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New York Tax Law Section 22 - Tax Credit For Remediated Brownfields.Legal Research Home > New York Lawyer > Tax > New York Tax Law Section 22 - Tax Credit For Remediated Brownfields. Sponsored Links
§ 22. Tax credit for remediated brownfields. (a) Definitions. As used
in this section the following terms shall have the following meanings:
(1) Certificate of completion. A "certificate of completion" issued by
the commissioner of environmental conservation pursuant to section
27-1419 of the environmental conservation law.
(2) Qualified site. For purposes of this section, a "qualified site"
is a site with respect to which a certificate of completion has been
issued by the commissioner of environmental conservation pursuant to
section 27-1419 of the environmental conservation law.
(3) Developer. (i) A "developer" is a taxpayer under article nine,
nine-A, twenty-two, thirty-two or thirty-three of this chapter who or
which either (I) has been issued a certificate of completion with
respect to a qualified site or (II) has purchased or in any other way
has been conveyed all or any portion of a qualified site from a taxpayer
or any other party who or which has been issued a certificate of
completion with respect to such site provided, such purchase or
conveyance occurs within seven years of the effective date of the
certificate of completion issued with respect to such qualified site.
Provided further, that the taxpayer who or which is purchasing all or
any portion of a qualified site and the taxpayer or any other party who
or which has been issued a certificate of completion with respect to
such site may not be related persons, as such term is defined in
subparagraph (C) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code.
(ii) Where the entity to whom a certificate of completion has been
issued is a partnership, or where the entity which has purchased all or
any portion of a qualified site from a taxpayer who or which has been
issued a certificate of completion with respect to such site within the
applicable time limit is a partnership, any partner in such partnership
who or which is taxable under article nine, nine-A, twenty-two,
thirty-two or thirty-three of this chapter shall be a developer under
this paragraph. Where the entity to whom a certificate of completion has
been issued is a New York S corporation, or where the entity which has
purchased all or any portion of a qualified site from a taxpayer who or
which has been issued a certificate of completion with respect to such
site within the applicable time limit is a New York S corporation, any
shareholder in such New York S corporation shall be a developer under
this paragraph.
(4) Cessation of status. A taxpayer shall cease to be a developer on
the first day of the taxable year during which revocation of its
certificate of completion under section 27-1419 of the environmental
conservation law is final and no longer subject to judicial review, and
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.
(5) 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;
(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.
(b) Remediated brownfield credit for real property taxes for qualified
sites. (1) Allowance of credit. A developer of a qualified site who or
which is 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 paragraph
nine of this subdivision, for eligible real property taxes imposed on
such site.
(2) Amount of credit. The amount of the credit shall be twenty-five
percent of the product of (i) the benefit period factor, (ii) the
employment number factor, and (iii) the eligible real property taxes
paid or incurred by the developer of the qualified site during the
taxable year (or the pro rata share of such taxes in the case of a
partner in a partnership or a shareholder in a New York S corporation),
except that if the real property which is the subject of the credit
provided for under this section is attributed to a qualified site
located in an environmental zone as defined in paragraph five of
subdivision (a) of this section, the amount of the credit shall be the
product of the factors and taxes referred to in subparagraphs (i), (ii)
and (iii) of this paragraph. However, the amount of the credit may not
exceed the credit limitation set forth in paragraph seven of this
subdivision.
(3) Benefit period factor. The benefit period factor is a numerical
value corresponding with a benefit period of ten consecutive taxable
years commencing in the taxpayer's taxable year during which the
certificate of completion is issued for the qualified site or the
taxpayer's first taxable year commencing on or after April first, two
thousand five, whichever is later. The benefit period factors are set
forth in the following table:
Taxable year of benefit period: Benefit period factor:
1-10 1.0
(4) Employment number factor. (i) The employment number factors are
set forth in the following table:
Average number of full-time Employment number factor:
employees employed by the
developer of a qualified site, plus
the average number of full-time
employees employed by a lessee
or lessees
of a portion of such qualified
site, where such employees are
employed at such site
during the taxable year:
At least 25 but less than 50 .25
At least 50 but less than 75 .50
At least 75 but less than 100 .75
At least 100 1.00
(ii) For purposes of this paragraph, the average number of full-time
employees, excluding general executive officers, employed by a developer
and a lessee at a qualified site during a taxable year or other
applicable period, shall be computed by ascertaining the number of such
employees employed by the developer and such lessee on the thirty-first
day of March, the thirtieth day of June, the thirtieth day of September
and the thirty-first day of December during each taxable year or other
applicable period, by adding together the number of such individuals
ascertained on each of such dates and dividing the sum so obtained by
the number of such dates occurring within such taxable year or other
applicable period. Where the developer is a partner in a partnership or
a shareholder in a New York S corporation, the number of full-time
employees of the partnership or the New York S corporation respectively,
at such qualified site, shall be used for purposes of this calculation.
