Amd §§210-B, 606 & 1511, Tax L; add Art 14-A §§14.15 - 14.18, Pks & Rec L
Authorizes the pass-through or transfer of the credits for rehabilitation of historic properties; authorizes the allocation of the credit in a separate manner from any federal certified historic tax credit.
STATE OF NEW YORK
________________________________________________________________________
2124
2025-2026 Regular Sessions
IN SENATE
January 15, 2025
___________
Introduced by Sens. KAVANAGH, MAY, SERRANO -- read twice and ordered
printed, and when printed to be committed to the Committee on Budget
and Revenue
AN ACT to amend the tax law and the parks, recreation and historic pres-
ervation law, in relation to authorizing the pass-through or transfer
of the credits for rehabilitation of historic properties
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 26 of section 210-B of the tax law is amended
2 by adding two new paragraphs (g) and (h) to read as follows:
3 (g) (i) The allocation of the credit established by this subdivision
4 may be made without regard to and in a separate manner from any federal
5 rehabilitation credit that may be allocated with respect to a certified
6 historic structure under section forty-seven of the internal revenue
7 code by written agreement of the taxpayer otherwise entitled to claim
8 such credit or by written agreement of a pass-through entity that may
9 report such credit or otherwise elect to pass the federal rehabilitation
10 tax credit through to a tenant taxpayer in accordance with applicable
11 federal law.
12 (ii) With respect to certified historic structures that are subject to
13 a lease arrangement whereby the landlord elects to pass the federal
14 rehabilitation credit through to the tenant taxpayer, not only may the
15 New York state rehabilitation credit be passed down to the tenant
16 taxpayer and then allocated without regard to and in a separate manner
17 from any federal rehabilitation credit that may be allocated, but the
18 landlord may also opt to retain the New York state rehabilitation cred-
19 it. For purposes of this section, a "landlord" means the owner of the
20 certified historic structure for federal tax purposes.
21 (iii) The New York state rehabilitation credit may be transferred as
22 provided for in article fourteen-A of the parks, recreation and historic
23 preservation law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05760-01-5
S. 2124 2
1 (h) The commissioner shall report annually, on or before the first day
2 of November, on the aggregate amount of credits claimed pursuant to this
3 subdivision on returns filed during the preceding calendar year. Such
4 report shall be provided to the governor, temporary president of the
5 senate, speaker of the assembly, chairs of the senate committees on
6 finance and on housing, construction and community development, and
7 chairs of the assembly committees on ways and means and on housing and
8 shall be made publicly available on the department's website.
9 § 2. Subsection (oo) of section 606 of the tax law is amended by
10 adding two new paragraphs 7 and 8 to read as follows:
11 (7) (A) The allocation of the credit established by this subsection
12 may be made without regard to and in a separate manner from any federal
13 rehabilitation credit that may be allocated with respect to a certified
14 historic structure under section forty-seven of the internal revenue
15 code by written agreement of the taxpayer otherwise entitled to claim
16 such credit or by written agreement of a pass-through entity that may
17 report such credit or otherwise elect to pass the federal rehabilitation
18 tax credit through to a tenant taxpayer in accordance with applicable
19 federal law.
20 (B) With respect to certified historic structures that are subject to
21 a lease arrangement whereby the landlord elects to pass the federal
22 rehabilitation credit through to the tenant taxpayer, not only may the
23 New York state rehabilitation credit be passed down to the tenant
24 taxpayer and then allocated without regard to and in a separate manner
25 from any federal rehabilitation credit that may be allocated, but the
26 landlord may also opt to retain the New York state rehabilitation cred-
27 it. For purposes of this section, a "landlord" means the owner of the
28 certified historic structure for federal tax purposes.
29 (C) The New York state rehabilitation credit may be transferred as
30 provided for in article fourteen-A of the parks, recreation and historic
31 preservation law.
32 (8) The commissioner shall report annually, on or before the first day
33 of November, on the aggregate amount of credits claimed pursuant to this
34 subsection on returns filed during the preceding calendar year. Such
35 report shall be provided to the governor, temporary president of the
36 senate, speaker of the assembly, chairs of the senate committees on
37 finance and on housing, construction and community development, and
38 chairs of the assembly committees on ways and means and on housing and
39 shall be made publicly available on the department's website.
40 § 3. Subdivision (y) of section 1511 of the tax law, as added by chap-
41 ter 472 of the laws of 2010, is amended by adding two new paragraphs 7
42 and 8 to read as follows:
43 (7) (A) The allocation of the credit established by this subdivision
44 may be made without regard to and in a separate manner from any federal
45 rehabilitation credit that may be allocated with respect to a certified
46 historic structure under section forty-seven of the internal revenue
47 code by written agreement of the taxpayer otherwise entitled to claim
48 such credit or by written agreement of a pass-through entity that may
49 report such credit or otherwise elect to pass the federal rehabilitation
50 tax credit through to a tenant taxpayer in accordance with applicable
51 federal law.
52 (B) With respect to certified historic structures that are subject to
53 a lease arrangement whereby the landlord elects to pass the federal
54 rehabilitation credit through to the tenant taxpayer, not only may the
55 New York state rehabilitation credit be passed down to the tenant
56 taxpayer and then allocated without regard to and in a separate manner
S. 2124 3
1 from any federal rehabilitation credit that may be allocated, but the
2 landlord may also opt to retain the New York state rehabilitation cred-
3 it. For purposes of this section, a "landlord" means the owner of the
4 certified historic structure for federal tax purposes.
