2012 New York Consolidated Laws
TAX - Tax
Article 1 - (1 - 37) SHORT TITLE; DEFINITIONS; MISCELLANEOUS
35*2 - Economic transformation and facility redevelopment program tax credit.

 
    * § 35. Economic transformation and facility redevelopment program tax
  credit.  (a) General. (1) A taxpayer which is a participant or the owner
  of  a  participant  in  the   economic   transformation   and   facility
  redevelopment program under article eighteen of the economic development
  law  that  is  subject  to  tax under section one hundred eighty-five of
  article nine, or article nine-A, twenty-two, thirty-two or  thirty-three
  of this chapter shall be allowed the sum of following components against
  such  tax,  pursuant  to the provisions referenced in subdivision (f) of
  this section.
    (A) the economic transformation  and  facility  redevelopment  program
  jobs tax credit component;
    (B)  the  economic  transformation  and facility redevelopment program
  investment tax credit component;
    (C) the economic transformation and facility redevelopment program job
  training credit component; and
    (D) the economic transformation  and  facility  redevelopment  program
  real property tax credit component.
    (2)  A  taxpayer which is a participant in the economic transformation
  and  facility  redevelopment  program  under  article  eighteen  of  the
  economic  development  law,  or  such participant's contractor, shall be
  allowed a sales tax refund as provided in subdivision (f) of section one
  thousand one hundred nineteen of this chapter.
    (3) To be  eligible  for  the  economic  transformation  and  facility
  redevelopment  program  tax  credit,  the  taxpayer  must  meet  all the
  following requirements.
    (A) The taxpayer must be a participant or the owner of  a  participant
  in  the  economic  transformation  and facility development program. The
  commissioner of economic development must have issued a  certificate  of
  eligibility  pursuant  to  section  four  hundred  two  of  the economic
  development law to the taxpayer or to an entity in which the taxpayer is
  an owner. A copy of the certificate shall be attached to the  taxpayer's
  report or return.
    (B)  The taxpayer or the entity in which the taxpayer is an owner must
  be a qualified new business  as  defined  in  subdivision  (e)  of  this
  section.
    (C)  The taxpayer or the entity in which the taxpayer is an owner must
  create and  maintain  at  least  five  net  new  jobs  in  the  economic
  transformation area.
    (4)  The  benefit  period  for  the  tax  credits under articles nine,
  nine-A, twenty-two, thirty-two and thirty-three of this chapter is  five
  consecutive  taxable  years,  beginning  with  the first taxable year in
  which the five net new jobs are created. However, in no event  may  that
  benefit  period  start  later  than  two  years after the certificate of
  eligibility is issued. If, in  any  year  of  the  benefit  period,  the
  taxpayer  fails  to  maintain  the  required  level of five net new jobs
  (measured quarterly), the taxpayer will not be allowed a credit for that
  year. Such failure to be allowed a credit will not extend the taxpayer's
  benefit period.
    (b) Election of credit. No cost or expense paid  or  incurred  by  the
  taxpayer  or  the  entity  in which the taxpayer is an owner that is the
  basis for any of the above named credits shall  be  the  basis  for  any
  other  tax  credit  under this chapter. If a taxpayer elects to claim an
  economic transformation and facility redevelopment program  tax  credit,
  the election is irrevocable.
    (c)  Information  sharing.  (1)  Notwithstanding any provision of this
  chapter,  employees  and  officers  of  the   department   of   economic
  development  and  the  department  shall  be allowed and are directed to
  share and exchange:

