2012 New York Consolidated Laws
TAX - Tax
Article 1 - (1 - 37) SHORT TITLE; DEFINITIONS; MISCELLANEOUS
15 - QEZE credit for real property taxes.

 
    §  15. QEZE credit for real property taxes. (a) Allowance of credit. A
  taxpayer which is a qualified empire zone enterprise (QEZE), or which is
  a sole proprietor of a QEZE or a member of  a  partnership  which  is  a
  QEZE,  and  which  is  subject  to tax under article nine-A, twenty-two,
  thirty-two or thirty-three of this chapter, shall be  allowed  a  credit
  against  such  tax, pursuant to the provisions referenced in subdivision
  (h) of this section, for eligible real property taxes.
    (b) Amount of credit. (1) In the case of a business  enterprise  which
  is first certified under article eighteen-B of the general municipal law
  before April first, two thousand five, the amount of the credit shall be
  equal to the product (or pro rata share of the product, in the case of a
  member  of  a  partnership)  of  (i) the benefit period factor, (ii) the
  employment increase factor and (iii) the eligible  real  property  taxes
  paid or incurred by the QEZE during the taxable year. However the amount
  of  the  credit  may  not  exceed  the  credit  limitation  set forth in
  subdivision (f) of this section.
    (2) (A) For a business  enterprise  which  is  first  certified  under
  article eighteen-B of the general municipal law on or after April first,
  two  thousand  five,  and  notwithstanding  any  other  provision to the
  contrary, in the case of a business enterprise which was first certified
  between August first, two  thousand  two  and  March  thirty-first,  two
  thousand five that conducts its operations on real property that it owns
  or leases that is both located within an empire zone and that is subject
  to  a brownfield site cleanup agreement executed prior to January first,
  two thousand six in accordance with section 27-1409 of the environmental
  conservation law, the amount of the credit shall be equal to the product
  (or pro rata share of the  product,  in  the  case  of  a  member  of  a
  partnership)  of twenty-five percent of the total wages, health benefits
  and retirement benefits paid to or on behalf of net new employees during
  the taxable year, provided however, that the total amount of the  credit
  shall  not  exceed  ten  thousand  dollars  for  each such employee. For
  purposes of  computing  total  wages,  health  benefits  and  retirement
  benefits,  wages,  health  benefits  and  retirement  benefits  for each
  employee in excess of forty thousand dollars shall be excluded from such
  computation. Provided however, the amount  of  the  credit  for  a  QEZE
  certified  in  an empire zone designated under subdivision (b) or (c) of
  section nine hundred fifty-eight of the general municipal law, except  a
  manufacturer  certified  in an empire zone designated under section nine
  hundred fifty-eight of the  general  municipal  law,  shall  be  further
  adjusted  by  the  product  of  the  amount  determined  above  and  the
  development zone employment increase factor under  subparagraph  (B)  of
  this  paragraph. Provided further, in addition, the amount of the credit
  may not exceed the credit amount set forth in subdivision (f-1) of  this
  section.
    (B)  Development zone employment increase factor. The development zone
  employment increase factors are set forth in the following table:
 
  Net New Employees:                 DZ Employment Increase Factor:
  1 to 10                            0.25
  11 to 49                           0.5
  50 to 75                           0.75
  76 and above                       the amount, not to exceed 1.0,
                                     of new employees divided by 100
 
    Net new employees. The number of net new employees for a QEZE is equal
  to the excess of the QEZE's employment number in the empire  zones  with
  respect to which the QEZE is certified pursuant to article eighteen-B of

  the  general  municipal  law  for  the  taxable  year,  over  the QEZE's
  employment number in such zones for the base period.
    (3)  For  a business enterprise which is first certified under article
  eighteen-B of the general municipal law on or  after  April  first,  two
  thousand  nine,  the credit allowed shall be seventy-five percent of the
  amount calculated under paragraph two of this subdivision.
    (c) Benefit period factor.  The benefit period factors are  set  forth
  in the following table:
 
