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New York Tax Law Section 21 - Brownfield Redevelopment Tax Credit.Legal Research Home > New York Lawyer > Tax > New York Tax Law Section 21 - Brownfield Redevelopment Tax Credit. Sponsored Links
* § 21. Brownfield redevelopment tax credit. (a) Allowance of credit.
(1) General. A taxpayer subject to tax under article nine, nine-A,
twenty-two, thirty-two or thirty-three of this chapter shall be allowed
a credit against such tax, pursuant to the provisions referenced in
subdivision (f) of this section. Such credit shall be allowed with
respect to a qualified site, as such term is defined in paragraph one of
subdivision (b) of this section. The amount of the credit in a taxable
year shall be the sum of the credit components specified in paragraphs
two, three and four of this subdivision applicable in such year.
(2) Site preparation credit component. The site preparation credit
component shall be equal to the applicable percentage of the site
preparation costs paid or incurred by the taxpayer with respect to a
qualified site. The credit component amount so determined with respect
to a site's qualification for a certificate of completion shall be
allowed for the taxable year in which the effective date of the
certificate of completion occurs. The credit component amount determined
other than with respect to such qualification shall be allowed for the
taxable year in which the improvement to which the applicable costs
apply is placed in service for up to five taxable years after the
issuance of such certificate of completion.
(3) Tangible property credit component. The tangible property credit
component shall be equal to the applicable percentage of the cost or
other basis for federal income tax purposes of tangible personal
property and other tangible property, including buildings and structural
components of buildings, which constitute qualified tangible property.
The credit component amount so determined shall be allowed for the
taxable year in which such qualified tangible property is placed in
service on a qualified site with respect to which a certificate of
completion has been issued to the taxpayer for up to ten taxable years
after the date of the issuance of such certificate of completion. The
tangible property credit component shall be allowed with respect to
property leased to a second party only if such second party is either
(i) not a party responsible for the disposal of hazardous waste or the
discharge of petroleum at the site according to applicable principles of
statutory or common law liability, or (ii) a party responsible according
to applicable principles of statutory or common law liability if such
party's liability arises solely from operation of the site subsequent to
the disposal of hazardous waste or the discharge of petroleum, and is so
certified by the commissioner of environmental conservation at the
request of the taxpayer, pursuant to section 27-1419 of the
environmental conservation law. Notwithstanding any other provision of
law to the contrary, in the case of allowance of credit under this
section to such a lessor, the commissioner shall have the authority to
reveal to such lessor any information, with respect to the issue of
qualified use of property by the lessee, which is the basis for the
denial in whole or in part, or for the recapture, of the credit claimed
by such lessor.
(4) On-site groundwater remediation credit component. The on-site
groundwater remediation credit component shall be equal to the
applicable percentage of the on-site groundwater remediation costs paid
or incurred by the taxpayer with respect to a qualified site (to the
extent that such groundwater remediation costs are not included in the
determination of the site preparation credit or the cost or other basis
included in the determination of the tangible property credit). The
credit component so determined for costs incurred and paid with respect
to and prior to the issuance of a certificate of completion shall be
allowed for the taxable year in which the effective date of the issuance
of a certificate of completion occurs. The credit component amount
determined in taxable years after the effective date of the issuance of
a certificate of completion shall be allowed in the taxable year such
qualified costs are incurred and paid for up to five taxable years after
the issuance of such certificate of completion.
(5) Applicable percentage. For purposes of paragraphs two, three and
four of this subdivision, the applicable percentage shall be twelve
percent in the case of credits claimed under article nine, nine-A,
thirty-two or thirty-three of this chapter, and ten percent in the case
of credits claimed under article twenty-two of this chapter, except that
where at least fifty percent of the area of the qualified site relating
to the credit provided for in this section is located in an
environmental zone as defined in paragraph six of subdivision (b) of
this section, the applicable percentage shall be increased by an
additional eight percent. Provided, however, as afforded in section
27-1419 of the environmental conservation law, if the certificate of
completion indicates that the qualified site has been remediated to
Track 1 as that term is described in subdivision four of section 27-1415
of the environmental conservation law, the applicable percentage set
forth in the first sentence of this paragraph shall be increased by an
additional two percent.
(6) Site preparation costs and on-site groundwater remediation costs
paid or incurred by the taxpayer with respect to a qualified site and
the cost or other basis for federal income tax purposes of tangible
personal property and other tangible property, including buildings and
structural components of buildings, which constitute qualified tangible
property shall only include costs paid or incurred by the taxpayer on or
after the date of the brownfield site cleanup agreement executed by the
taxpayer and the department of environmental conservation pursuant to
section 27-1409 of the environmental conservation law.