(5) Eligible real property taxes. The term "eligible real property
taxes" means taxes imposed on real property which consists of a
qualified site owned by the developer, provided such taxes become a lien
on the real property in a period during which the real property is a
qualified site. In addition, the term "eligible real property taxes"
includes payments in lieu of taxes by the developer, with respect to a
qualified site, to the state, a municipal corporation or a public
benefit corporation pursuant to a written agreement entered into between
the developer and the state, a municipal corporation or a public benefit
corporation. Provided, however, such a payment in lieu of taxes 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, determined on the date the
taxpayer becomes a developer as defined under this section, of real
property, including buildings and structural components of buildings,
owned by the developer and located on a qualified site with respect to
which the taxpayer is a developer, or (ii) the 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 estimated
effective full value tax rate within the county in which such property
is located, as most recently reported to the commissioner by the
secretary of the state board of real property services, or his or her
designee. The state board shall annually calculate estimated and
effective full value tax rates within each county for this purpose based
upon the most current information available to it in relation to county,
city, town, village and school district taxes. Provided further, where
the amount of the credit determined under paragraph two of this
subdivision is the total product of the factors and tax specified
therein, the term "eligible real property taxes" under this paragraph
shall apply only to taxes imposed on real property which is attributed
to a qualified site located in an environmental zone. Where the
developer is a partner in a partnership or a shareholder in a New York S
corporation, such real property shall be owned by the partnership or the
New York S corporation, respectively.
(6) Credit recapture. Where a developer's eligible real property taxes
which were the basis for the allowance of the credit provided for under
this subdivision 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 (i) the amount of
credit originally allowed for a taxable year over (ii) 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 paragraph to be recaptured for each
year based on such reduction.
(7) Credit limitation. The credit limitation shall be the product of
(i) ten thousand dollars and (ii) the average number of full-time
employees employed by the developer of a qualified site and a lessee or
lessees of a portion of such qualified site during the taxable year, as
such average is computed under subparagraph (ii) of paragraph four of
this subdivision.
(8) Credit option. If the qualified site is located in whole or in
part in an area designated as an empire zone pursuant to article
eighteen-B of the general municipal law, and a taxpayer meets the
eligibility requirements for both the credit provided for under this
section and the QEZE credit for real property taxes provided for under
section fifteen of this article, with respect to all or part of such
site, such taxpayer shall not be allowed to claim both such credits. The
taxpayer shall be required, in the first taxable year such taxpayer is
allowed to claim a credit under this section, to elect whether to claim
the credit provided for under this section or the credit provided for
under section fifteen of this article. Such election shall be made with
the filing of the return or report required under article nine, nine-A,
twenty-two, thirty-two or thirty-three of this chapter, whichever is
applicable, for such taxable year. Such election shall apply to and be
binding in each subsequent taxable year applicable to the credit
provided for under either this section or section fifteen of this
article. A taxpayer who or which has been allowed a credit under section
fifteen of this article, in a taxable year preceding the first taxable
year such taxpayer is allowed to claim a credit under this section,
shall not be precluded from making the election provided for in this
paragraph.
(9) Cross-references. For application of the credit provided for in
this subdivision, see the following provisions of this chapter:
(i) Article 9: Section 187-h.
(ii) Article 9-A: Section 210: subdivision 34.
(iii) Article 22: Section 606: subsections (i) and (ee).
(iv) Article 32: Section 1456: subsection (r).
(v) Article 33: Section 1511: subdivision (v).
Last modified: September 7, 2006 |