  Taxable year of the benefit period:          Benefit period factor:
                 1 - 10                                 1.0
                   11                                    .8
                   12                                    .6
                   13                                    .4
                   14                                    .2
                   15                                     0
    (d)  Employment increase factor. The employment increase factor is the
  amount, not to exceed 1.0, which is the greater of:
    (1) the excess of the QEZE's employment number  in  the  empire  zones
  with  respect  to  which  the  QEZE  is  certified  pursuant  to article
  eighteen-B of the general municipal law for the taxable year,  over  the
  QEZE's  test  year employment number in such zones, divided by such test
  year employment number in such zones; or
    (2) the excess of the QEZE's employment number in such zones  for  the
  taxable  year over the QEZE's test year employment number in such zones,
  divided by 100.
    (3) For purposes of paragraph one of this subdivision, where there  is
  an  excess  as  described  in  such  paragraph,  and where the test year
  employment number is zero, then the employment increase factor shall  be
  1.0.
    (e)  Eligible  real  property  taxes. The term "eligible real property
  taxes" means taxes imposed on real property which is owned by  the  QEZE
  and  located  in  an  empire  zone  with  respect  to  which the QEZE is
  certified pursuant to article eighteen-B of the general  municipal  law,
  provided  such taxes are paid by the QEZE which is the owner of the real
  property or are paid by a tenant which either  (i)  does  not  meet  the
  eligibility  requirements under section fourteen of this article to be a
  QEZE or (ii) cannot treat such payment as eligible real  property  taxes
  pursuant  to  this  paragraph  and  such taxes become a lien on the real
  property during a taxable year in which the owner of the  real  property
  is  both  certified  pursuant  to  article  eighteen-B  of  the  general
  municipal law and a qualified empire zone enterprise.   For purposes  of
  this  subdivision,  the  term  "tax"  means  a  charge imposed upon real
  property by or on behalf of a county,  city,  town,  village  or  school
  district  for  municipal  or school district purposes, provided that the
  charge is levied for the general public welfare  by  the  proper  taxing
  authorities  at  a  like rate against all property in the territory over
  which such authorities have jurisdiction, and provided that where  taxes
  are  levied pursuant to article eighteen or article nineteen of the real
  property tax law,  the  property  must  have  been  taxed  at  the  rate
  determined  for  the class in which it is contained, as provided by such
  article eighteen or nineteen, whichever is applicable.  The  term  "tax"
  does  not  include a charge for local benefits, including any portion of
  that charge that is properly allocated  to  the  costs  attributable  to
  maintenance  or interest, when (1) the property subject to the charge is
  limited to the property that benefits from the charge, or (2) the amount
  of the charge is determined by the benefit to the property assessed,  or
  (3)  the  improvement for which the charge is assessed tends to increase

