2023 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).