    (A) information derived from tax returns or reports that  is  relevant
  to   a   taxpayer's   eligibility   to   participate   in  the  economic
  transformation and facility redevelopment program;
    (B) information regarding the credits applied for, allowed, or claimed
  pursuant  to this section and taxpayers who are applying for the credits
  or who are claiming the credits; and
    (C) information contained  in  or  derived  from  credit  claim  forms
  submitted  to  the  department  and  applications for admission into the
  economic transformation and facility redevelopment program.
    (2) Other than the information required to be contained in the  report
  issued  pursuant  to  subdivision  (d)  of this section, all information
  exchanged  between  the  department  of  economic  development  and  the
  department  shall  not  be subject to disclosure or inspection under the
  state's freedom of information law.
    (d) Economic transformation and  facility  redevelopment  program  tax
  credits   report.   (1)   The  commissioner  must  publish  an  economic
  transformation and facility redevelopment  program  tax  credits  report
  annually  by  July  thirty-first.  The  first  report  shall be due July
  thirty-first, two thousand thirteen.
    (2) The credits report shall contain the following  information  about
  the  economic  transformation  program  and  facility  redevelopment tax
  credits claimed under this chapter during the previous calendar year:
    (A) the name of each taxpayer claiming a credit; provided however,  if
  the  taxpayer  claims  a  credit  because  the taxpayer is a member of a
  limited liability company, a partner in a partnership or  a  shareholder
  in  a  New  York  subchapter  S  corporation,  the  name of each limited
  liability company, partnership or  New  York  subchapter  S  corporation
  earning  any  of  the  credit  must be included in the report instead of
  information about the taxpayer claiming the credit; and
    (B) the amount of  each  credit  earned  by  each  taxpayer;  provided
  however,  if  the  taxpayer  claims  a  credit because the taxpayer is a
  member of a limited liability company, a partner in a partnership  or  a
  shareholder in a New York subchapter S corporation, the amount of credit
  earned  by  each  entity  must  be  included  in  the  report instead of
  information about the taxpayer claiming the credit.
    (3) The credit report may also contain any other information  received
  by  the  commissioner  with  regard  to  the economic transformation and
  facility redevelopment program tax credits that the  commissioner  deems
  to  be  useful  in  evaluating  the  use of the credits. The information
  included in the credit report will be based  on  the  information  filed
  with  the  department  during  the previous calendar year, to the extent
  that it is practicable to use that information.
    (e)  Definitions.  (1)  The  terms  "participant",  "net  new   jobs",
  "economic   transformation  area",  "related  person",  "certificate  of
  eligibility", "benefit-cost ratio",  and  "qualified  investment"  shall
  have the same meaning as those terms have in section four hundred of the
  economic development law.
    (2)  The  term  "qualified  new business" means a business entity that
  satisfies all of the following tests:
    (A) the business entity must not be  currently  operating  or  located
  within  the  economic  transformation  area  in which it is applying for
  certification under article eighteen of the economic development law;
    (B) the business entity must not be  moving  existing  jobs  into  the
  economic  transformation  area in which it is applying for certification
  under article eighteen of the economic development law from another area
  of the state;
    (C) the business entity must not be substantially similar in ownership
  and operation to another taxpayer taxable or  previously  taxable  under

  section one hundred eighty-three, one hundred eighty-four or one hundred
  eighty-five  of  article  nine, former section one hundred eighty-six of
  this chapter or article nine-A, twenty-two, thirty-two  or  thirty-three
  of  this  chapter  or the income or losses of which is or was includable
  under article twenty-two of this chapter;
    (D) the business entity must not have caused individuals  to  transfer
  from  existing  employment in New York with another business entity with
  similar ownership to similar employment with the business entity;
    (E) the business entity must not have acquired, purchased, leased,  or
  had   transferred   to   it   real  property  located  in  the  economic
  transformation area in which it is applying for  certification  if  that
  real  property was previously owned by an entity with similar ownership,
  regardless of form of incorporation or organization; and
    (F) the business entity must not be substantially similar in operation
  to a business entity  from  which  it  has  acquired  real  or  tangible
  personal property that is located in the economic transformation area in
  which  it  is  applying  for certification under article eighteen of the
  economic development law.
    (3) The term "entity in which the taxpayer is an owner" shall  mean  a
  limited  liability  company  in  which  the  taxpayer  is  a  member,  a
  partnership in which the taxpayer is a partner and a New York subchapter
  S corporation in which the taxpayer is a shareholder.
    (f) Cross-references. For application of the credits provided  for  in
  this section, see the following provisions of this chapter:
    (1) section 185: section 187-r
    (2) article 9-A: section 210(43).
    (3) article 22: section 606 (ss).
    (4) article 32: section 1456(x).
    (5) article 33: section 1511 (aa).
    (g)  Economic  transformation  and facility redevelopment program jobs
  tax credit. A taxpayer which meets  the  requirements  in  this  section
  shall  be  eligible  to  claim  a  credit  for each net new job that the
  taxpayer creates in the economic transformation area with respect to the
  project for which the certificate of eligibility is issued.  The  amount
  of  such credit per job shall be equal to the product of the gross wages
  paid and 6.85 percent.
    (h)  Economic  transformation  and  facility   redevelopment   program
  investment  tax  credit.  (1) A taxpayer which meets the requirements in
  this  section  shall  be  eligible  to  claim  a  credit  on   qualified
  investments  with  respect  to  the project for which the certificate of
  eligibility is issued. The credit shall be equal to ten percent  of  the
  cost  or  other  basis  for federal income tax purposes of the qualified
  investment at a closed facility. The  total  amount  of  investment  tax
  credit  allowed for all eligible participants under this subdivision for
  qualified investments located at each closed facility shall  not  exceed
  eight  million  dollars. The credit shall be equal to six percent of the
  cost or other basis for  federal  income  tax  purposes  for  all  other
  qualified  investments,  but  the  credit  allowed to a taxpayer may not
  exceed four million dollars.
    (2) Costs incurred prior to the date the certificate of eligibility is
  issued are not eligible to be included in the calculation of the credit.
  A taxpayer which is a participant in  the  economic  transformation  and
  redevelopment  program or is an owner of an entity that is a participant
  is not eligible for any other investment tax credit provided under  this
  chapter.
    (3) If the taxpayer is a partner in a partnership, member of a limited
  liability  company  or shareholder of a New York S corporation, then the
  four million dollar limit imposed above by the preceding sentences shall

