundred  twelve may be treated as
  property principally used by the taxpayer in the production of goods  by
  manufacturing,  processing,  assembling,  refining,  mining, extracting,
  farming,  agriculture,  horticulture,   floriculture,   viticulture   or
  commercial  fishing,  provided  the  property  otherwise qualifies under
  paragraph two of this subsection, in which event, a  modification  shall
  not  be  allowed under such subsection (h) and under such paragraphs two
  and four of subsection (g).
    * NB Applies to taxable years prior to December 31, 1986
    * (6) At the option of the taxpayer for taxable years commencing prior
  to January first, nineteen hundred eighty-seven, air or water  pollution
  control  facilities  which  qualify  for  elective  modifications  under
  subsection  (h)  of  section  six  hundred  twelve,  or   research   and
  development  facilities  which  qualify for elective modifications under
  paragraphs two and four of subsection (g) of section six hundred  twelve
  may  be  treated  as  property  principally  used by the taxpayer in the
  production of goods by manufacturing, processing, assembling,  refining,
  mining,  extracting,  farming,  agriculture, horticulture, floriculture,
  viticulture or  commercial  fishing,  provided  the  property  otherwise
  qualifies  under  paragraph  two  of  this subsection, in which event, a
  modification shall not be allowed under such subsection  (h)  and  under
  such paragraphs two and four of subsection (g).
    * NB Applies to taxable years beginning after December 31, 1986
    * (7)  (A)  With  respect to property which is depreciable pursuant to
  section one hundred sixty-seven of the internal revenue code but is  not
  subject  to  the  provisions  of section one hundred sixty-eight of such
  code and which is disposed of or ceases to be in qualified use prior  to
  the  end  of  the  taxable  year in which the credit is to be taken, the
  amount of the credit shall be that portion of the credit provided for in
  this subsection which represents the ratio which the months of qualified
  use  bear  to the months of useful life. If property on which credit has
  been taken is disposed of or ceases to be in qualified use prior to  the
  end  of its useful life, the difference between the credit taken and the
  credit allowed for actual  use  must  be  added  back  in  the  year  of
  disposition.  Provided,  however,  if  such  property  is disposed of or
  ceases to be in qualified use after it has been  in  qualified  use  for
  more  than  twelve  consecutive  years, it shall not be necessary to add
  back the credit as provided in this subparagraph. The amount  of  credit
  allowed  for  actual use shall be determined by multiplying the original
  credit by the ratio which the months of qualified use bear to the months
  of useful life. For  purposes  of  this  subparagraph,  useful  life  of
  property  shall  be  the  same  as  the  taxpayer  uses for depreciation
  purposes when computing his federal income tax liability.
    (B) Except with respect to that property to which subparagraph (D)  of
  this  paragraph applies, with respect to three-year property, as defined
  in subsection (e) of section one hundred  sixty-eight  of  the  internal
  revenue  code,  which  is  disposed  of or ceases to be in qualified use
  prior to the end of the taxable year in which the credit is to be taken,
  the amount of the credit shall be that portion of  the  credit  provided
  for  in  this  subsection which represents the ratio which the months of
  qualified use bear to thirty-six. If property on which credit  has  been
  taken  is  disposed of or ceases to be in qualified use prior to the end
  of thirty-six months, the difference between the credit  taken  and  the
  credit  allowed  for  actual  use  must  be  added  back  in the year of
  disposition. The amount of  credit  allowed  for  actual  use  shall  be
  determined  by  multiplying  the  original credit by the ratio which the
  months of qualified use bear to thirty-six.
    (C) Except with respect to that property to which subparagraph (D)  of
  this  paragraph  applies,  with  respect  to  property  subject  to  the
  provisions of section one hundred sixty-eight of  the  internal  revenue
  code,  other  than  three-year  property as defined in subsection (e) of
  such section one hundred sixty-eight which is disposed of or  ceases  to
  be  in  qualified  use prior to the end of the taxable year in which the
  credit is to be taken, the amount of the credit shall be that portion of
  the credit provided for in this subsection which  represents  the  ratio
  which  the  months  of qualified use bear to sixty. If property on which
  credit has been taken is disposed of or ceases to be  in  qualified  use
  prior  to  the  end  of  sixty months, the difference between the credit
  taken and the credit allowed for actual use must be added  back  in  the
  year  of  disposition. The amount of credit allowed for actual use shall
  be determined by multiplying the original credit by the ratio which  the
  months of qualified use bear to sixty.
    (D)  With  respect  to  any  property  to  which  section  one hundred
  sixty-eight of the internal revenue code applies, which is a building or
  a structural component of a building and which is disposed of or  ceases
  to be in qualified use prior to the end of the taxable year in which the
  credit is to be taken, the amount of the credit shall be that portion of
  the  credit  provided  for in this subsection which represents the ratio
  which the months of qualified use bear to the  total  number  of  months
  over  which  the  taxpayer  chooses  to  deduct  the  property under the
  internal revenue code. If property on which credit  has  been  taken  is
  disposed  of  or  ceases  to be in qualified use prior to the end of the
  period over which the taxpayer chooses to deduct the property under  the
  internal  revenue  code, the difference between the credit taken and the
  credit allowed for actual  use  must  be  added  back  in  the  year  of
  disposition.  Provided,  however,  if  such  property  is disposed of or
  ceases  to  be  in  qualified use after it has been in qualified use for
  more than twelve consecutive years, it shall not  be  necessary  to  add
  back  the  credit as provided in this subparagraph. The amount of credit
  allowed for actual use shall be determined by multiplying  the  original
  credit  by the ratio which the months of qualified use bear to the total
  number of months over which the taxpayer chooses to deduct the  property
  under the internal revenue code.
    * NB  Applies  to property to which the amendments made by section 201
  of Public Law 99-514 apply
    * (E) For purposes of this paragraph, property (i) which is  described
  in  subparagraph  (B),  (C)  or (D) of this paragraph, and (ii) which is
  subject  to  paragraph  twenty-six  of  subsection  (c)  and   paragraph
  twenty-five  of  subsection  (b)  of  section six hundred twelve of this
  chapter, shall be treated as property which is depreciable  pursuant  to
  section  one hundred sixty-seven of the internal revenue code but is not
  subject to section one hundred sixty-eight of such code.
    * NB Applies to taxable years beginning after December 31, 1986
    * (F) For purposes of this paragraph, where a credit is  allowed  with
  respect  to  an  air  pollution  control  facility  on  the  basis  of a
  certificate  of  compliance  issued  pursuant   to   the   environmental
  conservation  law and the certificate is revoked pursuant to subdivision
  three of section 19-0309 of the  environmental  conservation  law,  such
  revocation  shall  constitute  a disposal or cessation of qualified use,
  unless such facility is described in clause (i) or (iii) of subparagraph
  (A) of paragraph two of this  subsection.  Also  for  purposes  of  this
  subparagraph,  the  use  of  an  air  pollution  control  facility or an
  industrial waste treatment facility for the primary purpose of salvaging
  materials  which  are  usable  in  the  manufacturing  process  or   are
  marketable  shall  constitute  a cessation of qualified use, unless such
  facility is described in clause (i) or  (iii)  of  subparagraph  (A)  of
  paragraph two of this subsection.
    * NB Applies to taxable years beginning after December 31, 1986
    (G)  For  taxable years commencing on or after January first, nineteen
  hundred eighty-seven, the amount required to be added back  pursuant  to
  this  paragraph  shall be augmented by an amount equal to the product of
  such amount and the underpayment rate of  interest  (without  regard  to
  compounding),  set  by  the  commissioner  pursuant to subsection (j) of
  section six hundred ninety-seven, in effect  on  the  last  day  of  the
  taxable year.
    * Shall apply to interest chargeable on or after April 1, 2003
    * (H) If, as of the close of the taxable year, there is a net increase
  with  respect  to the taxpayer in the amount of nonqualified nonrecourse
  financing (within the meaning of  section  46(c)  (8)  of  the  internal
  revenue  code)  with  respect  to any property with respect to which the
  credit  under  this  subsection  was  limited  based   on   attributable
  nonqualified nonrecourse financing, then an amount equal to the decrease
  in such credit which would have resulted from reducing, by the amount of
  such  net  increase,  the  cost  or  other basis taken into account with
  respect to such property must be added back in such  taxable  year.  The
  amount  of  nonqualified  nonrecourse  financing shall not be treated as
  increased by reason of a transfer of  (or  agreement  to  transfer)  any
  evidence  of  an indebtedness if such transfer occurs (or such agreement
  is entered into) more than one year after the date such indebtedness was
  incurred.
    * NB Applies to taxable years beginning after December 31, 1986
    (10) For purposes of paragraph five of this subsection, an  individual
  who  is  either  a  sole  proprietor  or a member of a partnership shall
  qualify as an owner of a new business unless:
    (A)  the business of which the individual is an owner is substantially
  similar in operation and in ownership to a business entity  taxable,  or
  previously  taxable, under section one hundred eighty-three, one hundred
  eighty-four, one  hundred  eighty-five  or  one  hundred  eighty-six  of
  article  nine;  article  nine-A,  thirty-two  or  thirty-three  of  this
  chapter; article twenty-three of this chapter or which would  have  been
  subject  to  tax under such article twenty-three (as such article was in
  effect on January first, nineteen hundred  eighty)  or  the  income  (or
  losses) of which is (or was) includable under article twenty-two of this
  chapter  whereby  the intent and purpose of this paragraph and paragraph
  five of this subsection with respect  to  refunding  of  credit  to  new
  business would be evaded; or
    (B) the individual has operated such new business entity in this state
  for  more  than  five  taxable  years  (excluding  short  years  of  the
  business).
    (11) Retail enterprise tax credit. A retail enterprise,  not  eligible
  to claim the credit under paragraph one of this subsection, but eligible
  to claim the credit allowable under section thirty-eight of the internal
  revenue  code  pursuant  solely to the provisions of subparagraph (E) of
  paragraph one of subsection (a) of section  forty-eight  of  such  code,
  shall  be  allowed  a  credit as hereinafter computed. The amount of the
  credit shall be the  percentage  appearing  in  paragraph  one  of  this
  subsection for the periods described therein for the amount of qualified
  rehabilitation  expenditures,  as  defined  in subsection (g) of section
  forty-eight of such code, paid or incurred with respect to  a  qualified
  rehabilitated  building,  as  defined in such subsection (g), located in
  this state and such expenditures shall be further limited  to  only  the
  portion  thereof  paid  or  incurred  with  respect  to  that  part of a
  qualified rehabilitated building employed by such taxpayer in the retail
  sales activity of such retail  enterprise.  For  the  purposes  of  this
  subsection,  the term "retail enterprise" means a taxpayer which is: (A)
  a registered vendor under article  twenty-eight  of  this  chapter,  (B)
  primarily  engaged  in  the  retail  sale,  as the term "retail sale" is
  defined in subparagraph (i) of paragraph  four  of  subdivision  (b)  of
  section  eleven  hundred  one  of  this  chapter,  of  tangible personal
  property, and (C) otherwise eligible for the credit allowed pursuant  to
  section thirty-eight of the internal revenue code.
    * (12)  Rehabilitation  credit for historic barns. A taxpayer shall be
  allowed a credit, to be computed as hereinafter  provided,  against  the
  tax  imposed  by  this  article.  The  amount  of  the  credit  shall be
  twenty-five  percent  of   the   taxpayer's   qualified   rehabilitation
  expenditures,  as  defined in paragraph two of subsection (c) of section
  forty-seven of the internal revenue code, which qualify as the basis for
  the credit provided for under paragraph one of subsection (b) of section
  thirty-eight of such  code  by  reason  of  subsection  one  of  section
  forty-six  of  such  code,  paid  or  incurred  with respect to any barn
  located in this state which is a qualified  rehabilitated  building,  as
  such  term is defined in paragraph one of subsection (c) of such section
  forty-seven. For purposes of this paragraph, the  term  "barn"  means  a
  building  originally  designed  and  used  for storing farm equipment or
  agricultural products, or for housing livestock. Provided, however, such
  qualified  rehabilitation  expenditures  shall  not  include  any   such
  expenditures   which  are  included,  directly  or  indirectly,  in  the
  computation of a credit claimed by the taxpayer  pursuant  to  paragraph
  one  of  this subsection. Provided further that no rehabilitation credit
  shall be allowed for any rehabilitation of  a  barn  which,  immediately
  prior   to  the  commencement  of  such  rehabilitation,  was  used  for
  residential  purposes,  or  which  converts  a  barn  not  suitable  for
  residential  purposes  into  one  which  is  so  suitable,  nor  shall a
  rehabilitation credit be allowed for any rehabilitation that  materially
  alters the historic appearance of the barn.
    * NB Applies to taxable years beginning on or after January 1, 1997
    (13)(A)(i)  If  a  taxpayer  is  required  by  paragraph seven of this
  subsection to add back a portion of the credit  taken  because  property
  was destroyed or ceased to be in qualified use as a direct result of the
  September  eleventh,  two  thousand one terrorist attacks, such taxpayer
  may elect to defer the amount to be recaptured for all such property  to
  the  taxable  year  next  succeeding  the  taxable  year  in  which  the
  destruction or cessation of qualified use occurred. The taxable year  in
  which  the  destruction  or cessation of qualified use occurred shall be
  hereinafter referred to as the "recapture event taxable  year".  If  the
  taxpayer's  total  employment number in the state on the last day of the
  taxable year next succeeding the  recapture  event  taxable  year  is  a
  significant percentage of the taxpayer's average total employment number
  in the state for the taxpayer's recapture event taxable year and the two
  taxable  years  immediately  preceding the recapture event taxable year,
  then the taxpayer shall not be required to  recapture  any  credit  with
  respect  to  such property. If the taxpayer's total employment number in
  the state on the last day  of  the  taxable  year  next  succeeding  the
  recapture  event  taxable  year  is  not a significant percentage of the
  taxpayer's  average  total  employment  number  in  the  state  for  the
  taxpayer's  recapture  event  taxable  year  and  the  two taxable years
  immediately preceding the recapture event  taxable  year,  the  taxpayer
  shall  be  required  to  recapture the portion of the credit taken under
  this subsection, as required by paragraph seven of this subsection,  for
  all  of its property destroyed or which ceased to be in qualified use as
  a direct result of the September eleventh, two  thousand  one  terrorist
  attacks.  The  amount  required  to  be recaptured shall be augmented as
  required pursuant  to  subparagraph  (G)  of  paragraph  seven  of  this
  subsection  by  using  an  interest  rate equal to two times the rate of
  interest specified in such subparagraph seven applicable for the taxable
  year in which the recapture occurs.
    (ii)  The  taxpayer's  total  employment  number  shall  include   all
  employees  of  the  taxpayer  employed  full-time by the taxpayer in the
  state. The average total  employment  number  for  the  recapture  event
  taxable  year  and  the  two  taxable  years  immediately  preceding the
  recapture event taxable  year  shall  be  computed  by  determining  the
  taxpayer's total employment number on the thirty-first day of March, the
  thirtieth   day  of  June,  the  thirtieth  day  of  September  and  the
  thirty-first day of December during the applicable taxable years, adding
  together the number of such individuals determined to be so employed  on
  each  of  such  dates  and dividing the sum so obtained by the number of
  such dates occurring within such applicable taxable years.  However,  in
  the  case  of  the  taxable  year which included September eleventh, two
  thousand one, the average total employment number for such taxable  year
  shall  be  determined  by using the total employment number on September
  first, two thousand one in lieu of September thirtieth, two thousand one
  and, if such taxable year included December thirty-first,  two  thousand
  one,  by excluding the total employment number on December thirty-first,
  two thousand one.
    (B) In lieu of subparagraph (A) of  this  paragraph,  a  taxpayer  may
  elect   to  recapture  the  portion  of  the  credit  taken  under  this
  subsection, as required by paragraph seven of this subsection,  for  all
  of  its  property  destroyed or which ceased to be in qualified use as a
  direct result of the September  eleventh,  two  thousand  one  terrorist
  attacks,  in  the  taxable year in which the destruction or cessation of
  qualified use occurred. If the taxpayer makes such election and acquires
  property  (hereinafter referred to as "replacement property") to replace
  any property destroyed as a direct result of the September eleventh, two
  thousand one terrorist attacks (regardless of  when  such  property  was
  placed  in  service  and  whether  a credit was claimed on that property
  pursuant to this subsection), and such replacement property  is  similar
  or  related in service or use to such destroyed property, the investment
  credit base of the replacement  property  shall  be  determined  without
  regard  to  any basis reduction required pursuant to section 1033 of the
  internal revenue code.
    (C) The election made by the taxpayer under subparagraph (A) or (B) of
  this paragraph shall be made in the manner and form  prescribed  by  the
  commissioner.
    (D) A taxpayer, over fifty percent of whose employees died as a direct
  result  of  the  September eleventh, two thousand one terrorist attacks,
  may  make  the  election  provided  for  in  subparagraph  (A)  of  this
  paragraph,  and  shall  not  be  required  to  recapture any credit with
  respect to property which  was  destroyed  or  which  ceased  to  be  in
  qualified  use  as  a  direct  result of such attacks, whether or not it
  meets the employment test specified in clause (i) of subparagraph (A) of
  this paragraph.
    (a-1) Employment incentive credit (EIC). (1)(A) Where  a  taxpayer  is
  allowed a credit under subsection (a) of this section, other than at the
  optional  rate  applicable  to  research  and  development property, the
  taxpayer shall be allowed a credit  for  each  of  the  two  years  next
  succeeding  the  taxable year for which the credit under such subsection
  (a) is allowed with respect to such property, whether or not  deductible
  in  such  taxable  year  or  in  subsequent  taxable  years  pursuant to
  paragraph five of subsection (a) of  this  section.  Provided,  however,
  that  the  credit  allowable  under this subsection for any taxable year
  shall be allowed only if the average number  of  employees  during  such
  taxable  year  is at least one hundred one percent of the average number
  of employees during the employment base year. The employment  base  year
  shall  be  the  taxable  year immediately preceding the taxable year for
  which the credit under such subsection (a) is allowed except that in the
  case of a new business, the employment base year shall  be  the  taxable
  year in which the credit under such subsection (a) is allowed.
 
    (B) The amount of the credit allowed under this subsection shall be as
  set forth in the following table:
       Average number of employees        Credit allowed under
       during the taxable year            this subsection expressed as a
       expressed as a percentage of       percentage of
       average number of employees        the applicable investment
       in employment base year:           credit base:
       Less than 102%                     1.5%
       at least 102% and less than 103%   2%
       at least 103%                      2.5%
 
    (2)  The  average  number  of  employees  in  a  taxable year shall be
  computed by ascertaining  the  number  of  employees  within  the  state
  employed by the taxpayer on the thirty-first day of March, the thirtieth
  day  of June, the thirtieth day of September and the thirty-first day of
  December in the taxable year, by adding together the number of employees
  ascertained on each of such dates and dividing the sum  so  obtained  by
  the  number  of  such  abovementioned dates occurring within the taxable
  year. For the purposes of this subsection, the  term  "employees  within
  the state" shall not include, except with respect to the employment base
  year,  any  employee  with  respect  to whom a credit provided for under
  subsection (k) of this section is claimed for the taxable year, based on
  employment within a zone equivalent area designated as such pursuant  to
  article eighteen-B of the general municipal law.
    (3)  If  the  amount of credit allowable under this subsection for any
  taxable year shall exceed the taxpayer's tax for such year,  the  excess
  allowed  for a taxable year may be carried over to the ten taxable years
  next following such taxable year and may be deducted from the taxpayer's
  tax for such year or years. In lieu of carrying over any such excess,  a
  taxpayer  who  qualifies  as  an owner of a new business for purposes of
  paragraph ten of subsection (a) of this  section  may,  at  his  or  her
  option,  receive  such  excess  as a refund. Any refund paid pursuant to
  this paragraph shall be deemed to be a refund of an overpayment  of  tax
  as provided in section six hundred eighty-six of this article, provided,
  however, that no interest shall be paid thereon.
    (b)  Household  credit.  * (1)  For  taxable  years  beginning  before
  nineteen hundred ninety-one, a household credit shall be allowed against
  the tax imposed by section six hundred one of  this  article.  Provided,
  however,  the  credit allowed for the taxable year beginning in nineteen
  hundred ninety shall be fifty percent of the credit otherwise  allowable
  under  this  subsection.  The credit, computed as described in paragraph
  two of this subsection, shall not exceed the tax imposed by section  six
  hundred one for the taxable year, reduced by the credits permitted under
  subsection  (c)  of  this  section  and sections six hundred twenty, six
  hundred twenty-one and six hundred forty of this article.
    * NB Applies to taxable years beginning prior to 1988
    * (1) A household credit shall be allowed against the  tax  determined
  under  subsections  (a)  through  (d) of section six hundred one of this
  article. The credit, computed as described  in  paragraph  two  of  this
  subsection,  shall  not  exceed the tax determined under subsections (a)
  through (d) of section six hundred one for the taxable year, reduced  by
  the  credits permitted under subsections (c) and (m) of this section and
  sections six hundred twenty and six hundred twenty-one of this article.
    * NB Applies to taxable years beginning after 1987
    * (1) A household credit shall be allowed against the  tax  determined
  under  subsections  (a)  through  (d) of section six hundred one of this
  article. The credit, computed as described  in  paragraph  two  of  this
  subsection,  shall  not  exceed the tax determined under subsections (a)
  through (d) of section six hundred one for the taxable year, reduced  by
  the  credits permitted under sections six hundred twenty and six hundred
  twenty-one of this article.
    * NB Applies to taxable years beginning on or after January 1, 1996
    (2) (A) For any individual who is  not  married  nor  the  head  of  a
  household  nor  a  surviving  spouse,  the  amount of the credit allowed
  pursuant to this subsection for taxable  years  beginning  on  or  after
  January  first,  nineteen  hundred  eighty-six  shall  be  determined in
  accordance with the following table:
 
     If household gross                          The credit
      income is                                  shall be
 
     Not over $5,000                               $75.00
     Over $5,000 but not over $6,000               60.00
     Over $6,000 but not over $7,000               50.00
     Over $7,000 but not over $20,000              45.00
     Over $20,000 but not over $25,000             40.00
     Over $25,000 but not over $28,000             20.00
 
    * (B)  For  any  husband  and  wife, head of a household, or surviving
  spouse, the amount of the credit allowed pursuant to this subsection for
  taxable years beginning on or  after  January  first,  nineteen  hundred
  eighty-six shall be determined in accordance with the following table:
 
  If household gross                                The credit
  income is                                         shall be
  Not over $5,000                    $90.00 plus an amount equal to
                                     $15.00  multiplied  by a number which
                                     is  one  less  than  the  number   of
                                     exemptions for which the taxpayer (or
                                     in  the  case  of a husband and wife,
                                     taxpayers) is entitled to a deduction
                                     for  the  taxable  year  for  federal
                                     income tax purposes under subsections
                                     (b)  and  (c)  of section one hundred
                                     fifty-one  of  the  internal  revenue
                                     code
 
  Over $5,000 but not over $6,000    $75.00 plus such an amount
  Over $6,000 but not over $7,000    $65.00 plus such an amount
  Over $7,000 but not over $20,000   $60.00 plus such an amount
  Over $20,000 but not over $22,000  $60.00 plus an amount equal to $10.00
                                     multiplied  by  a number which is one
                                     less than the  number  of  exemptions
                                     for  which  the  taxpayer  (or in the
                                     case   of   a   husband   and   wife,
                                     taxpayers) is entitled to a deduction
                                     for  the  taxable  year  for  federal
                                     income tax purposes under subsections
                                     (b) and (c) of  section  one  hundred
                                     fifty-one  of  the  internal  revenue
                                     code
 
  Over $22,000 but not over $25,000  $50.00 plus such an amount
  Over $25,000 but not over $28,000  $40.00 plus an amount equal to $5.00
                                     multiplied by a number which  is  one
                                     less  than  the  number of exemptions
                                     for which the  taxpayer  (or  in  the
                                     case   of   a   husband   and   wife,
                                     taxpayers) is entitled to a deduction
                                     for  the  taxable  year  for  federal
                                     income tax purposes under subsections
                                     (b)  and  (c)  of section one hundred
                                     fifty-one  of  the  internal  revenue
                                     code
 