(7) The amount of any grant received from the federal, state or a
local government or an instrumentality or public benefit corporation
thereof received by the taxpayer and used to pay for any of the costs
described in paragraphs two, three and four of this subdivision, which
was not included in the federal gross income of the taxpayer, shall be
subtracted in computing the credit components under this section.
(b) Definitions. As used in this section, the following terms shall
have the following meanings:
(1) Qualified site. A "qualified site" is a site with respect to which
a certificate of completion has been issued to the taxpayer by the
commissioner of environmental conservation pursuant to section 27-1419
of the environmental conservation law.
(2) Site preparation costs. The term "site preparation costs" shall
mean all amounts properly chargeable to a capital account, (i) which are
paid or incurred in connection with a site's qualification for a
certificate of completion, and (ii) all other site preparation costs
paid or incurred in connection with preparing a site for the erection of
a building or a component of a building, or otherwise to establish a
site as usable for its industrial, commercial (including the commercial
development of residential housing), recreational or conservation
purposes. Site preparation costs shall include, but not be limited to,
the costs of excavation, temporary electric wiring, scaffolding,
demolition costs, and the costs of fencing and security facilities. Site
preparation costs shall not include the cost of acquiring the site and
shall not include amounts included in the cost or other basis for
federal income tax purposes of qualified tangible property, as described
in paragraph three of this subdivision.
(3) Qualified tangible property. "Qualified tangible property" is
property which:
(A) is depreciable pursuant to section one hundred sixty-seven of the
internal revenue code,
(B) has a useful life of four years or more,
(C) has been acquired by purchase as defined in section one hundred
seventy-nine (d) of the internal revenue code,
(D) has a situs on a qualified site in this state, and
(E) is principally used by the taxpayer for industrial, commercial,
recreational or environmental conservation purposes (including the
commercial development of residential housing).
(4) On-site groundwater remediation costs. The term "on-site
groundwater remediation costs" shall mean all amounts properly
chargeable to a capital account, (i) which are paid or incurred in
connection with a site's qualification for a certificate of completion,
and (ii) include costs which are paid or incurred in connection with the
remediation of on-site groundwater contamination and incurred to
implement a requirement of the remedial work plan or an interim remedial
measure work plan for a qualified site which are imposed pursuant to
subdivisions two and three of section 27-1411 of the environmental
conservation law.
(5) Certificate of completion. A "certificate of completion" issued by
the commissioner of environmental conservation pursuant to section
27-1419 of the environmental conservation law.
(6) Environmental zones (EN-Zones). An "environmental zone" shall mean
an area designated as such by the commissioner of economic development.
Such areas so designated are areas which are census tracts and block
numbering areas which, as of the two thousand census, satisfy either of
the following criteria:
(A) areas that have both:
(i) a poverty rate of at least twenty percent for the year to which
the data relate; and
(ii) an unemployment rate of at least one and one-quarter times the
statewide unemployment rate for the year to which the data relate, or;
(B) areas that have a poverty rate of at least two times the poverty
rate for the county in which the areas are located for the year to which
the data relate provided, however, that a qualified site shall only be
deemed to be located in an environmental zone under this subparagraph
(B) if such site was the subject of a brownfield site cleanup agreement
pursuant to section 27-1409 of the environmental conservation law that
was entered into prior to September first, two thousand ten.
Such designation shall be made and a list of all such environmental
zones shall be established by the commissioner of economic development
no later than December thirty-first, two thousand four provided,
however, that a qualified site shall only be deemed to be located in an
environmental zone under subparagraph (B) of this paragraph if such site
was the subject of a brownfield site cleanup agreement pursuant to
section 27-1409 of the environmental conservation law that was entered
into prior to September first, two thousand ten.
(c) Qualifying property. Property which qualifies for the credit
provided for under this section and also for a credit provided for (1)
under either subdivision twelve or subdivision twelve-B of section two
hundred ten of this chapter, or both, (2) subsection (a) or subsection
(j) of section six hundred six of this chapter, or both, (3) the credit
provided for under subsection (i) of section fourteen hundred fifty-six
of this chapter, or (4) the credit provided under subdivision (q) of
section fifteen hundred eleven of this chapter may be the basis for
either the credit provided for under this section or one of the credits
enumerated in paragraph one, two, three or four of this subdivision, but
not both.
