2023 New York Laws › TAX - Tax › Article 1 - Short Title; Definitions; Miscellaneous › 18 - Low-Income Housing Credit.

§  18. Low-income housing credit.  (a) Allowance of credit. A taxpayer
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 (d) of this section,  with  respect
to   the  ownership  of  eligible  low-income  buildings  for  which  an
eligibility statement has been issued by the commissioner of housing and
community renewal. The amount of the credit shall be the  credit  amount
for  each  such  building  allocated by such commissioner as provided in
article two-A of the public housing law.  The  credit  amount  shall  be
allowed  for each of the ten taxable years in the credit period, and any
reduction in first-year credit as provided in subdivision two of section
twenty-two of such law shall be allowed in the eleventh taxable year.
(b) Credit recapture. (1) General. If,
(A) as of the close of any taxable year in the compliance period,  the
amount  of  the  qualified  basis  of  any  building with respect to the
taxpayer is less than
(B) the amount of such basis as of the close of the preceding  taxable
year,
(C)  then  the  credit  recapture  amount  must  be added back for the
taxable year.
(2) Credit recapture amount. The credit recapture amount is an  amount
equal to the sum of
(A)  the  aggregate  decrease  in  the credits allowed to the taxpayer
under this section for all prior taxable years which would have resulted
if the accelerated portion of the credit allowable  by  reason  of  this
section were not allowed for all prior taxable years with respect to the
excess  of  the amount described in subparagraph (B) of paragraph (1) of
this subdivision over the amount described in subparagraph (A)  of  such
paragraph, plus
(B)  interest  at  the  overpayment rate established under section one
thousand ninety-six of this  chapter  on  the  amount  determined  under
subparagraph  (A)  of this paragraph for each prior taxable year for the
period beginning on the due date for filing the  report  for  the  prior
taxable year involved.
(3)  Accelerated  portion  of credit. For purposes of paragraph two of
this subdivision, the accelerated portion of the credit  for  the  prior
taxable years with respect to any amount of basis is the excess of
(A)  the  aggregate  credit allowed by reason of this section (without
regard to this subdivision) for such years with respect to  such  basis,
over
(B)  the  aggregate  credit which would be allowable by reason of this
section for such years with respect  to  such  basis  if  the  aggregate
credit  which would (but for this subdivision) have been allowed for the
entire compliance period were allowable ratably over fifteen years.
(4) Special rules. For purposes of  this  subdivision,  the  rules  of
section 42 (j)(4)(B) and (C) of the internal revenue code shall apply in
determining the credit recapture amount.
(5)  Exceptions  to  recapture. Recapture under this subdivision shall
not apply to a reduction in qualified basis
(A) by reason of a casualty loss, if the commissioner, in consultation
with the commissioner of housing and community renewal, determines  that
such  loss  is  restored  by  reconstruction  or  replacement  within  a
reasonable period, or
(B) by reason of a change in floor space devoted to  low-income  units
in  a building, if such building remains an eligible low-income building
after such change, and if the commissioner,  in  consultation  with  the
commissioner  of  housing  and  community  renewal, determines that such
change is de minimis, or
(C) by reason of error in complying with low-income eligibility  tests
referred  to  in  subdivision  five  of section twenty-one of the public
housing law, if the commissioner, in consultation with the  commissioner
of  housing  and  community  renewal,  determines  that such error is de
minimis.
(6)  Recapture  by partners of a partnership. In the case of ownership
of a building or interest therein by a partnership which has thirty-five
or more partners, the provisions of section  42(j)(5)  of  the  internal
revenue  code shall apply to any recapture under this subdivision unless
the partnership elects not to have such provisions apply.
(6-a) The taxpayer that originally received the  credit  shall  remain
solely  liable  for  all  obligations  and  liabilities  imposed  on the
taxpayer with respect to the credit, none of  which  shall  apply  to  a
party to whom the credit has been subsequently transferred.
(7)  (A) The credit recapture required under this subdivision will not
apply solely by reason of the disposition of a building or  an  interest
therein if it is reasonably expected that such building will continue to
be  operated  as  an  eligible  low-income  building  for  the remaining
compliance period with respect to such building.
(B) Statute of limitations. If a building (or an interest therein)  is
disposed  of  during  any taxable year and there is any reduction in the
qualified basis of such building which results in  an  increase  in  tax
under this section for such taxable or any subsequent taxable year, then
(i)  the  statutory  period  for the assessment of any deficiency with
respect to such increase in tax will not expire before the expiration of
three years from the date the  commissioner  of  housing  and  community
renewal  is notified by the taxpayer (in such manner as the commissioner
of housing and community renewal may prescribe)  of  such  reduction  in
qualified basis, and
(ii)  such  deficiency  may  be assessed before the expiration of such
three-year period notwithstanding the provisions of  any  other  law  or
rule of law which would otherwise prevent such assessment.
(c)  Construction with public housing law; definitions. The provisions
of this section shall be construed in conjunction with the provisions of
article two-A of the public housing law. For definitions relating to the
low-income housing credit, see section twenty-one of such law.
(d) Cross-references. 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 15,
(2) Article 22: Section 606: subsections (i) and (x),
(3) Article 33: Section 1511: subdivision (n).