  Over $28,000 but not over $32,000  $20.00 plus such an amount
 
  * NB Applies to taxable years beginning after 1986
 
    (3) For the purposes of this subsection:
    (A) "Household gross income" shall mean the aggregate federal adjusted
  gross  income  of  a  household,  as  the  term  household is defined in
  subparagraph (B) of this paragraph, for the taxable year.
    (B) "Household" means a husband and  wife,  a  head  of  household,  a
  surviving  spouse, or an individual who is not married nor the head of a
  household nor a surviving spouse nor a taxpayer with respect to  whom  a
  deduction  under  subsection (c) of section one hundred fifty-one of the
  internal  revenue  code is allowable to another taxpayer for the taxable
  year.
    (C) "Household gross income of  a  husband  and  wife"  shall  be  the
  aggregate  of  their federal adjusted gross incomes for the taxable year
  irrespective of whether joint or separate New York  income  tax  returns
  are  filed. Provided, however, that a husband or wife who is required to
  file a separate New York income tax return shall be  permitted  one-half
  the  credit otherwise allowed his or her household, except as limited by
  paragraph one of this subsection.
    * (D) "Household gross income" shall be computed in all  cases  as  if
  each  member  of  the  household  were a resident for the entire taxable
  year.
    * NB Repealed as applied to taxable years beginning after 1987
    * (E) If a taxpayer changes his status during his  taxable  year  from
  resident  to nonresident, or from nonresident to resident, the household
  credit shall be prorated according to each period.  In  the  case  of  a
  husband  and  wife,  if  either  or  both changes his or her status from
  resident to nonresident or from nonresident  to  resident  and  separate
  returns  are  filed,  the  credit  computed for the entire year shall be
  divided first as provided in subparagraph (C) of this paragraph and then
  prorated according to each period.
    * NB Repealed as applied to taxable years beginning after 1987
    (c) Credit for certain household and dependent care services necessary
  for gainful employment.
    * (1) A taxpayer  shall  be  allowed  a  credit,  to  be  computed  as
  hereinafter provided, against the tax imposed by section six hundred one
  of  this  article.  Except  as  provided below, the amount of the credit
  shall be twenty percent of the credit allowed such taxpayer pursuant  to
  the  provisions  of  section twenty-one of the internal revenue code for
  the same taxable year. The amount of such credit shall  not  exceed  the
  tax  imposed  by section six hundred one of this article for the taxable
  year, reduced by  the  credits  permitted  under  sections  six  hundred
  twenty, six hundred twenty-one and six hundred forty of this article.
    * NB Shall be deemed to have been in full force and effect since April
  20, 1987
    * (1)  A  taxpayer  shall  be  allowed  a  credit,  to  be computed as
  hereinafter provided, against the tax determined under  subsections  (a)
  through  (d)  of  section  six  hundred  one  of this article. Except as
  provided below, the amount of the credit shall be twenty percent of  the
  credit  allowed  such  taxpayer  pursuant  to  the provisions of section
  twenty-one of the internal revenue code for the same taxable  year.  The
  amount  of  such  credit  shall  not  exceed  the  tax  determined under
  subsections (a) through (d) of section six hundred one of  this  article
  for  the  taxable  year, reduced by the credits permitted under sections
  six hundred twenty and six hundred twenty-one of this article.
    * NB Applies to taxable years beginning after 1987
    * (2) In the case of a husband and  wife  who  file  a  joint  federal
  return,  but  who  are  required  to  determine  their  New  York  taxes
  separately, the credit allowed pursuant to this subsection may  only  be
  applied  against  the  tax  imposed on the spouse with the lower taxable
  income, computed without regard to such credit.
    * NB Applies to taxable years beginning after 1986
    * (3) A nonresident individual shall be allowed the same credit as  is
  allowed  resident  individuals under this subsection; except that if (A)
  his New York adjusted gross income determined under section six  hundred
  thirty-two  of this article, as a nonresident is exceeded by (B) the New
  York adjusted gross income he would be required to report under  section
  six  hundred twelve of this article, if he were a resident, by more than
  one hundred dollars, the credit shall be limited  to  the  amount  which
  represents  the  same percentage of the total allowable credit which (A)
  is of (B).
    * NB Applies to taxable years beginning after 1986
    * NB Repealed as applied to taxable years beginning after 1987
    * (4) If a taxpayer changes his status during his  taxable  year  from
  resident  to  nonresident,  or  from  nonresident  to resident, a credit
  computed as if the taxpayer were a resident for the entire taxable  year
  shall   be   prorated   according   to  the  periods  of  residence  and
  nonresidence,  and  the  portion  thereby  assigned  to  the  period  of
  nonresidence  shall  be  then  subject  to  the limitations set forth in
  paragraph three of this subsection computed with respect to such  period
  of nonresidence.
    * NB Repealed as applied to taxable years beginning after 1987
    * (c)  Credit  for  certain  household  and  dependent  care  services
  necessary for gainful employment.
    (1) A taxpayer shall be allowed a credit as provided herein  equal  to
  the   applicable  percentage  of  the  credit  allowable  under  section
  twenty-one of the internal  revenue  code  for  the  same  taxable  year
  (without regard to whether the taxpayer in fact claimed the credit under
  such   section   twenty-one  for  such  taxable  year).  The  applicable
  percentage shall be the sum of (i) twenty percent and (ii) a  multiplier
  multiplied  by  a  fraction.  For  taxable  years  beginning in nineteen
  hundred ninety-six and nineteen hundred ninety-seven, the  numerator  of
  such  fraction  shall be the lesser of (i) four thousand dollars or (ii)
  fourteen thousand dollars less the New York adjusted  gross  income  for
  the  taxable  year,  provided,  however, the numerator shall not be less
  than  zero.  For  the  taxable  year  beginning  in   nineteen   hundred
  ninety-eight,  the numerator of such fraction shall be the lesser of (i)
  thirteen thousand dollars or (ii) thirty thousand dollars less  the  New
  York  adjusted gross income for the taxable year, provided, however, the
  numerator shall not be less than zero. For taxable  years  beginning  in
  nineteen  hundred  ninety-nine,  the numerator of such fraction shall be
  the lesser of (i)  fifteen  thousand  dollars  or  (ii)  fifty  thousand
  dollars  less  the  New York adjusted gross income for the taxable year,
  provided, however, the numerator  shall  not  be  less  than  zero.  For
  taxable   years   beginning  after  nineteen  hundred  ninety-nine,  the
  numerator of such fraction shall be the lesser of (i)  fifteen  thousand
  dollars  or  (ii) sixty-five thousand dollars less the New York adjusted
  gross income for the taxable  year,  provided,  however,  the  numerator
  shall  not  be less than zero. The denominator of such fraction shall be
  four thousand dollars for taxable years beginning  in  nineteen  hundred
  ninety-six  and nineteen hundred ninety-seven, thirteen thousand dollars
  for the taxable year beginning in  nineteen  hundred  ninety-eight,  and
  fifteen  thousand  dollars  for  taxable  years beginning after nineteen
  hundred ninety-eight. The multiplier shall be ten  percent  for  taxable
  years  beginning  in  nineteen  hundred  ninety-six,  forty  percent for
  taxable years beginning in nineteen  hundred  ninety-seven,  and  eighty
  percent for taxable years beginning after nineteen hundred ninety-seven.
  Provided,  however,  for  taxable years beginning after nineteen hundred
  ninety-nine, for a person whose New York adjusted gross income  is  less
  than  forty  thousand dollars, such applicable percentage shall be equal
  to (i) one hundred percent,  plus  (ii)  ten  percent  multiplied  by  a
  fraction  whose  numerator  shall  be the lesser of (i) fifteen thousand
  dollars or (ii) forty thousand dollars less the New York adjusted  gross
  income  for  the taxable year, provided such numerator shall not be less
  than zero, and whose denominator  shall  be  fifteen  thousand  dollars.
  Provided,  further,  that  if  the  reversion  event, as defined in this
  paragraph, occurs, the applicable percentage shall,  for  taxable  years
  ending  on  or  after the date on which the reversion event occurred, be
  determined using the rules specified in  this  paragraph  applicable  to
  taxable  years  beginning in nineteen hundred ninety-nine. The reversion
  event shall be deemed to have occurred on  the  date  on  which  federal
  action,  including  but  not  limited  to,  administrative, statutory or
  regulatory changes, materially reduces or eliminates  New  York  state's
  allocation  of the federal temporary assistance for needy families block
  grant, or materially reduces the ability of the state to  spend  federal
  temporary assistance for needy families block grant funds for the credit
  for  certain household and dependent care services necessary for gainful
  employment or to apply state general fund spending  on  the  credit  for
  certain  household  and  dependent  care  services necessary for gainful
  employment toward the temporary  assistance  for  needy  families  block
  grant  maintenance  of  effort  requirement, and the commissioner of the
  office of temporary and disability assistance shall certify the date  of
  such  event  to  the  commissioner,  the director of the division of the
  budget, the speaker of the assembly and the temporary president  of  the
  senate.
    (2)  Residents.  In  the case of a resident taxpayer, the credit under
  this subsection shall be allowed  against  the  taxes  imposed  by  this
  article  for  the  taxable year reduced by the credits permitted by this
  article.  If the credit exceeds the tax as so reduced, the taxpayer  may
  receive,   and   the  comptroller,  subject  to  a  certificate  of  the
  commissioner, shall pay as an overpayment, without interest, the  amount
  of such excess.
    (3)  Nonresidents.  In  the case of a nonresident taxpayer, the credit
  under this subsection shall be allowed against the tax determined  under
  subsections  (a)  through  (d) of section six hundred one. The amount of
  the credit shall not exceed the tax determined  under  such  subsections
  for  the  taxable  year reduced by the credit permitted under subsection
  (b) of this section.
    (4) Part-year residents. In the case of a part-year resident taxpayer,
  the credit under this  subsection  shall  be  allowed  against  the  tax
  determined  under subsections (a) through (d) of section six hundred one
  reduced by the credit permitted under subsection (b)  of  this  section,
  and  any  excess  credit after such application shall be allowed against
  the taxes imposed by sections six hundred two and six hundred three. Any
  remaining excess, after such application, shall be refunded as  provided
  in  paragraph  two hereof, provided, however, that any overpayment under
  such paragraph shall be limited to the amount of  the  remaining  excess
  multiplied  by  a  fraction,  the numerator of which is federal adjusted
  gross income for the period of residence, computed  as  if  the  taxable
  year  for  federal  income  tax  purposes  were limited to the period of
  residence, and the denominator of which is federal adjusted gross income
  for the taxable year.
    (5) In the case of a husband and wife who file a joint federal return,
  but who are required to determine their New York taxes  separately,  the
  credit  allowed  pursuant to this subsection may only be applied against
  the tax imposed on the spouse with the lower  taxable  income,  computed
  without regard to such credit. In the case of a husband and wife who are
  not  required to file a federal return, the credit under this subsection
  shall be allowed only if such taxpayers file a joint New York income tax
  return.
    * NB Applies to taxable years beginning on or after January 1, 1996
    (c-1)  Empire  state  child credit.   (1) A resident taxpayer shall be
  allowed a credit as provided herein equal to the greater of one  hundred
  dollars  times  the number of qualifying children of the taxpayer or the
  applicable percentage of the child tax credit allowed the taxpayer under
  section twenty-four of the internal revenue code for  the  same  taxable
  year.  Provided,  however,  in  the  case  of  a  taxpayer whose federal
  adjusted gross income exceeds the applicable threshold amount set  forth
  by  section 24(b)(2) of the Internal Revenue Code, the credit shall only
  be equal to the applicable percentage of the child  tax  credit  allowed
  the  taxpayer  under  section  24  of the Internal Revenue Code. For the
  purposes of this subsection, a qualifying child shall  be  a  child  who
  meets  the  definition  of  qualified  child  under section 24(c) of the
  internal revenue code and is at least four years of age. The  applicable
  percentage shall be thirty-three percent.
    (2)  If the amount of the credit allowed under this subsection for any
  taxable year shall exceed the taxpayer's tax for such year,  the  excess
  shall  be treated as an overpayment of tax to be credited or refunded in
  accordance with the provisions of section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    (3) In the case of a husband and wife who file a joint federal return,
  but who are required to determine their New York taxes  separately,  the
  credit  allowed  pursuant  to this subsection may be applied against the
  tax imposed of either or divided between them as they may elect.
    (d) Earned income credit. (1) General. A taxpayer shall be  allowed  a
  credit  as provided herein equal to (i) the applicable percentage of the
  earned income credit allowed under section thirty-two  of  the  internal
  revenue  code  for  the  same  taxable  year, (ii) reduced by the credit
  permitted under subsection (b) of this section.
    The applicable percentage shall be (i) seven and one-half percent  for
  taxable  years  beginning  in  nineteen  hundred  ninety-four,  (ii) ten
  percent for taxable years beginning  in  nineteen  hundred  ninety-five,
  (iii)  twenty percent for taxable years beginning after nineteen hundred
  ninety-five and  before  two  thousand,  (iv)  twenty-two  and  one-half
  percent  for  taxable  years  beginning in two thousand, (v) twenty-five
  percent  for  taxable  years  beginning  in  two  thousand   one,   (vi)
  twenty-seven  and  one-half  percent  for taxable years beginning in two
  thousand two, and (vii) thirty percent for taxable  years  beginning  in
  two  thousand  three  and  thereafter.  Provided,  however,  that if the
  reversion event, as defined in this paragraph,  occurs,  the  applicable
  percentage  shall be twenty percent for taxable years ending on or after
  the date on which the reversion  event  occurred.  The  reversion  event
  shall  be  deemed  to have occurred on the date on which federal action,
  including but not limited to, administrative,  statutory  or  regulatory
  changes, materially reduces or eliminates New York state's allocation of
  the  federal  temporary  assistance  for  needy families block grant, or
  materially reduces the ability of the state to spend  federal  temporary
  assistance  for  needy  families block grant funds for the earned income
  credit or to apply state general fund  spending  on  the  earned  income
  credit  toward  the  temporary assistance for needy families block grant
  maintenance of effort requirement, and the commissioner of the office of
  temporary and disability assistance shall certify the date of such event
  to the commissioner  of  taxation  and  finance,  the  director  of  the
  division  of  the  budget, the speaker of the assembly and the temporary
  president of the senate.
    (2) Residents. In the case of a resident taxpayer,  the  credit  under
  this  subsection  shall  be  allowed  against  the taxes imposed by this
  article for the taxable year reduced by the credits  permitted  by  this
  article.   If the credit exceeds the tax as so reduced, the taxpayer may
  receive,  and  the  comptroller,  subject  to  a  certificate   of   the
  commissioner,  shall pay as an overpayment, without interest, the amount
  of such excess.
    (3)  Nonresidents.  In  the case of a nonresident taxpayer, the credit
  under this subsection shall be allowed against the tax determined  under
  subsections  (a)  through  (d) of section six hundred one. The amount of
  the credit shall not exceed the tax determined  under  such  subsections
  for  the taxable year reduced by the credits permitted under subsections
  (b), (c) and (m) of this section.
    (4) Part-year residents. In the case of a part-year resident taxpayer,
  the credit under this  subsection  shall  be  allowed  against  the  tax
  determined  under subsections (a) through (d) of section six hundred one
  reduced by the credits permitted under subsections (b), (c) and  (m)  of
  this  section,  and  any  excess  credit after such application shall be
  allowed against the taxes imposed by sections six hundred  two  and  six
  hundred  three.  Any  remaining excess, after such application, shall be
  refunded as provided in paragraph two hereof,  provided,  however,  that
  any  overpayment  under such paragraph shall be limited to the amount of
  the remaining excess multiplied by a fraction, the numerator of which is
  federal adjusted gross income for the period of residence,  computed  as
  if  the taxable year for federal income tax purposes were limited to the
  period of residence, and the denominator of which  is  federal  adjusted
  gross income for the taxable year.
    (5)  Husband  and  wife.  In the case of a husband and wife who file a
  joint federal return but who are required to determine  their  New  York
  taxes  separately, the credit allowed pursuant to this subsection may be
  applied against the tax of either or divided between them  as  they  may
  elect.
    (6)  Notification.  The  commissioner shall periodically, but not less
  than every three years, make efforts to  alert  taxpayers  that  may  be
  currently eligible to receive the credit provided under this subsection,
  and  the  credit  provided  under  any  local  law  enacted  pursuant to
  subsection (f) of section thirteen hundred ten of this  chapter,  as  to
  their  potential  eligibility.  In making the determination of whether a
  taxpayer may be eligible for such credit,  the  commissioner  shall  use
  such  data  as  may  be  appropriate  and  available, including, but not
  limited  to,  data  available  from  the  United  States  Department  of
  Treasury, Internal Revenue Service and New York state income tax returns
  for preceding tax years.
    (7)  Reports.  The  commissioner  shall  prepare a preliminary written
  report after July thirty-first and a final written report after December
  thirty-first of each calendar  year,  which  shall  contain  statistical
  information  regarding the credits granted on or before such dates under
  this subsection, and under any local law enacted pursuant to  subsection
  (f)  of  section  thirteen  hundred  ten  of  this  chapter, during such
  calendar year. Copies of  these  reports  shall  be  submitted  by  such
  commissioner to the governor, the temporary president of the senate, the
  speaker  of  the  assembly, the chairman of the senate finance committee
  and the chairman of the assembly ways and means committee  within  sixty
  days  of  July  thirty-first with respect to the preliminary report, and
  within forty-five days of December  thirty-first  with  respect  to  the
  final  report,  and copies of such reports with respect to credits under
  any local law enacted pursuant to subsection  (f)  of  section  thirteen
  hundred  ten of this chapter shall be submitted in addition to the mayor
  and the speaker of the council of the city where such a local law is  in
  effect.  Such  reports  shall  contain,  but need not be limited to, the
  number of credits and the average amount of such credits allowed; and of
  those, the number of credits and the  average  amount  of  such  credits
  allowed to taxpayers in each county; and of those, the number of credits
  and the average amount of such credits allowed to taxpayers whose earned
  income  falls within ranges, determined by the commissioner, of not more
  than four thousand dollars; and of those, the number of credits and  the
  average  amount  of such credits allowed to taxpayers who file under the
  different statuses set forth in subsections (a), (b) and (c) of  section
  six  hundred  one  of this part; and of those, the number of credits and
  the average amount of such credits allowed to taxpayers whose number  of
  qualifying  children  falls  within  the  categories  set  forth in such
  section thirty-two of the internal revenue code.
    (d-1) Enhanced earned income tax credit. (1) A taxpayer  described  in
  paragraph  two of this subsection shall be allowed a credit equal to the
  greater of:
    (A) twenty percent of the amount of the earned income tax credit  that
  would have been allowed to the taxpayer under section 32 of the internal
  revenue  code,  absent  the  application  of section 32(b)(2)(B) of such
  code, if  the  child  or  children  described  in  subparagraph  (C)  of
  paragraph  two  of  this  subsection  satisfied  the  requirements for a
  qualifying child set forth in section 32(c)(3) of  such  code,  provided
  however, that the credit shall be calculated as if the taxpayer had only
  one child; or
    (B)  the  product  of  two  and  one-half and the amount of the earned
  income tax credit that would have been allowed  to  the  taxpayer  under
  section  32  of the internal revenue code, if the taxpayer satisfied the
  eligibility requirements set forth in section  32(c)(1)(A)(ii)  of  such
  code.
    (2)  To  be  allowed  a  credit under this subsection, a taxpayer must
  satisfy all of the following qualifications.
    (A) The taxpayer must be a resident taxpayer.
    (B) The taxpayer must have attained the age of eighteen.
    (C) The taxpayer must be the parent of a minor child or children  with
  whom the taxpayer does not reside.
    (D) The taxpayer must have an order requiring him or her to make child
  support  payments,  which  are payable through a support collection unit
  established pursuant to section  one  hundred  eleven-h  of  the  social
  services law, which order must have been in effect for at least one-half
  of the taxable year.
    (E)  The  taxpayer  must  have  paid an amount in child support in the
  taxable year at least equal to the amount of current child  support  due
  during  the  taxable  year  for every order requiring him or her to make
  child support payments.
    (3) If the amount of the credit allowed under  this  subsection  shall
  exceed  the taxpayer's tax for such year, the excess shall be treated as
  an overpayment of tax to be credited or refunded in accordance with  the
  provisions  of section six hundred eighty-six of this article, provided,
  however, that no interest shall be paid thereon.
    (4) No claim for credit under this subsection shall be allowed  unless
  the  department has verified, from information provided by the office of
  temporary and disability assistance, that a taxpayer has  satisfied  the
  qualifications  set forth in subparagraphs (C), (D) and (E) of paragraph
  two  of  this  subsection.  The  office  of  temporary  and   disability
  assistance  shall provide to the department by January fifteenth of each
  year information applicable  for  the  immediately  preceding  tax  year
  necessary for the department to make such verification. Such information
  shall  be  provided in the manner and form agreed upon by the department
  and such  office.  If  a  taxpayer's  claim  for  a  credit  under  this
  subsection  is  disallowed  because  the  taxpayer has not satisfied the
  qualifications set forth in subparagraphs (C), (D) and (E) of  paragraph
  two  of  this  subsection,  the  taxpayer  may request a review of those
  qualifications by the support collection unit  established  pursuant  to
  section  one  hundred  eleven-h of the social services law through which
  the child support payments were payable.  The  support  collection  unit
  shall  transmit the result of that review to the office of temporary and
  disability assistance on a form developed by such  office.  Such  office
  shall  then  transmit  such  result to the department in a manner agreed
  upon by the department and such office.
    (5) A taxpayer shall  not  be  allowed  multiple  credits  under  this
  subsection  for  a  taxable year even if such taxpayer has more than one
  child or has more than one order requiring him  or  her  to  make  child
  support payments.
    (6)  If  a credit is allowed under this subsection and the taxpayer is
  also allowed a credit under subsection (d) of this section, the taxpayer
  shall only be allowed to claim one credit.
    (7) In the report prepared pursuant to paragraph seven  of  subsection
  (d)   of  this  section,  the  commissioner  shall  include  statistical
  information concerning the credit allowed pursuant to  this  subsection.
  Such  information  shall  be  limited  to  the number of credits and the
  average amount of such credits allowed; and  of  those,  the  number  of
  credits  and the average amounts of such credits allowed to taxpayers in
  each county.
    * (e) Real property tax circuit breaker credit. (1)  For  purposes  of
  this subsection:
    (A)  "Qualified taxpayer" means a resident individual of the state who
  has occupied the same residence for six months or more  of  the  taxable
  year, and is required or chooses to file a return under this article.
    (B)  "Household"  or  "members  of  the  household"  means a qualified
  taxpayer and all other persons, not necessarily related,  who  have  the
  same residence and share its furnishings, facilities and accommodations.
  Such  terms shall not include a tenant, subtenant, roomer or boarder who
  is not related to the qualified taxpayer  in  any  degree  specified  in
  paragraphs  one  through  eight of subsection (a) of section one hundred
  fifty-two of the internal revenue code. Provided, however, no person may
  be a member of more than one household at one time.
    (C) "Household gross income" means the aggregate adjusted gross income
  of all members of the household for the taxable  year  as  reported  for
  federal  income  tax  purposes,  or  which would be reported as adjusted
  gross income if a federal income tax return were required to  be  filed,
  with  the  modifications in subsection (b) of section six hundred twelve
  but without the modifications in subsection (c) of  such  section,  plus
  any  portion of the gain from the sale or exchange of property otherwise
  excluded from such amount; earned income from sources without the United
  States excludable from federal gross  income  by  section  nine  hundred
  eleven  of  the  internal  revenue  code;  support money not included in
  adjusted gross income; nontaxable strike benefits; supplemental security
  income payments; the gross amount of any pension or annuity benefits  to
  the  extent  not  included in such adjusted gross income (including, but
  not limited to, railroad retirement benefits and all  payments  received
  under   the   federal  social  security  act  and  veterans'  disability
  pensions); nontaxable interest received from the state of New York,  its
  agencies,   instrumentalities,   public   corporations,   or   political
  subdivisions  (including  a  public  corporation  created  pursuant   to
  agreement   or   compact   with   another  state  or  Canada);  workers'
  compensation; the gross amount  of  "loss-of-time"  insurance;  and  the
  amount  of  cash  public  assistance  and  relief,  other  than  medical
  assistance for the needy, paid to or for the benefit  of  the  qualified
  taxpayer  or  members of his household. Household gross income shall not
  include surplus foods or other  relief  in  kind  or  payments  made  to
  individuals  because  of  their status as victims of Nazi persecution as
  defined in P.L. 103-286. Provided, further, household gross income shall
  only  include  all  such income received by all members of the household
  while members of such household.
    (D) "Residence" means a dwelling  in  this  state,  whether  owned  or
  rented,  and so much of the land abutting it, not exceeding one acre, as
  is reasonably necessary for use of the  dwelling  as  a  home,  and  may
  consist  of  a  part  of  a  multi-dwelling  or  multi-purpose  building
  including a cooperative or condominium, and rental units within a single
  dwelling.  Residence includes a trailer or mobile home, used exclusively
  for residential purposes  and  defined  as  real  property  pursuant  to
  paragraph  (g)  of  subdivision twelve of section one hundred two of the
  real property tax law.
    (E) "Qualifying real property taxes" means all  real  property  taxes,
  special   ad  valorem  levies  and  special  assessments,  exclusive  of
  penalties and interest, levied on the residence of a qualified  taxpayer
  and  paid  during  the  taxable  year.  In  addition,  for taxable years
  beginning after December thirty-first, nineteen hundred  eighty-four,  a
  qualified taxpayer may elect to include any additional amount that would
  have  been  levied  in  the  absence  of an exemption from real property
  taxation pursuant to  section  four  hundred  sixty-seven  of  the  real
  property  tax  law.  If  tenant-stockholders  in  a  cooperative housing
  corporation have met the requirements of section two hundred sixteen  of
  the internal revenue code by which they are allowed a deduction for real
  estate  taxes,  the  amount  of  taxes  so  allowable, or which would be
  allowable if the taxpayer had filed returns on a cash  basis,  shall  be
  qualifying  real  property taxes. If a residence is owned by two or more
  individuals as joint tenants or tenants in common, and one or more  than
  one  individual  is  not  a  member  of  the  household, qualifying real
  property taxes is that  part  of  such  taxes  on  the  residence  which
  reflects  the ownership percentage of the qualified taxpayer and members
  of his household. If a residence is an integral part of a  larger  unit,
  qualifying  real  property taxes shall be limited to that amount of such
  taxes paid as may be reasonably apportioned  to  such  residence.  If  a
  household  owns  and  occupies  two  or more residences during different
  periods in the same taxable year, qualifying real property  taxes  shall
  be  the  sum of the prorated qualifying real property taxes attributable
  to the household during the periods such household occupies each of such
  residences. If the household owns and occupies a residence for  part  of
  the  taxable  year  and  rents  a residence for part of the same taxable
  year, it may include both the  proration  of  qualifying  real  property
  taxes  on  the residence owned and the real property tax equivalent with
  respect to the months the residence is rented.  Provided,  however,  for
  purposes  of  the  credit allowed under this subsection, qualifying real
  property taxes may be included by  a  qualified  taxpayer  only  to  the
  extent  that such taxpayer or the spouse of such taxpayer occupying such
  residence for six months or more of the taxable year owns or  has  owned
  the residence and paid such taxes.
    (F)  "Real  property  tax equivalent" means twenty-five percent of the
  adjusted rent actually paid in the taxable year by  a  household  solely
  for  the  right  of  occupancy of its New York residence for the taxable
  year. If (i) a residence  is  rented  to  two  or  more  individuals  as
  cotenants, or such individuals share in the payment of a single rent for
  the  right  of  occupancy  of  such  residence,  and  (ii)  each of such
  individuals is a member of a different household, one or more  of  which
  individuals  shares such residence, real property tax equivalent is that
  portion of twenty-five percent of the adjusted rent paid in the  taxable
  year  which  reflects  that  portion  of  the  rent  attributable to the
  qualified taxpayer and the members of his household.
    (G)  "Adjusted rent" means rental paid for the right of occupancy of a
  residence, excluding charges for heat, gas, electricity, furnishings and
  board. Where charges for heat, gas, electricity, furnishing or board are
  included in rental but where such charges and the amount thereof are not
  separately set forth in a written  rental  agreement,  for  purposes  of
  determining  adjusted  rent  the  qualified taxpayer shall reduce rental
  paid as follows:
    (i) For heat, or heat and gas, deduct fifteen percent of rental paid.
    (ii) For heat, gas and electricity, deduct twenty  percent  of  rental
  paid.
    (iii)  For  heat, gas, electricity and furnishings, deduct twenty-five
  percent of rental paid.
    (iv) For heat, gas, electricity, furnishings and board,  deduct  fifty
  percent of rental paid.
  If  the  tax  commission  determines that the adjusted rent shown on the
  return is excessive, the  tax  commission  may  reduce  such  rent,  for
  purposes  of  the  computation of the credit, to an amount substantially
  equivalent to rent for a comparable accommodation.
    (2) A qualified taxpayer shall be allowed  a  credit  as  provided  in
  paragraph three hereof against the taxes imposed by this article reduced
  by  the credits permitted by this article. If the credit exceeds the tax
  as so reduced for such year under this article  the  qualified  taxpayer
  may  receive, and the comptroller, subject to a certificate of the state
  tax commission, shall pay  as  an  overpayment,  without  interest,  any
  excess between such tax as so reduced and the amount of the credit. If a
  qualified  taxpayer is not required to file a return pursuant to section
  six hundred fifty-one, a qualified taxpayer may nevertheless receive and
  the comptroller, subject to a certificate of the state  tax  commission,
  shall  pay  as  an  overpayment  the  full amount of the credit, without
  interest.
    (3) Determination of credit. (A)  For  qualified  taxpayers  who  have
  attained  the  age of sixty-five years before the beginning of or during
  the  taxable  year  the  amount  of  the  credit  allowable  under  this
  subsection  shall  be  fifty  percent,  or  in  the  case of a qualified
  taxpayer who has elected to include an  additional  amount  pursuant  to
  subparagraph  (E)  of  paragraph  one  of  this  subsection, twenty-five
  percent, of the excess of real property taxes  or  the  excess  of  real
  property tax equivalent determined as follows:
 