  be applied at the entity level, so that the aggregate credit allowed  to
  all  the  partners,  members  or shareholders of each such entity in the
  taxable year  does  not  exceed  the  four  million  dollar  limitation.
  Further,  in  order  to properly administer the limitation of investment
  tax credit at a closed facility, the department may disclose information
  about the calculation and the amounts of the credits claimed under  this
  subdivision for qualified investments at a particular closed facility to
  other  taxpayers  claiming investment tax credits under this subdivision
  at that same closed facility.
    (i)  Economic  transformation  and  facility   redevelopment   program
  training tax credit. (1) A taxpayer which meets the requirements of this
  section  shall  be  allowed a credit for qualified training expenditures
  paid by  the  taxpayer  with  respect  to  the  project  for  which  the
  certificate  of eligibility is issued. The amount of the credit shall be
  fifty percent of the qualified training expenses paid during the taxable
  year, subject to a limitation of no more than four thousand dollars  per
  employee  per  year for such training expenses. This credit applies only
  to qualified training provided to employees who were  hired  after  they
  lost  their jobs at a closed facility as a result of the closure of that
  facility as described in subdivision eleven of section four  hundred  of
  the economic development law.
    (2)  Qualified  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  (A)  directly relates to the duties that the employee
  performs for the taxpayer within the economic transformation  area;  and
  (B)  is  intended  to  upgrade,  retrain  or improve the productivity or
  theoretical awareness of the employee. 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.
    (3) Qualified training expenditures shall include expenses for tuition
  and  mandatory  fees,  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 related person, that are paid
  or reimbursed by the taxpayer. Qualified training  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 training expenditures shall
  not be eligible for the credit  provided  by  this  section  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 site in an economic transformation area during the period
  of such coursework and lasting through at least one hundred eighty  days
  after   the  satisfactory  completion  of  the  qualifying  course-work.
  Qualified 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.

    (j) Economic transformation and facility  redevelopment  program  real
  property tax credit. (1) A taxpayer which meets the requirements of this
  section shall be allowed a credit measured by the real property taxes on
  the  real  property  located  in  the  economic transformation area with
  respect  to  the  project  for  which  the certificate of eligibility is
  issued. In the first taxable year  that  the  taxpayer  may  claim  this
  credit,  the  credit  shall  be equal to twenty-five percent of the real
  property taxes assessed and paid during that year by the participant  on
  the real property located in the economic transformation area outside of
  the closed facility. If the real property is located entirely within the
  grounds  of  a  closed  facility,  the  credit  in the first year of the
  benefit period shall be equal to fifty  percent  of  the  real  property
  taxes  assessed  and  paid  by  the participant during that year on that
  property. In the following years of the benefit period,  the  percentage
  decreases  by five percentage points each year for real property located
  in the economic transformation area outside of the closed facility,  and
  ten percentage points for real property located at the closed facility.
    (2)  (A)  For  purposes  of this credit, "real property taxes" 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.
    (B) The term "real property taxes" 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 (i)
  the property subject to the charge  is  limited  to  the  property  that
  benefits from the charge, or (ii) the amount of the charge is determined
  by  the  benefit  to the property assessed, or (iii) the improvement for
  which the charge is assessed tends to increase the property value.
    (C) The term "real property taxes" includes payments in lieu of  taxes
  made  by  the  participant  which  is  the  beneficial owner of the real
  property to the state, a  municipal  corporation  or  a  public  benefit
  corporation  pursuant  to  a  written agreement entered into between the
  participant and the state,  municipal  corporation,  or  public  benefit
  corporation.  Provided,  however, a payment in lieu of taxes made by the
  participant pursuant to a written agreement shall  not  constitute  real
  property  taxes  in  any  taxable  year  to the extent that such payment
  exceeds the product of (i) the basis for federal income tax purposes  of
  the  real  property  located  in  the  economic  transformation area and
  subject to that agreement, calculated without regard to depreciation, on
  the last day of the taxable year, and (ii) 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.
    (k) Recapture of credits. If the participant at the end of its benefit
  period has not created sufficient  net  new  jobs  and  made  sufficient
  qualified investments to achieve a benefit-cost ratio of at least ten to
  one,  the taxpayer shall be required to add back as tax in the last year
  of its benefit period the portion of  the  economic  transformation  and

  facility  redevelopment  tax credits claimed in the years of its benefit
  period necessary to achieve a cost benefit ratio of ten to one.
    * NB Repealed December 31, 2021
    * NB There are 2 § 35's