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A08559 Summary:

BILL NOA08559D
 
SAME ASSAME AS UNI. S06359-D
 
SPONSORBudget
 
COSPNSR
 
MLTSPNSR
 
Amd Various Laws, generally
 
Enacts into law major components of legislation necessary to implement the state fiscal plan for the 2014-2015 state fiscal year; relates to the reformation of the taxation on business corporations; allows direct payment of STAR savings; extends fees for the establishment of oil and gas unit of production value; modifies signature requirements on e-filed returns; extends the non-custodial parent earned income tax credit for two years; closes the resident trust loophole; repeals the additional minimum personal income tax; establishes an enhanced real property tax circuit breaker; modifies delivery of the family tax relief credit; extends the empire state commercial production tax credit; authorizes additional credits for the low income housing credit; establishes a twenty percent real property tax credit for manufacturers and eliminates the net income tax on upstate manufacturers; repeals the franchise tax on agriculture cooperatives; provides a refundable credit for telecommunications excise taxes on START-UP NY; enhances the youth works tax credit; extends the alternative fuels tax exemption; simplifies the distribution of motor vehicle fee receipts; relates to comprehensive estate tax reform; extends Monticello raceway video lottery terminal rates for one year; extends certain tax rates and certain simulcasting provisions; extends VLG vendors capital awards program; aligns mobility and personal income tax filings for the self-employed; relates to commercial gaming; provides a two-year property tax freeze through a refundable personal income tax credit; extends certain New York city tax exemptions; relates to a musical theatrical production credit; increases the sales tax exemption threshold amount for vending machines; increases film production credit benefits for films produced in certain counties; relates to the length of service awards; creates a third region for the prepayment of motor fuel taxes; establishes the workers with disabilities tax credit program; provides tax incentives to employers for employing individuals with developmental disabilities; allows a STAR lookback period for widows and widowers; relates to health insurance for jockeys.
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A08559 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
            S. 6359--D                                            A. 8559--D
 
                SENATE - ASSEMBLY
 
                                    January 21, 2014
                                       ___________
 
        IN  SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti-
          cle seven of the Constitution -- read twice and ordered  printed,  and
          when  printed to be committed to the Committee on Finance -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee  --  committee  discharged,  bill  amended,  ordered
          reprinted  as  amended  and recommitted to said committee -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee  --  committee  discharged,  bill  amended,  ordered
          reprinted as amended and recommitted to said committee
 
        IN  ASSEMBLY  --  A  BUDGET  BILL, submitted by the Governor pursuant to
          article seven of the Constitution -- read once  and  referred  to  the
          Committee  on  Ways  and  Means -- committee discharged, bill amended,
          ordered reprinted as amended and  recommitted  to  said  committee  --
          again  reported from said committee with amendments, ordered reprinted
          as amended and recommitted to said committee --  again  reported  from
          said  committee  with  amendments,  ordered  reprinted  as amended and
          recommitted to said committee -- again reported  from  said  committee
          with  amendments, ordered reprinted as amended and recommitted to said
          committee
 
        AN ACT to amend the tax law, the general municipal law, the urban devel-
          opment corporation act, the business corporation law, and the  general
          associations law, in relation to reforming taxation of business corpo-
          rations;  and  to  repeal  various  provisions of the tax law relating
          thereto (Part A); to amend the real property tax law, in  relation  to
          the  STAR  registration  program (Part B); to amend chapter 540 of the
          laws of 1992, amending the real property tax law relating to  oil  and
          gas  charges,  in relation to the effective date of such chapter (Part
          C); intentionally omitted (Part D); to amend the tax law, in  relation
          to  modifying the signature requirement on e-filed returns prepared by
          tax professionals (Part E); intentionally omitted (Part F);  to  amend
          part  I of chapter 58 of the laws of 2006, amending the tax law relat-
          ing to providing an enhanced earned income tax credit, in relation  to
          the effectiveness thereof (Part G); intentionally omitted (Part H); to
          amend the tax law and the administrative code of the city of New York,
          in  relation  to  taxing residents who are grantors of exempt resident
          trusts that qualify as  non-grantor  incomplete  gift  trusts  on  the
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD12674-07-4

        S. 6359--D                          2                         A. 8559--D
 
          income  from such trusts and taxing residents who are beneficiaries of
          all other exempt resident trusts or nonresident trusts on the distrib-
          utions of accumulated income that they receive from such trusts  (Part
          I);  to  amend  the tax law and the administrative code of the city of
          New York, in relation to eliminating the personal  income  tax  add-on
          minimum  tax;  and  to repeal certain provisions of such laws relating
          thereto (Part J); to amend the tax law, in relation to establishing an
          enhanced real property tax circuit  breaker;  and  providing  for  the
          repeal  of  such  provisions  upon expiration thereof (Part K); inten-
          tionally omitted (Part L); to amend the tax law, in  relation  to  the
          prepayment  element  of  the family tax relief credit (Part M); inten-
          tionally omitted (Part N); to  amend  the  tax  law,  in  relation  to
          extending  the empire state commercial production tax credit (Part O);
          to amend the public housing law, in relation to extending  the  credit
          against  income  tax  for  persons or entities investing in low-income
          housing (Part P); intentionally omitted (Part Q);  to  amend  the  tax
          law,  in relation to providing a tax credit for real property taxes to
          New York manufacturers;  and  providing  for  the  repeal  of  certain
          provisions  upon  expiration  thereof  (Part R); to amend the economic
          development law, the tax law, the transportation law, the  administra-
          tive  code of the city of New York and the New York state urban devel-
          opment corporation act, in relation to repealing the franchise tax  on
          farmers',  fruit  growers',  and  other like agricultural corporations
          organized and operated on a co-operative basis; and to repeal  section
          185  of the tax law relating to franchise tax on farmers', fruit grow-
          ers', and other like agricultural corporations organized and  operated
          on  a  co-operative  basis;  to  repeal  sections 187-j, 187-k, 187-l,
          187-m, 187-q, 187-r and 187-s of the tax law relating to  certain  tax
          credits; to repeal paragraph 1 of subdivision (h) of section 15, para-
          graph 1 of subdivision (g) of section 31, and certain other provisions
          of  the tax law, in relation to making conforming changes (Part S); to
          amend the tax law, in relation to providing a credit for excise tax on
          telecommunication services for businesses located in tax-free NY areas
          and providing for the repeal of  certain  provisions  upon  expiration
          thereof  (Part  T);  to amend the tax law, in relation to reducing the
          number of hours of part-time work needed  by  employees  for  employer
          qualification  for  the  New York youth works tax credit; and to amend
          the labor law, in relation to the New  York  youth  works  tax  credit
          (Part  U);  to  amend chapter 109 of the laws of 2006 amending the tax
          law and other laws relating to  providing  exemptions,  reimbursements
          and  credits  from  various  taxes  for  certain alternative fuels, in
          relation to extending the alternative fuels  tax  exemptions  for  two
          years  (Part V); to amend chapter 63 of the laws of 2000, amending the
          tax law and other laws relating to modifying the distribution of funds
          from the motor vehicle fuel excise tax and  the  vehicle  and  traffic
          law,  in  relation  to simplifying the methodology for distribution of
          motor vehicle receipts (Part W); to amend the tax law, in relation  to
          the  estate  tax;  to  repeal section 2 of chapter 1013 of the laws of
          1962, amending the tax law relating to imposing a tax on the  transfer
          of  estates  of  decedents  dying  on  or  after April first, nineteen
          hundred sixty-three, relating to an appendix  of  applicable  internal
          revenue  code  provisions,  and to repeal article 26-B of the tax law,
          relating to the generation skipping  transfer  tax  (Part  X);  inten-
          tionally omitted (Part Y); to amend the tax law, in relation to vendor
          fees  paid to vendor tracks (Part Z); to amend the racing, pari-mutuel
          wagering and breeding law,  in  relation  to  licenses  for  simulcast