                                     Excess  real  property  taxes are the
                                     excess   of   real    property    tax
                                     equivalent    or    the   excess   of
                                     qualifying
                                     real property taxes over the follow-
  If household gross income for      ing percentage of household gross
  the taxable year is:               income:
  _____________________________       ____________________________________
 
  $3,000 or less                                       3 1/2
  Over $3,000 but not over $5,000                      4
  Over $5,000 but not over $7,000                      4 1/2
  Over $7,000 but not over $9,000                      5
  Over $9,000 but not over $11,000                     5 1/2
  Over $11,000 but not over $14,000                    6
  Over $14,000 but not over $18,000                    6 1/2
    Notwithstanding  the  foregoing   provisions,   the   maximum   credit
  determined  under this subparagraph may not exceed the amount determined
  in accordance with the following table:
 
  If household gross income          The maximum credit is:
  for the taxable year is:
  _________________________________   ____________________________________
  $1,000 or less                                     $375
  Over $1,000 but not over $2,000                    $358
  Over $2,000 but not over $3,000                    $341
  Over $3,000 but not over $4,000                    $324
  Over $4,000 but not over $5,000                    $307
  Over $5,000 but not over $6,000                    $290
  Over $6,000 but not over $7,000                    $273
  Over $7,000 but not over $8,000                    $256
  Over $8,000 but not over $9,000                    $239
  Over $9,000 but not over $10,000                   $222
  Over $10,000 but not over $11,000                  $205
  Over $11,000 but not over $12,000                  $188
  Over $12,000 but not over $13,000                  $171
  Over $13,000 but not over $14,000                  $154
  Over $14,000 but not over $15,000                  $137
  Over $15,000 but not over $16,000                  $120
  Over $16,000 but not over $17,000                  $103
  Over $17,000 but not over $18,000                  $ 86
 
    (B)  For  all  other  qualified  taxpayers  the  amount  of the credit
  allowable under this subsection shall be fifty percent  of  excess  real
  property  taxes  or  the  excess  of  the  real  property tax equivalent
  determined as follows:
 
                                     Excess real property  taxes  are  the
                                     excess    of    real   property   tax
                                     equivalent   or   the    excess    of
                                     qualifying
                                     real property taxes over the follow-
  If household gross income for      ing percentage of household gross
  the taxable year is:               income:
  _____________________________       ____________________________________
 
  $3,000 or less                                     3 1/2
  Over $3,000 but not over $5,000                    4
  Over $5,000 but not over $7,000                    4 1/2
  Over $7,000 but not over $9,000                    5
  Over $9,000 but not over $11,000                   5 1/2
  Over $11,000 but not over $14,000                  6
  Over $14,000 but not over $18,000                  6 1/2
 
    Notwithstanding   the   foregoing   provisions,   the  maximum  credit
  determined under this subparagraph may not exceed the amount  determined
  in accordance with the following table:
 
  If household gross income for
  the taxable year is:               The maximum credit is:
  ______________________________      ____________________________________
  $1,000 or less                                     $75
  Over $1,000 but not over $2,000                    $73
  Over $2,000 but not over $3,000                    $71
  Over $3,000 but not over $4,000                    $69
  Over $4,000 but not over $5,000                    $67
  Over $5,000 but not over $6,000                    $65
  Over $6,000 but not over $7,000                    $63
  Over $7,000 but not over $8,000                    $61
  Over $8,000 but not over $9,000                    $59
  Over $9,000 but not over $10,000                   $57
  Over $10,000 but not over $11,000                  $55
  Over $11,000 but not over $12,000                  $53
  Over $12,000 but not over $13,000                  $51
  Over $13,000 but not over $14,000                  $49
  Over $14,000 but not over $15,000                  $47
  Over $15,000 but not over $16,000                  $45
  Over $16,000 but not over $17,000                  $43
  Over $17,000 but not over $18,000                  $41
 
    (4)  If a qualified taxpayer occupies a residence for a period of less
  than twelve months during the taxable  year  or  occupies  two  or  more
  residences  during  different  periods  in such taxable year, the credit
  allowed pursuant to this subsection shall be computed in such manner  as
  the  tax  commission  may, by regulation, prescribe in order to properly
  reflect the credit or portion thereof attributable to such residence  or
  residences and such period or periods.
    (5)  The  tax  commission  may  prescribe  that  the credit under this
  subsection shall be determined in whole or in part by the use of  tables
  prescribed by such commission. Such tables shall set forth the credit to
  the nearest dollar.
    (6)  Only one credit per household and per qualified taxpayer shall be
  allowed per taxable year under this subsection. When two or more members
  of a household are able to  meet  the  qualifications  for  a  qualified
  taxpayer,  the  credit  shall  be  equally divided between or among such
  individuals unless such individuals  file  with  the  tax  commission  a
  written  agreement  among  such  individuals  setting  forth a different
  division. Where two or more members of a household are able to meet  the
  qualifications  of  a  qualified  taxpayer and one of them is sixty-five
  years of age or more, the credit which may be taken shall be the  credit
  applicable to individuals who have attained the age of sixty-five years.
    (A)  Provided, however, where a joint income tax return has been filed
  pursuant to the  provisions  of  section  six  hundred  fifty-one  by  a
  qualified  taxpayer  and his spouse (or where both spouses are qualified
  taxpayers and have filed such joint return), the credit, or the  portion
  of  the  credit  if  divided, to which the husband and wife are entitled
  shall be applied against the tax of both  spouses  and  any  overpayment
  shall be made to both spouses.
    (B)  Where  any return required to be filed pursuant to the provisions
  of section six hundred fifty-one is combined  with  any  return  of  tax
  imposed  pursuant  to  the authority of this chapter or any other law if
  such tax is administered by  the  tax  commission,  the  credit  or  the
  portion  of the credit if divided, allowed to the qualified taxpayer may
  be  applied  by  the  tax  commission  toward  any  liability  for   the
  aforementioned taxes.
    (7) No credit shall be granted under this subsection:
    (A)  If  household  gross income for the taxable year exceeds eighteen
  thousand dollars.
    (B) To  a  property  owner  unless:  (i)  the  property  is  used  for
  residential  purposes,  (ii)  not more than twenty percent of the rental
  income, if any, from the property  is  from  rental  for  nonresidential
  purposes  and  (iii) the property is occupied as a residence in whole or
  in part by one or more of the owners of the property.
    (C)  To  a  property  owner  who owns real property, the full value of
  which exceeds eighty-five thousand dollars.
    (D) To a tenant if the adjusted rent for the  residence  exceeds  four
  hundred fifty dollars per month on average.
    (E) To an individual with respect to whom a deduction under subsection
  (c)  of  section  one  hundred fifty-one of the internal revenue code is
  allowable to another taxpayer for the taxable year.
    (F) With respect to a residence that  is  wholly  exempted  from  real
  property taxation.
    (G) To an individual who is not a resident individual of the state for
  the entire taxable year.
    (8) The right to claim a credit or the portion of a credit, where such
  credit  has been divided under this subsection, shall be personal to the
  qualified taxpayer and shall not survive his death, but such  right  may
  be  exercised  on behalf of a claimant by his legal guardian or attorney
  in fact during his lifetime.
    (9) Returns. If a qualified taxpayer is not required to file a  return
  pursuant  to  section six hundred fifty-one, a claim for a credit may be
  taken on a return filed with the tax commission within three years  from
  the  time it would have been required that a return be filed pursuant to
  such section had the qualified taxpayer had a  taxable  year  ending  on
  December  thirty-first.  Returns  under  this paragraph shall be in such
  form as shall be prescribed by the  tax  commission,  which  shall  make
  available such forms and instructions for filing such returns.
    (10)  Proof  of  claim.  The  tax  commission  may require a qualified
  taxpayer to furnish the following information in support  of  his  claim
  for  credit  under  this  subsection: household gross income, rent paid,
  name and address of owner or managing agent of the property rented, real
  property taxes levied or that would have been levied in the  absence  of
  an  exemption  from  real  property tax pursuant to section four hundred
  sixty-seven of the real property tax law, the names of  members  of  the
  household  and  other  qualifying taxpayers occupying the same residence
  and  their  identifying  numbers  including  social  security   numbers,
  household gross income, size and nature of property claimed as residence
  and all other information which may be required by the tax commission to
  determine the credit.
    (11)  Administration.  The  provisions  of this article, including the
  provisions of section six hundred fifty-three, six hundred  fifty-eight,
  and  six  hundred  fifty-nine  and  the  provisions  of part six of this
  article relating to procedure and administration, including the judicial
  review of the decisions of the tax commission, except so much of section
  six hundred eighty-seven which permits a claim for credit or  refund  to
  be  filed  after  the  period  provided  for  in  paragraph nine of this
  subsection and except sections  six  hundred  fifty-seven,  six  hundred
  eighty-eight  and  six hundred ninety-six, shall apply to the provisions
  of this subsection in the same manner and with the same force and effect
  as if the language of those provisions had  been  incorporated  in  full
  into this subsection and had expressly referred to the credit allowed or
  returns  filed under this subsection, except to the extent that any such
  provision is either inconsistent with a provision of this subsection  or
  is  not  relevant  to this subsection. As used in such sections and such
  part, the term "taxpayer" shall include a qualified taxpayer under  this
  subsection  and,  notwithstanding  the  provisions  of subsection (e) of
  section  six  hundred  ninety-seven,  where  a  qualified  taxpayer  has
  protested the denial of a claim for credit under this subsection and the
  time  to  file  a  petition  for  redetermination of a deficiency or for
  refund has not expired, he shall, subject to such conditions as  may  be
  set  by  the  tax  commission,  receive  such  information  (A) which is
  contained in any return filed under this article  by  a  member  of  his
  household  for the taxable year for which the credit is claimed, and (B)
  which the tax commission finds is relevant and material to the issue  of
  whether  such  claim  was properly denied. The tax commission shall have
  the authority to  promulgate  such  rules  and  regulations  as  may  be
  necessary  for the processing, determination and granting of credits and
  refunds under this subsection.
    (12) The commissioner may request the cooperation of the  state  board
  of  real  property  services  in  carrying  out  the  provisions of this
  subsection. Such  board  may  promulgate  such  rules  and  regulations,
  subject to prior consultation with the commissioner, as may be necessary
  to  provide  such  assistance  with respect to the determination of full
  value of real property for purposes of the  credit  allowed  under  this
  subsection.
    (13)  Notwithstanding  any other provision of this article, the credit
  allowed  under  this  subsection   shall   be   determined   after   the
  determination  and  application of any other credits permitted under the
  provisions of this article.
    (14)  The  commissioner  of  taxation  and  finance  shall  prepare  a
  preliminary  written  report after July thirty-first and a final written
  report after December thirty-first of each calendar  year,  which  shall
  contain  statistical  information  regarding  the  credits granted on or
  before such dates under  this  subsection  during  such  calendar  year.
  Copies  of  these reports shall be submitted by such commissioner to the
  governor, the temporary president of the  senate,  the  speaker  of  the
  assembly,  the chairman of the senate finance committee and the chairman
  of the assembly ways and means  committee  within  sixty  days  of  July
  thirty-first   with  respect  to  the  preliminary  report,  and  within
  forty-five days of December  thirty-first  with  respect  to  the  final
  report.  Such  reports  shall  contain,  but need not be limited to, the
  number of credits and the average amount of such credits allowed; and of
  those, the number of credits and the  average  amount  of  such  credits
  allowed  to qualified taxpayers in each county; and of those, the number
  of credits and the average amount of such credits allowed  to  qualified
  taxpayers  whose  household  gross  income  falls  within  each  of  the
  household gross income ranges set  forth  in  paragraph  three  of  this
  subsection;  and  of those, the number of credits and the average amount
  of such credits allowed to qualified taxpayers whose credit amount falls
  within credit amount ranges set forth in twenty-five dollar increments.
    * NB Applies to taxable years beginning after 1986
    (e-1) Volunteer firefighters' and ambulance workers' credit.  (1)  For
  taxable  years beginning on and after January first, two thousand seven,
  a resident taxpayer who serves as an  active  volunteer  firefighter  as
  defined in subdivision one of section two hundred fifteen of the general
  municipal  law  or  as  a  volunteer  ambulance  worker  as  defined  in
  subdivision fourteen of section two hundred nineteen-k  of  the  general
  municipal  law shall be allowed a credit against the tax imposed by this
  article equal to two hundred dollars. In order to receive this credit  a
  volunteer  firefighter  or  volunteer  ambulance  worker  must have been
  active for the entire taxable year for which the credit is sought.
    (2) If a taxpayer receives a real property tax exemption  relating  to
  such  service  under  title two of article four of the real property tax
  law, such taxpayer shall not be eligible for this credit.
    (3) In the case of a husband and wife who file a joint return and  who
  both  individually  qualify  for  the  credit under this subsection, the
  amount of the credit allowed shall be four hundred dollars.
    (4) If the amount of the credit allowed under this subsection for  any
  taxable  year  shall exceed the taxpayer's tax for such year, the excess
  shall be treated as an overpayment of tax to be credited or refunded  in
  accordance with the provisions of section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    (f)  Credit  for  the special additional mortgage recording tax. * (1)
  For taxable years beginning  before  nineteen  hundred  eighty-eight,  a
  taxpayer  shall  be  allowed  a  credit,  to be credited against the tax
  imposed by this article, after allowance of any  other  credit  provided
  under  this section and any credits permitted under sections six hundred
  twenty, six hundred twenty-one and six hundred forty  of  this  article.
  The  amount  of the credit shall be the amount of the special additional
  mortgage recording tax paid by the taxpayer pursuant to  the  provisions
  of  subdivision one-a of section two hundred fifty-three of this chapter
  on mortgages recorded on  and  after  January  first,  nineteen  hundred
  seventy-nine. Provided, however, no credit shall be allowed with respect
  to a mortgage of real property principally improved or to be improved by
  one  or  more  structures  containing in the aggregate not more than six
  residential dwelling units, each dwelling unit having its  own  separate
  cooking facilities, where the real property is located in one or more of
  the   counties   comprising  the  metropolitan  commuter  transportation
  district and where the mortgage is  recorded  on  or  after  May  first,
  nineteen  hundred  eighty-seven.  Provided,  however, no credit shall be
  allowed with respect to a mortgage of real property principally improved
  or to be improved by one or more structures containing in the  aggregate
  not  more than six residential dwelling units, each dwelling unit having
  its own separate cooking facilities, where the real property is  located
  in the county of Erie and where the mortgage is recorded on or after May
  first, nineteen hundred eighty-seven.
    * NB Applies to taxable years beginning prior to 1988
    * (1)   For   taxable   years   beginning   before   nineteen  hundred
  eighty-eight, a taxpayer shall be  allowed  a  credit,  to  be  credited
  against  the  tax  imposed by this article, after allowance of any other
  credit provided under this  section  and  any  credits  permitted  under
  sections  six  hundred  twenty,  six  hundred twenty-one and six hundred
  thirty-five of this article. The amount  of  the  credit  shall  be  the
  amount  of  the  special  additional  mortgage recording tax paid by the
  taxpayer pursuant to the provisions of subdivision one-a of section  two
  hundred  fifty-three  of this chapter on mortgages recorded on and after
  January first, nineteen  hundred  seventy-nine.  Provided,  however,  no
  credit  shall  be  allowed  with  respect to a mortgage of real property
  principally improved or  to  be  improved  by  one  or  more  structures
  containing  in  the  aggregate  not  more  than six residential dwelling
  units, each dwelling unit having its own  separate  cooking  facilities,
  where  the  real  property  is  located  in  one or more of the counties
  comprising the metropolitan commuter transportation district  and  where
  the  mortgage  is  recorded  on  or  after  May  first, nineteen hundred
  eighty-seven. Provided, however, no credit shall be allowed with respect
  to a mortgage of real property principally improved or to be improved by
  one or more structures containing in the aggregate  not  more  than  six
  residential  dwelling  units, each dwelling unit having its own separate
  cooking facilities, where the real property is located in the county  of
  Erie  and where the mortgage is recorded on or after May first, nineteen
  hundred eighty-seven.
    * NB Applies to taxable years beginning after 1987
    (2) In no event shall the amount of the credit herein provided for  be
  allowed  in  excess of the taxpayer's tax for such year. However, if the
  amount of credit otherwise  allowable  under  this  subsection  for  any
  taxable  year  results  in  such excess amount, any amount of credit not
  deductible in such taxable year may be carried  over  to  the  following
  year  or years and may be deducted from the taxpayer's tax for such year
  or years.
    (3)(A)  Notwithstanding  the  provisions  of paragraphs one and two of
  this subsection, for taxable years beginning after two thousand three, a
  taxpayer shall be allowed a credit,  to  be  credited  against  the  tax
  imposed  by  this article, equal to the amount of the special additional
  mortgage recording tax paid by  the  taxpayer  or,  in  the  case  of  a
  taxpayer who is a partner in a partnership, the partner's pro rata share
  of  the  amount of the special additional mortgage recording tax paid by
  the partnership, pursuant to the  provisions  of  subdivision  one-a  of
  section two hundred fifty-three of this chapter on mortgages recorded on
  and after January first, two thousand four. Provided, however, no credit
  shall be allowed with respect to a mortgage of real property principally
  improved  by one or more structures containing in the aggregate not more
  than six residential dwelling units, each dwelling unit having  its  own
  separate  cooking  facilities, where the real property is located in one
  or  more  of  the  counties   comprising   the   metropolitan   commuter
  transportation  district  and where the mortgage is recorded on or after
  January first, two thousand four. Provided further, no credit  shall  be
  allowed with respect to a mortgage of real property principally improved
  by  one or more structures containing in the aggregate not more than six
  residential dwelling units, each dwelling unit having its  own  separate
  cooking  facilities,  where  the real property is located in Erie county
  and where the mortgage is  recorded  on  or  after  January  first,  two
  thousand four.
    (B)  If  the  amount  of credit allowable under this paragraph for any
  taxable year exceeds the taxpayer's tax for such  year,  any  amount  of
  credit  exceeding  such tax may be carried over to the following year or
  years and may be deducted from the  taxpayer's  tax  for  such  year  or
  years.  Provided  further,  such taxpayer may elect to treat such unused
  amount of credit as an overpayment of tax to be credited or refunded  in
  accordance with the provisions of section six hundred eighty-six of this
  article except that no interest shall be paid on such overpayment.
    (g)  Credit for solar and wind energy systems. (1) A taxpayer shall be
  allowed a credit for taxable years beginning on or after January  first,
  nineteen  hundred  eighty-one  and  ending before December thirty-first,
  nineteen hundred eighty-six against the tax imposed by this article  for
  the  purchase  and  installation  of  a solar or wind energy system by a
  taxpayer in his principal residence, if such residence is located within
  the state. The amount of the credit shall be fifty-five percent  of  the
  expenditure  incurred  in  purchasing  and installing any such system or
  combination thereof, but  not  to  exceed  the  maximum  credit  of  two
  thousand seven hundred fifty dollars.
    (2)  A solar or wind system is a system whose original use begins with
  the taxpayer; which meets the eligibility criteria, if  any,  prescribed
  by the department of taxation and finance; and which is:
    (A)  an  active solar energy system which shall mean an arrangement or
  combination of components designed  to  provide  heating,  cooling,  hot
  water  or electricity through the process of collecting solar radiation,
  converting it to another form of energy, storing the  converted  energy,
  protecting   against   unnecessary   dissipation  and  distributing  the
  converted energy, and  which  requires  external  mechanical  power  for
  operation.  This  term  shall not include pipes, controls, insulation or
  other equipment which are part of  the  conventional  heating,  cooling,
  insulation  or electrical system of a building; nor shall it include any
  expenditure allocable to a swimming pool used as a storage medium;
    (B) a passive solar energy system, which shall  mean  a  system  which
  relies  upon  the  original  or  retrofitted  design  and  elements of a
  building to enhance the use of natural forces including solar radiation,
  winds and night-time coolness to provide heating, cooling or  hot  water
  through  the  process  of  collecting  solar radiation, converting it to
  another form of energy, storing the converted energy, protecting against
  unnecessary dissipation and distributing the converted energy, and which
  is not primarily dependent upon mechanical  power  for  operation.  This
  term  shall  not  include pipes, controls, insulation or other equipment
  which are part of the conventional heating, cooling or insulation system
  of the building; nor shall it include any  expenditure  allocable  to  a
  swimming pool used as a storage medium; or
    (C)  a  wind  energy  system,  which  shall  mean  an  arrangement  or
  combination  of  components,  including  power  conditioning  equipment,
  designed to provide electricity or mechanical energy through the process
  of  converting  wind  energy into mechanical and/or electric energy, and
  storing or distributing such energy.
    (3) Where a solar or wind energy system is purchased and installed  by
  a   condominium   management   association   or  a  cooperative  housing
  corporation, a taxpayer who is a member of  the  condominium  management
  association  or  who  is a tenant-stockholder in the cooperative housing
  corportion may for the purpose of this subsection claim a  proportionate
  share  of  the  total expense as the expenditure for the purposes of the
  credit attributable to his principal residence.
    (4) Where a solar or wind system  is  purchased  and  installed  in  a
  principal  residence  shared  by two or more taxpayers the amount of the
  credit allowable under this subsection for each such taxpayer  shall  be
  prorated  according  to the percentage of the total expenditure for such
  system contributed by each taxpayer.
    (5) To the extent that a federal income  tax  credit  shall  apply  to
  expenditures  eligible  for  a  credit under this subsection, the credit
  provided in this subsection shall be reduced so that the combined credit
  shall not exceed fifty-five percent of such expenditures or six thousand
  seven hundred fifty dollars, whichever is less.
    (6) If the amount of credit  allowable  under  this  subsection  shall
  exceed  the taxpayer's tax for such year, the excess may be carried over
  to the following year or years and may be deducted from  the  taxpayer's
  tax for such year or years.
    (7)  If  all  or  any  part  of  the  credit  provided  for under this
  subsection was allowed or carried over from  a  prior  taxable  year  or
  years,  a  taxpayer  shall  reduce  the  allowable credit for additional
  qualifying expenditures in a subsequent tax year by the  amount  of  the
  credit  previously  allowed  or  carried  over;  provided however that a
  credit previously allowed or carried over from a prior taxable  year  or
  years  shall  not  be  taken  into  account in determining the allowable
  credit for the purchase and installation  of  a  solar  or  wind  energy
  system in a subsequent principal residence.
    (8)   For  the  purpose  of  determining  the  amount  of  the  actual
  expenditure incurred in purchasing and installing a solar or wind energy
  system, the amount of any federal, state or local grant received by  the
  taxpayer,  which  was  used for the purchase and/or installation of such
  system and which was not included in the gross income of  the  taxpayer,
  shall not be taken into account.
    * (9)  Notwithstanding  any  other  provision  of  law, if a credit is
  allowed under this subsection for a renewable energy system with respect
  to any property, the increase in the basis of such property which  would
  but for this subsection result from such expenditure shall be reduced by
  the amount of the credit allowed.
    * NB Applies to taxable years prior to December 31, 1986
    * (9)  Notwithstanding  any  other  provision  of  law, if a credit is
  allowed under this subsection for a renewable energy system with respect
  to any property, the increase in the basis of such property which  would
  but for this subsection result from such expenditure shall be reduced by
  the  amount of the credit allowed. When the sale or other disposition of
  such property results in the nonrecognition of gain  under  section  one
  thousand  thirty-four  of  the  internal  revenue code, a like reduction
  shall be made to the basis of the new residence, if  such  residence  is
  located within the state.
    * NB Applies to taxable years beginning after December 31, 1986
    (g-1) Solar energy system equipment credit. (1) General. An individual
  taxpayer  shall  be  allowed  a  credit  against the tax imposed by this
  article equal to twenty-five percent of qualified  solar  energy  system
  equipment  expenditures.  This  credit  shall  not exceed three thousand
  seven hundred fifty dollars for qualified solar energy equipment  placed
  in  service  before September first, two thousand six, and five thousand
  dollars for qualified solar energy equipment placed  in  service  on  or
  after September first, two thousand six.
    (2) Qualified solar energy system equipment expenditures. (A) The term
  "qualified   solar   energy   system   equipment   expenditures"   means
  expenditures for the purchase of solar energy system equipment which  is
  installed  in  connection with residential property which is (i) located
  in this state and (ii) which is used by  the  taxpayer  as  his  or  her
  principal  residence  at  the  time the solar energy system equipment is
  placed in service.
    (B)  Such  qualified  expenditures  shall  include  expenditures   for
  materials,  labor  costs  properly  allocable  to  on-site  preparation,
  assembly  and  original  installation,  architectural  and   engineering
  services,  and designs and plans directly related to the construction or
  installation of the solar electric generating equipment.
    (C) Such qualified expenditures shall not include  interest  or  other
  finance charges.
    (3)  Solar  energy  system  equipment.  The  term "solar energy system
  equipment" shall  mean  an  arrangement  or  combination  of  components
  utilizing  solar  radiation,  which,  when  installed  in  a  residence,
  produces energy designed to  provide  heating,  cooling,  hot  water  or
  electricity  for  use  in such residence. Such arrangement or components
  shall not include equipment connected to solar energy  system  equipment
  that  is  a  component  of part or parts of a non-solar energy system or
  which uses any sort of recreational facility or equipment as  a  storage
  medium. Solar energy system equipment that generates electricity for use
  in  a  residence  must  conform  to applicable requirements set forth in
  section sixty-six-j of the public service law.
    (4)  Multiple  taxpayers.  Where  solar  energy  system  equipment  is
  purchased  and  installed in a principal residence shared by two or more
  taxpayers, the amount of the credit allowable under this subsection  for
  each  such taxpayer shall be prorated according to the percentage of the
  total expenditure for such solar energy system equipment contributed  by
  each taxpayer.
    (5)  Grants. For purposes of determining the amount of the expenditure
  incurred in purchasing and installing solar energy system equipment, the
  amount of any federal, state or local grant received  by  the  taxpayer,
  which  was  used  for the purchase and/or installation of such equipment
  and which was not included in the federal gross income of the  taxpayer,
  shall not be included in the amount of such expenditures.
    (6)  When  credit  allowed.  The  credit  provided for herein shall be
  allowed with respect to the  taxable  year,  commencing  after  nineteen
  hundred  ninety-seven,  in  which  the  solar energy system equipment is
  placed in service.
    (7)  Carryover  of credit. If the amount of the credit, and carryovers
  of such credit, allowable under this subsection  for  any  taxable  year
  shall exceed the taxpayer's tax for such year, such excess amount may be
  carried  over  to the five taxable years next following the taxable year
  with respect to which the credit is allowed and may be deducted from the
  taxpayer's tax for such year or years.
    (g-2) Fuel cell electric generating equipment credit.  (1) General. An
  individual taxpayer shall be allowed a credit against the tax imposed by
  this article equal to twenty percent of  qualified  fuel  cell  electric
  generating  equipment  expenditures.  This  credit  shall not exceed one
  thousand five hundred dollars per generating unit with  respect  to  any
  taxable  year.  The  credit  provided  for  herein shall be allowed with
  respect to the taxable year in which the fuel cell  electric  generating
  equipment is placed in service.
    (2)  Qualified  fuel  cell electric generating equipment expenditures.
  (A) Qualified fuel cell electric generating equipment  expenditures  are
  the  costs,  incurred  on  or  after  July  first,  two  thousand  five,
  associated with the purchase of on-site electricity  generation  systems
  utilizing  proton  exchange  membrane  fuel  cells,  providing  a  rated
  baseload capacity of no less than one kilowatt  and  no  more  than  one
  hundred kilowatts of electricity, which are located in this state at the
  time  the qualified fuel cell electric generating equipment is placed in
  service.
    (B) Qualified fuel cell  electric  generating  equipment  expenditures
  shall  also include costs, incurred on or after July first, two thousand
  five,  for  materials,  labor  for  on-site  preparation,  assembly  and
  original  installation, engineering services, designs and plans directly
  related to construction or installation and utility compliance costs.
    (C) Such qualified expenditures shall not include  interest  or  other
  finance charges.
    (3)  Multiple taxpayers. Where fuel cell electric generating equipment
  is purchased and installed in a principal residence  shared  by  two  or
  more taxpayers, the amount of the credit allowable under this subsection
  for  each such taxpayer shall be prorated according to the percentage of
  the total expenditure for such fuel cell electric  generating  equipment
  contributed by each taxpayer.
    (4)  Grants. For purposes of determining the amount of the expenditure
  incurred in purchasing and  installing  fuel  cell  electric  generating
  equipment,  the  amount of any federal, state or local grant received by
  the taxpayer, which was used for the  purchase  and/or  installation  of
  such equipment and which was not included in the federal gross income of
  the taxpayer, shall not be included in the amount of such expenditures.
    (5)  Carryover  of credit. If the amount of the credit, and carryovers
  of such credit, allowable under this subsection  for  any  taxable  year
  shall exceed the taxpayer's tax for such year, such excess amount may be
  carried  over  to the five taxable years next following the taxable year
  with respect to which the credit is allowed and may be deducted from the
  taxpayer's tax for such year or years.
    (h) Research and development  tax  credit.  * (1)  For  taxable  years
  commencing  prior  to  January  first,  nineteen hundred eighty-seven, a
  taxpayer shall be allowed a credit  against  the  tax  imposed  by  this
  article  after allowance of any other credit provided under this section
  and any credits permitted under sections six hundred twenty, six hundred
  twenty-one and six hundred forty of this  article.  The  amount  of  the
  credit  shall  be  ten  percent  of  the cost or other basis for federal
  income tax purposes of tangible personal property,  including  buildings
  and other structural components of buildings, described in paragraph two
  of  this  subsection  acquired, constructed or reconstructed, or erected
  after June thirtieth, nineteen hundred eighty-two.
    * NB Applies to taxable years prior to 1988
    * (1)  For  taxable  years commencing prior to January first, nineteen
  hundred eighty-seven, a taxpayer shall be allowed a credit  against  the
  tax imposed by this article after allowance of any other credit provided
  under  this section and any credits permitted under sections six hundred
  twenty, six hundred twenty-one  and  six  hundred  thirty-five  of  this
  article.  The  amount  of the credit shall be ten percent of the cost or
  other basis  for  federal  income  tax  purposes  of  tangible  personal
  property,   including  buildings  and  other  structural  components  of
  buildings, described in  paragraph  two  of  this  subsection  acquired,
  constructed  or reconstructed, or erected after June thirtieth, nineteen
  hundred eighty-two.
    * NB Applies to taxable years beginning after 1987
    * (2) A credit shall be allowed under this  section  with  respect  to
  tangible  personal  property  and  other  tangible  property,  including
  buildings and structural components of buildings which are:  depreciable
  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
  code, have a useful life of four years or more, are acquired by purchase
  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
  revenue  code, have a situs in this state and are used or are to be used
  for  purposes  of  research  and  development  in  the  experimental  or
  laboratory  sense.  Such  purposes  shall  not  be deemed to include the
  ordinary testing or inspection of  materials  or  products  for  quality
  control,  efficiency  surveys,  management  studies,  consumer  surveys,
  advertising,  promotions,  or  research  in  connection  with  literary,
  historical or similar projects.
    * NB  Applies  to property to which the amendments made by section 201
  of Public Law 99-514 apply
    (3) A taxpayer shall not be allowed a  credit  under  this  subsection
  with respect to any property described in paragraphs one and two of this
  subsection,  if  such  property  qualifies  for the modification allowed
  under either paragraph three or paragraph  four  of  subsection  (g)  of
  section  six  hundred  twelve whether or not such amount shall have been
  subtracted, or if a credit is taken pursuant to subsection (a)  of  this
  section.  Provided,  however,  with  respect to property which qualifies
  under either clause (A), (B) or (C) of paragraph four of subsection  (g)
  because  such  property  was ordered on or before December thirty-first,
  nineteen hundred sixty-eight, but with respect to which  no  expenditure
  has  been  paid  or  incurred  at  such  date, the taxpayer may elect to
  subtract the amount allowable under clause (A), (B) or (C) or  may  take
  the credit provided by this subsection, but not both.
    (4)  A  taxpayer  shall  not be allowed a credit under this subsection
  with respect to tangible personal property and other tangible  property,
  including  buildings  and  structural  components of buildings, which it
  leases to any other person or corporation. For purposes of the preceding
  sentence, any contract or agreement to lease or rent or for a license to
  use such property shall be considered a  lease.  Provided,  however,  in
  determining  whether  a  taxpayer  shall  be allowed a credit under this
  subsection with respect to such property, any election made with respect
  to such property pursuant  to  the  provisions  of  paragraph  eight  of
  subsection  (f)  of  section  one  hundred  sixty-eight  of the internal
  revenue code, as such paragraph was in  effect  for  agreements  entered
  into  prior  to  January  first,  nineteen hundred eighty-four, shall be
  disregarded.
    (5) If the amount of credit allowable under this  subsection  for  any
  taxable  year  shall exceed the taxpayer's tax for such year, the excess
  may be carried over to the following year or years and may  be  deducted
  from  the  taxpayer's  tax  for such year or years but in no event shall
  such  credit  be  carried  over  to taxable years commencing on or after
  January first, nineteen hundred ninety-four.
    (6) * (A) With respect to property which is  depreciable  pursuant  to
  section  one hundred sixty-seven of the internal revenue code but is not
  subject to the provisions of section one  hundred  sixty-eight  of  such
  code, and which is disposed of or ceases to be in qualified use prior to
  the  end  of  the  taxable  year in which the credit is to be taken, the
  amount of the credit shall be that portion of the credit provided for in
  this subsection which represents the ratio which the months of qualified
  use bear to the months of useful life. If property on which  credit  has
  been  taken is disposed of or ceases to be in qualified use prior to the
  end of its useful life, the difference between the credit taken and  the
  credit  allowed  for  actual  use  must  be  added  back  in the year of
  disposition. Provided, however, if  such  property  is  disposed  of  or
  ceases  to  be  in  qualified use after it has been in qualified use for
  more than twelve consecutive years, it shall not  be  necessary  to  add
  back  the  credit as provided in this subparagraph. The amount of credit
  allowed for actual use shall be determined by multiplying  the  original
  credit by the ratio which the months of qualified use bear to the months
  of  useful  life.  For  purposes  of  this  subparagraph, useful life of
  property shall be  the  same  as  the  taxpayer  uses  for  depreciation
  purposes when computing his federal income tax liability.
    * NB  Applies  to property to which the amendments made by section 201
  of Public Law 99-514 apply
    * (B) Except with respect to that property to which  subparagraph  (D)
  of  this  paragraph  applies,  with  respect  to three-year property, as
  defined in subsection (e) of section  one  hundred  sixty-eight  of  the
  internal revenue code, which is disposed of or ceases to be in qualified
  use  prior  to  the end of the taxable year in which the credit is to be
  taken, the amount of the credit shall be  that  portion  of  the  credit
  provided  for  in  this  subsection which represents the ratio which the
  months of qualified use bear to thirty-six. If property on which  credit
  has  been taken is disposed of or ceases to be in qualified use prior to
  the end of thirty-six months, the difference between  the  credit  taken
  and  the credit allowed for actual use must be added back in the year of
  disposition. The amount of  credit  allowed  for  actual  use  shall  be
  determined  by  multiplying  the  original credit by the ratio which the
  months of qualified use bear to thirty-six.
    * NB Applies to property to which the amendments made by  section  201
  of Public Law 99-514 apply
    * (C)  Except  with respect to that property to which subparagraph (D)
  of this paragraph applies, with  respect  to  property  subject  to  the
  provisions  of  section  one hundred sixty-eight of the internal revenue
  code other than three-year property as defined in subsection (e) of such
  section one hundred sixty-eight, which is disposed of or ceases to be in
  qualified use prior to the end of the taxable year in which  the  credit
  is  to  be  taken, the amount of the credit shall be that portion of the
  credit provided for in this subsection which represents the ratio  which
  the  months  of qualified use bear to sixty. If property on which credit
  has been taken is disposed of or ceases to be in qualified use prior  to
  the end of sixty months, the difference between the credit taken and the
  credit  allowed  for  actual  use  must  be  added  back  in the year of
  disposition. The amount of  credit  allowed  for  actual  use  shall  be
  determined  by  multiplying  the  original credit by the ratio which the
  months of qualified use bear to sixty.
    * NB  Applies  to property to which the amendments made by section 201
  of Public Law 99-514 apply for taxable years commencing  after  December
  31, 1986
    * (D)  With  respect  to  any  property  to  which section one hundred
  sixty-eight of the internal revenue code applies, which is a building or
  a structural component of a building and which is disposed of or  ceases
  to be in qualified use prior to the end of the taxable year in which the
  credit is to be taken, the amount of the credit shall be that portion of
  the  credit  provided  for in this subsection which represents the ratio
  which the months of qualified use bear to the  total  number  of  months
  over  which  the  taxpayer  chooses  to  deduct  the  property under the
  internal revenue code. If property on which credit  has  been  taken  is
  disposed  of  or  ceases  to be in qualified use prior to the end of the
  period over which the taxpayer chooses to deduct the property under  the
  internal  revenue  code, the difference between the credit taken and the
  credit allowed for actual  use  must  be  added  back  in  the  year  of
  disposition.  Provided,  however,  if  such  property  is disposed of or
  ceases to be in qualified use after it has been  in  qualified  use  for
  more  than  twelve  consecutive  years, it shall not be necessary to add
  back the credit as provided in this subparagraph. The amount  of  credit
  allowed  for  actual use shall be determined by multiplying the original
  credit by the ratio which the months of qualified use bear to the  total
  number  of months over which the taxpayer chooses to deduct the property
  under the internal revenue code.
    * NB Applies to property to which the amendments made by  section  201
  of Public Law 99-514 apply
 