  the property value.  In addition, "eligible real property  taxes"  shall
  include  taxes  paid by a QEZE which is a lessee of real property if the
  following conditions are satisfied:  (1) the taxes must be paid  by  the
  lessee  pursuant to explicit requirements in a written lease executed or
  amended on or after June first, two thousand five, (2) such taxes become
  a lien on the real property during a taxable year in which the lessee of
  the real property is both certified pursuant to  article  eighteen-B  of
  the  general  municipal  law and a qualified empire zone enterprise, and
  (3) the lessee has made direct payment  of  such  taxes  to  the  taxing
  authority  and has received a receipt for such payment of taxes from the
  taxing authority.  In addition, the term "eligible real property  taxes"
  includes  payments  in  lieu  of  taxes made by the QEZE to the state, a
  municipal corporation or a public  benefit  corporation  pursuant  to  a
  written agreement entered into between the QEZE and the state, municipal
  corporation, or public benefit corporation. Provided, however, a payment
  in  lieu  of  taxes  made  by  the  QEZE pursuant to a written agreement
  executed or amended on or after January first, two thousand  one,  shall
  not  constitute  eligible real property taxes in any taxable year to the
  extent that such payment exceeds the product of (A) the greater  of  (i)
  the  basis for federal income tax purposes, calculated without regard to
  depreciation,  determined  as  of  the  effective  date  of  the  QEZE's
  certification  pursuant  to  article eighteen-B of the general municipal
  law of real property, including buildings and structural  components  of
  buildings, owned by the QEZE and located in empire zones with respect to
  which  the  QEZE is certified pursuant to such article eighteen-B of the
  general municipal law, and  provided  that  if  such  basis  is  further
  adjusted  or  reduced  pursuant to any provision of the internal revenue
  code, the QEZE  may  petition  the  department  and  the  department  of
  economic  development  to disregard such reduction or adjustment for the
  purpose of this subdivision or (ii) the basis  for  federal  income  tax
  purposes  of  such  real  property  described  in  clause  (i)  of  this
  subparagraph, calculated without regard to depreciation, on the last day
  of the taxable year, and provided that if such basis is further adjusted
  or reduced pursuant to any provision of the internal revenue  code,  the
  QEZE may petition the department, the department of economic development
  and  the office of real property services to disregard such reduction or
  adjustment for the purpose of this subdivision; and  (B)  the  estimated
  effective  full  value tax rate within the county in which such property
  is located,  as  most  recently  calculated  by  the  commissioner.  The
  commissioner shall annually calculate estimated effective full value tax
  rates  within  each  county for this purpose based upon the most current
  information available to him or her in relation to county,  city,  town,
  village and school district taxes.
    (f)  In  the  case  of  a business enterprise which is first certified
  under article eighteen-B of the general municipal law on or after August
  first, two thousand two and before April first, two thousand  five,  the
  credit  limitation  shall  be  the  greater  of  the employment increase
  limitation or the capital investment limitation.
    (1) The employment increase limitation shall be the product of (A) ten
  thousand dollars and (B) the excess of the QEZE's employment  number  in
  the empire zones with respect to which the QEZE is certified pursuant to
  article  eighteen-B  of  the general municipal law for the taxable year,
  over the QEZE's test year employment number in such zones.
    (2) The capital investment limitation shall be the product of (A)  ten
  percent of the greater of (i) the cost or other basis for federal income
  tax purposes, determined on the later of January first, two thousand one
  or  the  effective  date of the QEZE's certification pursuant to article
  eighteen-B of the general municipal law,  of  real  property,  including