        S. 6359--D                          3                         A. 8559--D
 
          facilities,  sums  relating  to  track simulcast, simulcast of out-of-
          state thoroughbred races, simulcasting of races  run  by  out-of-state
          harness  tracks  and  distributions of wagers; to amend chapter 281 of
          the  laws of 1994 amending the racing, pari-mutuel wagering and breed-
          ing law and other laws relating to simulcasting and chapter 346 of the
          laws of 1990 amending the racing, pari-mutuel  wagering  and  breeding
          law  and  other  laws  relating  to simulcasting and the imposition of
          certain taxes, in relation to extending  certain  provisions  thereof;
          and  to  amend  the  racing, pari-mutuel wagering and breeding law, in
          relation to extending certain provisions thereof (Part AA);  to  amend
          the tax law, in relation to capital awards to vendor tracks (Part BB);
          intentionally  omitted (Part CC); to amend the tax law, in relation to
          conforming the due dates for the metropolitan commuter  transportation
          mobility  tax  for taxpayers with income from self-employment with the
          due dates for the personal income tax (Part DD); to  amend  the  state
          finance  law,  the upstate New York gaming economic development act of
          2013 and the tax law, in relation to  moneys  appropriated  or  trans-
          ferred from the commercial gaming revenue fund (Part EE); to amend the
          tax  law,  the  education law, the general municipal law, and the real
          property tax law, in relation to a real property tax freeze (Part FF);
          to amend the tax law, in relation  to  the  temporary  exemption  from
          sales  and  use taxes for premises used for commercial office space in
          lower Manhattan; and to amend part C of chapter 2 of the laws of  2005
          amending  the tax law relating to exemptions from sales and use taxes,
          in relation to the effectiveness thereof (Subpart  A);  to  amend  the
          real  property  tax law and the administrative code of the city of New
          York, in relation to extending a real property tax  abatement  program
          for certain commercial properties in cities having a population of one
          million or more and in relation to extending a special reduction under
          the  commercial rent tax in the city of New York (Subpart B); to amend
          the real property tax law and the administrative code of the  city  of
          New  York,  in  relation to applications for tax abatements for indus-
          trial and commercial construction work on properties in a city of  one
          million or more persons (Subpart C); to amend the general city law and
          the  administrative  code  of  the  city  of  New York, in relation to
          extending the relocation and employment  assistance  program  and  the
          Lower  Manhattan relocation and employment assistance program (Subpart
          D); to amend the general city law and the administrative code  of  the
          city  of  New  York,  in relation to extending the special rebates and
          discounts provided pursuant to the energy cost savings program and the
          Lower Manhattan energy program (Subpart E); to amend  the  administra-
          tive  code  of  the  city  of  New  York, in relation to the amount of
          special reduction allowed (Subpart F); and to amend the real  property
          tax law and the administrative code  of  the  city  of  New  York,  in
          relation  to  a  real estate tax abatement program for certain commer-
          cial, industrial and manufacturing properties in a city of one million
          or more persons (Subpart G) (Part  GG);  to  amend  the  tax  law,  in
          relation  to a musical and theatrical production credit; and providing
          for the repeal of such provisions upon expiration thereof  (Part  HH);
          to  amend  the  tax law, in relation to the sale of food and beverages
          through vending machines (Part II); to amend the tax law, in  relation
          to  requiring  that  services  eligible  for  the  empire  state  film
          production tax credit take place in certain  counties  (Part  JJ);  to
          amend the tax law and the administrative code of the city of New York,
          in  relation to exempting the proceeds from service award programs for
          volunteer firefighters and  ambulance  workers  from  personal  income

        S. 6359--D                          4                         A. 8559--D
 
          taxes  (Part KK); to amend the tax law, in relation to the regions and
          rate of the prepaid sales tax on fuels (Part LL); to amend  the  labor
          law  and  the tax law, in relation to the creation of the workers with
          disabilities  tax credit program; and providing for the repeal of such
          provisions upon expiration thereof (Part MM); to amend the real  prop-
          erty  tax law, in relation to permitting senior citizens whose spouses
          are deceased to substitute a more recent year's income for purposes of
          determining eligibility for the  enhanced  exemption  for  school  tax
          relief (Part NN); and to amend the tax law and the racing, pari-mutuel
          wagering and breeding law, in relation to health insurance for jockeys
          (Part OO)
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. This act enacts into law major  components  of  legislation
     2  which are necessary to implement the state fiscal plan for the 2014-2015
     3  state  fiscal  year.  Each  component  is wholly contained within a Part
     4  identified as Parts A through OO. The effective date for each particular
     5  provision contained within such Part is set forth in the last section of
     6  such Part. Any provision in any section contained within a Part, includ-
     7  ing the effective date of the Part, which makes a reference to a section
     8  "of this act", when used in connection with that  particular  component,
     9  shall  be  deemed  to mean and refer to the corresponding section of the
    10  Part in which it is found. Section three of  this  act  sets  forth  the
    11  general effective date of this act.
 
    12                                   PART A
 
    13    Section 1. Article 32 of the tax law is REPEALED.
    14    § 2. Section 180 of the tax law is REPEALED.
    15    § 3. Section 181 of the tax law is REPEALED.
    16    §  4.  Section 208 of the tax law, as added by chapter 415 of the laws
    17  of 1944, subdivision 1 as amended by chapter 576 of the  laws  of  1994,
    18  subdivision  1-A as amended by chapter 166 of the laws of 1991, subdivi-
    19  sion 1-B as added by section 45 of part A and paragraph (k) of  subdivi-
    20  sion  9  as  added by section 46 of part A of chapter 389 of the laws of
    21  1997, subdivision 3, the opening paragraph, subparagraphs 6  and  11  of
    22  paragraph (b), and the opening paragraph of paragraph (g) of subdivision
    23  9  as  amended and subdivision 8-B and subparagraph 3-a of paragraph (b)
    24  of subdivision 9 as added by chapter 817 of the laws of  1987,  subdivi-
    25  sion  4  as  amended by section 1, subdivision 6 as amended by section 2
    26  and subparagraph 2 of paragraph (a)  of  subdivision  9  as  amended  by
    27  section  7  of part M of chapter 407 of the laws of 1999, subdivisions 5
    28  and 7, paragraph (a) of subdivision 8-B, subparagraph  10  of  paragraph
    29  (b)  and  paragraph  (j)  of  subdivision 9 as amended, paragraph (d) of
    30  subdivision 8-B and paragraph (c-1) of subdivision 9 as added and  para-
    31  graphs  (e)  and  (f) of subdivision 8-B as relettered by chapter 170 of
    32  the laws of 1994, subdivisions 8 and 10 as amended by chapter 133 of the
    33  laws of 1945, subdivision 8-A as added and subparagraph 1  of  paragraph
    34  (a)  of  subdivision  9  as  amended by chapter 778 of the laws of 1972,
    35  paragraph (b) of subdivision 8-A and paragraph (i) of subdivision  9  as
    36  amended  by chapter 779 of the laws of 1972, subdivision 9 as amended by
    37  chapter 713 of the laws of 1961,  paragraph  (a)  of  subdivision  9  as
    38  amended by chapter 203 of the laws of 1962, subparagraphs 5, 9 and 10 of

        S. 6359--D                          5                         A. 8559--D
 
     1  paragraph  (a) and subparagraphs 8 and 9 of paragraph (b) of subdivision
     2  9 as amended by chapter 61 of the laws of  1989  and  paragraph  (f)  of
     3  subdivision  9  as separately amended by sections 278 and 347 of chapter
     4  61 of the laws of 1989, clause (i) of subparagraph 5 of paragraph (a) of
     5  subdivision  9  as amended by section 2 and subparagraph 20 of paragraph
     6  (b) of subdivision 9 as added by section 3 of part C of  chapter  25  of
     7  the  laws  of  2009, subparagraph 6 of paragraph (a) of subdivision 9 as
     8  added by chapter 895 of the laws of 1975 and as  renumbered  by  chapter
     9  613  of the laws of 1976, subparagraph 7 of paragraph (a) of subdivision
    10  9 as added by chapter 33 of the laws of 1978, subparagraph  8  of  para-
    11  graph  (a)  and  subparagraph  7  of  paragraph  (b) of subdivision 9 as
    12  amended by chapter 639 of the laws of 1986, subparagraph 11 of paragraph
    13  (a) of subdivision 9 as added by chapter 15 of the laws of 1983, subpar-
    14  agraph 12 of paragraph  (a),  subparagraph  4-a  of  paragraph  (b)  and
    15  subparagraph 2 of paragraph (h) of subdivision 9 as amended and subpara-
    16  graph  13  of  paragraph (a) of subdivision 9 as added by chapter 760 of
    17  the laws of 1992, subparagraph 14 of paragraph (a) of subdivision  9  as
    18  added  by  section  101  and  paragraphs (l) and (m) of subdivision 9 as
    19  added by section 102 of part A of  chapter  56  of  the  laws  of  1998,
    20  subparagraph  15 of paragraph (a) of subdivision 9 as amended by section
    21  1 of part ZZ of chapter 63 of the laws of 2003, subparagraph 16 of para-
    22  graph (a) of subdivision 9 as added by section 1 of  part  K3,  subpara-
    23  graph 16 of paragraph (b) of subdivision 9 as added by section 2 of part
    24  K3,  subparagraph  17  of  paragraph  (b)  of  subdivision 9 as added by
    25  section 2 of part O3, and paragraphs (o), (p) and (q) of  subdivision  9
    26  as  added  by  section  3  of part O3 of chapter 62 of the laws of 2003,
    27  subparagraph 18 of paragraph (a) of subdivision 9 as added by section  3
    28  of  part C and paragraph (o) of subdivision 9 as amended by section 2 of
    29  part E of chapter 59 of the laws of 2013, subparagraph  3  of  paragraph
    30  (b)  of  subdivision  9  as  amended by chapter 895 of the laws of 1975,
    31  subparagraph 4 of paragraph (b) and subparagraph 4 of paragraph  (f)  of
    32  subdivision  9  as  amended by chapter 190 of the laws of 1990, subpara-
    33  graph 15 of paragraph (b) of subdivision 9 as added by  chapter  309  of
    34  the  laws  of 1996, subparagraph 18 of paragraph (b) of subdivision 9 as
    35  added by section 21 of part H of chapter 1 of the laws of 2003, subpara-
    36  graph 19 of paragraph (b) of subdivision 9 as added by section 1 of part
    37  HH1 of chapter 57 of the laws of 2008, paragraphs  (c-2)  and  (c-3)  of
    38  subdivision 9 as added by section 10 of part Y of chapter 63 of the laws
    39  of  2000,  paragraph (g) of subdivision 9 as added by chapter 178 of the
    40  laws of 1965, subparagraph 1 and clauses (B) and (C) of  subparagraph  3
    41  of  paragraph (g) of subdivision 9 as amended by chapter 613 of the laws
    42  of 1976, clause (A) of subparagraph 1 of paragraph (g) of subdivision  9
    43  as  separately  amended  by  chapters  675  and 836 of the laws of 1977,
    44  clause (B) of subparagraph 1, clause (A) of subparagraph  2  and  clause
    45  (A)  of  subparagraph  3 of paragraph (g) of subdivision 9 as amended by
    46  chapter 675 of the laws of 1977, item 1 of clause (B) of subparagraph  1
    47  of  paragraph (g) of subdivision 9 as amended by chapter 972 of the laws
    48  of 1984, clause (B) of subparagraph 2 of paragraph (g) of subdivision  9
    49  as  amended  by  chapter 365 of the laws of 1979, clause (C) of subpara-
    50  graph 2 of paragraph (g) of subdivision 9 as amended by chapter 1005  of
    51  the  laws  of 1970, paragraph (h) of subdivision 9 as amended by chapter
    52  606 of the laws of 1984, paragraph (n) of  subdivision  9  as  added  by
    53  section 1 of part O of chapter 85 of the laws of 2002, subdivision 12 as
    54  added  by  chapter  828  of the laws of 1977, subdivision 19 as added by
    55  chapter 681 of the laws of 1997, is amended to read as follows:
    56    § 208. Definitions. As used in this article:

