2023 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).