    (i) S corporation credits.
    (1)  For purposes of determining the application under this section of
  the credit provisions enumerated in the following table,  a  shareholder
  of a New York S corporation:
    (A)  shall  be  treated as the taxpayer with respect to his or her pro
  rata share  of  the  corresponding  credit  base  of  such  corporation,
  determined  for the corporation's taxable year ending with or within the
  shareholder's taxable year and
    (B) shall be treated as the owner of a new business  with  respect  to
  such  share  if  the corporation qualifies as a new business pursuant to
  paragraph (j) of subdivision twelve of section two hundred ten  of  this
  chapter.
 
                                          The corporation's
  With respect to the                     credit base under
  following credit                        section two hundred ten
  under this section:                     or section fourteen
                                          hundred fifty-six of this
                                          chapter is:
 
  Investment tax credit                   Investment credit base
  under subsection (a)                    or qualified
                                          rehabilitation
                                          expenditures under
                                          subdivision twelve of
                                          section two hundred ten
 
  Empire zone                             Cost or other basis
  investment tax credit                   under subdivision
  under subsection (j)                    twelve-B
                                          of section two hundred
                                          ten
 
  Empire zone                             Eligible wages under
  wage tax credit                         subdivision nineteen of
  under subsection (k)                    section two hundred ten
                                          or subsection (e) of
                                          section fourteen hundred
                                          fifty-six
 
  Empire zone                             Qualified investments
  capital tax credit                      and contributions under
  under subsection (l)                    subdivision twenty of
                                          section two hundred ten
                                          or subsection (d) of
                                          section fourteen hundred
                                          fifty-six
 
  Agricultural property tax               Allowable school
  credit under subsection (n)             district property taxes under
                                          subdivision twenty-two of
                                          section two hundred ten
 
  Credit for employment                   Qualified first-year wages or
  of persons with dis-                    qualified second-year wages
  abilities under                         under subdivision
  subsection (o)                          twenty-three of section
                                          two hundred ten
                                          or subsection (f)
                                          of section fourteen
                                          hundred fifty-six
 
  Employment incentive                    Applicable investment credit
  credit under subsec-                    base under subdivision
  tion (a-1)                              twelve-D of section two
                                          hundred ten
 
  Empire zone                             Applicable investment
  employment                              credit under sub-
  incentive credit under                  division twelve-C
  subsection (j-1)                        of section two hundred ten
 
  Alternative fuels credit                Cost under subdivision
  under subsection (p)                    twenty-four of section two
                                          hundred ten
 
  Qualified emerging                      Applicable credit base
  technology company                      under subdivision twelve-E
  employment credit                       of section two hundred ten
  under subsection (q)
 
  Qualified emerging                      Qualified investments under
  technology company                      subdivision twelve-F of
  capital tax credit                      section two hundred ten
  under subsection (r)
  Credit for purchase of an               Cost of an automated
  automated external defibrillator        external defibrillator under
  under subsection (s)                    subdivision twenty-five of
                                          section two hundred ten
                                          or subsection (j) of section
                                          fourteen hundred fifty-six
 
  Low-income housing                      Credit amount under
  credit under subsection (x)             subdivision thirty
                                          of section two hundred ten or
                                          subsection (l) of section
                                          fourteen hundred fifty-six
 
  Credit for transportation               Amount of credit under sub-
  improvement contributions               division thirty-two of section
  under subsection (z)                    two hundred ten or subsection
                                          (n) of section fourteen
                                          hundred fifty-six
 
  *IMB credit for energy                  Amount of credit
  taxes under sub-                        under subdivision
  section (t-1)                           twenty-six-a of
                                          section two hundred ten
 
  QEZE credit for real property           Amount of credit under
  taxes under subsection (bb)             subdivision twenty-seven of
                                          section two hundred ten or
                                          subsection (o) of section
                                          fourteen hundred fifty-six
 
  QEZE tax reduction credit               Amount of benefit period
  under subsection (cc)                   factor, employment increase factor
                                          and zone allocation
                                          factor (without regard
                                          to pro ration) under
                                          subdivision twenty-eight of
                                          section two hundred ten or
                                          subsection (p) of section
                                          fourteen hundred fifty-six
                                          and amount of tax factor
                                          as determined under
                                          subdivision (f) of section sixteen
 
  Green building credit                   Amount of green building credit
  under subsection (y)                    under subdivision thirty-one
                                          of section two hundred ten
                                          or subsection (m) of section
                                          fourteen hundred fifty-six
 
  Credit for long-term                    Qualified costs under
  care insurance premiums                 subdivision twenty-five-a of
  under subsection (aa)                   section two hundred ten
                                          or subsection (k) of section
                                          fourteen hundred fifty-six
 
  Brownfield redevelopment                Amount of credit
  credit under subsection                 under subdivision
  (dd)                                    thirty-three of section
                                          two hundred ten
                                          or subsection (q) of
                                          section fourteen hundred
                                          fifty-six
 
  Remediated brownfield                   Amount of credit under
  credit for real property                subdivision thirty-four
  taxes for qualified                     of section two hundred
  sites under subsection                  ten or subsection (r) of
  (ee)                                    section fourteen hundred
                                          fifty-six
 
  Environmental                           Amount of credit under
  remediation                             subdivision thirty-five of
  insurance credit under                  section two hundred
  subsection (ff)                         ten or subsection
                                          (s) of section
                                          fourteen hundred
                                          fifty-six
 
  *Empire state film production           Amount of credit for qualified
  credit under subsection (gg)            production costs in production
                                          of a qualified film under
                                          subdivision thirty-six of
                                          section two hundred ten
 
  Qualified emerging                      Qualifying expenditures and
  technology company facilities,          development activities under
  operations and training credit          subdivision twelve-G of section
  under subsection (nn)                   two hundred ten
 
  Security training tax                   Amount of credit
  credit under                            under subdivision thirty-seven
  subsection (ii)                         of section two hundred ten or
                                          under subsection (t) of
                                          section fourteen hundred fifty-six
 
  Credit for qualified fuel               Amount of credit under
  cell electric generating equipment      subdivision thirty-seven
  expenditures under subsection (g-2)     of section two hundred ten
                                          or subsection (t) of
                                          section fourteen hundred
                                          fifty-six
 
  *Empire state commercial production     Amount of credit for qualified
  credit under subsection (jj)            production costs in production
                                          of a qualified commercial under
                                          subdivision thirty-eight of sec-
                                          tion two hundred ten
 