        S. 6359--D                          6                         A. 8559--D
 
     1    1. The term "corporation" includes (a) an association within the mean-
     2  ing of paragraph  three  of  subsection  (a)  of  section  seventy-seven
     3  hundred  one of the internal revenue code (including a limited liability
     4  company), (b) a joint-stock company or association, (c) a publicly trad-
     5  ed  partnership  treated  as  a corporation for purposes of the internal
     6  revenue code pursuant to section seventy-seven hundred four thereof  and
     7  (d)  any business conducted by a trustee or trustees wherein interest or
     8  ownership is evidenced  by  certificate  or  other  written  instrument.
     9  "DISC"  and  "former DISC" mean any corporation which meets the require-
    10  ments of subsection (a) of section nine hundred ninety-two of the inter-
    11  nal revenue code[;].
    12    1-A. The term "New York S corporation"  means,  with  respect  to  any
    13  taxable  year, a corporation subject to tax under this article for which
    14  an election is in effect pursuant  to  subsection  (a)  of  section  six
    15  hundred  sixty  of  this  chapter  for such year, any such year shall be
    16  denominated a "New York S year", and such election shall be  denominated
    17  a  "New  York S election". The term "New York C corporation" means, with
    18  respect to any taxable year, a corporation subject  to  tax  under  this
    19  article  which  is not a New York S corporation, and any such year shall
    20  be denominated a "New York C year". The term  "termination  year"  means
    21  any  taxable  year of a corporation during which the New York S election
    22  terminates on a day other than the first day of such year.  The  portion
    23  of  the  taxable  year ending before the first day for which such termi-
    24  nation is effective shall be denominated the "S  short  year",  and  the
    25  portion  of  such  year beginning on such first day shall be denominated
    26  the "C short year". The term "New York S  termination  year"  means  any
    27  termination  year  which  is  not also an S termination year for federal
    28  purposes.
    29    1-B. The term "QSSS" means a corporation which is a qualified subchap-
    30  ter S subsidiary as defined in subparagraph (B) of  paragraph  three  of
    31  subsection  (b)  of  section  thirteen hundred sixty-one of the internal
    32  revenue code. The term "exempt QSSS" means a QSSS exempt from tax  under
    33  this  article  as  provided in paragraph (k) of subdivision nine of this
    34  section, or a QSSS described in subclause (i) of clause (B) of  subpara-
    35  graph  two of paragraph (k) of subdivision nine of this section, wherein
    36  the parent corporation of the QSSS is subject to tax under this article,
    37  and the assets, liabilities, income  and  deductions  of  the  QSSS  are
    38  treated  as the assets, liabilities, income and deductions of the parent
    39  corporation. Where a QSSS is an exempt QSSS, then for all purposes under
    40  this article:
    41    (a) the assets, liabilities, income,  deductions,  property,  payroll,
    42  receipts, capital, credits, and all other tax attributes and elements of
    43  economic  activity of the QSSS shall be deemed to be those of the parent
    44  corporation,
    45    (b) the stocks, bonds and other securities issued by, and any  indebt-
    46  edness  from, the QSSS shall not be [subsidiary,] investment or business
    47  capital of the parent corporation,
    48    (c) transactions between the parent corporation and the QSSS,  includ-
    49  ing  the  payment  of  interest  and  dividends, shall not be taken into
    50  account, and
    51    (d) general executive officers of the  QSSS  shall  be  deemed  to  be
    52  general executive officers of the parent corporation.
    53    2. The term "taxpayer" means any corporation subject to tax under this
    54  article[;].
    55    3.  The  term  "subsidiary"  means  a  corporation of which over fifty
    56  percent of the number of shares of stock entitling the  holders  thereof

        S. 6359--D                          7                         A. 8559--D

     1  to  vote  for  the  election  of  directors  or trustees is owned by the
     2  taxpayer[;].
     3    4.  The  term  ["subsidiary capital" means investments in the stock of
     4  subsidiaries  and  any  indebtedness  from  subsidiaries,  exclusive  of
     5  accounts receivable acquired in the ordinary course of trade or business
     6  for  services  rendered or for sales of property held primarily for sale
     7  to customers, whether or not evidenced by written instrument,  on  which
     8  interest  is  not claimed and deducted by the subsidiary for purposes of
     9  taxation under article nine-A, thirty-two or thirty-three of this  chap-
    10  ter,  provided,  however,  that,  in the discretion of the commissioner,
    11  there shall be deducted from subsidiary capital  any  liabilities  which
    12  are  directly  or indirectly attributable to subsidiary capital] "stock"
    13  means an interest in a corporation that is treated as equity for federal
    14  income tax purposes.
    15    5. (a) The term "investment capital"  means  investments  in  stocks[,
    16  bonds  and  other securities, corporate and governmental,] that are held
    17  by the taxpayer for more than six consecutive months but  are  not  held
    18  for  sale  to customers in the regular course of business, [exclusive of
    19  subsidiary capital] or, if the taxpayer makes the election provided  for
    20  in  subparagraph one of paragraph (a) of subdivision five of section two
    21  hundred ten-A of this article, are not qualified  financial  instruments
    22  as  described  in  subdivision five of section two hundred ten-A of this
    23  article. Stock in a corporation that is conducting  a  unitary  business
    24  with the taxpayer, stock in a corporation that is included in a combined
    25  report  with  the taxpayer pursuant to the commonly owned group election
    26  in subdivision three of section two hundred ten-C of this  article,  and
    27  stock   issued  by  the  taxpayer[,  provided,  however,  that,  in  the
    28  discretion of the commissioner, there] shall not  constitute  investment
    29  capital.  For  purposes  of  this  subdivision,  if the taxpayer owns or
    30  controls, directly or indirectly, less than twenty percent of the voting
    31  power of the stock of a corporation, that corporation will  be  presumed
    32  to be conducting a business that is not unitary with the business of the
    33  taxpayer.
    34    (b)  There  shall  be deducted from investment capital any liabilities
    35  which are directly or indirectly attributable  to  investment  capital[;
    36  and  provided, further, that investment]. If the amount of those liabil-
    37  ities exceeds the amount of investment capital, the amount of investment
    38  capital will be zero.
    39    (c) Investment capital shall not  include  any  such  investments  the
    40  income  from  which  is  excluded from entire net income pursuant to the
    41  provisions of paragraph (c-1) of subdivision nine of this  section,  and
    42  that  investment capital shall be computed without regard to liabilities
    43  directly or indirectly attributable to such investments, but only if air
    44  carriers organized in the United States and  operating  in  the  foreign
    45  country  or  countries in which the taxpayer has its major base of oper-
    46  ations and in which it is organized, resident or headquartered  (if  not
    47  in  the same country as its major base of operations) are not subject to
    48  any tax based on or measured by capital imposed by such foreign  country
    49  or  countries  or  any  political  subdivision thereof, or if taxed, are
    50  provided an exemption, equivalent to that provided for herein, from  any
    51  tax  based  on or measured by capital imposed by such foreign country or
    52  countries and from any such tax imposed  by  any  political  subdivision
    53  thereof[;].
    54    (d) If a taxpayer acquires stock during the second half of its taxable
    55  year and owns that stock on the last day of the taxable year, it will be
    56  presumed that the taxpayer held that stock for more than six consecutive