  buildings  and structural components of buildings, owned by the QEZE and
  located in empire zones with respect to  which  the  QEZE  is  certified
  pursuant  to  such  article  eighteen-B of the general municipal law, or
  (ii)  the  cost  or  other basis for federal income tax purposes of such
  real property described in clause (i) of this subparagraph on  the  last
  day  of  the  taxable year, and (B) the greater of (i) the percentage of
  such real property described in clause (i) of subparagraph (A)  of  this
  paragraph  which  is  physically  occupied  and used by the QEZE or by a
  related person to the QEZE, as the term "related person" is  defined  in
  subparagraph  (c)  of  paragraph three of subsection (b) of section four
  hundred sixty-five of the internal revenue code, or (ii) the  percentage
  of  such  cost or other basis which is attributable to the construction,
  expansion  or  rehabilitation  of  such  property,   rather   than   the
  acquisition  of  such  real property, by the QEZE. Provided, however, if
  the percentage of such cost or other basis, which is attributable to the
  construction, expansion or rehabilitation of such real  property  equals
  or  exceeds  fifty percent, then the percentage described in clause (ii)
  of subparagraph (B) of this paragraph shall be deemed to be one  hundred
  percent.
    (f-1)  In  the  case of a business enterprise which is first certified
  under article eighteen-B of the general municipal law on or after  April
  first,  two thousand five, the credit shall be the greater of the credit
  amount as determined pursuant to paragraph two  of  subdivision  (b)  of
  this  section,  or  the  capital investment amount determined under this
  subdivision. Provided however, that in no case shall the amount  of  the
  credit  exceed the amount of the taxpayer's eligible real property taxes
  for the taxable year.
    (1)  For  a  QEZE  certified  in  an  empire  zone  designated   under
  subdivision  (a)  or  (d)  of  section  nine  hundred fifty-eight of the
  general municipal law and a manufacturer certified  in  an  empire  zone
  designated  under  section  nine  hundred  fifty-eight  of  the  general
  municipal law, the capital investment amount shall be the product of (A)
  ten percent of the greater of (i) the cost or other  basis  for  federal
  income  tax  purposes,  determined  on  the  later of January first, two
  thousand one or the effective date of the QEZE's certification  pursuant
  to  article  eighteen-B  of the general municipal law, of real property,
  including buildings and structural components of buildings, owned by the
  QEZE and located in empire zones with  respect  to  which  the  QEZE  is
  certified  pursuant  to such article eighteen-B of the general municipal
  law, or (ii) the cost or other basis for federal income tax purposes  of
  such  real  property described in clause (i) of this subparagraph on the
  last day of the taxable year, and (B) the greater of (i) the  percentage
  of  such  real  property  described in clause (i) of subparagraph (A) of
  this paragraph which is physically occupied and used by the QEZE or by a
  related person to the QEZE, as the term "related person" is  defined  in
  subparagraph  (c)  of  paragraph three of subsection (b) of section four
  hundred sixty-five of the internal revenue code, or (ii) the  percentage
  of  such  cost or other basis which is attributable to the construction,
  expansion  or  rehabilitation  of  such  property,   rather   than   the
  acquisition  of  such  real property, by the QEZE. Provided, however, if
  the percentage of such cost or other basis, which is attributable to the
  construction, expansion or rehabilitation of such real  property  equals
  or  exceeds  fifty percent, then the percentage described in clause (ii)
  of subparagraph (B) of this paragraph shall be deemed to be one  hundred
  percent.
    (2)   For  a  QEZE  certified  in  an  empire  zone  designated  under
  subdivision (b) or (c)  of  section  nine  hundred  fifty-eight  of  the
  general  municipal  law,  which  is  not  a  manufacturer,  the  capital

  investment amount shall be the product of ten percent and the amount  of
  such  cost  or  other  basis  which is attributable to the construction,
  expansion  or  rehabilitation  of  such  property,   rather   than   the
  acquisition  of  such  real  property,  and  the percentage of such real
  property described in clause (i) of subparagraph (A) of paragraph (1) of
  this subdivision which is physically occupied and used by the QEZE or by
  a related person to the QEZE, as the term "related person" is defined in
  subparagraph (c) of paragraph three of subsection (b)  of  section  four
  hundred  sixty-five  of the internal revenue code. Provided, however, if
  the percentage of such cost or other basis, which is attributable to the
  construction, expansion or rehabilitation of such real  property  equals
  or exceeds fifty percent, then the percentage of physical occupation and
  use  described  in  the  preceding  sentence  shall  be deemed to be one
  hundred percent.
    (g) Credit recapture. Where a  QEZE's  eligible  real  property  taxes
  which  were the basis for the allowance of the credit provided for under
  this section are subsequently reduced as a result of a  final  order  in
  any proceeding under article seven of the real property tax law or other
  provision  of  law,  the taxpayer shall add back, in the taxable year in
  which such final order is issued, the excess of (1) the amount of credit
  originally allowed for a taxable year over  (2)  the  amount  of  credit
  determined  based upon the reduced eligible real property taxes. If such
  final order reduces real property taxes for  more  than  one  year,  the
  taxpayer  must  determine  how much of such reduction is attributable to
  each year covered by such final order and calculate the amount of credit
  which is required by this subdivision to be  recaptured  for  each  year
  based on such reduction.
    (h) Definitions and cross-references. For definitions of terms used in
  this  section  see  section fourteen of this article. For application of
  the credit provided for in this section, see the following provisions of
  this chapter:
    (1) Article 9: Section 187-j.
    (2) Article 9-A: Section 210: subdivision 27.
    (3) Article 22: Section 606: subsections (i) and (bb).
    (4) Article 32: Section 1456: subsection (o).
    (5) Article 33: Section 1511: subdivision (r).