  Biofuel production                      Amount of credit
  tax credit under                        under subdivision
  subsection (jj)                         thirty-eight of
                                          section two hundred ten
    *IMB tax credit expires January 1, 2007
    *Empire state film production credit expires August 20, 2008
    *Empire  state  commercial  production credit is repealed December 31,
  2011
    (2) The reduction of a shareholder's  proportionate  interest  in  the
  corporation  shall  be  treated as a disposition of property for which a
  redetermination of credit is required under subsections (a), (j) and (l)
  of this section.
    (3)  Transition  provisions  relating to S corporation credits allowed
  for taxable years beginning before  nineteen  hundred  ninety-four.  (A)
  Credit  carryover. Any excess credit under subparagraph (A) of paragraph
  one of this subsection, as it was in effect for taxable years  beginning
  before  nineteen  hundred  ninety-four,  may  be  carried  over  to  the
  shareholder's following year or years and  may  be  deducted  from  such
  shareholder's  tax for such year or years, except that any excess credit
  attributable to subdivision twelve of section two hundred  ten  of  this
  chapter  shall  in no event be carried over beyond the ten taxable years
  next following the taxable year of origin.
    (B) Credit recapture. Any redetermination of credit required  by  this
  subsection  as  it  was  in  effect  for  taxable years beginning before
  nineteen hundred ninety-four, upon disposition or cessation of qualified
  use of  property  pursuant  to  paragraph  (g)  of  subdivision  twelve,
  paragraph  (f)  of  subdivision twelve-B or paragraph (f) of subdivision
  eighteen of section two hundred ten of this chapter shall be  attributed
  in  pro  rata  shares  to the shareholders who were allowed credit under
  this subsection with respect to such property, and the  reduction  of  a
  shareholder's  proportionate  stock  interest  shall  be  treated  as  a
  disposition of property for which a redetermination of credit under such
  paragraphs is required with respect to such shareholder.
    (4) Transition provisions relating to credit  for  special  additional
  mortgage  recording  tax. In the case of the special additional mortgage
  recording tax  credit,  in  addition  to  any  carryover  thereof  under
  paragraph  three  of this subsection (relating to carryover from taxable
  years of the shareholder beginning before nineteen hundred ninety-four),
  there also shall be allowed a credit for such tax which is due and  paid
  by  an  S  corporation in a taxable year of the corporation beginning in
  nineteen hundred ninety-three, which year ends within the  shareholder's
  taxable year beginning in nineteen hundred ninety-four. Any such credit,
  and   carryover  thereof,  shall  be  allowed  as  provided  under  this
  subsection as it was  in  effect  for  taxable  years  beginning  before
  nineteen hundred ninety-four.
    (j)  Empire  zone investment tax credit (EZ-ITC). (1) A taxpayer shall
  be allowed a credit, to be computed as hereinafter provided, against the
  tax imposed by this  article  where  the  taxpayer  has  been  certified
  pursuant  to article eighteen-B of the general municipal law. The amount
  of such credit shall be eight percent of the cost  or  other  basis  for
  federal  income  tax  purposes  of  tangible personal property and other
  tangible property, including  buildings  and  structural  components  of
  buildings,  described  in  paragraph  two  of  this subsection, which is
  located within an empire zone designated as  such  pursuant  to  article
  eighteen-B  of  such  law,  but  only  if the acquisition, construction,
  reconstruction or erection of such property occurred or was commenced on
  or after the date of  such  designation  and  prior  to  the  expiration
  thereof.  Provided,  however,  that  in  the  case  of  an  acquisition,
  construction, reconstruction or erection which was commenced during such
  period and continued or completed  subsequently,  the  credit  shall  be
  eight  percent  of  the  portion  of the cost or other basis for federal
  income tax purposes attributable to such period, which portion shall  be
  ascertained  by  multiplying  such  cost  or  basis  by  a  fraction the
  numerator of which shall be the expenditures  paid  or  incurred  during
  such  period for such purposes and the denominator of which shall be the
  total of  all  expenditures  paid  or  incurred  for  such  acquisition,
  construction, reconstruction or erection.
    * (2)  A credit shall be allowed under this subsection with respect to
  tangible  personal  property  and  other  tangible  property,  including
  buildings   and  structural  components  of  buildings  which:  (A)  are
  depreciable pursuant to section one hundred sixty-seven of the  internal
  revenue  code,  (B)  have  a  useful life of four years or more, (C) are
  acquired by purchase as defined in section one hundred seventy-nine  (d)
  of  the  internal  revenue  code,  (D)  have  a  situs in an empire zone
  designated as  such  pursuant  to  article  eighteen-B  of  the  general
  municipal  law,  and (E) are (i) principally used by the taxpayer in the
  production of goods by manufacturing, processing, assembling,  refining,
  mining,  extracting,  farming,  agriculture, horticulture, floriculture,
  viticulture or  commercial  fishing,  (ii)  industrial  waste  treatment
  facilities  or  air  pollution control facilities used in the taxpayer's
  trade  or  business,  (iii)  research  and  development  property,  (iv)
  principally  used  in  the  ordinary  course  of the taxpayer's trade or
  business as a broker or dealer in connection with the purchase  or  sale
  (which  shall include but not be limited to the issuance, entering into,
  assumption, offset, assignment, termination,  or  transfer)  of  stocks,
  bonds   or   other   securities  as  defined  in  section  four  hundred
  seventy-five (c)(2) of the Internal Revenue Code, or of  commodities  as
  defined in section four hundred seventy-five (e) of the Internal Revenue
  Code,  or  (v) principally used in the ordinary course of the taxpayer's
  trade or business  of  providing  investment  advisory  services  for  a
  regulated  investment  company  as  defined  in  section  eight  hundred
  fifty-one of the Internal Revenue Code, or lending, loan arrangement  or
  loan  origination  services to customers in connection with the purchase
  or sale (which shall  include  but  not  be  limited  to  the  issuance,
  entering into, assumption, offset, assignment, termination, or transfer)
  of  securities as defined in section four hundred seventy-five (c)(2) of
  the Internal Revenue Code. For purposes of clauses (iv) and (v) of  this
  subparagraph,  property  purchased  by  a  taxpayer  affiliated  with  a
  regulated broker or dealer is allowed a credit under this subsection  if
  the  property  is  used  by its affiliated regulated broker or dealer in
  accordance with this subsection. Provided, however, a taxpayer shall not
  be allowed  the  credit  provided  by  clauses  (iv)  and  (v)  of  this
  subparagraph  unless  all  or  a  substantial  portion  of the employees
  performing the administrative and support functions  resulting  from  or
  related  to  the  qualifying  uses of such equipment are located in this
  state. For purposes of this  subsection,  the  term  "goods"  shall  not
  include electricity. For purposes of this paragraph, manufacturing shall
  mean the process of working raw materials into wares suitable for use or
  which  gives  new shapes, new quality or new combination to matter which
  already  has  gone  through  some  artificial  process  by  the  use  of
  machinery,  tools, appliances and other similar equipment. Property used
  in the production of goods shall include machinery, equipment  or  other
  tangible property which is principally used in the repair and service of
  other  machinery,  equipment or other tangible property used principally
  in the production of goods and shall include all facilities used in  the
  production  operation,  including  storage  of  material  to  be used in
  production and of the products that are produced. For purposes  of  this
  paragraph,  the  terms  "research and development property", "industrial
  waste treatment facilities",  and  "air  pollution  control  facilities"
  shall  have  the  meanings  ascribed  thereto by clauses (ii), (iii) and
  (iv), respectively, of subparagraph (B) of paragraph two  of  subsection
  (a)  of  this  section,  and  the provisions of subparagraph (C) of such
  paragraph two shall apply.
    * NB Applies to property to which the amendments made by  section  201
  of Public Law 99-514 apply
    (3)  A  taxpayer  shall  not be allowed a credit under this subsection
  with respect to  any  tangible  personal  property  and  other  tangible
  property,  including  buildings  and structural components of buildings,
  which it leases to any  other  person  or  corporation  except  where  a
  taxpayer  leases  property  to  an affiliated regulated broker or dealer
  that uses such property  in  accordance  with  clause  (iv)  or  (v)  of
  subparagraph  (E)  of  paragraph two of this subsection. For purposes of
  the preceding sentence, any contract or agreement to lease  or  rent  or
  for  a  license  to  use  such  property  shall  be  considered a lease.
  Provided, however, in determining whether a taxpayer shall be allowed  a
  credit under this subsection with respect to such property, any election
  made  with  respect  to  such  property  pursuant  to  the provisions of
  paragraph eight of subsection (f) of section one hundred sixty-eight  of
  the  internal  revenue  code,  as  such  paragraph  was  in  effect  for
  agreements  entered  into  prior  to  January  first,  nineteen  hundred
  eighty-four, shall be disregarded.
    (4)  If  the  amount  of  credit allowed under this subsection for any
  taxable year shall exceed the taxpayer's tax for such year,  the  excess
  may  be  carried over to the following year or years and may be deducted
  from the taxpayer's tax for such year or years. In lieu of carrying over
  any such excess, a taxpayer who qualifies as an owner of a new  business
  for  purposes of paragraph ten of subsection (a) of this section may, at
  his option, receive fifty percent of such excess as a refund. Any refund
  paid pursuant to this paragraph shall be deemed to be  a  refund  of  an
  overpayment of tax as provided in section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    (5)  At  the  option  of  the taxpayer, air or water pollution control
  facilities which qualify for elective modifications under subsection (h)
  of section six hundred twelve, or research  and  development  facilities
  which  qualify for elective modification under paragraphs three and four
  of subsection (g) of section  six  hundred  twelve,  or  property  which
  qualifies  for  the  credit provided under subsection (a) or (h) of this
  section may be treated as property principally used by the  taxpayer  in
  the  production  of  goods  by  manufacturing,  processing,  assembling,
  mining,  refining,  extracting,  farming,   agriculture,   horticulture,
  floriculture,  viticulture, or commercial fishing, provided the property
  otherwise qualifies under paragraph two of  this  subsection,  in  which
  event a deduction shall not be allowed under such subsection (h) or such
  paragraphs  three  and  four of subsection (g) and a credit shall not be
  allowed under such subsection (a) or (h).
    * (6) (A) With respect to property which is  depreciable  pursuant  to
  section  one hundred sixty-seven of the internal revenue code but is not
  subject to the provisions of section one  hundred  sixty-eight  of  such
  code  and which is disposed of or ceases to be in qualified use prior to
  the end of the taxable year in which the credit  is  to  be  taken,  the
  amount of the credit shall be that portion of the credit provided for in
  this  section  which  represents the ratio which the months of qualified
  use bear to the months of useful life. If the property on  which  credit
  has  been taken is disposed of or ceases to be in qualified use prior to
  the end of its useful life, the difference between the credit taken  and
  the  credit  allowed  for  actual  use must be added back in the year of
  disposition. Provided, however, if  such  property  is  disposed  of  or
  ceases  to  be  in  qualified use after it has been in qualified use for
  more than twelve consecutive years, it shall not  be  necessary  to  add
  back  the  credit  as  provided in this subsection. The amount of credit
  allowed for actual use shall be determined by multiplying  the  original
  credit by the ratio which the months of qualified use bear to the months
  of useful life. For purposes of this subsection, useful life of property
  shall  be  the  same as the taxpayer uses for depreciation purposes when
  computing his federal income tax liability.
    (B)  Except with respect to that property to which subparagraph (D) of
  this paragraph applies, with respect to three-year property, as  defined
  in  subsection  (e)  of  section one hundred sixty-eight of the internal
  revenue code, which is disposed of or ceases  to  be  in  qualified  use
  prior to the end of the taxable year in which the credit is to be taken,
  the  amount  of  the credit shall be that portion of the credit provided
  for in this subsection which represents the ratio which  the  months  of
  qualified  use  bear to thirty-six. If property on which credit has been
  taken is disposed of or ceases to be in qualified use prior to  the  end
  of  thirty-six  months,  the difference between the credit taken and the
  credit allowed for actual  use  must  be  added  back  in  the  year  of
  disposition.  The  amount  of  credit  allowed  for  actual use shall be
  determined by multiplying the original credit by  the  ratio  which  the
  months of qualified use bear to thirty-six.
    (C)  Except with respect to that property to which subparagraph (D) of
  this  paragraph  applies,  with  respect  to  property  subject  to  the
  provisions  of  section  one hundred sixty-eight of the internal revenue
  code other than three-year property as defined in subsection (e) of such
  section one hundred sixty-eight of the internal revenue  code  which  is
  disposed  of  or  ceases  to be in qualified use prior to the end of the
  taxable year in which the credit is to  be  taken,  the  amount  of  the
  credit  shall  be  that  portion  of  the  credit  provided  for in this
  subsection which represents the ratio which the months of qualified  use
  bear to sixty. If property on which credit has been taken is disposed of
  or  ceases  to be in qualified use prior to the end of sixty months, the
  difference between the credit taken and the credit  allowed  for  actual
  use  must be added back in the year of disposition. The amount of credit
  allowed for actual use shall be determined by multiplying  the  original
  credit by the ratio which the months of qualified use bear to sixty.
    (D)  With  respect  to  any  property  to  which  section  one hundred
  sixty-eight of the internal revenue code applies, which is a building or
  a structural component of a building and which is disposed of or  ceases
  to be in qualified use prior to the end of the taxable year in which the
  credit is to be taken, the amount of the credit shall be that portion of
  the  credit  provided  for in this subsection which represents the ratio
  which the months of qualified use bear to the  total  number  of  months
  over  which  the  taxpayer  chooses  to  deduct  the  property under the
  internal revenue code. If property on which credit  has  been  taken  is
  disposed  of  or  ceases  to be in qualified use prior to the end of the
  period over which the taxpayer chooses to deduct the property under  the
  internal  revenue  code, the difference between the credit taken and the
  credit allowed for actual  use  must  be  added  back  in  the  year  of
  disposition.  Provided,  however,  if  such  property  is disposed of or
  ceases to be in qualified use after it has been  in  qualified  use  for
  more  than  twelve  consecutive  years, it shall not be necessary to add
  back the credit as provided in this subparagraph. The amount  of  credit
  allowed  for  actual use shall be determined by multiplying the original
  credit by the ratio which the months of qualified use bear to the  total
  number  of months over which the taxpayer chooses to deduct the property
  under the internal revenue code.
    (E) For purposes of this paragraph, disposal or cessation of qualified
  use shall not be deemed  to  have  occurred  solely  by  reason  of  the
  termination or expiration of an empire zone's designation as such.
    (F)(i)  For  purposes  of  this  paragraph,  the  decertification of a
  business enterprise with respect to an empire zone  shall  constitute  a
  disposal  or  cessation  of  qualified  use of the property on which the
  credit  was  taken  which  is  located  in  the  zone   to   which   the
  decertification applies, on the effective date of such decertification.
    (ii)  Where  a  business  enterprise  has  been decertified based on a
  finding pursuant to clause one, two,  or  five  of  subdivision  (a)  of
  section nine hundred fifty-nine of the general municipal law, the amount
  required to be added back by reason of this paragraph shall be augmented
  by  an amount equal to the product of the amount of credit, with respect
  to property which is disposed of or ceases to be in qualified use, which
  was deducted from the taxpayer's tax otherwise due  under  this  article
  for  all  prior  taxable  years  (subject to the limit set forth in this
  subparagraph) and the underpayment rate of interest (without  regard  to
  compounding) set by the commissioner of taxation and finance pursuant to
  subdivision  (j) of section six hundred ninety-seven of this chapter, in
  effect on the last day of the taxable year. The limit shall be  (I)  the
  amount  of  credit, with respect to the property which is disposed of or
  ceases to be in qualified use, which was deducted  from  the  taxpayer's
  tax  otherwise  due  under  this  article  for  all prior taxable years,
  reduced (but not below zero) by (II) the credit allowed for actual  use.
  For  purposes of this subparagraph, the attribution to specific property
  of credit amount deducted from tax shall be  established  in  accordance
  with  the  date  of  placement in service of such property in the empire
  zone.
    (iii) In no event shall the amount of the credit allowed  pursuant  to
  this  subsection  be  rendered,  solely  by reason of clause (i) of this
  subparagraph, less than the amount of the credit to which  the  taxpayer
  would otherwise be entitled under subsection (a) of this section.
    (iv)  Notwithstanding  any  other provision of this subsection, in the
  case of a business enterprise which has been decertified, any amount  of
  credit  allowed with respect to the property of such business enterprise
  located in the zone  to  which  the  decertification  applies  which  is
  carried  over pursuant to paragraph four of this subsection shall not be
  carried over beyond the seventh taxable year next following the  taxable
  year  with  respect  to which the credit provided for in this subsection
  was allowed.
    (G) For purposes of this paragraph, where a  credit  is  allowed  with
  respect  to  an  air  pollution  control  facility  on  the  basis  of a
  certificate  of  compliance  issued  pursuant   to   the   environmental
  conservation  law and the certificate is revoked pursuant to subdivision
  three of section 19-0309 of the  environmental  conservation  law,  such
  revocation  shall  constitute  a disposal or cessation of qualified use,
  except with respect to property contained in or comprising such facility
  which is described in clause (i), (ii) or (iii) of subparagraph  (E)  of
  paragraph  two of this subsection other than as part of or comprising an
  air pollution control facility. Also for purposes of this paragraph, the
  use of  an  air  pollution  control  facility  or  an  industrial  waste
  treatment  facility for the primary purpose of salvaging materials which
  are  usable  in  the  manufacturing  process  or  are  marketable  shall
  constitute a cessation of qualified use, except with respect to property
  contained  in  or  comprising such facility which is described in clause
  (i) or (iii) of subparagraph (E) of paragraph two of this subsection.
    (H) Except as provided in this subparagraph, this paragraph shall  not
  apply  to  a  credit  allowed by this subsection to a taxpayer that is a
  partner  in  a  partnership  in  the  case  of  manufacturing  property;
  provided,  at  the  time  such  property  was  placed in service by such
  partnership in an empire zone the basis for federal income tax  purposes
  of  such  property (or a project that includes such property) equaled or
  exceeded three hundred million dollars and such partner owned his or her
  partnership interest for  at  least  three  years  from  the  date  such
  property  was  placed  in  service.  If  such  property  ceases to be in
  qualified use after it is placed in service, this paragraph shall  apply
  to  such  partner  in  the year such property ceases to be in qualifying
  use.
    * NB Applies to property to which the amendments made by  section  201
  of Public Law 99-514 apply
    (j-1) Empire zone employment incentive credit. (1) Where a taxpayer is
  allowed  a  credit  under  subsection  (j) of this section, the taxpayer
  shall be allowed a credit for each of the three  years  next  succeeding
  the  taxable  year  for  which  the  credit under such subsection (j) is
  allowed, with respect to such property, whether  or  not  deductible  in
  such  taxable  year or in subsequent taxable years pursuant to paragraph
  four of subsection (j) of this section, of thirty percent of the  credit
  allowable  under such subsection (j); provided, however, that the credit
  allowable under this subsection for  any  taxable  year  shall  only  be
  allowed  if  the average number of employees employed by the taxpayer in
  the empire zone,  designated  pursuant  to  article  eighteen-B  of  the
  general  municipal  law,  in  which such property is located during such
  taxable year is at least one hundred one percent of the  average  number
  of  employees  employed  by  the  taxpayer in such empire zone or, where
  applicable, in the geographic area subsequently constituting such  zone,
  during the taxable year immediately preceding the taxable year for which
  the  credit  under such subsection (j) is allowed and provided, further,
  that in the case of a new business,  the  credit  allowable  under  this
  subsection  for  any taxable year shall be allowed if the average number
  of employees employed in such empire zone in such  taxable  year  is  at
  least  one  hundred  one percent of the average number of such employees
  during the taxable year in which the credit under such subsection (j) is
  allowed.
    (2) The average number of employees employed in an  empire  zone,  or,
  where  applicable, in the geographic area subsequently constituting such
  zone, in a taxable year shall be computed by ascertaining the number  of
  such employees within such zone, or, where applicable, in the geographic
  area  subsequently  constituting  such zone, employed by the taxpayer on
  the thirty-first day of March, the thirtieth day of June, the  thirtieth
  day  of  September  and  the thirty-first day of December in the taxable
  year, by adding together the number of employees ascertained in each  of
  such  dates  and  dividing  the  sum  so  obtained by the number of such
  abovementioned dates occurring within the taxable year.
    (3) If the amount of credit allowed  under  this  subsection  for  any
  taxable  year  shall exceed the taxpayer's tax for such year, the excess
  may be carried over to the following year or years and may  be  deducted
  from the taxpayer's tax for such year or years. In lieu of carrying over
  any  such excess, a taxpayer who qualified as an owner of a new business
  for purposes of paragraph ten of subsection (a) of this section may,  at
  his option, receive fifty percent of such excess as a refund. Any refund
  paid  pursuant  to  this  paragraph shall be deemed to be a refund of an
  overpayment of tax as provided in section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    (k) Empire zone wage tax credit. (1) A taxpayer  shall  be  allowed  a
  credit,  to be computed as hereinafter provided, against the tax imposed
  by this article, where the  taxpayer  has  been  certified  pursuant  to
  article  eighteen-B  of  the  general  municipal law. The amount of such
  credit shall be as prescribed in paragraph four of this subsection.
    (2) For the purposes of this subsection,  the  following  terms  shall
  have the following meanings: (A) "Empire zone wages" means wages paid by
  the  taxpayer  for  full-time  employment during the taxable year, in an
  area designated or previously designated  as  an  empire  zone  or  zone
  equivalent  area pursuant to article eighteen-B of the general municipal
  law, where such employment is in a job created in the  area  (i)  during
  the  period of its designation as an empire zone, (ii) within four years
  of the expiration of such designation, or  (iii)  during  the  ten  year
  period   immediately  following  the  date  of  designation  as  a  zone
  equivalent area, provided, however, that if the taxpayer's certification
  under article eighteen-B of the general municipal law  is  revoked  with
  respect to an empire zone or zone equivalent area, any wages paid by the
  taxpayer,  on  or  after the effective date of such decertification, for
  employment in such zone shall not constitute empire zone wages.
    (B) "Targeted employee" means a New York resident who receives  empire
  zone wages and who is (i) an eligible individual under the provisions of
  the  targeted jobs tax credit (section fifty-one of the internal revenue
  code), (ii) eligible for benefits under the provisions of the  workforce
  investment  act  as  a  dislocated worker or low-income individual (P.L.
  105-220, as amended), (iii) a recipient of public  assistance  benefits,
  (iv)  an  individual whose income is below the most recently established
  poverty rate promulgated by the United States department of commerce, or
  a member of a family whose family income  is  below  the  most  recently
  established  poverty  rate promulgated by the appropriate federal agency
  or (v) an honorably discharged member of any branch of the armed  forces
  of the United States.
    An  individual  who  satisfies  the  criteria set forth in clause (i),
  (ii), (iv) or (v) at the time of initial  employment  in  the  job  with
  respect  to  which the credit is claimed, or who satisfies the criterion
  set forth in clause (iii) at  such  time  or  at  any  time  within  the
  previous  two  years,  shall  be  a  targeted  employee  so long as such
  individual continues to receive empire zone wages.
    (C) "Average  number  of  individuals  employed  full-time"  shall  be
  computed  by ascertaining the number of such individuals employed by the
  taxpayer on the thirty-first day of March, the thirtieth  day  of  June,
  the  thirtieth  day  of  September  and the thirty-first day of December
  during each taxable year or other applicable period, by adding  together
  the  number  of  such  individuals ascertained on each of such dates and
  dividing the sum so obtained by  the  number  of  such  dates  occurring
  within such taxable year or other applicable period.
    (3)  The  credit  provided  for herein shall be allowed only where the
  average number of individuals employed full-time by the taxpayer in  (i)
  the  state and (ii) the empire zone or area previously constituting such
  zone or zone equivalent  area,  during  the  taxable  year  exceeds  the
  average number of such individuals employed full-time by the taxpayer in
  (i)  the  state  and  (ii)  such zone or area subsequently or previously
  constituting such zone  or  such  zone  equivalent  area,  respectively,
  during  the  four  years immediately preceding the first taxable year in
  which the credit is claimed with respect to such zone or area. Where the
  taxpayer provided full-time employment within (i) the state or (ii) such
  zone or area during only a portion of such four-year  period,  then  for
  purposes  of  this  paragraph  the  term "four years" shall be deemed to
  refer instead to such portion, if any.
    The credit shall be allowed only with respect  to  the  first  taxable
  year  during  which  payments  of  empire  zone  wages  are made and the
  conditions set forth in this paragraph are satisfied, and  with  respect
  to each of the four taxable years next following (but only, with respect
  to  each of such years, if such conditions are satisfied), in accordance
  with paragraph four of this subsection. Subsequent certifications of the
  taxpayer pursuant to article eighteen-B of the general municipal law, at
  the same or a different  location  in  the  same  empire  zone  or  zone
  equivalent  area  or  at  a  location in a different empire zone or zone
  equivalent area, shall not extend the five taxable year time  limitation
  on  the  allowance  of  the  credit set forth in the preceding sentence.
  Provided, further, however, that no credit shall be allowed with respect
  to any taxable year beginning more than four years following the taxable
  year in which designation as an empire zone expired  or  more  than  ten
  years after the designation as a zone equivalent area.
    (4) The amount of the credit shall equal the sum of
    (i)  the  product  of three thousand dollars and the average number of
  individuals employed full-time by the taxpayer, computed pursuant to the
  provisions of subparagraph (C) of paragraph two of this subsection, who
    (I) received empire zone wages for more than half of the taxable year,
    (II) received with  respect  to  more  than  half  of  the  period  of
  employment by the taxpayer during the taxable year, an hourly wage which
  was  at  least  one  hundred  thirty-five  percent  of  the minimum wage
  specified in section six hundred fifty-two of the labor law, and
    (III) are targeted employees; and
    (ii) the product of fifteen hundred dollars and the average number  of
  individuals (excluding individuals described in subparagraph (i) of this
  paragraph)  employed full-time by the taxpayer, computed pursuant to the
  provisions of subparagraph (C) of paragraph two of this subsection,  who
  received empire zone wages for more than half of the taxable year.
    Provided,  further,  however, that the credit provided for herein with
  respect to the taxable year,  and  carryovers  of  such  credit  to  the
  taxable  year,  deducted  from  the  tax  otherwise due, may not, in the
  aggregate, exceed fifty percent of the tax  imposed  under  section  six
  hundred  one  computed  without  regard to any credit provided for under
  this article.
    (iii)  For  purposes  of  calculating  the  amount  of   the   credit,
  individuals  employed  within  an  empire  zone  or zone equivalent area
  within the immediately preceding sixty months by a  related  person,  as
  such  term  is  defined  in  subparagraph  (c)  of  paragraph  three  of
  subsection (b) of  section  four  hundred  sixty-five  of  the  internal
  revenue code, shall not be included in the average number of individuals
  described  in  subparagraph  (i) or subparagraph (ii) of this paragraph,
  unless such related  person  was  never  allowed  a  credit  under  this
  subsection  with  respect  to  such  employees.  For  purposes  of  this
  subparagraph, a "related person" shall include  an  entity  which  would
  have  qualified as a "related person" to the taxpayer if it had not been
  dissolved, liquidated, merged with another entity or otherwise ceased to
  exist or operate.
    (iv) If a taxpayer is certified in an  empire  zone  designated  under
  subdivision  (a)  or  (d)  of  section  nine  hundred fifty-eight of the
  general municipal law, the dollar amounts specified  under  subparagraph
  (i) or (ii) of this paragraph shall be increased by five hundred dollars
  for  each  qualifying  individual  under such subparagraph who received,
  during the taxable year, wages in excess of forty thousand dollars.
    (5) If the amount of the credit and carryovers of such credit  allowed
  under  this  subsection for any taxable year shall exceed the taxpayer's
  tax for such year, the excess, as well as any  part  of  the  credit  or
  carryovers  of  such credit, or both, which may not be deducted from the
  tax otherwise due by reason of the  final  sentence  in  paragraph  four
  hereof,  may  be  carried over to the following year or years and may be
  deducted from the taxpayer's tax for such year  or  years.  In  lieu  of
  carrying over any such excess, a taxpayer who qualifies as an owner of a
  new  business  for  purposes  of paragraph ten of subsection (a) of this
  section may, at his option, receive fifty percent of such  excess  as  a
  refund. Any refund paid pursuant to this paragraph shall be deemed to be
  a  refund  of  an  overpayment of tax as provided in section six hundred
  eighty-six of this article, provided, however, that no interest shall be
  paid thereon.
    (l) Empire zone capital tax credit.  (1) A taxpayer shall be allowed a
  credit against the tax imposed by this article. The amount of the credit
  shall be equal to twenty-five  percent  of  the  sum  of  the  following
  investments and contributions made during the taxable year and certified
  by  the  commissioner  of  economic  development:  (A) for taxable years
  beginning before January first, two thousand five, qualified investments
  made in, or contributions in the form of donations made to, one or  more
  empire  zone  capital  corporations established pursuant to section nine
  hundred sixty-four of the general municipal law prior to January  first,
  two   thousand   five,  (B)  qualified  investments  in  certified  zone
  businesses which during the twelve month  period  immediately  preceding
  the month in which such investment is made employed full-time within the
  state  an  average  number of individuals of two hundred fifty or fewer,
  computed pursuant to the provisions of subparagraph (C) of paragraph two
  of subsection (k) of this section, except for investments made by or  on
  behalf  of  an  owner  of  the business including, but not limited to, a
  stockholder, partner or sole  proprietor,  or  any  related  person,  as
  defined  in  subparagraph  (C)  of  paragraph three of subsection (b) of
  section four hundred sixty-five of the internal revenue  code,  and  (C)
  contributions  of  money to community development projects as defined in
  regulations promulgated by the  commissioner  of  economic  development.
  "Qualified   investments"  means  the  contribution  of  property  to  a
  corporation in exchange  for  original  issue  capital  stock  or  other
  ownership  interest,  the  contribution  of property to a partnership in
  exchange for an interest in the partnership, and  similar  contributions
  in the case of a business entity not in corporate or partnership form in
  exchange  for  an ownership interest in such entity. The total amount of
  credit allowable to a taxpayer under this provision for all years, taken
  in the aggregate, shall not exceed three hundred thousand  dollars,  and
  shall  not  exceed  one  hundred  thousand  dollars  with respect to the
  investments and contributions described in each  of  subparagraphs  (A),
  (B) and (C) of this paragraph.
    * (2)  The  credit  allowed under this subsection for any taxable year
  shall not exceed the tax imposed by section  six  hundred  one  of  this
  article  for  the  taxable  year, reduced by the credits permitted under
  subsections (b) and (c) of this section and sections six hundred twenty,
  six hundred twenty-one and six hundred thirty-five of this article,  nor
  may any unused credit be carried over to the following year or years. In
  addition, no taxpayer shall be allowed such credit, or such credits with
  respect  to more than one year, taken in the aggregate, of more than one
  hundred thousand dollars. In addition, such credit may not exceed  fifty
  percent of the tax imposed under section six hundred one of this article
  computed without regard to any credit provided for by this section.
    * NB Applies to taxable years beginning on or after January 1, 1986
    * (2)  (A)  If  the amount of the credit and carryovers of such credit
  allowed under this subsection for any  taxable  year  shall  exceed  the
  taxpayer's tax for such year, or if any part of the credit or carryovers
  of  such credit may not be deducted from the tax otherwise due by reason
  of the final sentence of this subparagraph,  any  amount  of  credit  or
  carryovers  of  such credit thus not deductible in such taxable year may
  be carried over to the following year or years and may be deducted  from
  the  tax for such year or years. In addition, the amount of such credit,
  and carryovers of such credit to the taxable year, deducted from the tax
  otherwise due may not, in the aggregate, exceed fifty percent of the tax
  imposed under section six hundred one computed  without  regard  to  any
  credit provided for by this section.
    (B)  In  the  case  of  a  husband  or  wife who is required to file a
  separate return, the limitation provided for in paragraph  one  of  this
  subsection  shall  be  fifty  thousand  dollars  in  lieu of one hundred
  thousand dollars and one hundred fifty thousand dollars in lieu of three
  hundred thousand dollars, unless the  spouse  of  the  taxpayer  has  no
  credit  allowable  under  this  subsection  for the taxable year of such
  spouse which ends within or with the taxpayer's taxable year.
    (C) In the case of an estate or trust, the limitation provided for  in
  paragraph  one  of  this  subsection shall be reduced to an amount which
  bears the same ratio to one hundred thousand dollars and an amount which
  bears the same ratio to three hundred thousand dollars as the portion of
  the  income  of  the  estate  or  trust  which  is  not   allocated   to
  beneficiaries bears to the total income of the estate or trust.
    * NB Applies to taxable years beginning after 1986
    (3)  Where the stock, partnership interest or other ownership interest
  arising from a qualified investment as described  in  subparagraphs  (A)
  and  (B)  of  paragraph  one  of  this  subsection  is  disposed of, the
  taxpayer's New York  taxable  income  shall  be  computed,  pursuant  to
  regulations  promulgated  by the commissioner, so as to properly reflect
  the reduced cost thereof arising from  the  application  of  the  credit
  provided for herein.
    (4)  (A)  Where  a  taxpayer sells, transfers or otherwise disposes of
  corporate stock, a partnership  interest  or  other  ownership  interest
  arising  from  the making of a qualified investment which was the basis,
  in whole or in part, for the allowance of the credit provided for  under
  this  subsection,  or  where  a contribution or investment which was the
  basis for such allowance  is  in  any  manner,  in  whole  or  in  part,
  recovered  by  such  taxpayer,  and  such disposition or recovery occurs
  during the taxable year or within thirty-six months from  the  close  of
  the  taxable  year  with  respect  to  which  such  credit  is  allowed,
  subparagraph (B) of this paragraph shall apply.
    (B) The taxpayer shall add back with respect to the  taxable  year  in
  which  the disposition or recovery described in subparagraph (A) of this
  paragraph  occurred  the  required  portion  of  the  credit  originally
  allowed.
    (C) The required portion of the credit originally allowed shall be the
  product  of  (i) the portion of such credit attributable to the property
  disposed of or the  payment  or  contribution  recovered  and  (ii)  the
  applicable percentage.
    (D) The applicable percentage shall be:
    (i)  one hundred percent, if the disposition or recovery occurs within
  the taxable year with respect to which the credit is allowed  or  within
  twelve months of the end of such taxable year,
    (ii)  sixty-seven  percent, if the disposition or recovery occurs more
  than twelve but not more than twenty-four months after the  end  of  the
  taxable year with respect to which the credit is allowed, or
    (iii) thirty-three percent, if the disposition or recovery occurs more
  than  twenty-four  but  not more than thirty-six months after the end of
  the taxable year with respect to which the credit is allowed.
    (m) Excess deductions credit. (1) General. For taxable years beginning
  in nineteen hundred ninety-five, an excess deductions  credit  shall  be
  allowed  against the tax determined under subsections (a) through (d) of
  section six hundred one of this article. The credit shall be allowed  to
  an  individual  taxpayer  whose  New  York itemized deduction determined
  under section six hundred fifteen (whether or not  the  taxpayer  elects
  the  New  York itemized deduction for the taxable year) exceeds the base
  amount determined under paragraph  two  hereof.  The  credit  shall  not
  exceed  the  tax determined under subsections (a) through (d) of section
  six hundred one for the taxable year, reduced by the  credits  permitted
  under subsection (c) of this section and sections six hundred twenty and
  six hundred twenty-one of this article.
    (2) Base amount. The base amount shall be determined by the taxpayer's
  standard deduction status under section six hundred fourteen (whether or
  not the taxpayer employs the standard deduction for the taxable year) as
  follows:
 