        S. 6359--D                          8                         A. 8559--D
 
     1  months  during  the  taxable  year. However, if the taxpayer does not in
     2  fact hold that stock for more than six consecutive months, the  taxpayer
     3  must  increase  its total business capital in the immediately succeeding
     4  taxable  year  by  the  amount  included  in investment capital for that
     5  stock, net of any liabilities attributable to  that  stock  computed  as
     6  provided  in  paragraph  (b)  of  this subdivision and must increase its
     7  business income in the immediately succeeding taxable year by the amount
     8  of income and net gains  (but  not  less  than  zero)  from  that  stock
     9  included  in investment income, less any interest deductions directly or
    10  indirectly attributable to that stock, as provided in subdivision six of
    11  this section.
    12    (e) When income or gain from  a  debt  obligation  or  other  security
    13  cannot  be  apportioned  to  the  state  using  the  business allocation
    14  percentage as a result of United States constitutional  principles,  the
    15  debt  obligation  or other security will be included in investment capi-
    16  tal.
    17    (f) For purposes of determining whether a taxpayer has held a security
    18  for more than six consecutive months, the commissioner shall  take  into
    19  account offsetting positions the taxpayer takes in such or similar secu-
    20  rities.
    21    6.  (a)  The  term "investment income" means income, including capital
    22  gains in excess of capital  losses,  from  investment  capital,  to  the
    23  extent  included  in computing entire net income, less, [(a)] (i) in the
    24  discretion of the commissioner, any  interest  deductions  allowable  in
    25  computing  entire  net income which are directly or indirectly attribut-
    26  able to investment capital or investment income, and [(b)  such  portion
    27  of  any  net  operating loss deduction allowable in computing entire net
    28  income, as the investment income, before such deduction, bears to entire
    29  net income, before such deduction,] (ii) the taxpayer's loss,  deduction
    30  and/or  expense  attributable  to  any  transaction, or series of trans-
    31  actions, entered into to manage the risk of price  changes  or  currency
    32  fluctuations with respect to any item of investment capital that is held
    33  or  to be held by the taxpayer, or the aggregate investment capital that
    34  is held or to be held by the taxpayer, if all of the risk, or all but  a
    35  de  minimis  amount  of the risk, is with respect to investment capital,
    36  provided, however, that in no case shall investment income exceed entire
    37  net income[;]. If  the  amount  subtracted  under  subparagraph  (i)  or
    38  subparagraph (ii) of this paragraph or under both of those subparagraphs
    39  exceeds  investment  income,  the  excess of such amount over investment
    40  income must be added back to entire net income.
    41    (b) In lieu of subtracting from investment income the amount of  those
    42  interest  deductions, the taxpayer may elect to reduce its total invest-
    43  ment income by forty percent. If the taxpayer makes this  election,  the
    44  taxpayer must also make the elections provided for in paragraphs (b) and
    45  (c) of subdivision six-a of this section. A taxpayer which does not make
    46  this election because it has no investment capital will not be precluded
    47  from making those other elections.
    48    (c)  Investment  income  shall not include any amount treated as divi-
    49  dends pursuant to section seventy-eight of the internal revenue code.
    50    6-a. (a) The term "other exempt income" means the sum  of  exempt  CFC
    51  income and exempt unitary corporation dividends.
    52    (b)  "Exempt  CFC  income" means the income required to be included in
    53  the taxpayer's federal  gross  income  pursuant  to  subsection  (a)  of
    54  section  951  of  the internal revenue code, received from a corporation
    55  that is conducting a unitary business  with  the  taxpayer  but  is  not
    56  included in a combined report with the taxpayer, less, in the discretion

        S. 6359--D                          9                         A. 8559--D
 
     1  of  the  commissioner,  any  interest  deductions directly or indirectly
     2  attributable to that income.  In lieu of subtracting from its exempt CFC
     3  income the amount of those interest deductions, the taxpayer  may  elect
     4  to  reduce its total exempt CFC income by forty percent. If the taxpayer
     5  makes this election, the taxpayer must also make the elections  provided
     6  for  in  paragraph  (b) of subdivision six of this section and paragraph
     7  (c) of this subdivision.  A taxpayer which does not make  this  election
     8  because  it  has  no exempt CFC income will not be precluded from making
     9  those other elections.
    10    (c) "Exempt unitary corporation dividends" means those dividends  from
    11  a  corporation  that  is conducting a unitary business with the taxpayer
    12  but is not included in a combined report with the taxpayer, less, in the
    13  discretion of the commissioner,  any  interest  deductions  directly  or
    14  indirectly  attributable  to  such  income.   Other than dividend income
    15  received from corporations  that  are  taxable  under  a  franchise  tax
    16  imposed by article nine or article thirty-three of this chapter or would
    17  be  taxable  under  a  franchise  tax imposed by article nine or article
    18  thirty-three of this chapter if subject to tax, in lieu  of  subtracting
    19  from  this  dividend  income those interest deductions, the taxpayer may
    20  elect to reduce the total  amount  of  this  dividend  income  by  forty
    21  percent.  If  the  taxpayer  makes this election, the taxpayer must also
    22  make the elections provided for in paragraph (b) of subdivision  six  of
    23  this  section  and  paragraph  (b) of this subdivision. A taxpayer which
    24  does not make this election because  it  has  not  received  any  exempt
    25  unitary  corporation dividends or is precluded from making this election
    26  for dividends received from corporations taxable under a  franchise  tax
    27  imposed by article nine or article thirty-three of this chapter or would
    28  be  taxable  under  a  franchise  tax imposed by article nine or article
    29  thirty-three of this chapter if subject to tax  will  not  be  precluded
    30  from making those other elections.
    31    (d)  If  the  taxpayer  attributes interest deductions to other exempt
    32  income and the amount subtracted exceeds other exempt income, the excess
    33  of the interest deductions over other exempt income must be  added  back
    34  to entire net income. In no case shall other exempt income exceed entire
    35  net income.
    36    (e)  Other exempt income shall not include any amount treated as divi-
    37  dends pursuant to section seventy-eight of the internal revenue code.
    38    7. (a) The term  "business  capital"  means  all  assets,  other  than
    39  [subsidiary capital,] investment capital and stock issued by the taxpay-
    40  er,  less liabilities not deducted from [subsidiary or] investment capi-
    41  tal [except that cash on hand and on deposit shall be treated as invest-
    42  ment capital  or  as  business  capital  as  the  taxpayer  may  elect].
    43  Business  capital  shall  include  only those assets the income, loss or
    44  expense of which are properly reflected (or  would  have  been  properly
    45  reflected  if  not  fully  depreciated  or  expensed  or  depreciated or
    46  expensed to a nominal amount) in the computation of  entire  net  income
    47  for the taxable year.
    48    (b)  Provided, however, "business capital" shall not include assets to
    49  the extent employed for  the  purpose  of  generating  income  which  is
    50  excluded  from entire net income pursuant to the provisions of paragraph
    51  (c-1) of subdivision nine of this section and shall be computed  without
    52  regard  to  liabilities  directly  or  indirectly  attributable  to such
    53  assets, but only if air carriers organized  in  the  United  States  and
    54  operating  in the foreign country or countries in which the taxpayer has
    55  its major base of operations and in which it is organized,  resident  or
    56  headquartered  (if  not  in  the same country as its major base of oper-

        S. 6359--D                         10                         A. 8559--D
 
     1  ations) are not subject to any tax  based  on  or  measured  by  capital
     2  imposed  by  such foreign country or countries or any political subdivi-
     3  sion thereof, or if taxed, are provided an exemption, equivalent to that
     4  provided  for  herein,  from  any  tax  based  on or measured by capital
     5  imposed by such foreign country or  countries  and  from  any  such  tax
     6  imposed by any political subdivision thereof[;].
     7    8. The term "business income" means entire net income minus investment
     8  income[;]  and other exempt income. In no event shall the sum of invest-
     9  ment income and other exempt income exceed entire  net  income.  If  the
    10  taxpayer  makes  the  election provided for in subparagraph one of para-
    11  graph (a) of subdivision five of section two hundred ten-A of this arti-
    12  cle, then all income from qualified financial instruments shall  consti-
    13  tute business income.
    14    8-A.  Provided, however, that with respect to a DISC or a former DISC,
    15  the following provisions shall apply:
    16    (a) investments in the stocks, bonds or other securities of a DISC  or
    17  any  indebtedness from a DISC shall not be treated as [either subsidiary
    18  capital or] investment capital under [subdivisions four or]  subdivision
    19  five of this section,
    20    (b)  any amounts deemed distributed from a DISC or a former DISC which
    21  are taxable as dividends pursuant to  subsection  (b)  of  section  nine
    22  hundred  ninety-five  of  the  internal revenue code of nineteen hundred
    23  fifty-four shall be treated as business income, except any such  amounts
    24  from  a  former  DISC attributable to amounts includible in a taxpayer's
    25  entire net income for a prior taxable year  under  subparagraph  (B)  of
    26  paragraph (i) of subdivision nine of this section shall be excluded from
    27  entire net income,
    28    (c)  any gain recognized for federal income tax purposes on the dispo-
    29  sition of stock in a DISC, and any gain recognized on the disposition of
    30  stock in a former DISC, includible in gross income as a dividend  pursu-
    31  ant  to subsection (c) of section nine hundred ninety-five of the inter-
    32  nal revenue code of nineteen hundred fifty-four,  shall  be  treated  as
    33  business income, and
    34    (d)  except  as  provided in paragraph (i) of subdivision nine of this
    35  section, any actual distribution from a DISC or a former DISC  shall  be
    36  treated  as  business  income  except  an  actual distribution which for
    37  federal income tax purposes is treated as made out  of  "other  earnings
    38  and  profits"  under  section  nine  hundred  ninety-six of the internal
    39  revenue code of nineteen hundred fifty-four, in which case  such  actual
    40  distribution  shall  be treated as [either subsidiary income or] invest-
    41  ment income under this article.
    42    [8-B. (a) The term "minimum taxable income" shall mean the entire  net
    43  income of the taxpayer for the taxable year:
    44    (1) increased by the amount of the federal items of tax preference set
    45  forth  in  section  fifty-seven  of  the internal revenue code (with the
    46  modifications set forth in paragraph (b)  of  this  subdivision),  which
    47  items  of  tax preference shall have the same meaning and be computed in
    48  the same manner as under section fifty-seven  of  the  internal  revenue
    49  code,
    50    (2) determined with the federal adjustments described in paragraph (c)
    51  of  this  subdivision, which adjustments shall have the same meaning and
    52  be computed in the same manner as under sections  fifty-six  and  fifty-
    53  eight of the internal revenue code,
    54    (3)  increased  by  the net operating loss deduction otherwise allowed
    55  under paragraph (f) of subdivision nine of this section, and

