NY Tax L § 15 (2021)
2021 New York Laws TAX - Tax Article 1 - 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  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:  (2) Article 9-A: Section 210-B: subdivision 5.  (3) Article 22: Section 606: subsections (i) and (bb).  (4) Article 33: Section 1511: subdivision (r).