5 (C) The New York state rehabilitation credit may be transferred as
6 provided for in article fourteen-A of the parks, recreation and historic
7 preservation law.
8 (8) The commissioner shall report annually, on or before the first day
9 of November, on the aggregate amount of credits claimed pursuant to
10 this subdivision on returns filed during the preceding calendar year.
11 Such report shall be provided to the governor, temporary president of
12 the senate, speaker of the assembly, chairs of the senate committees on
13 finance and on housing, construction and community development, and
14 chairs of the assembly committees on ways and means and on housing and
15 shall be made publicly available on the department's website.
16 § 4. The parks, recreation and historic preservation law is amended by
17 adding a new article 14-A to read as follows:
18 ARTICLE 14-A
19 HISTORIC REHABILITATION TAX CREDIT TRANSFER PROGRAM
20 Section 14.15 Definitions.
21 14.16 Transfer of rehabilitation credit.
22 14.17 Reporting.
23 14.18 Regulations, coordination with federal rehabilitation
24 credit provisions.
25 § 14.15 Definitions. As used in this article, the following terms
26 shall have the following meanings:
27 1. "Federal rehabilitation credit" means the federal credit that may
28 be allocated with respect to a certified historic structure under
29 section forty-seven of the internal revenue code. References in this
30 article to section forty-seven of the internal revenue code shall mean
31 such section as amended from time to time.
32 2. "Pass-through entity" means an entity that is not a taxpayer under
33 federal or state tax law, such as a limited liability company, a part-
34 nership, an S Corporation, or any other entity as determined by the
35 commissioner of taxation and finance which is deemed to be a reporting
36 entity for income tax purposes and files annual information returns
37 passing through items of income, loss, credits and certain other tax
38 attributes to each partner, member or shareholder as applicable.
39 3. "Qualified rehabilitation expenditures" shall have the same meaning
40 as in section forty-seven of the internal revenue code.
41 4. "Regulations" means regulations adopted by the commissioner, in
42 consultation with the commissioner of the department of taxation and
43 finance, pursuant to section 14.18 of this article.
44 5. "Rehabilitation credit" means the credit provided for under subdi-
45 vision twenty-six of section two hundred ten-B, subsection (oo) of
46 section six hundred six or subdivision (y) of section fifteen hundred
47 eleven of the tax law.
48 6. "Transferee" means a taxpayer or a pass-through entity that
49 receives a transfer of the rehabilitation credit. A transferee need not
50 own an interest in the certified historic structure or in an entity with
51 an ownership interest in the certified historic structure to receive a
52 transfer of a rehabilitation credit.
53 7. "Non-profit transferee" means a non-profit entity that receives a
54 transfer of the rehabilitation credit.
55 § 14.16 Transfer of rehabilitation credit. Either a 1. taxpayer or
56 pass-through entity that may report the rehabilitation credit or other-
S. 2124 4
1 wise elect to pass the federal rehabilitation credit through to a tenant
2 taxpayer in accordance with applicable federal law or 2. non-profit
3 transferee may, with prior notice in accordance with the regulations,
4 transfer the rehabilitation credit, in whole or in part, to any trans-
5 feree or non-profit transferee with the same effect as if the transferee
6 or non-profit transferee had incurred the qualified rehabilitation
7 expenditures itself; provided that no partial transfer of the rehabili-
8 tation credit may be for less than twenty-five percent of the full reha-
9 bilitation credit claimed by the taxpayer. A transferee shall use or
10 report the rehabilitation credit in the year it is allowed and may not
11 transfer the rehabilitation credit on to yet another transferee. A
12 transfer of rehabilitation credit to a non-profit transferee, where the
13 non-profit transferee is solely acting as a go-between to further trans-
14 fer the rehabilitation credit to a transferee, shall not constitute a
15 transfer for purposes of determining the single transfer limitation of
16 this section.
17 § 14.17 Reporting. If a taxpayer or a pass-through entity that may
18 report the credit or otherwise elect to pass the federal rehabilitation
19 credit through to a tenant taxpayer in accordance with applicable feder-
20 al law elects to transfer the credit as provided for in section 14.16 of
21 this article, prior to filing any tax returns claiming the rehabili-
22 tation credit, a taxpayer or a pass-through entity that may report the
23 rehabilitation credit or otherwise elect to pass the federal rehabili-
24 tation credit through to a tenant taxpayer in accordance with applicable
25 federal law shall provide an information statement to the commissioner
26 in accordance with the department's regulations. Such information state-
27 ment shall include, but may not be limited to, the identity and tax
28 identification information of any non-profit transferee and the identity
29 and tax identification information of any transferee that will claim the
30 credit.
31 § 14.18 Regulations, coordination with federal rehabilitation credit
32 provisions. The commissioner, in consultation with the commissioner of
33 the department of taxation and finance, shall promulgate rules and regu-
34 lations necessary to administer the provisions of this article.
35 § 5. This act shall take effect immediately and shall apply to taxable
36 years beginning on and after January 1, 2026.