        S. 6359--D                         11                         A. 8559--D

     1    (4) reduced, for taxable years beginning after nineteen hundred  nine-
     2  ty-three, by the alternative net operating loss deduction, as defined in
     3  paragraph (d) of this subdivision.
     4    (b)  The federal items of tax preference referred to hereinabove shall
     5  be modified by deducting "tax-exempt interest" and "accelerated depreci-
     6  ation or amortization on certain property placed in service before Janu-
     7  ary  1,  1987",  as  determined  under  paragraphs  five  and  seven  of
     8  subsection (a) of section fifty-seven of the internal revenue code.
     9    (c) The adjustments referred to hereinabove shall be:
    10    (1) "Depreciation" as determined under paragraph one of subsection (a)
    11  of  section fifty-six of the internal revenue code. For purposes of this
    12  subparagraph, the depreciation item  of  adjustment  provided  for  here
    13  shall  not include any amount attributable to property for which the tax
    14  benefits of the accelerated cost recovery system are not available under
    15  this article by reason of subparagraph ten of paragraph (b) of  subdivi-
    16  sion nine of this section;
    17    (2)  "Mining  exploration  and  development costs" as determined under
    18  paragraph two of subsection (a) of section  fifty-six  of  the  internal
    19  revenue code;
    20    (3)  "Treatment  of  certain  long-term contracts" as determined under
    21  paragraph three of subsection (a) of section fifty-six of  the  internal
    22  revenue code;
    23    (4)  "Installment sales of certain property" as determined under para-
    24  graph six of subsection (a) of section fifty-six of the internal revenue
    25  code;
    26    (5) "Circulation expenditures of personal holding companies" as deter-
    27  mined under subparagraph (C) of  paragraph  two  of  subsection  (b)  of
    28  section fifty-six of the internal revenue code;
    29    (6)  "Merchant  marine capital construction funds" as determined under
    30  paragraph two of subsection (c) of section  fifty-six  of  the  internal
    31  revenue code;
    32    (7)  "Disallowance  of  passive  activity  loss"  as  determined under
    33  subsection (b) of section fifty-eight of the internal revenue code; and
    34    (8) "Adjusted basis", as it appears in paragraph seven  of  subsection
    35  (a)  of  section  fifty-six  of  the  internal revenue code, but without
    36  taking  into  account  the  references  therein  to  paragraph  five  of
    37  subsection (a) of section fifty-six of the internal revenue code.
    38    (d)  The term "alternative net operating loss deduction" means the net
    39  operating loss deduction allowed for the taxable  year  under  paragraph
    40  (f) of subdivision nine of this section, except as provided herein.
    41    (1)(A)  The  net  operating loss for any year beginning after nineteen
    42  hundred eighty-nine which is  included  in  determining  such  deduction
    43  shall be determined with the adjustments provided in subparagraph two of
    44  paragraph  (a) of this subdivision, and shall be reduced by the items of
    45  tax preference determined under subparagraph one  of  paragraph  (a)  of
    46  this  subdivision,  attributable to such year. An item of tax preference
    47  shall be taken into account only to the extent such item  increased  the
    48  amount  of  the  net operating loss for the taxable year under paragraph
    49  (f) of subdivision nine of this section.
    50    (B) In the case of loss years beginning before nineteen hundred  nine-
    51  ty,  the  amount  of the net operating loss which may be carried over to
    52  taxable years beginning after  nineteen  hundred  eighty-nine  shall  be
    53  equal  to an amount which may be carried from the loss year to the first
    54  taxable year of the taxpayer beginning after  nineteen  hundred  eighty-
    55  nine.

        S. 6359--D                         12                         A. 8559--D

     1    (2)  In  determining  the amount of such deduction, loss carryforwards
     2  and carrybacks shall, subject to the provisions of subparagraph five  of
     3  paragraph  (f)  of  subdivision nine of this section, be computed in the
     4  manner set forth in paragraph two  of  subsection  (b)  of  section  one
     5  hundred  seventy-two  of the internal revenue code, except that, for the
     6  reference therein to taxable income,  there  shall  be  substituted  the
     7  phrase  "ninety  percent  of  minimum  taxable income determined without
     8  regard to the alternative net operating loss deduction".
     9    (3) The amount of such deduction shall not exceed  ninety  percent  of
    10  minimum  taxable  income  determined  without  regard to such deduction,
    11  provided, however, the term "ninety percent" shall be  read  as  "forty-
    12  five  percent"  with  respect  to  taxable  years  beginning in nineteen
    13  hundred ninety-four.
    14    (e) The tax commission may, whenever necessary in  order  to  properly
    15  reflect  the  minimum taxable income of any taxpayer, determine the year
    16  or period in which any item of income or deduction  shall  be  included,
    17  without regard to the method of accounting employed by the taxpayer.
    18    (f) If the period covered by a report under this article is other than
    19  the  period  covered by the report to the United States treasury depart-
    20  ment, the minimum taxable income shall be appropriately modified  pursu-
    21  ant to regulations promulgated by the tax commission.]
    22    9. The term "entire net income" means total net income from all sourc-
    23  es,  which  shall  be  presumably  the same as the entire taxable income
    24  [(but not alternative minimum taxable income)], which, except as herein-
    25  after provided in this subdivision,
    26    (i) [which] the taxpayer is required to report to  the  United  States
    27  treasury department, or
    28    (ii)  [which]  the  taxpayer would have been required to report to the
    29  United States treasury department if it had not made an  election  under
    30  subchapter s of chapter one of the internal revenue code, or
    31    (iii)  [which]  the  taxpayer,  in  the case of a corporation which is
    32  exempt from federal income tax (other than the tax on unrelated business
    33  taxable income imposed under section 511 of the internal  revenue  code)
    34  but which is subject to tax under this article, would have been required
    35  to  report  to  the  United  States  treasury  department  but  for such
    36  exemption, [except as hereinafter provided, and subject to any modifica-
    37  tion required by paragraphs (d) and (e) of subdivision three of  section
    38  two hundred ten of this article] or
    39    (iv)  in  the case of an alien corporation that under any provision of
    40  the internal revenue code is not treated as a "domestic corporation"  as
    41  defined  in  section  seven  thousand  seven hundred one of such code is
    42  effectively connected with the conduct of a trade or business within the
    43  United States as determined under section 882 of  the  Internal  Revenue
    44  Code.
    45    (a) Entire net income shall not include:
    46    [(1)  income,  gains  and  losses from subsidiary capital which do not
    47  include the amount of a recovery in respect of any war loss  except  for
    48  such  amounts  from  a  former DISC which are treated as business income
    49  under subdivision eight-A of this section,
    50    (2) fifty percent of dividends (A) other than from  subsidiaries,  and
    51  (B)  other  than  amounts  treated  as business income under subdivision
    52  eight-A of this section,  on  shares  of  stock  which  conform  to  the
    53  requirements  of  subsection (c) of section two hundred forty-six of the
    54  internal revenue code.]
    55    (3) bona fide gifts,