(d) Depreciable property. (1) With respect to qualified tangible
property which is depreciable pursuant to section one hundred
sixty-seven of the internal revenue code but is not subject to the
provisions of section one hundred sixty-eight of such code and which
ceases to be in qualified use prior to the end of the taxable year in
which the credit is to be taken, the amount of the credit shall be that
portion of the credit provided for in this subdivision which represents
the ratio which the months of qualified use bear to the months of useful
life. If property on which credit has been taken ceases to be in
qualified use prior to the end of its useful life, the difference
between the credit taken and the credit allowed for actual use must be
added back in the year in which the property ceased to be in qualified
use. Provided, however, if such property ceases to be in qualified use
after it has been in qualified use for more than twelve consecutive
years, it shall not be necessary to add back the credit as provided in
this paragraph. The amount of credit allowed for actual use shall be
determined by multiplying the original credit by the ratio which the
months of qualified use bear to the months of useful life. For purposes
of this paragraph, the useful life of property shall be the same as the
taxpayer uses for depreciation purposes when computing its federal
income tax liability.
(2) Except with respect to that property to which paragraph four of
this subdivision applies, with respect to qualified tangible property
which is three-year property, as defined in subsection (e) of section
one hundred sixty-eight of the internal revenue code, which ceases to be
in qualified use prior to the end of the taxable year in which the
credit is to be taken, the amount of the credit shall be that portion of
the credit provided for in this section which represents the ratio which
the months of qualified use bear to thirty-six. If property on which
credit has been taken ceases to be in qualified use prior to the end of
thirty-six months, the difference between the credit taken and the
credit allowed for actual use must be added back in the year in which
the property ceased to be in qualified use. The amount of credit allowed
for actual use shall be determined by multiplying the original credit by
the ratio which the months of qualified use bear to thirty-six.
(3) Except with respect to that property to which paragraph four of
this subdivision applies, with respect to qualified tangible property
which is subject to the provisions of section one hundred sixty-eight of
the internal revenue code other than three-year property as defined in
subsection (e) of such section one hundred sixty-eight which ceases to
be in qualified use prior to the end of the taxable year in which the
credit is to be taken, the amount of the credit shall be that portion of
the credit provided for in this section which represents the ratio which
the months of qualified use bear to sixty. If property on which credit
has been taken ceases to be in qualified use prior to the end of sixty
months, the difference between the credit taken and the credit allowed
for actual use must be added back in the year in which the property
ceased to be in qualified use. The amount of credit allowed for actual
use shall be determined by multiplying the original credit by the ratio
which the months of qualified use bear to sixty.
(4) With respect to any qualified tangible property to which section
one hundred sixty-eight of the internal revenue code applies, which is a
building or a structural component of a building and which ceases to be
in qualified use prior to the end of the taxable year in which the
credit is to be taken, the amount of the credit shall be that portion of
the credit provided for in this section which represents the ratio which
the months of qualified use bear to the total number of months over
which the taxpayer chooses to deduct the property under the internal
revenue code. If property on which credit has been taken ceases to be in
qualified use prior to the end of the period over which the taxpayer
chooses to deduct the property under the internal revenue code, the
difference between the credit taken and the credit allowed for actual
use must be added back in the year in which the property ceased to be in
qualified use. Provided, however, if such property ceases to be in
qualified use after it has been in qualified use for more than twelve
consecutive years, it shall not be necessary to add back the credit as
provided in this paragraph. The amount of credit allowed for actual use
shall be determined by multiplying the original credit by the ratio
which the months of qualified use bear to the total number of months
over which the taxpayer chooses to deduct the property under the
internal revenue code.
(e) If the certificate of completion issued to the taxpayer with
respect to a qualified site is revoked by a determination issued
pursuant to section 27-1419 of the environmental conservation law, the
amount of any credit allowed by this section shall be added back in the
taxable year in which such determination is final and no longer subject
to judicial review.
(f) Cross-references. For application of the credit provided for in
this section, see the following provisions of this chapter:
(1) Article 9: Section 187-g
(2) Article 9-A: Section 210, subdivision 33
(3) Article 22: Section 606, subsections (i) and (dd)
(4) Article 32: Section 1456, subsection (q)
(5) Article 33: Section 1511, subdivision (u).
* NB Applies to taxable years beginning on or after April 1, 2005
* NB There are 2 § 21's
Last modified: September 7, 2006 |