  If the taxpayer's standard The base amount is:
  deduction status is:
  Unmarried individual who is
  not a head of household nor a
  surviving spouse nor an
  individual whose federal
  exemption amount is zero                    $6,000
 
  Husband and wife whose New York
  taxable income is determined
  jointly, or a surviving spouse              $9,500
 
  Head of household                           $7,000
 
  Married individual filing a
  separate New York return                    $4,750
    (3) Credit amount.
    (A)  Married  individuals  filing joint returns and surviving spouses.
  The amount of the credit allowed pursuant to this subsection for married
  individuals filing jointly under subsection (b) of section  six  hundred
  fifty-one and for a surviving spouse shall be:
 
  If New York taxable income is:              The credit is the
                                              following percentage of
                                              New York taxable income:
  Not over $11,500                            0.57%
  Over $11,500 but not over $17,500           0.51%
  Over $17,500 but not over $24,100           0.36%
  Over $24,100 but not over $31,500           0.26%
  Over $31,500 but not over $35,500           0.16%
  Over $35,500 but not over $42,000           0.11%
  Over $42,000 but not over $49,000           0.06%
  Over $49,000                                0.00%
 
    (B)  Heads of households. The amount of the credit allowed pursuant to
  this subsection for a head of household shall be:
 
  If New York taxable income is:              The credit is the
                                              following percentage of
                                              New York taxable income:
  Not over $7,600                             0.57%
  Over $7,600 but not over $11,700            0.51%
  Over $11,700 but not over $16,400           0.36%
  Over $16,400 but not over $20,500           0.26%
  Over $20,500 but not over $23,800           0.16%
  Over $23,800 but not over $28,650           0.11%
  Over $28,650 but not over $33,400           0.06%
  Over $33,400                                0.00%
 
    (C)  Unmarried  individuals  and  married  individuals filing separate
  returns. The amount of the credit allowed pursuant  to  this  subsection
  for  an  individual who is not a married individual filing jointly under
  subsection (b) of  section  six  hundred  fifty-one  nor  a  head  of  a
  household nor a surviving spouse shall be:
 