        S. 6359--D                         13                         A. 8559--D
 
     1    (4) income and deductions with respect to amounts received from school
     2  districts and from corporations and associations, organized and operated
     3  exclusively for religious, charitable or educational purposes,  no  part
     4  of the net earnings of which inures to the benefit of any private share-
     5  holder or individual, for the operation of school buses,
     6    (5)  (i)  any  refund  or  credit of a tax imposed under this article,
     7  article twenty-three, or former article thirty-two of this chapter,  for
     8  which  tax  no  exclusion  or  deduction  was allowed in determining the
     9  taxpayer's entire net income under this article,  article  twenty-three,
    10  or  former article thirty-two of this chapter for any prior year, (ii) a
    11  refund or credit of general corporation tax allowed by subdivision elev-
    12  en of section 11-604 of the administrative code of the city of New York,
    13  or (iii) any refund or credit  of  a  tax  imposed  under  sections  one
    14  hundred  eighty-three,  one  hundred eighty-three-a, one hundred eighty-
    15  four or one hundred eighty-four-a of this chapter, and
    16    (6) any amount treated as dividends pursuant to section  seventy-eight
    17  of the internal revenue code [and not otherwise deductible under subpar-
    18  agraphs one and two of this paragraph];
    19    (7)  that portion of wages and salaries paid or incurred for the taxa-
    20  ble year for which a deduction is not allowed pursuant to the provisions
    21  of section two hundred eighty-C of the internal revenue code.
    22    [(8) in the case of a taxpayer who is separately or as a partner of  a
    23  partnership  doing  an  insurance  business  as a member of the New York
    24  insurance exchange described in section six thousand two hundred one  of
    25  the  insurance  law, any item of income, gain, loss or deduction of such
    26  business which is the taxpayer's distributive  or  pro  rata  share  for
    27  federal  income  tax  purposes or which the taxpayer is required to take
    28  into account separately for federal income tax purposes.]
    29    (9) for taxable years beginning after December thirty-first,  nineteen
    30  hundred eighty-one, except with respect to property which is a qualified
    31  mass  commuting vehicle described in subparagraph (D) of paragraph eight
    32  of subsection (f) of section one hundred  sixty-eight  of  the  internal
    33  revenue code (relating to qualified mass commuting vehicles) and proper-
    34  ty  of  a taxpayer principally engaged in the conduct of aviation (other
    35  than air freight forwarders acting as principal and  like  indirect  air
    36  carriers)  which  is placed in service before taxable years beginning in
    37  nineteen hundred eighty-nine,  any  amount  which  is  included  in  the
    38  taxpayer's federal taxable income solely as a result of an election made
    39  pursuant  to  the provisions of such paragraph eight as it was in effect
    40  for agreements entered into prior to  January  first,  nineteen  hundred
    41  eighty-four;
    42    (10) for taxable years beginning after December thirty-first, nineteen
    43  hundred eighty-one, except with respect to property which is a qualified
    44  mass  commuting vehicle described in subparagraph (D) of paragraph eight
    45  of subsection (f) of section one hundred  sixty-eight  of  the  internal
    46  revenue code (relating to qualified mass commuting vehicles) and proper-
    47  ty  of  a taxpayer principally engaged in the conduct of aviation (other
    48  than air freight forwarders acting as principal and  like  indirect  air
    49  carriers)  which  is placed in service before taxable years beginning in
    50  nineteen hundred eighty-nine, any amount which the taxpayer  could  have
    51  excluded  from  federal  taxable  income  had  it  not made the election
    52  provided for in such paragraph eight as it was in effect for  agreements
    53  entered into prior to January first, nineteen hundred eighty-four;
    54    (11)  the amount deductible pursuant to paragraph (j) of this subdivi-
    55  sion; and

        S. 6359--D                         14                         A. 8559--D
 
     1    (12) upon the disposition of property to which paragraph (j)  of  this
     2  subdivision  applies,  the amount, if any, by which the aggregate of the
     3  amounts described in subparagraph ten of paragraph (b) of this  subdivi-
     4  sion  attributable to such property exceeds the aggregate of the amounts
     5  described  in  paragraph  (j)  of  this subdivision attributable to such
     6  property; and
     7    [(13) if the added tax provided for in either (i)  former  subdivision
     8  two  of section one hundred eighty-two of this chapter (relating to real
     9  estate corporations) or (ii) former subdivision  one-a  of  section  two
    10  hundred  nine of this chapter (relating to real estate corporations) has
    11  been imposed upon the taxpayer,  any  income  which  has  been  used  in
    12  computing such tax.]
    13    (14)   The  amount  deductible  pursuant  to  paragraph  (l)  of  this
    14  [subsection] subdivision.
    15    [(15) In the case of an attorney-in-fact,  with  respect  to  which  a
    16  mutual  insurance  company,  which  is  an  interinsurer or a reciprocal
    17  insurer and is subject to tax under subdivision (a) of  section  fifteen
    18  hundred  ten  of  this chapter, has made the election provided for under
    19  section eight hundred thirty-five  of  the  Internal  Revenue  Code,  an
    20  amount  equal  to the excess, if any, of the amounts paid or incurred by
    21  such interinsurer or reciprocal insurer  in  the  taxable  year  to  the
    22  attorney-in-fact  over  the  deduction  allowed  to such interinsurer or
    23  reciprocal insurer with respect to amounts paid or incurred in the taxa-
    24  ble year to the attorney-in-fact under subsection (b)  of  such  section
    25  eight hundred thirty-five of the Internal Revenue Code.]
    26    (16) In the case of a taxpayer subject to the modification provided by
    27  subparagraph  sixteen  of  paragraph (b) of this subdivision, the amount
    28  required to be recaptured pursuant to subsection (d) of section  179  of
    29  the  internal  revenue  code  with  respect  to property upon which such
    30  modification was based.
    31    (17) for taxable years  beginning  after  December  thirty-first,  two
    32  thousand  two, the amount deductible pursuant to paragraph (n-1) of this
    33  subdivision.
    34    (18) the amount of income or gain included in federal  taxable  income
    35  of  a taxpayer that is a partner in a qualified entity or is a qualified
    36  entity that is located both within and without a New  York  state  inno-
    37  vation  hot  spot, to the extent that the income or gain is attributable
    38  to the operations of a qualified entity at or as part of  the  New  York
    39  state  innovation  hot  spot as provided in section thirty-eight of this
    40  chapter.
    41    (19) the amount computed pursuant to paragraph (r), (s) or (t) of this
    42  subdivision, but only the amount determined  pursuant  to  one  of  such
    43  paragraphs.
    44    (b)  Entire  net  income  shall  be  determined without the exclusion,
    45  deduction or credit of:
    46    (1) [the amount of any specific exemption or credit allowed in any law
    47  of the United States imposing any tax on or measured by  the  income  of
    48  corporations,]  in  the  case  of  an  alien  corporation that under any
    49  provision of the internal revenue code is not  treated  as  a  "domestic
    50  corporation"  as  defined in section seven thousand seven hundred one of
    51  such code, (i) any part of any income from dividends or interest on  any
    52  kind  of  stock,  securities or indebtedness, but only if such income is
    53  treated as effectively connected with the conduct of a trade or business
    54  in the United States pursuant to section 864  of  the  internal  revenue
    55  code, (ii) any income exempt from federal taxable income under any trea-
    56  ty  obligation  of  the  United States, but only if such income would be

        S. 6359--D                         15                         A. 8559--D
 
     1  treated as effectively connected in absence of such  exemption  provided
     2  that  such  treaty  obligation  does  not  preclude the taxation of such
     3  income by a state, or (iii) any income which would be treated as  effec-
     4  tively  connected  if  such  income  were not excluded from gross income
     5  pursuant to subsection (a) of section 103 of the internal revenue code;
     6    (2) any part of any income from dividends or interest on any  kind  of
     7  stock,  securities  or  indebtedness, [except as provided in clauses (1)
     8  and (2) of paragraph (a) hereof,]
     9    (3) taxes on or measured by profits or income paid or accrued  to  the
    10  United  States[,] or any of its possessions [or to any foreign country],
    11  territories or commonwealths, including taxes in  lieu  of  any  of  the
    12  foregoing  taxes  otherwise generally imposed by [any foreign country or
    13  by] any possession, territory or commonwealth of the United States,
    14    (3-a) taxes on or measured by profits  or  income,  or  which  include
    15  profits  or  income  as a measure, paid or accrued to any other state of
    16  the United States, or any  political  subdivision  thereof,  or  to  the
    17  District  of  Columbia,  including taxes expressly in lieu of any of the
    18  foregoing taxes otherwise generally imposed by any other  state  of  the
    19  United  States, or any political subdivision thereof, or the District of
    20  Columbia;
    21    (4) taxes imposed under this article  and  article  thirty-two  as  in
    22  effect  on December thirty-first, two thousand fourteen and sections one
    23  hundred eighty-three, one hundred eighty-three-a,  one  hundred  eighty-
    24  four and one hundred eighty-four-a of this chapter,
    25    (4-a)(A) [the entire amount allowable as an exclusion or deduction for
    26  stock transfer taxes imposed by article twelve of this chapter in deter-
    27  mining  the  entire  taxable  income  which  the taxpayer is required to
    28  report to the United States treasury department but only to  the  extent
    29  that  such  taxes  are  incurred and paid in market making transactions,
    30  (B)] in those instances where a credit for the special additional  mort-
    31  gage  recording  tax credit is allowed under [paragraph (a) of] subdivi-
    32  sion [seventeen] nine of section two hundred [ten] ten-B of  this  arti-
    33  cle,  the  amount  allowed  as an exclusion or deduction for the special
    34  additional mortgage  recording  tax  imposed  by  subdivision  one-a  of
    35  section  two  hundred  fifty-three  of  this  chapter in determining the
    36  entire taxable income which the taxpayer is required to  report  to  the
    37  United  States  treasury  department,  and  [(C)]  (B) unless the credit
    38  allowed pursuant to subdivision [seventeen] nine of section two  hundred
    39  [ten]  ten-B of this article is reflected in the computation of the gain
    40  or loss so as to result in an increase in such gain or decrease of  such
    41  loss,  for  federal income tax purposes, from the sale or other disposi-
    42  tion of the property with respect to which the special additional  mort-
    43  gage  recording tax imposed pursuant to subdivision one-a of section two
    44  hundred fifty-three of this chapter was paid, the amount of the  special
    45  additional  mortgage  recording  tax  imposed  by  subdivision  one-a of
    46  section two hundred fifty-three of this chapter which was paid and which
    47  is reflected in the computation of the basis of the property  so  as  to
    48  result  in  a decrease in such gain or increase in such loss for federal
    49  income tax purposes from the sale or other disposition of  the  property
    50  with respect to which such tax was paid.
    51    (6)  [in  the discretion of the tax commission, any amount of interest
    52  directly or indirectly and  any  other  amount  directly  or  indirectly
    53  attributable  as a carrying charge or otherwise to subsidiary capital or
    54  to income, gains or losses from subsidiary capital] any  amount  allowed
    55  as  a  deduction  for the taxable year under section 172 of the internal

