N.Y.
Tax Law Section 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 Environmental Conservation Law § 27-1419 (Certification of completion)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 Environmental Conservation Law § 27-1419 (Certification of completion)section 27-1419 of the environmental conservation law.(3)
Developer.(i)
A “developer” is a taxpayer under article nine, nine-A, twenty-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 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 Environmental Conservation Law § 27-1419 (Certification of completion)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 Environmental Conservation Law § 27-1409 (Brownfield site cleanup agreement)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 Environmental Conservation Law § 27-1409 (Brownfield site cleanup agreement)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 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 calculated by the commissioner. The commissioner shall annually calculate estimated and 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. 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 § 15 (QEZE credit for real property taxes)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-B: subdivision 18.(iii)
Article 22: Section 606: subsections (i) and (ee).(iv)
Article 33: Section 1511: subdivision (v).
Source:
Section 22 — Tax credit for remediated brownfields, https://www.nysenate.gov/legislation/laws/TAX/22 (updated Jan. 9, 2015; accessed Oct. 26, 2024).