  If New York taxable income is:              The credit is the
                                              following percentage of
                                              New York taxable income:
  Not over $5,600                             0.57%
  Over $5,600 but not over $8,600             0.51%
  Over $8,600 but not over $12,000            0.36%
  Over $12,000 but not over $15,700           0.26%
  Over $15,700 but not over $17,600           0.16%
  Over $17,600 but not over $21,000           0.11%
  Over $21,000 but not over $24,500           0.06%
  Over $24,500                                0.00%
    (n)  Agricultural  property  tax credit. (1) General. In the case of a
  taxpayer who is an eligible farmer or an eligible farmer  who  has  paid
  taxes  pursuant  to a land contract, there shall be allowed a credit for
  the allowable school district property taxes. The term "allowable school
  district property taxes" means the school district property  taxes  paid
  during  the  taxable year on qualified agricultural property, subject to
  the acreage limitation provided in paragraph five of this subsection and
  the income limitation provided in paragraph six of this subsection. Such
  credit shall be allowed against the taxes imposed by  this  article  for
  the  taxable  year  reduced by the credits permitted by this article. If
  the credit exceeds the tax as so reduced, the taxpayer may receive,  and
  the comptroller, subject to a certificate of the commissioner, shall pay
  as an overpayment, without interest, the amount of such excess.
    (2)  Eligible  farmer.  For  purposes  of  this  subsection,  the term
  "eligible farmer" means a  taxpayer  whose  federal  gross  income  from
  farming  for  the  taxable year is at least two-thirds of excess federal
  gross income. The term "eligible farmer"  also  includes  an  individual
  other  than  the  taxpayer of record for qualified agricultural land who
  has paid the school district property taxes on such land pursuant  to  a
  contract  for  the  future  purchase  of  such  land; provided that such
  individual has a federal gross income from farming for the taxable  year
  which  is  at  least  two-thirds  of  excess  federal  gross income; and
  provided  further  that,  in  determining  such  income  eligibility,  a
  taxpayer  may,  for  any  taxable  year, use the average of such federal
  gross income from farming for that taxable year and such income for  the
  two  consecutive  taxable years immediately preceding such taxable year.
  Excess federal gross income means the amount  of  federal  gross  income
  from  all sources for the taxable year reduced by the sum (not to exceed
  thirty thousand dollars) of those items included in federal gross income
  which consist of (i) earned income,  (ii)  pension  payments,  including
  social  security  payments,  (iii)  interest,  and  (iv)  dividends. For
  purposes of this paragraph, the term "earned income" shall  mean  wages,
  salaries, tips and other employee compensation, and those items of gross
  income  which  are  includible  in  the computation of net earnings from
  self-employment.
    (3) School district property taxes. For purposes of  this  subsection,
  the  term  "school  district  property  taxes" means all property taxes,
  special  ad  valorem  levies  and  special  assessments,  exclusive   of
  penalties  and  interest,  levied  for  school  district purposes on the
  qualified agricultural property (A) owned by the taxpayer or  (B)  owned
  by  the  father,  mother, grandfather, grandmother, brother or sister of
  the  taxpayer  and  a  written agreement expressing intent to eventually
  purchase the land has been entered into.
    (4) Qualified agricultural property. For purposes of this  subsection,
  the  term  "qualified  agricultural property" means land located in this
  state which is used in agricultural production, and  land  improvements,
  structures  and  buildings  (excluding buildings used for the taxpayer's
  residential purpose) located on such land which are used or occupied  to
  carry out such production. Qualified agricultural property also includes
  land  set  aside  or  retired  under a federal supply management or soil
  conservation program or land that at the time it becomes  subject  to  a
  conservation easement, as defined under subsection (kk) of this section,
  met the requirements under this paragraph.
    (5)  Acreage  limitation.  (A)  Eligible  taxes. In the event that the
  qualified agricultural property owned by the taxpayer includes  land  in
  excess  of the base acreage as provided in this paragraph, the amount of
  school district property taxes eligible for credit under this subsection
  shall be that portion of the school district property taxes which  bears
  the  same  ratio to the total school district property taxes paid during
  the taxable year, as the acreage allowable under this paragraph bears to
  the entire acreage of such land.
    (B) Allowable acreage. The allowable acreage is the sum  of  the  base
  acreage  set  forth  below and fifty percent of the incremental acreage.
  The incremental acreage is the excess of the entire acreage of qualified
  agricultural land owned by the taxpayer over the base acreage. Except as
  provided in subparagraph (C) of this paragraph:
      For taxable years beginning:  The base acreage is:
      in 1997                                 100
      after 1997 but before 2006              250
      2006 and thereafter                     350
  For taxable years beginning after two thousand, total base  acreage  may
  be increased by any acreage enrolled or participating during the taxable
  year  in  a  federal  environmental conservation acreage reserve program
  pursuant to title three  of  the  federal  agriculture  improvement  and
  reform act of nineteen hundred ninety-six.
    (C)  Base  acreage  of  related persons. Where the taxpayer and one or
  more related persons each own qualified  agricultural  property  on  the
  first  day of March of any year, the base acreage under subparagraph (B)
  of this paragraph shall  be  divided  equally  and  allotted  among  the
  taxpayer  and  such related persons, and the taxpayer's base acreage for
  the taxable year which includes such March first shall be limited to its
  allotted share. Provided, however, if the taxpayer and all such  related
  persons consent (at such time and in such manner as the commissioner may
  prescribe)  to an unequal division, the taxpayer's base acreage for such
  taxable year shall be limited to its allotted share under  such  unequal
  division.
    (D)  Related  persons.  (i)  For  purposes of subparagraph (C) of this
  paragraph, the term "related person" means:
    (I) a spouse;
    (II) a corporation  subject  to  tax  under  article  nine-A  of  this
  chapter, where more than fifty percent in value of the outstanding stock
  of  the  corporation  is  owned,  directly  or indirectly, by or for the
  taxpayer, or, where the taxpayer is a trust, where such stock  is  owned
  directly or indirectly by or for the grantor of such trust;
    (III)  a  partnership,  estate  or  trust  of which the taxpayer owns,
  directly or indirectly, more than fifty percent of the capital,  profits
  or beneficial interest.
    (ii)  For  purposes  of  subparagraph (C) of this paragraph, where the
  taxpayer is an estate or trust, the term  "related  person"  shall  also
  mean  a corporation subject to tax under article nine-A of this chapter,
  a partnership, an estate or trust:
    (I) where more than fifty percent of the beneficial  interest  in  the
  taxpayer  is  owned, directly or indirectly, by or for such corporation,
  partnership, estate or trust or by or for the grantor of such trust; or
    (II) if the same person owns more than fifty percent of the beneficial
  interest in the taxpayer and more than fifty percent  in  value  of  the
  outstanding  stock of the corporation, or more than fifty percent of the
  capital or profits interest in  the  partnership,  or  more  than  fifty
  percent of the beneficial interest in the estate or trust.
    (iii)  In  determining whether a person is a related person within the
  meaning of this subparagraph:
    (I) stock owned, directly or indirectly,  by  or  for  a  corporation,
  partnership,  estate  or  trust  shall  be  considered  as  being  owned
  proportionately by or for its shareholders, partners or beneficiaries;
    (II) an individual shall be considered  as  owning  the  stock  owned,
  directly or indirectly, by or for his spouse;
    (III)  stock  constructively  owned  by  a  person  by  reason  of the
  application of item (I)  of  this  clause  shall,  for  the  purpose  of
  applying  item  (I) or (II) of this clause, be treated as actually owned
  by such person.
    (6) Income limitation. (A) In the event that  the  modified  New  York
  adjusted  gross  income  of  the  taxpayer  exceeds one hundred thousand
  dollars for taxable years beginning  before  two  thousand  six  or  two
  hundred   thousand  dollars  for  taxable  year  two  thousand  six  and
  thereafter, the allowable school district property taxes under paragraph
  one of this subsection shall be the eligible  taxes  under  subparagraph
  (A)  of  paragraph five of this subsection reduced by the product of the
  amount of such eligible taxes and a percentage, such  percentage  to  be
  determined  by  multiplying  one  hundred  percent  by  a  fraction, the
  numerator of which is the lesser of fifty thousand dollars  for  taxable
  years  beginning before two thousand six or one hundred thousand dollars
  for taxable year two thousand six and thereafter or the  excess  of  the
  taxpayer's  modified  New  York  adjusted  gross income over one hundred
  thousand dollars for taxable years beginning before two thousand six  or
  two  hundred  thousand  dollars  for  taxable  year two thousand six and
  thereafter and the denominator of which is fifty  thousand  dollars  for
  taxable  years beginning before two thousand six or one hundred thousand
  dollars for taxable year two thousand six and thereafter.  For  purposes
  of  the preceding sentence, the term "eligible taxes", where the acreage
  limitation of paragraph five of this subsection does  not  apply,  shall
  mean  the  total  school district property taxes paid during the taxable
  year.
    (B) The term "modified New York adjusted gross income" means  the  New
  York adjusted gross income for the taxable year reduced by the amount of
  principal  paid  on  farm indebtedness during the taxable year. The term
  "farm indebtedness" means debt incurred or refinanced which  is  secured
  by  farm  property,  where  the  proceeds  of the debt are disbursed for
  expenditures incurred in the business of farming.
    (7) Nonqualified use. (A) No credit in conversion year. In  the  event
  that  qualified  agricultural  property  is converted by the taxpayer to
  nonqualified use, credit under this subsection shall not be allowed with
  respect to such  property  for  the  taxable  year  of  conversion  (the
  conversion year).
    (B)  Credit  recapture. If the conversion by the taxpayer of qualified
  agricultural property to nonqualified use occurs during  the  period  of
  the  two  taxable  years following the taxable year for which the credit
  under this subsection was first claimed with respect to  such  property,
  the  credit  allowed with respect to such property for the taxable years
  prior to the conversion year must be added back in the conversion  year.
  Where  the property converted includes land, and where the conversion is
  of only a portion of such land, the credit allowed with respect  to  the
  property  converted shall be determined by multiplying the entire credit
  under this subsection for the taxable years prior to the conversion year
  by a fraction, the numerator of which is the acreage converted  and  the
  denominator  of  which  is  the entire acreage of such land owned by the
  taxpayer immediately prior to the conversion.
    (C) Exception to recapture. Subparagraph (B) of this  paragraph  shall
  not  apply  to  the  conversion  of  property where the conversion is by
  reason of involuntary conversion, within  the  meaning  of  section  one
  thousand thirty-three of the internal revenue code.
    (D)  Conversion to nonqualified use. For purposes of this paragraph, a
  sale or other disposition of qualified agricultural property alone shall
  not constitute a conversion to a nonqualified use.
    (8) Special rules. For purposes of this subsection, the term  "federal
  gross   income  from  farming"  shall  include  gross  income  from  the
  production of maple syrup, cider, Christmas trees derived from a managed
  Christmas tree operation whether dug for transplanting or cut  from  the
  stump,  or  from  a  commercial  horse  boarding operation as defined in
  subdivision thirteen of section three hundred one of the agriculture and
  markets law, or from the sale of wine from a  licensed  farm  winery  as
  provided for in article six of the alcoholic beverage control law.
    (9)  Election  to  deem  gross  income  of  New  York C corporation to
  shareholders. (A)  General.  For  purposes  of  the  credit  under  this
  subsection,  the  shareholders  of  an eligible corporation may elect to
  take into account their pro rata shares of the corporation's income  and
  principal  payments on farm indebtedness as provided in subparagraph (B)
  of this paragraph, for the taxable year of the corporation  ending  with
  or  within  the taxable year of each shareholder. No election under this
  paragraph shall be  effective  unless  shareholders  holding  more  than
  one-half,  by  vote and value, of the shares of stock of the corporation
  on the day on which the election is made have so elected.
    (B) Inclusion in gross and adjusted gross income. (i) For any  taxable
  year  of  the corporation for which the election under this paragraph is
  in effect, the shareholders of the corporation shall include:
    (I) in gross income, for purposes of paragraph two of this subsection,
  their pro rata shares of the corporation's gross  income,  which  income
  shall have the same character as in the hands of the corporation, and
    (II)  in  adjusted gross income, for purposes of paragraph six of this
  subsection, their pro  rata  shares  of  the  corporation's  entire  net
  income, and
    (III)  in  principal  payments  on  farm indebtedness, for purposes of
  paragraph six of this subsection, their pro rata shares of such payments
  made by the corporation.
    (ii) Tiered New York C and New York S corporation. In the event that a
  shareholder of the corporation is a New York S corporation, the New York
  S corporation shall make the inclusions prescribed by clause (i) of this
  subparagraph (except that the inclusion prescribed by subclause (II)  of
  such  clause  shall  be  in  the  entire  net  income  of the New York S
  corporation), and the New York S corporation  shall  pass  through  such
  inclusions  in pro rata shares to its shareholders for purposes of their
  calculation of credit under this subsection.
    (C)  Eligible  corporation.  The  term  "eligible corporation" means a
  corporation subject to tax under article nine-A of this chapter which is
  a New York C corporation for federal income tax purposes.
    (D) Pro rata share. For purposes of this paragraph, the pro rata share
  of any item of income or farm  indebtedness  principal  payments  for  a
  taxable  year  of  the corporation shall be determined with respect to a
  shareholder by assigning an equal portion of the item  to  each  day  of
  such  taxable year, and then by dividing that portion pro rata among the
  shares outstanding on such day.
    (E) Election. (i) An election under subparagraph (A) of this paragraph
  shall be made on such form and in such manner as  the  commissioner  may
  prescribe.
    (ii) When made. Such election shall be made no later than the due date
  of  the corporation tax return (determined without regard to extensions)
  for the corporation's taxable year for  which  the  election  is  to  be
  effective.
    (iii) When effective. Such election shall be effective for the taxable
  year  of  the  corporation  for  which it is made and for all succeeding
  taxable years of the corporation,  until  such  election  is  terminated
  under subparagraph (F) of this paragraph.
    (F) Termination. (i) Revocation. An election under subparagraph (A) of
  this  paragraph  shall  be  terminated if shareholders holding more than
  one-half, by vote and value, of the shares of stock of  the  corporation
  on  the  day  on  which the revocation is made revoke the election. Such
  revocation shall be made  on  such  form  and  in  such  manner  as  the
  commissioner  may  prescribe, and shall be effective on the first day of
  the  corporation's  taxable  year  following  the  date  on  which   the
  revocation is made.
    (ii)  Ineligible  corporation.  An  election under subparagraph (A) of
  this paragraph shall be terminated on the first day of the corporation's
  taxable year with respect to which  the  corporation  ceases  to  be  an
  eligible corporation.
    (G)  Election  after  termination.  If an election is terminated under
  subparagraph  (F)  of  this  paragraph,  no   further   election   under
  subparagraph  (A)  of  this  paragraph  shall  be  made before the fifth
  taxable year of the corporation following the taxable year during  which
  the  termination  occurred,  unless  the  commissioner  consents to such
  election.
    (H) Waiver of secrecy. The commissioner shall have authority to reveal
  to shareholders of the  corporation  any  information  with  respect  to
  income  or  farm indebtedness principal payments of the corporation, for
  any taxable year of the corporation for which the  election  under  this
  paragraph  is  in  effect,  which is the basis for denial in whole or in
  part of the credit claimed by such shareholders.
    (o) Credit for employment of persons with disabilities. (1)  Allowance
  of  credit.  A  taxpayer  shall  be  allowed a credit, to be computed as
  hereinafter provided, against the  tax  imposed  by  this  article,  for
  employing within the state a qualified employee.
    (2) Qualified employee. A qualified employee is an individual:
    (A) who is certified by the education department, or in the case of an
  individual  who  is  blind  or visually handicapped, by the state agency
  responsible for provision of vocation  rehabilitation  services  to  the
  blind  and visually handicapped: (i) as a person with a disability which
  constitutes or results in a substantial handicap to employment and  (ii)
  as  having  completed  or  as receiving services under an individualized
  written rehabilitation plan approved  by  the  education  department  or
  other  state  agency responsible for providing vocational rehabilitation
  services to such individual; and
    (B)  who  has  worked  on  a  full-time  basis for the employer who is
  claiming the credit for at least one hundred eighty days or four hundred
  hours.
    (3) Amount of credit. Except as provided in  paragraph  four  of  this
  subsection,  the  amount  of  credit shall be thirty-five percent of the
  first six thousand dollars in qualified first-year wages earned by  each
  qualified  employee.  "Qualified  first-year  wages" means wages paid or
  incurred by the taxpayer during the taxable year to qualified  employees
  which  are  attributable, with respect to any such employee, to services
  rendered during the one-year period beginning with the day the  employee
  begins work for the taxpayer.
    (4)  Credit  where  federal  work opportunity tax credit applies. With
  respect to any qualified employee whose qualified first-year wages under
  paragraph three of this subsection also constitute qualified  first-year
  wages  for  purposes  of  the work opportunity tax credit for vocational
  rehabilitation referrals under section fifty-one of the internal revenue
  code, the amount of credit under this subsection  shall  be  thirty-five
  percent of the first six thousand dollars in qualified second-year wages
  earned  by each such employee. "Qualified second-year wages" means wages
  paid or incurred by the taxpayer during the taxable  year  to  qualified
  employees  which are attributable, with respect to any such employee, to
  services rendered during the one-year period beginning  one  year  after
  the employee begins work for the taxpayer.
    (5) Carryover. If the amount of credit allowable under this subsection
  for  any taxable year shall exceed the taxpayer's tax for such year, the
  excess may be carried over to the following year or years,  and  may  be
  deducted from the taxpayer's tax for such year or years.
    (6)  Coordination  with  federal  work  opportunity  tax  credit.  The
  provisions of sections fifty-one and fifty-two of the  internal  revenue
  code,  as  such  sections  applied  on  October  first, nineteen hundred
  ninety-six, that apply to the work opportunity tax credit for vocational
  rehabilitation referrals shall apply to the credit under this subsection
  to the extent that  such  sections  are  consistent  with  the  specific
  provisions  of this subsection, provided that in the event of a conflict
  the provisions of this subsection shall control.
    (p) Alternative fuels credit.    (1)  General.  A  taxpayer  shall  be
  allowed  a  credit,  to be computed as hereinafter provided, against the
  tax imposed by this article, for electric vehicles,  clean-fuel  vehicle
  property,  clean-fuel  vehicle  refueling  property and qualified hybrid
  vehicles placed in service during the taxable year.  Provided,  however,
  that the credit provided for by this subsection with respect to electric
  vehicles  shall  not  be  allowed  to  a  gas corporation or an electric
  corporation  as   defined   in   subdivisions   eleven   and   thirteen,
  respectively,  of  section  two  of the public service law, or a gas and
  electric corporation as described in section sixty-four  of  the  public
  service law, where such corporation is subject to the supervision of the
  department of public service.
    (2)  Electric  vehicles. The credit under this subsection for electric
  vehicles shall equal fifty percent of the incremental cost of  any  such
  vehicle
    (A) which is registered in this state and
    (B) for which a credit is allowed under section thirty of the internal
  revenue code (determined without regard to the limitations prescribed in
  subsection  (b)  or  the  elections prescribed in subsection (d) of such
  section, including the election with  respect  to  section  one  hundred
  seventy-nine of such code),
    (C)  provided,  however,  the  credit with respect to any such vehicle
  shall not exceed five thousand dollars.
    (3)  Clean-fuel vehicle property. The credit under this subsection for
  clean-fuel vehicle property shall equal sixty percent of the cost of any
  such property
    (A) for which  a  deduction  is  allowed  under  section  one  hundred
  seventy-nine-A  of  the internal revenue code (determined without regard
  to the limitations prescribed in paragraph one of subsection (b) of such
  section or the election referred to in subsection (e)  of  such  section
  with  respect to section one hundred seventy-nine of such code), but not
  including clean-fuel vehicle property relating  to  a  qualified  hybrid
  vehicle  as such vehicle is defined in subparagraph (E) of paragraph six
  of this subsection and
    (B) which is installed in or manufactured as part of a  motor  vehicle
  which is registered in this state,
    (C)  provided,  however,  the  credit with respect to any such vehicle
  shall not exceed five thousand dollars per vehicle for vehicles  with  a
  gross  vehicle weight rating of fourteen thousand pounds or less and ten
  thousand dollars per vehicle for all other vehicles.
    (4) Clean-fuel vehicle  refueling  property.  The  credit  under  this
  subsection  for  clean-fuel vehicle refueling property shall equal fifty
  percent of the cost of any such property
    (A) which is located in this state and
    (B) for which  a  deduction  is  allowed  under  section  one  hundred
  seventy-nine-A  of  the internal revenue code (determined without regard
  to the limitations prescribed in paragraph two of subsection (b) of such
  section or the election referred to in subsection (e)  of  such  section
  with  respect to section one hundred seventy-nine of such code), but not
  including clean-fuel vehicle refueling property relating to a  qualified
  hybrid  vehicle  as  such  vehicle  is  defined  in  subparagraph (E) of
  paragraph six of this subsection.
    (5) Qualified hybrid vehicle. The credit  under  this  subsection  for
  qualified  hybrid  vehicles shall equal two thousand dollars per vehicle
  registered in this state.
    (6) Definitions. (A) The term "electric  vehicle"  means  a  qualified
  electric  vehicle within the meaning of subsection (c) of section thirty
  of the internal revenue code.
    (B) The terms "clean-fuel vehicle property"  and  "clean-fuel  vehicle
  refueling property" mean any such property which is qualified within the
  meaning of subsections (c) and (d), respectively, of section one hundred
  seventy-nine-A  of  the  internal revenue code, but such terms shall not
  include clean-fuel vehicle  property  or  clean-fuel  vehicle  refueling
  property  relating  to  a  qualified  hybrid  vehicle as such vehicle is
  defined in subparagraph (E) of this paragraph.
    (C) The term "clean-fuel" means natural gas, liquefied petroleum  gas,
  hydrogen,  electricity, and any other fuel which is at least eighty-five
  percent, singly or in combination, methanol, ethanol, any other alcohol,
  or ether.
    (D) The term "incremental cost" shall mean the excess of the  cost  of
  an electric vehicle over the cost of a gasoline-powered vehicle which is
  similar in size and style.
    (E)  The  term  "qualified  hybrid  vehicle" means a motor vehicle, as
  defined in section one hundred twenty-five of the  vehicle  and  traffic
  law,  other  than  an  electric  vehicle  (as  such  term  is defined in
  subparagraph (A) of this paragraph), that:
    (i) draws propulsion energy from both
    (a)  an  internal  combustion  engine  (or  heat  engine   that   uses
  combustible fuel); and
    (b) an energy storage device; and
    (ii) employs a regenerative vehicle braking system that recovers waste
  energy to charge such energy storage device.
    (7)   Carryovers.  If  the  amount  of  credit  allowable  under  this
  subsection shall exceed the taxpayer's tax for such year, the excess may
  be carried over to the following year or years and may be deducted  from
  the taxpayer's tax for such year or years.
    (8) Credit recapture. (A) Vehicles.
    (i)  If,  within  three  full years from the date an electric vehicle,
  qualified hybrid vehicle  or  a  vehicle  of  which  clean-fuel  vehicle
  property  is  a  part  is  placed  in  service,  such  electric vehicle,
  qualified hybrid vehicle or clean-fuel vehicle  property  ceases  to  be
  qualified,  a  recapture  amount  must  be added back in the tax year in
  which such cessation occurs.
    (ii) Cessation of qualification. (I) An electric vehicle ceases to  be
  qualified if
    (a)  it  is  modified  by the taxpayer so that it no longer is powered
  primarily by electricity, or
    (b) the taxpayer receiving the credit under this subsection  sells  or
  disposes of the vehicle and knows or has reason to know that the vehicle
  will be so modified.
    (II) A qualified hybrid vehicle ceases to be qualified if
    (a)  it  is  modified  by  the taxpayer so that it no longer meets the
  requirements of a qualified hybrid vehicle as  defined  in  subparagraph
  (E) of paragraph six of this subsection.
    (b)  the  taxpayer receiving the credit under this subsection sells or
  disposes of the vehicle and knows or has reason to know that the vehicle
  will be so modified.
    (III) Clean-fuel vehicle property ceases to be qualified if
    (a) the vehicle of which it is a part is modified by the  taxpayer  so
  that it may no longer be propelled by a clean-burning fuel, or
    (b)  the  vehicle  otherwise  ceases to qualify as property defined in
  subsection (c) of section one hundred  seventy-nine-A  of  the  internal
  revenue code, or
    (c)  the  taxpayer receiving the credit under this subsection sells or
  disposes of the vehicle and knows or has reason to know that the vehicle
  will be used in a manner described in subclause (a) or (b) of this item.
    (iii) Recapture amount. The recapture amount is equal  to  the  credit
  allowable under this subsection multiplied by:
    (I)  one  hundred  percent,  if  the cessation of qualification occurs
  within the first full year after the  date  the  vehicle  is  placed  in
  service,
    (II)   sixty-six   and   two-thirds   percent,  if  the  cessation  of
  qualification occurs within the second full  year  after  the  date  the
  vehicle is placed in service, or
    (III)   thirty-three  and  one-third  percent,  if  the  cessation  of
  qualification occurs within the third  full  year  after  the  date  the
  vehicle is placed in service.
    (B)  Clean-fuel vehicle refueling property. (i) If, at any time before
  the end of its recovery period, clean-fuel  vehicle  refueling  property
  ceases  to  be  qualified,  a recapture amount must be added back in the
  year in which such cessation occurs.
    (ii) Cessation of qualification. Clean-fuel vehicle refueling property
  ceases to be qualified if
    (I)  the  property  no  longer  qualifies  as  property  described  in
  subsection  (d)  of  section  one hundred seventy-nine-A of the internal
  revenue code, or
    (II) fifty percent or more of the use of the  property  in  a  taxable
  year is other than in a trade or business in this state, or
    (III) the taxpayer receiving the credit under this subsection sells or
  disposes  of  the  property  and  knows  or  has reason to know that the
  property will be used in a manner described in item (I) or (II) of  this
  clause.
    (iii)  Recapture  amount.  The recapture amount is equal to the credit
  allowable under this subsection multiplied by a fraction, the  numerator
  of  which is the total recovery period for the property minus the number
  of recovery years prior to, but not including, the recapture  year,  and
  the denominator of which is the total recovery period.
    (9) Termination. This subsection shall not apply to property placed in
  service  in  taxable  years  beginning  after December thirty-first, two
  thousand four.
    (q) Qualified emerging technology company  employment  credit.  (1)  A
  taxpayer  shall  be  allowed  a  credit,  to  be computed as hereinafter
  provided, against the tax imposed by this article, provided:
    (A) the  taxpayer  is  a  sole  proprietor  of  a  qualified  emerging
  technology  company,  a  member  of  a  partnership which is a qualified
  emerging  technology  company,  or  a  shareholder  of  a  New  York   S
  corporation which is a qualified emerging technology company, as defined
  in section thirty-one hundred two-e of the public authorities law; and
    (B)  the  average  number  of  individuals  employed full-time by such
  company in New York state during  the  taxable  year  is  at  least  one
  hundred  one  percent  of  such  company's base year employment. For the
  purposes of this subsection, "base year employment"  means  the  average
  number  of  individuals  employed full-time by such company in the state
  during the three taxable years immediately preceding the  first  taxable
  year  in  which  the  credit  is  claimed.  Where  such company provided
  full-time employment within the state during  only  a  portion  of  such
  three-year period, then for purposes of this subsection, the term "three
  years"  shall  be  deemed  to  refer  instead to such portion, provided,
  however, the first taxable year for which this credit may be taken  with
  respect  to such company shall be the next year following the first full
  taxable year that such company had  full-time  employment  in  New  York
  state.
    (2)  The  credit  shall  be  allowed only in the first taxable year in
  which the credit is claimed and in each of the next two  taxable  years,
  provided  that  the  conditions  of paragraph one of this subsection are
  satisfied in each taxable year.
    (3) For the purposes of this subsection, average number of individuals
  employed full-time shall be  computed  by  adding  the  number  of  such
  individuals  employed  by such company at the end of each quarter during
  each taxable year or other applicable period and  dividing  the  sum  so
  obtained  by  the  number of such quarters occurring within such taxable
  year or other applicable period; provided, however,  that  in  computing
  base year employment there shall be excluded therefrom any employee with
  respect  to  whom  a  credit  provided  for under subsection (k) of this
  section is claimed for the taxable year.
    (4) The amount of the credit shall equal the product of  one  thousand
  dollars  multiplied  by  the number of individuals employed full-time by
  such company in the taxable year that  are  in  excess  of  one  hundred
  percent of such company's base year employment.
    (5)  If  the  amount  of  credit allowed under this subsection for any
  taxable year shall exceed the taxpayer's tax for such year,  the  excess
  shall  be treated as an overpayment of tax to be credited or refunded in
  accordance with the provisions of section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    (r) Qualified emerging technology company capital tax  credit.  (1)  A
  taxpayer  shall  be  allowed  a  credit  against the tax imposed by this
  article. The amount of the credit shall be equal to one of the following
  percentages, per each  qualified  investment  in  a  qualified  emerging
  technology company as defined in section thirty-one hundred two-e of the
  public  authorities  law, made during the taxable year, and certified by
  the commissioner, either:
    (A)  ten  percent  of  qualified  investments  in  qualified  emerging
  technology  companies, except for investments made by or on behalf of an
  owner of the business, including, but not  limited  to,  a  stockholder,
  partner  or  sole  proprietor,  or  any  related  person,  as defined in
  subparagraph (C) of paragraph three of subsection (b)  of  section  four
  hundred  sixty-five of the internal revenue code, and provided, however,
  that the taxpayer certifies  to  the  commissioner  that  the  qualified
  investment  will not be sold, transferred, traded, or disposed of during
  the four years following the year in which the credit is first  claimed;
  or
    (B)  twenty  percent  of  qualified  investments in qualified emerging
  technology companies, except for investments made by or on behalf of  an
  owner  of  the  business,  including, but not limited to, a stockholder,
  partner or sole  proprietor,  or  any  related  person,  as  defined  in
  subparagraph  (C)  of  paragraph three of subsection (b) of section four
  hundred sixty-five of the internal revenue code, and provided,  however,
  that  the  taxpayer  certifies  to  the  commissioner that the qualified
  investment will not be sold, transferred, traded, or disposed of  during
  the nine years following the year in which the credit is first claimed.
    (C)  "Qualified  investment"  means  the contribution of property to a
  corporation in exchange  for  original  issue  capital  stock  or  other
  ownership  interest,  the  contribution  of property to a partnership in
  exchange for an interest in the partnership, and  similar  contributions
  in the case of a business entity not in corporate or partnership form in
  exchange  for  an ownership interest in such entity. The total amount of
  credit allowable to a taxpayer under this provision for all years, taken
  in the aggregate, shall not exceed one hundred fifty thousand dollars in
  the case of investments  made  pursuant  to  subparagraph  (A)  of  this
  paragraph  and  shall  not  exceed three hundred thousand dollars in the
  case of investments made pursuant to subparagraph (B) of this paragraph.
    (2) (A) If the amount of the credit  and  carryovers  of  such  credit
  allowed  under  this  subsection  for  any taxable year shall exceed the
  taxpayer's tax for such year, any amount of credit or carryovers of such
  credit thus not deductible in such taxable year may be carried  over  to
  the  following  year  or years and may be deducted from the tax for such
  year or years. In addition, the amount of such credit, and carryovers of
  such credit to the taxable year, deducted from the tax otherwise due may
  not, in the aggregate, exceed fifty percent of  the  tax  imposed  under
  section  six  hundred one computed without regard to any credit provided
  for by this section.
    (B) In the case of a husband  or  wife  who  is  required  to  file  a
  separate  return,  the  limitations  provided for in subparagraph (c) of
  paragraph one of this subsection shall be seventy-five thousand  dollars
  in  lieu  of  one  hundred fifty thousand dollars, and one hundred fifty
  thousand dollars in lieu of three hundred thousand dollars,  unless  the
  spouse of the taxpayer has no credit allowable under this subsection for
  the taxable year of such spouse which ends within or with the taxpayer's
  taxable year.
    (C) In the case of an estate or trust, the limitations provided for in
  paragraph  one  of  this  subsection shall be reduced to an amount which
  bears the same ratio to one hundred fifty thousand dollars and an amount
  which bears the same ratio to three  hundred  thousand  dollars  as  the
  portion  of  the income of the estate or trust which is not allocated to
  beneficiaries bears to the total income of the estate or trust.
    (3)  (A)  Where  a  taxpayer sells, transfers or otherwise disposes of
  corporate stock, a partnership  interest  or  other  ownership  interest
  arising  from  the making of a qualified investment which was the basis,
  in whole or in part, for the allowance of the credit provided for  under