        S. 6359--D                         16                         A. 8559--D
 
     1  revenue code, including carryovers  of  deductions  from  prior  taxable
     2  years.
     3    [(7)  in the case of a taxpayer who is separately or as a partner of a
     4  partnership doing an insurance business as a  member  of  the  New  York
     5  insurance  exchange described in section six thousand two hundred one of
     6  the insurance law, such taxpayer's distributive or pro rata share of the
     7  allocated entire  net  income  of  such  business  as  determined  under
     8  sections fifteen hundred three and fifteen hundred four of this chapter,
     9  provided  however,  in  the  event such allocated entire net income is a
    10  loss, such taxpayer's distributive or pro rata share of such loss  shall
    11  not  be  subtracted  from federal taxable income in computing entire net
    12  income under this subdivision.]
    13    (8) for taxable years beginning after December thirty-first,  nineteen
    14  hundred eighty-one, except with respect to property which is a qualified
    15  mass  commuting vehicle described in subparagraph (D) of paragraph eight
    16  of subsection (f) of section one hundred  sixty-eight  of  the  internal
    17  revenue code (relating to qualified mass commuting vehicles) and proper-
    18  ty  of  a taxpayer principally engaged in the conduct of aviation (other
    19  than air freight forwarders acting as principal and  like  indirect  air
    20  carriers)  which  is placed in service before taxable years beginning in
    21  nineteen hundred eighty-nine, any amount which the taxpayer claimed as a
    22  deduction in computing its federal taxable income solely as a result  of
    23  an  election  made pursuant to the provisions of such paragraph eight as
    24  it was in effect for agreements entered into  prior  to  January  first,
    25  nineteen hundred eighty-four;
    26    (9)  for taxable years beginning after December thirty-first, nineteen
    27  hundred eighty-one, except with respect to property which is a qualified
    28  mass commuting vehicle described in subparagraph (D) of paragraph  eight
    29  of  subsection  (f)  of  section one hundred sixty-eight of the internal
    30  revenue code (relating to qualified mass commuting vehicles) and proper-
    31  ty of a taxpayer principally engaged in the conduct of  aviation  (other
    32  than  air  freight  forwarders acting as principal and like indirect air
    33  carriers) which is placed in service before taxable years  beginning  in
    34  nineteen  hundred  eighty-nine, any amount which the taxpayer would have
    35  been required to include in  the  computation  of  its  federal  taxable
    36  income had it not made the election permitted pursuant to such paragraph
    37  eight  as  it was in effect for agreements entered into prior to January
    38  first, nineteen hundred eighty-four;
    39    (10) in the case of property placed in service in taxable years begin-
    40  ning before nineteen hundred ninety-four, for  taxable  years  beginning
    41  after  December  thirty-first,  nineteen hundred eighty-one, except with
    42  respect to property subject to the provisions  of  section  two  hundred
    43  eighty-F   of  the  internal  revenue  code,  property  subject  to  the
    44  provisions of section one hundred sixty-eight of  the  internal  revenue
    45  code which is placed in service in this state in taxable years beginning
    46  after  December  thirty-first, nineteen hundred eighty-four and property
    47  of a taxpayer principally engaged in the conduct of aviation (other than
    48  air freight forwarders acting as principal and like indirect air  carri-
    49  ers)  which is placed in service before taxable years beginning in nine-
    50  teen  hundred  [eight-nine]  eighty-nine,  the  amount  allowable  as  a
    51  deduction determined under section one hundred sixty-eight of the inter-
    52  nal revenue code;
    53    (11)  upon  the disposition of property to which paragraph (j) of this
    54  subdivision applies, the amount, if any, by which the aggregate  of  the
    55  amounts  described  in  such paragraph (j) attributable to such property

        S. 6359--D                         17                         A. 8559--D
 
     1  exceeds the aggregate of the amounts described in  subparagraph  ten  of
     2  this paragraph attributable to such property.
     3    (15)  Real  property taxes paid on qualified agricultural property and
     4  deducted in determining federal taxable income, to  the  extent  of  the
     5  amount of the agricultural property tax credit allowed under subdivision
     6  [twenty-two] eleven of section two hundred [ten] ten-B of this article.
     7    (16)  In  the  case  of  a taxpayer which is not an eligible farmer as
     8  defined in paragraph (b) of subdivision [twenty-two] eleven  of  section
     9  two  hundred  [ten]  ten-B  of this article, the amount of any deduction
    10  claimed pursuant to section  179  of  the  internal  revenue  code  with
    11  respect  to  a sport utility vehicle which is not a passenger automobile
    12  as defined in paragraph 5 of subsection  (d)  of  section  280F  of  the
    13  internal revenue code.
    14    (17)  for  taxable  years  beginning  after December thirty-first, two
    15  thousand two, in the case of qualified property described  in  paragraph
    16  two  of  subsection k of section 168 of the internal revenue code, other
    17  than qualified resurgence zone property described in  paragraph  (q)  of
    18  this subdivision, and other than qualified New York Liberty Zone proper-
    19  ty  described  in  paragraph two of subsection b of section 1400L of the
    20  internal revenue code (without regard to clause (i) of subparagraph  (C)
    21  of  such paragraph), which was placed in service on or after June first,
    22  two thousand three, the amount allowable as a  deduction  under  section
    23  167 of the internal revenue code.
    24    (18) Premiums paid for environmental remediation insurance, as defined
    25  in  section  twenty-three  of  this chapter, and deducted in determining
    26  federal taxable income, to the extent of the amount of the environmental
    27  remediation insurance credit allowed under such section twenty-three and
    28  subdivision [thirty-five] nineteen of section two hundred [ten] ten-B of
    29  this article.
    30    (19) The amount of any  deduction  allowed  pursuant  to  section  one
    31  hundred ninety-nine of the internal revenue code.
    32    (20) The amount of any federal deduction for taxes imposed under arti-
    33  cle twenty-three of this chapter.
    34    (20-a) The amount of any federal deduction for the excise tax on tele-
    35  communication services to the extent such taxes are used as the basis of
    36  the  calculation of the tax-free NY area excise tax on telecommunication
    37  services credit allowed under  subdivision  forty-four  of  section  two
    38  hundred ten-B of this article.
    39    (21)  The  amount  of any federal deduction for real property taxes to
    40  the extent such taxes are used as the basis of the  calculation  of  the
    41  real  property  tax  credit  for manufacturers allowed under subdivision
    42  forty-three of section two hundred ten-B of this article.
    43    [(c) Entire net income shall include income  within  and  without  the
    44  United States;]
    45    (c-1)(1)  Notwithstanding  any other provision of this article, in the
    46  case of a taxpayer which is a foreign air carrier holding a foreign  air
    47  carrier  permit issued by the United States department of transportation
    48  pursuant to section four hundred two of  the  federal  aviation  act  of
    49  nineteen  hundred  fifty-eight, as amended, and which is qualified under
    50  subparagraph two of this paragraph, entire net income shall not include,
    51  and shall be computed without the  deduction  of,  amounts  directly  or
    52  indirectly  attributable  to,  (i)  any income derived from the interna-
    53  tional operation  of  aircraft  as  described  in  and  subject  to  the
    54  provisions of section eight hundred eighty-three of the internal revenue
    55  code,  (ii)  income  without the United States which is derived from the
    56  operation of aircraft, and (iii) income without the United States  which

