NY Tax L § 16 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 16 - Qeze Tax Reduction Credit.

§  16. QEZE tax reduction credit.  (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 or thirty-three of this chapter, shall be allowed a credit against such tax, pursuant to the provisions referenced in subdivision (g)  of  this  section,  to  be computed as hereinafter provided.  (b) Amount of credit. The amount of the credit shall be the product of (i)  the  benefit  period  factor,  (ii) the employment increase factor, (iii) the zone allocation factor and (iv) the tax factor.  (c) Benefit period factor. The benefit period factor for  the  taxable year  shall  be  as  prescribed in subdivision (c) of section fifteen of this article.  (d) Employment increase factor. The employment increase factor for the taxable year shall be  as  prescribed  in  subdivision  (d)  of  section fifteen of this article.  (e)  Zone  allocation  factor. The zone allocation factor shall be the percentage representing the QEZE's economic  presence  in  empire  zones with  respect to which the QEZE is certified under article eighteen-B of the general municipal law. This percentage shall be computed by:  (1) ascertaining the percentage which the average value of the  QEZE's real  and  tangible personal property, whether owned or rented to it, in empire zones with respect to which the QEZE is certified  under  article eighteen-B of the general municipal law during the period covered by the taxpayer's  report  or  return  bears to the average value of the QEZE's real and tangible personal property, whether  owned  or  rented  to  it, within  the  state  during such period; provided that the term "value of the QEZE's real and tangible personal  property"  shall  have  the  same meaning  as  such  term  has  in  subparagraph  one  of paragraph (a) of subdivision three of section two hundred ten of this chapter; and  (2) ascertaining the percentage of the total wages, salaries and other personal service compensation, similarly computed, during such period of employees, except general executive officers,  of  the  QEZE  in  empire zones  with  respect  to  which  the  QEZE  is  certified  under article eighteen-B of the general municipal law, to the  total  wages,  salaries and other personal service compensation, similarly computed, during such period,  of  all  the  QEZE's employees within the state, except general executive officers; and  (3) adding together the percentages so  determined  and  dividing  the result by the number of percentages.   For purposes of article twenty-two of this chapter, references in this subdivision  to  property,  wages,  salaries  and other personal service compensation shall be deemed to be references to  such  items  connected with the conduct of a business.  (f)  Tax factor.  (1) General. The tax factor shall be, in the case of article nine-A of this chapter, the amount of  tax  determined  for  the taxable  year  under  paragraph  (a)  of  subdivision one of section two hundred ten of such article. The tax factor shall be,  in  the  case  of article  twenty-two  of this chapter, the tax determined for the taxable year under subsections (a) through (d) of section  six  hundred  one  of such  article.  The  tax  factor  shall  be,  in  the  case  of  article thirty-three  of  this  chapter,  the  larger  of  the  amounts  of  tax determined  for  the  taxable  year  under  paragraphs  one and three of subdivision (a) of section fifteen hundred two of such article.  (2) Sole proprietors, partners and  S  corporation  shareholders.  (A) Where  the  taxpayer  is  a  sole  proprietor of a qualified empire zone enterprise, the taxpayer's tax factor  shall  be  that  portion  of  the amount  determined  in  paragraph  one  of  this  subdivision  which  is  attributable to the income of the qualified empire zone enterprise. Such attribution shall be made in accordance with the ratio of the taxpayer's income from the qualified empire zone enterprise  allocated  within  the state,  entering  into New York adjusted gross income, to the taxpayer's New York adjusted gross income, or in accordance with such other methods as the commissioner may prescribe as providing  an  apportionment  which reasonably  reflects  the  portion of the taxpayer's tax attributable to the income of the qualified empire zone enterprise. In no event may  the ratio so determined exceed 1.0.  (B)(i)  Where  the  taxpayer  is  a member of a partnership which is a qualified empire zone enterprise, the taxpayer's  tax  factor  shall  be that  portion  of  the  amount  determined  in  paragraph  one  of  this subdivision which is attributable to the income of the partnership. Such attribution shall be made in accordance with the ratio of the  partner's income  from the partnership allocated within the state to the partner's entire  income,  or  in  accordance  with  such  other  methods  as  the commissioner   may   prescribe   as  providing  an  apportionment  which reasonably reflects the portion of the partner's tax attributable to the income of the partnership. In no  event  may  the  ratio  so  determined exceed 1.0.  (ii)  For  purposes  of  article  nine-A  of  this  chapter,  the term "partner's income from  the  partnership"  means  partnership  items  of income,  gain,  loss  and deduction, and New York modifications thereto, entering into business income and the  term  "partner's  entire  income" means  business  income  allocated  within  the  state.  For purposes of article thirty-three of this chapter, the term  "partner's  income  from the  partnership"  means  partnership  items  of  income, gain, loss and deduction, and New York modifications thereto, entering into entire  net income  or  entire  net income plus compensation and the term "partner's entire income" means entire  net  income,  or  entire  net  income  plus compensation,  allocated  within  the  state.  For  purposes  of article twenty-two  of  this  chapter,  the  term  "partner's  income  from  the partnership"   means   partnership  items  of  income,  gain,  loss  and deduction, and New York modifications thereto, entering  into  New  York adjusted  gross income, and the term "partner's entire income" means New York adjusted gross income.  (C) Where the taxpayer is a shareholder of a New  York  S  corporation which  is  a  qualified  empire  zone  enterprise, the shareholder's tax factor shall be that portion of the amount determined in  paragraph  one of  this  subdivision  which  is  attributable  to  the  income of the S corporation. Such attribution shall be made in accordance with the ratio of the shareholder's income from the S corporation allocated within  the state,   entering   into   New   York  adjusted  gross  income,  to  the shareholder's New York adjusted gross income, or in accordance with such other  methods  as  the  commissioner  may  prescribe  as  providing  an apportionment which reasonably reflects the portion of the shareholder's tax  attributable to the income of the qualified empire zone enterprise. In no event may the ratio so determined exceed 1.0.  (3) Combined returns  or  reports.  (A)  Where  the  taxpayer  is  a qualified  empire zone enterprise and is required or permitted to make a return or report on a combined basis under  article  nine-A  or  article thirty-three  of  this  chapter,  the taxpayer's tax factor shall be the amount  determined  in  paragraph  one  of  this  subdivision  which  is attributable to the income of the qualified empire zone enterprise. Such attribution  shall be made in accordance with the ratio of the qualified empire zone enterprise's  income  allocated  within  the  state  to  the combined group's income, or in accordance with such other methods as the commissioner   may   prescribe   as  providing  an  apportionment  which  reasonably reflects the portion of the combined group's tax attributable to the income of the qualified empire zone enterprise. In no  event  may the ratio so determined exceed 1.0.  (B)  The  term  "income of the qualified empire zone enterprise" means entire net income, minimum taxable income, alternative entire net income or entire net income plus compensation calculated as if the taxpayer was filing separately and the term "combined group's  income"  means  entire net  income,  minimum  taxable  income, alternative entire net income or entire net income plus compensation as shown on the combined  return  or report, allocated within the state.  (4)  If  the amount determined in paragraph one of this subdivision is less than zero, a taxpayer shall not be  allowed  a  credit  under  this section.  (g) Definitions and cross-references. For definitions of terms used in this  section  see  sections  fourteen  and fifteen of this article. For application of  the  credit  provided  for  in  this  section,  see  the following provisions of this chapter:  (1) Article 9-A: Section 210-B: subdivision 6.  (2) Article 22: Section 606: subsections (i) and (cc).  (3) Article 33: Section 1511: subdivision (s).