  subparagraph  (A)  of  paragraph  one  of  this  subsection, or where an
  investment which was the basis for such allowance is,  in  whole  or  in
  part,  recovered  by  such  taxpayer,  and  such disposition or recovery
  occurs during the taxable year or within  forty-eight  months  from  the
  close  of the taxable year with respect to which such credit is allowed,
  the taxpayer shall add back, with respect to the taxable year  in  which
  the  disposition  or  recovery  described  above  occurred, the required
  portion of the credit originally allowed.
    (B) Where  a  taxpayer  sells,  transfers  or  otherwise  disposes  of
  corporate  stock,  a  partnership  interest  or other ownership interest
  arising from the making of a qualified investment which was  the  basis,
  in  whole or in part, for the allowance of the credit provided for under
  subparagraph (B) of paragraph  one  of  this  subsection,  or  where  an
  investment  which  was the basis for such allowance is in any manner, in
  whole or in part, recovered by such taxpayer, and  such  disposition  or
  recovery  occurs  during  the  taxable  year or within one hundred eight
  months from the close of the taxable year with  respect  to  which  such
  credit  is  allowed,  the  taxpayer  shall add back, with respect to the
  taxable  year  in  which  the  disposition  or  recovery  described   in
  subparagraph  one of this paragraph occurred the required portion of the
  credit originally allowed.
    (C) The required portion of the credit originally allowed shall be the
  product of (i) the portion of such credit attributable to  the  property
  disposed of and (ii) the applicable percentage.
    (D) The applicable percentage shall be:
    (i)  for credits allowed pursuant to subparagraph (A) of paragraph one
  of this subsection:
    (I) one hundred percent, if the disposition or recovery occurs  within
  the  taxable  year with respect to which the credit is allowed or within
  twelve months of the end of such taxable year,
    (II) seventy-five percent, if the disposition or recovery occurs  more
  than  twelve  but  not more than twenty-four months after the end of the
  taxable year with respect to which the credit is allowed,
    (III) fifty percent, if the disposition or recovery occurs  more  than
  twenty-four  months but not more than thirty-six months after the end of
  the taxable year with respect to which the credit is allowed, or
    (IV) twenty-five percent, if the disposition or recovery  occurs  more
  than  thirty-six  months  but not more than forty-eight months after the
  end of the taxable year with respect to which the credit is allowed; or
    (ii) for credits allowed pursuant to subparagraph (B) of paragraph one
  of this subsection:
    (I) one hundred percent, if the disposition or recovery occurs  within
  the  taxable  year with respect to which the credit is allowed or within
  twelve months of the end of such taxable year,
    (II) eighty percent, if the disposition or recovery occurs  more  than
  twelve but not more than forty-eight months after the end of the taxable
  year with respect to which the credit is allowed,
    (III)  sixty  percent, if the disposition or recovery occurs more than
  forty-eight months but not more than seventy-two months after the end of
  the taxable year with respect to which the credit is allowed,
    (IV) forty percent, if the disposition or recovery  occurs  more  than
  seventy-two  months but not more than ninety-six months after the end of
  the taxable year with respect to which the credit is allowed, or
    (V)  twenty  percent,  if the disposition or recovery occurs more than
  ninety-six months but not more than one hundred eight months  after  the
  end of the taxable year with respect to which the credit is allowed.
    (s)  Credit  for  purchase  of  an automated external defibrillator. A
  taxpayer shall be allowed a credit as hereinafter provided, against  the
  tax  imposed by this article for the purchase, other than for resale, of
  an automated external defibrillator, as such term is defined in  section
  three thousand-b of the public health law. The amount of credit shall be
  the  cost to the taxpayer of automated external defibrillators purchased
  during the taxable year, such credit not to exceed five hundred  dollars
  with respect to each unit purchased.
    (t) College tuition credit.  (1) General. A resident taxpayer shall be
  allowed  the  option of claiming a credit, to be computed as provided in
  paragraph four of this subsection,  against  the  tax  imposed  by  this
  article,  or  an  itemized  deduction,  to  be  computed  as provided in
  paragraph four of subsection (d) of section six hundred fifteen of  this
  article, for allowable college tuition expenses.
    (2) Allowable and qualified college tuition expenses. For the purposes
  of  this credit and the itemized deduction provided by paragraph four of
  subsection (d) of section six hundred fifteen of this article:
    (A) The term "allowable  college  tuition  expenses"  shall  mean  the
  amount  of  qualified college tuition expenses of eligible students paid
  by the taxpayer during the taxable year, limited to ten thousand dollars
  for each such student;
    (B)  The  term  "eligible  student"  shall  mean  the  taxpayer,   the
  taxpayer's  spouse,  and  any  dependent of the taxpayer with respect to
  whom the taxpayer is allowed an  exemption  under  section  six  hundred
  sixteen of this article for the taxable year;
    (C)  The  term  "qualified  college  tuition  expenses" shall mean the
  tuition required for the enrollment or attendance of an eligible student
  at an  institution  of  higher  education.  Provided,  however,  tuition
  payments  made  pursuant to the receipt of any scholarships or financial
  aid, or tuition required for enrollment or attendance  in  a  course  of
  study  leading to the granting of a post baccalaureate or other graduate
  degree, shall be excluded from  the  definition  of  "qualified  college
  tuition expenses".
    (D)  Expenses  paid  by  dependent.  If an exemption under section six
  hundred sixteen of this article with respect to an individual is allowed
  to another taxpayer for a taxable year beginning in the calendar year in
  which such individual's taxable year begins,
    (i) no credit under this subsection or deduction under paragraph  four
  of  subsection  (d) of section six hundred fifteen of this article shall
  be allowed to such individual for such individual's taxable year, and
    (ii) for purposes of  such  credit  or  deduction,  qualified  college
  tuition  expenses  paid  by  such  individual  during  such individual's
  taxable year shall be treated as paid by such other taxpayer.
    (3) Institution of higher education. For the purposes of  this  credit
  and the itemized deduction provided by paragraph four of subdivision (d)
  of section six hundred fifteen of this article, the term "institution of
  higher  education"  shall  mean  any  institution of higher education or
  business, trade, technical or other occupational school, recognized  and
  approved   by  the  regents,  or  any  successor  organization,  of  the
  university of the state of  New  York  or  accredited  by  a  nationally
  recognized  accrediting  agency  or  association accepted as such by the
  regents, or any successor organization, of the university of  the  state
  of New York, which provides a course of study leading to the granting of
  a post-secondary degree, certificate or diploma.
    (4)  Amount  of credit. If allowable college tuition expenses are less
  than five thousand dollars, the amount of the credit provided under this
  subsection shall be equal to the applicable percentage of the lesser  of
  allowable  college tuition expenses or two hundred dollars. If allowable
  college tuition expenses are five thousand dollars or more,  the  amount
  of  the  credit  provided  under  this  subsection shall be equal to the
  applicable  percentage  of  the  allowable  college   tuition   expenses
  multiplied   by  four  percent.  Such  applicable  percentage  shall  be
  twenty-five percent for taxable years beginning  in  two  thousand  one,
  fifty   percent  for  taxable  years  beginning  in  two  thousand  two,
  seventy-five percent for taxable years beginning in two  thousand  three
  and  one  hundred percent for taxable years beginning after two thousand
  three.
    (5) Refundability. The credit under this subsection shall  be  allowed
  against  the  taxes imposed by this article for the taxable year reduced
  by the credits permitted by this article. If the credit exceeds the  tax
  as so reduced, the taxpayer may receive, and the comptroller, subject to
  a  certificate of the commissioner, shall pay as an overpayment, without
  interest, the amount of such excess.
    (6) Limitation. No credit shall be allowed under this subsection to  a
  taxpayer who claims the itemized deduction provided under paragraph four
  of subdivision (d) of section six hundred fifteen of this article.
    * (t-1)  IMB  credit  for  energy  taxes.  (1)  Allowance of credit. A
  taxpayer which is a sole proprietor of an  industrial  or  manufacturing
  business  (IMB),  or a member of a partnership which is an IMB, shall be
  allowed a credit for energy taxes, to be computed as provided in section
  fourteen-a of this chapter, against the tax imposed by this article.
    (2) Application of credit. If the amount of the credit  allowed  under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such  year,  the  excess shall be treated as an overpayment of tax to be
  credited or refunded in accordance with the provisions  of  section  six
  hundred  eighty-six of this article, provided, however, that no interest
  shall be paid thereon.
    * NB Repealed for taxable years ending on and after January 1, 2007
    (x) Low-income housing credit. (1) Allowance  of  credit.  A  taxpayer
  shall  be  allowed a credit against the tax imposed by this article with
  respect to the ownership of eligible low-income buildings,  computed  as
  provided in section eighteen of this chapter.
    (2)  Application  of  credit.  If the amount of credit allowable under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such year, the excess may be carried  over  to  the  following  year  or
  years,  and  may  be  deducted  from the taxpayer's tax for such year or
  years.
    (3) Credit recapture. For provisions requiring  recapture  of  credit,
  see subdivision (b) of section eighteen of this chapter.
    (y)  Green  building credit. (1) Allowance of credit. A taxpayer shall
  be allowed a credit, to be computed as provided in section  nineteen  of
  this chapter, against the tax imposed by this article.
    (2)  Carryovers.  If  the  amount of the credit and carryovers of such
  credit allowed under this subsection for any taxable year  shall  exceed
  the taxpayer's tax for such year, the excess, as well as any part of the
  credit or carryovers of such credit, or both, may be carried over to the
  following  year or years and may be deducted from the taxpayer's tax for
  such year or years.
    (z) Credit for transportation improvement contributions. (1) Allowance
  of credit. A taxpayer shall be allowed  a  credit,  to  be  computed  as
  provided  in  section twenty of this chapter, against the tax imposed by
  this article.
    (2)  Application  of credit. If the amount of the credit allowed under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such year, the excess shall be treated as an overpayment of  tax  to  be
  credited  or  refunded  in accordance with the provisions of section six
  hundred eighty-six of this article, provided, however, that no  interest
  shall be paid thereon.
    (3)  Credit  recapture.  For provisions requiring recapture of credit,
  see subdivision (c) of section twenty of this chapter.
    (aa) Long-term care insurance credit. (1) Residents. A taxpayer  shall
  be  allowed  a  credit  against the tax imposed by this article equal to
  twenty percent of the premium paid during the taxable year for long-term
  care insurance. In order to qualify  for  such  credit,  the  taxpayer's
  premium  payment  must be for the purchase of or for continuing coverage
  under a long-term care insurance policy that qualifies for  such  credit
  pursuant  to section one thousand one hundred seventeen of the insurance
  law. If the amount of the credit allowable under this subsection for any
  taxable year shall exceed the taxpayer's tax for such year,  the  excess
  may  be  carried over to the following year or years and may be deducted
  from the taxpayer's tax for such year or years.
    (2) Nonresidents and part-year residents. In the case of a nonresident
  taxpayer or a part-year resident taxpayer, the credit  determined  under
  this subsection shall be limited to the amount determined by multiplying
  the  amount  of such credit by the New York source fraction as set forth
  in paragraph three of subsection (e) of section six hundred one of  this
  article.  The  credit  as  so  limited  shall  be applied as provided in
  paragraph one of this subsection.
    (bb) QEZE credit for real property taxes. (1) Allowance of  credit.  A
  taxpayer  which  is  a  sole  proprietor  of  a  qualified  empire  zone
  enterprise (QEZE), or a member of a partnership which is a  QEZE,  shall
  be  allowed a credit for eligible real property taxes, to be computed as
  provided in section fifteen of this chapter, against the tax imposed  by
  this article.
    (2)  Application  of credit. If the amount of the credit allowed under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such year, the excess shall be treated as an overpayment of  tax  to  be
  credited  or  refunded  in accordance with the provisions of section six
  hundred eighty-six of this article, provided, however, that no  interest
  shall be paid thereon.
    (cc)  QEZE tax reduction credit. Allowance of credit. A taxpayer which
  is a sole proprietor of a qualified empire zone enterprise (QEZE), or  a
  member  of  a  partnership  which is a QEZE, shall be allowed a QEZE tax
  reduction credit against the tax imposed by subsections (a) through  (e)
  of section six hundred one of this part.
    * (dd) Brownfield redevelopment tax credit. (1) Allowance of credit. A
  taxpayer  shall  be  allowed  a  credit,  to  be computed as provided in
  section twenty-one of this chapter, against  the  tax  imposed  by  this
  article.
    (2)  Application  of credit. If the amount of the credit allowed under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such year, the excess shall be treated as an overpayment of  tax  to  be
  credited  or  refunded  in accordance with the provisions of section six
  hundred eighty-six of this article, provided, however, that no  interest
  shall be paid thereon.
    * NB Applies to taxable years beginning on or after April 1, 2005
    * (ee)  Remediated  brownfield  credit  for  real  property  taxes for
  qualified sites.   (1) Allowance  of  credit.  A  taxpayer  which  is  a
  developer  of  a  qualified  site shall be allowed a credit for eligible
  real property taxes, to be computed as provided in  subdivision  (b)  of
  section  twenty-two  of  this  chapter,  against the tax imposed by this
  article. For purposes of this subsection, the terms "qualified site" and
  "developer"  shall  have the same meaning as set forth in paragraphs two
  and three, respectively, of subdivision (a)  of  section  twenty-two  of
  this chapter.
    (2)  Application  of credit. If the amount of the credit allowed under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such year, the excess shall be treated as an overpayment of  tax  to  be
  credited  or  refunded  in accordance with the provisions of section six
  hundred eighty-six of this article, provided, however, that no  interest
  shall be paid thereon.
    * NB Applies to taxable years beginning on or after April 1, 2005
    * (ff)  Environmental  remediation  insurance credit. (1) Allowance of
  credit. A taxpayer shall be allowed a credit, to be computed as provided
  in section twenty-three of this chapter, against the tax imposed by this
  article.
    (2) Application of credit. If the amount of the credit  allowed  under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such  year,  the  excess shall be treated as an overpayment of tax to be
  credited or refunded in accordance with the provisions  of  section  six
  hundred  eighty-six of this article, provided, however, that no interest
  shall be paid thereon.
    * NB Applies to taxable years beginning on or after April 1, 2005
    * (gg) Empire state film production credit. (1) Allowance of credit. A
  taxpayer who is eligible pursuant to section twenty-four of this chapter
  shall be allowed a credit to be computed as  provided  in  such  section
  twenty-four against the tax imposed by this article.
    (2) Application of credit. If the amount of the credit allowable under
  this subsection for any taxable year exceeds the taxpayer's tax for such
  year,  fifty percent of the excess shall be treated as an overpayment of
  tax to be credited or  refunded  as  provided  in  section  six  hundred
  eighty-six of this article, provided, however, that no interest shall be
  paid  thereon.  The  balance  of such credit not credited or refunded in
  such taxable year may be carried  over  to  the  immediately  succeeding
  taxable  year and may be deducted from the taxpayer's tax for such year.
  The excess, if any, of the amount of the credit over the  tax  for  such
  succeeding year shall be treated as an overpayment of tax to be credited
  or  refunded  as  provided  in  section  six  hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    * NB Repealed August 20, 2008
    (hh) Nursing home  assessment  credit.  (1)  Allowance  of  credit.  A
  taxpayer  shall  be  allowed  a  credit  against the tax imposed by this
  article equal to the amount that  directly  relates  to  the  assessment
  imposed  on a residential health care facility pursuant to paragraph (b)
  of subdivision two of section twenty-eight hundred seven-d of the public
  health law which is separately stated and accounted for on  the  billing
  statement  of  a  resident  of a residential health care facility and is
  paid directly by the individual taxpayer.
    (2) Application of credit. If the amount of the credit  allowed  under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such  year,  the  excess shall be treated as an overpayment of tax to be
  credited or refunded in accordance with the provisions  of  section  six
  hundred  eighty-six of this article, provided, however, that no interest
  shall be paid thereon.
    (ii) Security training tax credit. (1) Allowance of credit. A taxpayer
  shall be allowed a  credit,  to  be  computed  as  provided  in  section
  twenty-six of this chapter, against the tax imposed by this article.
    (2)  Application  of credit. If the amount of the credit allowed under
  this subsection for any taxable year shall exceed the taxpayer's tax for
  such year, the excess shall be treated as an overpayment of  tax  to  be
  credited  or  refunded  in accordance with the provisions of section six
  hundred eighty-six of this article, provided, however, that no  interest
  shall be paid thereon.
    * (jj)  Empire  state  commercial  production credit. (1) Allowance of
  credit. A taxpayer that  is  eligible  pursuant  to  the  provisions  of
  section  twenty-eight  of  this  chapter shall be allowed a credit to be
  computed as provided in such section against the  tax  imposed  by  this
  article.
    (2) Application of credit. If the amount of the credit allowable under
  this subsection for any taxable year exceeds the taxpayer's tax for such
  year,  fifty percent of the excess shall be treated as an overpayment of
  tax to be credited or  refunded  as  provided  in  section  six  hundred
  eighty-six  of  this article, provided, however, that no interests shall
  be paid thereon. The balance of such credit not credited or refunded  in
  such  taxable  year  may  be  carried over to the immediately succeeding
  taxable year and may be deducted from the taxpayer's tax for such  year.
  The  excess,  if  any, of the amount of the credit over the tax for such
  succeeding year shall be treated as an overpayment of tax to be credited
  or refunded as provided  in  section  six  hundred  eighty-six  of  this
  article, provided, however, that no interest shall be paid thereon.
    * NB Repealed December 31, 2011
    * NB There are 2 sb (jj)'s
    * (jj) Biofuel production credit. A taxpayer shall be allowed a credit
  to  be  computed  as  provided  in section twenty-eight of this chapter,
  against the tax imposed by this article. If the  amount  of  the  credit
  allowed  under  this  subsection  for  any taxable year shall exceed the
  taxpayer's tax for  such  year,  the  excess  shall  be  treated  as  an
  overpayment  of  tax  to  be credited or refunded in accordance with the
  provisions of section six hundred eighty-six of this article,  provided,
  however, that no interest shall be paid thereon.
    * NB There are 2 sb (jj)'s
    (kk) Conservation easement tax credit. (1) Credit allowed. In the case
  of  a  taxpayer who owns land that is subject to a conservation easement
  held by a public or private conservation agency, there shall be  allowed
  a  credit  for  twenty-five  percent  of  the allowable school district,
  county and town real property taxes on such land. In no event shall  the
  credit  allowed  under  this  subsection  in  combination with any other
  credit for such school district, county and  town  real  property  taxes
  under this section exceed such taxes.
    (2)  Conservation  easement. For purposes of this subsection, the term
  "conservation easement" means a  perpetual  and  permanent  conservation
  easement   as   defined  in  article  forty-nine  of  the  environmental
  conservation law that serves to  protect  open  space,  scenic,  natural
  resources,   biodiversity,   agricultural,   watershed  and/or  historic
  preservation resources. Any conservation easement for which a tax credit
  is claimed under this subsection shall be filed with the  department  of
  environmental conservation, as provided for in article forty-nine of the
  environmental  conservation  law  and  such  conservation easement shall
  comply with the provisions of title  three  of  such  article,  and  the
  provisions  of  subdivision  (h)  of section 170 of the internal revenue
  code. Dedications of land  for  open  space  through  the  execution  of
  conservation   easements   for   the   purpose   of  fulfilling  density
  requirements to obtain subdivision or  building  permits  shall  not  be
  considered a conservation easement under this subsection.
    (3) Land. For purposes of this subsection, the term "land" means a fee
  simple  title  to  real  property located in this state, with or without
  improvements  thereon;  rights  of  way;  water  and  riparian   rights;
  easements;  privileges  and all other rights or interests of any land or
  description in, relating to or connected with real  property,  excluding
  buildings, structures, or improvements.
    (4)  Public  or  private  conservation  agency.  For  purposes of this
  subsection, the term "public or private conservation agency"  means  any
  state,   local,   or   federal   governmental   body;   or  any  private
  not-for-profit charitable corporation or trust which is authorized to do
  business in the state of New York, is organized and operated to  protect
  land  for  natural  resources,  conservation  or  historic  preservation
  purposes, is exempt from federal income taxation under section 501(c)(3)
  of the internal revenue code, and has the power  to  acquire,  hold  and
  maintain land and/or interests in land for such purposes.
    (5) Credit limitation. The amount of the credit that may be claimed by
  a  taxpayer  pursuant  to this subsection shall not exceed five thousand
  dollars in any given year.
    (6) Application of the credit. If the amount of the credit under  this
  subsection for any taxable year shall exceed the taxpayer's tax for such
  year,  the  excess  shall  be  treated  as  an  overpayment of tax to be
  credited or refunded in accordance with the provisions  of  section  six
  hundred  eighty-six of this article, provided, however, that no interest
  shall be paid therein.
    (nn) Qualified emerging technology company facilities, operations  and
  training  credit. (1) A taxpayer that is a qualified emerging technology
  company pursuant to the provisions of section thirty-one  hundred  two-e
  (and  specifically  for  the  activities  referenced in paragraph (b) of
  subdivision one of such section thirty-one hundred two-e) of the  public
  authorities   law,  and  that  meets  the  eligibility  requirements  in
  paragraph two of this subsection, shall be allowed a credit against  the
  tax  imposed by this article. The amount of credit shall be equal to the
  sum (or pro rata share of the sum in the case of a partnership)  of  the
  amounts   specified   in  paragraphs  three,  four,  and  five  of  this
  subsection,  subject  to  the  limitations  in  paragraph  six  of  this
  subsection.
    (2)  An  eligible  taxpayer  shall  (i)  have no more than one hundred
  full-time employees, of which at least seventy-five percent are employed
  in New York state,
    (ii) have a ratio of research and development funds to net  sales,  as
  referred   to   in  section  thirty-one  hundred  two-e  of  the  public
  authorities law, which equals or exceeds six percent during its  taxable
  year, and
    (iii)  have  gross  revenues,  along  with  the  gross revenues of its
  affiliates and related members, not exceeding twenty million dollars for
  the taxable year immediately preceding the year the taxpayer is  allowed
  a credit under this subsection. For purposes of this paragraph, the term
  "related member" shall have the same meaning as set forth in clauses (A)
  and (B) of subparagraph one of paragraph (o) of subdivision 9 of section
  two  hundred eight of this chapter, and the term "affiliates" shall mean
  those corporations that are members of the  same  affiliated  group  (as
  defined in section fifteen hundred four of the internal revenue code) as
  the taxpayer.
    (3)  An  eligible  taxpayer shall be allowed a credit for eighteen per
  centum of the cost or other basis for federal  income  tax  purposes  of
  research  and  development  property  as  defined in subparagraph (B) of
  paragraph two of subsection (a) of this section that is acquired by  the
  taxpayer  by  purchase  as  defined  in  section  179(d) of the internal
  revenue code and is placed in service during the taxable year. Provided,
  however,  for  the purposes of this paragraph only, an eligible taxpayer
  shall be allowed a credit for such percentage of the (i) cost  or  other
  basis  for  federal  income purposes for property used in the testing or
  inspection of materials and products,
    (ii) the costs or expenses associated  with  quality  control  of  the
  research and development,
    (iii)   fees  for  use  of  sophisticated  technology  facilities  and
  processes, and
    (iv) fees  for  production  or  eventual  commercial  distribution  of
  materials  and  products  resulting  from  the activities of an eligible
  taxpayer as long as such activities fall under the activities listed  in
  paragraph  (b) of subdivision one of section thirty-one hundred two-e of
  the public authorities law. The costs, expenses and  other  amounts  for
  which  a credit is allowed and claimed under this paragraph shall not be
  used in the calculation of any other credit allowed under this article.
    (4) An eligible taxpayer shall be allowed a credit for nine  percentum
  of  "qualified  research  expenses", paid or incurred by the taxpayer in
  the taxable year. "Qualified  research  expenses"  shall  mean  expenses
  associated  with  in-house  research,  use  of  sophisticated technology
  facilities and processes, and costs associated with the dissemination of
  the results of the products that directly result from such research  and
  development  activities;  provided,  however,  that such costs shall not
  include advertising or  promotion  through  media.  In  addition,  costs
  associated   with   the   preparation  of  patent  applications,  patent
  application filing fees, patent research fees, patent examinations fees,
  patent  post  allowance  fees,  patent  maintenance  fees,   and   grant
  application  expenses  and fees shall be eligible for such credit. In no
  case shall the credit allowed by this paragraph apply  to  expenses  for
  litigation  or  the  challenge of another entity's intellectual property
  rights, or for contract expenses involving outside paid consultants.
    (5) An eligible taxpayer shall  be  allowed  a  credit  for  qualified
  high-technology  training  expenditures  as  described in this paragraph
  paid or incurred by the taxpayer.
    (a) The amount of credit shall be one hundred percent of the  training
  expenses  described  in subparagraph (c) of this paragraph, subject to a
  limitation of no more than four thousand dollars per employee  per  year
  for such training expenses.
    (b)  Qualified  high-technology  training  shall  include  a course or
  courses taken  and  satisfactorily  completed  by  an  employee  of  the
  taxpayer  at  an  accredited,  degree granting post-secondary college or
  university in New York state that
    (i) directly relates to the activities referred to in paragraph (b) of
  subdivision one of  section  thirty-one  hundred  two-e  of  the  public
  authorities law, and
    (ii)  is  intended  to upgrade, retrain or improve the productivity or
  theoretical awareness of  the  employee.  Such  course  or  courses  may
  include,  but  are  not  limited to, instruction or research relating to
  techniques, meta, macro, or  micro-theoretical  or  practical  knowledge
  bases or frontiers, or ethical concerns related to such activities. Such
  course  or  courses  shall  not  include  classes  in the disciplines of
  management, accounting or the law or any class designed to  fulfill  the
  discipline  specific  requirements of a degree program at the associate,
  baccalaureate, graduate or  professional  level  of  these  disciplines.
  Satisfactory  completion  of  a course or courses shall mean the earning
  and granting of credit or equivalent unit,  with  the  attainment  of  a
  grade of "B" or higher in a graduate level course or courses, a grade of
  "C"  or higher in an undergraduate level course or courses, or a similar
  measure of competency for a course that is not measured according  to  a
  standard grade formula.
    (c)  Qualified  high-technology  training  expenditures  shall include
  expenses for tuition and mandatory fees, and software  required  by  the
  institution,  fees  for  textbooks  or  other literature required by the
  institution  offering  the   course   or   courses,   minus   applicable
  scholarships  and  tuition or fee waivers not granted by the taxpayer or
  any affiliate of the taxpayer,  paid  or  reimbursed  by  the  taxpayer.
  Qualified  high  technology  expenditures do not include room and board,
  computer hardware or software not specifically assigned for such  course
  or courses, late-charges, fines or membership dues and similar expenses.
  Such qualified expenditures shall not be eligible for the credit allowed
  by  this  subsection  unless  the employee for whom the expenditures are
  disbursed is continuously employed  by  the  taxpayer  in  a  full-time,
  full-year  position  primarily  located  at  a qualified site during the
  period of such coursework and lasting through at least one  hundred  and
  eighty   days  after  the  satisfactory  completion  of  the  qualifying
  course-work. Qualified high-technology training expenditures  shall  not
  include  expenses  for in house or shared training outside of a New York
  state higher education institution or the use of consultants outside  of
  credit granting courses whether such consultants function inside of such
  higher education institution or not.
    (d)  If  a  taxpayer  relocates  from  an  academic business incubator
  facility  partnered  with   an   accredited   post-secondary   education
  institution  located  within  New  York  state, which provides space and
  business support services to taxpayers,  to  another  site,  the  credit
  provided  in  this  subsection  shall  be  allowed  for all expenditures
  referenced in subparagraph (c) of this paragraph paid or incurred in the
  two preceding taxable years that the taxpayer was  located  in  such  an
  incubator  facility for employees of the taxpayer who also relocate from
  said incubator facility to such New  York  site  and  are  employed  and
  primarily  located by the taxpayer in New York. Such expenditures in the
  two preceding years shall be added to the amounts  otherwise  qualifying
  for the credit provided by this subsection that were paid or incurred in
  the  taxable year that the taxpayer relocated from such a facility. Such
  expenditures shall include expenses paid or  incurred  for  an  eligible
  employee  who is a full-time, full-year employee of said taxpayer during
  the taxable year that the taxpayer relocated from an incubator  facility
  notwithstanding (i) that such employee was employed full or part-time as
  an  officer,  staff-person  or  paid  intern  of  the taxpayer when such
  taxpayer was located at  such  incubator  facility  or  (ii)  that  such
  employee was not continuously employed when such taxpayer was located at
  the  incubator  facility  during  the  one  hundred  eighty  day  period
  referenced in subparagraph (c) of this paragraph, provided such employee
  received wages or equivalent income for at  least  seven  hundred  fifty
  hours  during any twenty-four month period when the taxpayer was located
  at the incubator facility. Such expenditures shall include payments made
  to such an employee after the taxpayer has relocated from the  incubator
  facility  for  qualified  expenditures  if  such  payments  are  made to
  reimburse such an  employee  for  qualified  expenditures  paid  by  the
  employee during such two preceding years. The credit provided under this
  subparagraph  shall be allowed, in any year that said taxpayer qualifies
  as an eligible taxpayer.
    (e) For purposes of this subsection the  term  "academic  year"  shall
  mean  the  annual  period  of  sessions  of  a post-secondary college or
  university.
    (f) For the purposes of this subsection the term  "academic  incubator
  facility"  shall  mean  a  facility  providing low-cost space, technical
  assistance, support services and  educational  opportunities,  including
  but  not  limited  to  central  services  provided by the manager of the
  facility  to  the  tenants  of the facility, to an entity located in New
  York state. Such entity's primary activity must be an activity described
  in paragraph (b) of subdivision one of section thirty-one hundred  two-e
  of  the public authorities law, and such entity must be in the formative
  stage of development. The academic incubator  facility  and  the  entity
  must  act  in  partnership  with an accredited post-secondary college or
  university located in New York state. An academic  incubator  facility's
  mission  shall  be to promote job creation, entrepreneurship, technology
  transfer, and provide support services to incubator tenants,  including,
  but   not   limited   to,   business  planning,  management  assistance,
  financial-packaging, linkages to financing  services,  and  coordinating
  with other sources of assistance.
    (6)  An  eligible taxpayer may claim credits under this subsection for
  four consecutive taxable years, except, if a taxpayer is located  in  an
  academic  incubator  facility  and  relocates within New York state to a
  nonacademic incubator site, then the taxpayer (i) may make  a  revocable
  election to defer the credit provided under this subsection to the first
  taxable  year  beginning  after  the taxpayer relocates from an academic
  incubator facility, and (ii) shall be eligible for such credit for  five
  consecutive  years.  In  no  case  shall  the  credit  allowed  by  this
  subsection to a taxpayer exceed two hundred fifty thousand  dollars  per
  year.
    (7)  If  the  amount  of  credit allowed under this subsection for any
  taxable year shall exceed the taxpayer's tax for such year,  the  excess
  shall  be treated as an overpayment of tax to be credited or refunded in
  accordance with the provisions of section six hundred eighty-six of this
  article, provided, however, that no interest shall be paid thereon.
    (8) The credit allowed under this subsection shall not  be  applicable
  for  taxable  years  beginning  on  or after January first, two thousand
  twelve.
    (yy) Order of credits. Credits  allowable  under  this  article  which
  cannot  be  carried  over and which are not refundable shall be deducted
  first.  Credits allowable under this article which can be carried  over,
  and  carryovers  of such credits, shall be deducted next, and among such
  credits, those whose carryover is of limited duration shall be  deducted
  before those whose carryover is of unlimited duration. Credits allowable
  under this article which are refundable shall be deducted last.
    (zz) Cross references.--For credit in respect of:
    (1) taxes withheld on wages, see section six hundred seventy-three,
    (2)  taxes  imposed  on  a  resident  by other states, see section six
  hundred twenty,
    (3) taxes overpaid for a prior taxable year, see section  six  hundred
  eighty-six,
    * (4)  taxes  paid  by  a  trust  for  a  prior taxable year on income
  subsequently distributed, see sections six hundred  twenty-one  and  six
  hundred forty.
    * NB Applies to taxable years beginning prior to 1988
    * (4)  taxes  paid  by  a  trust  for  a  prior taxable year on income
  subsequently distributed, see sections six hundred  twenty-one  and  six
  hundred thirty-five.
    * NB Applies to taxable years beginning after 1987

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