        S. 6359--D                         18                         A. 8559--D
 
     1  is  of  a  type  described  in  subdivision (a) of section eight hundred
     2  eighty-one of the internal revenue code except that it is  derived  from
     3  sources  without  the  United  States.  Entire  net income shall include
     4  income  described in clauses (i), (ii) and (iii) of this subparagraph in
     5  the case of taxpayers not described in the previous sentence.
     6    (2) A taxpayer is qualified under this subparagraph  if  air  carriers
     7  organized  in  the United States and operating in the foreign country or
     8  countries in which the taxpayer has its major base of operations and  in
     9  which  it  is  organized,  resident or headquartered (if not in the same
    10  country as its major base of operations) are not subject to  any  income
    11  tax  or  other tax based on or measured by income or receipts imposed by
    12  such foreign country or countries or any political subdivision  thereof,
    13  or  if  so  subject to such tax, are provided an exemption from such tax
    14  equivalent to that provided for herein.
    15    (c-2) Adjustments by qualified public utilities. (1) In the case of  a
    16  taxpayer which is a qualified public utility, entire net income shall be
    17  computed with the adjustments set forth in this paragraph.
    18    (2)  Definitions.  (A)  Qualified  public utility. The term "qualified
    19  public utility" means a taxpayer which: (i)  on  December  thirty-first,
    20  nineteen  hundred ninety-nine, was subject to the ratemaking supervision
    21  of the state department of public service, and (ii) for the year  ending
    22  on  December  thirty-first, nineteen hundred ninety-nine, was subject to
    23  tax under former section one hundred eighty-six of this chapter.
    24    (B) Transition property. The term "transition property" means property
    25  placed in service by the taxpayer before January  first,  two  thousand,
    26  for  which a depreciation deduction is allowed under section one hundred
    27  sixty-seven of the internal revenue code.
    28    (3) Federal depreciation disallowed. With respect to transition  prop-
    29  erty,  the  deduction  for  federal income tax purposes for depreciation
    30  shall not be allowed.
    31    (4) New York depreciation. With  respect  to  transition  property,  a
    32  deduction  shall  be  allowed  for the depreciation expense shown on the
    33  books and records of the taxpayer for the taxable year and determined in
    34  accordance with generally accepted accounting principles.
    35    (5) Regulatory assets. A deduction shall be allowed for amounts recog-
    36  nized as expense on the books and records of the taxpayer for the  taxa-
    37  ble  year,  which  amounts were recognized as expense for federal income
    38  tax purposes in a taxable year ending  on  or  before  December  thirty-
    39  first,  nineteen  hundred ninety-nine, where: (A) such amounts represent
    40  expenditures which, when made, were charged to a deferred debit  account
    41  or  similar  asset account on the books and records of the taxpayer, and
    42  where (B) the recognition of expense on the books  and  records  of  the
    43  taxpayer  is  matched by revenue stemming from a procedure or adjustment
    44  allowing the recovery of such expenditures, and where (C)  such  revenue
    45  is recognized for federal income tax purposes in the taxable year.
    46    (6)  Basis for gain or loss. (A) Recognition transactions. (i) General
    47  rule - book basis. Except as provided in subclause (ii) of this  clause,
    48  where  transition property is sold or otherwise disposed of in the taxa-
    49  ble year in a transaction of the type requiring recognition of  gain  or
    50  loss  for  federal  income  tax  purposes, the basis for determining the
    51  amount of such gain or loss under this article shall be the cost of  the
    52  property less the accumulated depreciation on the property determined on
    53  the  books  and  records  of  the  taxpayer in accordance with generally
    54  accepted accounting principles.
    55    (ii) Qualified gain - New York basis.  Where  a  sale  or  disposition
    56  described in subclause (i) of this clause results in recognition of gain

        S. 6359--D                         19                         A. 8559--D
 
     1  for  federal  income tax purposes, and where either (I) such recognition
     2  occurs in a taxable year ending after nineteen hundred  ninety-nine  and
     3  before  two  thousand ten, or (II) such recognition is with respect to a
     4  nuclear  electric  generating  facility,  the  basis for determining the
     5  amount of such gain under this article shall be the cost of the property
     6  less the aggregate of the New York depreciation deductions on the  prop-
     7  erty determined under subparagraph four of this paragraph.
     8    (iii)  No  conversion  of  gain  to  loss. In the event that the basis
     9  determined under subclause (ii) of this clause results in  determination
    10  of  a  loss  on the sale or disposition of the property, no gain or loss
    11  shall be recognized under this article with  respect  to  such  sale  or
    12  disposition.
    13    (B)  Nonrecognition transactions. (i) Carryover basis. (I) where tran-
    14  sition property is disposed of ("original disposition") in a transaction
    15  of a type requiring deferral of recognition of gain or loss for  federal
    16  income tax purposes, and where (II) there is a subsequent recognition of
    17  gain  or loss for federal income tax purposes ("clause B gain or loss"),
    18  the amount of which is determined by reference, in whole or in part,  to
    19  the  basis  of  such transition property ("underlying transition proper-
    20  ty"), then (III) the amount of such clause B gain  or  loss  under  this
    21  article shall be adjusted as provided in subclause (ii) or (iii) of this
    22  clause.
    23    (ii)  General  rule  -  book  basis  adjustment. Except as provided in
    24  subclause (iii) of this clause, the amount of clause  B  gain  shall  be
    25  reduced,  or  the  amount  of  clause B loss increased, by the amount by
    26  which the book basis of the underlying transition property on  the  date
    27  of  original  disposition  (determined using the provisions of subclause
    28  (i) of clause (A) of this subparagraph) exceeds the federal  income  tax
    29  basis of such property on such date.
    30    (iii)  Qualified gain - New York basis adjustment. Where clause B gain
    31  either (I) occurs in a taxable year ending after nineteen hundred  nine-
    32  ty-nine and before two thousand ten, or (II) is with respect to a nucle-
    33  ar  electric  generating  facility,  the  amount of such gain under this
    34  article shall be reduced, but not below zero, by the amount by which the
    35  New York basis of the underlying transition  property  on  the  date  of
    36  original  disposition (determined using the provisions of subclause (ii)
    37  of clause (A) of this subparagraph) exceeds the federal income tax basis
    38  of such property on such date.
    39    (iv) Application to replacement  property  and  transferee  taxpayers.
    40  This  clause  shall apply whether the clause B gain or loss: (I) is with
    41  respect to either transition property or depreciable property the  basis
    42  of  which  is determined by reference to transition property, or (II) is
    43  recognized by either a qualified public utility or by a  taxpayer  which
    44  is  a  transferee of transition property (whether or not such transferee
    45  is a qualified public utility, notwithstanding subparagraph one of  this
    46  paragraph).
    47    (c-3)  Depreciation adjustments by qualified power producers and pipe-
    48  line companies. (1) In the case of  a  qualified  taxpayer,  entire  net
    49  income  shall be computed with the depreciation adjustments set forth in
    50  this paragraph.
    51    (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"
    52  means a qualified power producer or a qualified pipeline.
    53    (B) Qualified power producer.  The  term  "qualified  power  producer"
    54  means  a  taxpayer which: (i) on December thirty-first, nineteen hundred
    55  ninety-nine, was not subject to the ratemaking supervision of the  state
    56  department  of  public service, and (ii) for the year ending on December

        S. 6359--D                         20                         A. 8559--D
 
     1  thirty-first, nineteen hundred ninety-nine, was  subject  to  tax  under
     2  former  section one hundred eighty-six of this chapter on account of its
     3  being principally engaged in the business of supplying electricity.
     4    (C) Qualified pipeline. The term "qualified pipeline" means a taxpayer
     5  which:  (i)  on December thirty-first, nineteen hundred ninety-nine, was
     6  subject to the ratemaking supervision of either the federal energy regu-
     7  latory commission or the state department of public  service,  and  (ii)
     8  for  the  year ending on December thirty-first, nineteen hundred ninety-
     9  nine, was subject to tax under sections one hundred eighty-three and one
    10  hundred eighty-four of this chapter on account of its being  principally
    11  engaged in the business of pipeline transmission.
    12    (D) Transition property. The term "transition property" means property
    13  placed  in  service  by  a  qualified taxpayer before January first, two
    14  thousand, for which a depreciation deduction is  allowed  under  section
    15  one hundred sixty-seven of the internal revenue code.
    16    (3)  Federal depreciation disallowed. With respect to transition prop-
    17  erty, the deduction for federal income  tax  purposes  for  depreciation
    18  shall not be allowed.
    19    (4)  New  York  depreciation.  With  respect to transition property, a
    20  deduction shall be allowed for  the  depreciation  expense  computed  as
    21  provided  in this subparagraph. (A) All transition property shown on the
    22  books and records of the taxpayer on January first, two  thousand  shall
    23  be  treated  as  a  single asset placed in service on such date. The New
    24  York basis for purposes of computing the depreciation deduction on  such
    25  single  asset  shall  be  the net book value of such transition property
    26  determined on the first day of the federal taxable year  ending  in  two
    27  thousand  (or  on  the  date  any such property is placed in service, if
    28  later) adjusted as provided in clause (B) of this subparagraph.
    29    (B) If transition property is sold or otherwise disposed of,  the  New
    30  York basis of the single asset shall be reduced on the date of such sale
    31  or  disposition  by the amount of the adjusted federal tax basis of such
    32  property on such date.
    33    (C) The New York depreciation deduction allowed for any  taxable  year
    34  with  respect to such single asset shall be computed using the straight-
    35  line method, a twenty-year life, and a salvage value of zero.
    36    (D) For purposes of this subparagraph, the term "net book value" means
    37  cost reduced by accumulated depreciation shown on the books and  records
    38  of the taxpayer and determined, in the case of a qualified power produc-
    39  er,  in accordance with generally accepted accounting principles; and in
    40  the case of a qualified pipeline,  in  accordance  with  the  taxpayer's
    41  regulatory  reports  filed with the federal energy regulatory commission
    42  or state department of public service.
    43    (d) The [tax commission] commissioner may, whenever necessary in order
    44  properly to reflect the entire net income of any taxpayer, determine the
    45  year or period in which  any  item  of  income  or  deduction  shall  be
    46  included,  without  regard  to  the method of accounting employed by the
    47  taxpayer[;].
    48    (e) The entire net income of any bridge commission created by  act  of
    49  congress  to  construct  a bridge across an international boundary means
    50  its gross income less the expense of maintaining and operating its prop-
    51  erties, the annual interest upon its bonds and  other  obligations,  and
    52  the  annual  charge  for  the retirement of such bonds or obligations at
    53  maturity[;].
    54    [(f) A net operating loss deduction shall be allowed  which  shall  be
    55  presumably  the  same  as the net operating loss deduction allowed under
    56  section one hundred seventy-two of the internal revenue code,  or  which

        S. 6359--D                         21                         A. 8559--D

     1  would  have  been allowed if the taxpayer had not made an election under
     2  subchapter s of chapter one of the internal revenue code, except that in
     3  every instance where such deduction is allowed under this article:
     4    (1)  any  net  operating  loss  included in determining such deduction
     5  shall be adjusted to reflect the inclusions and exclusions  from  entire
     6  net income required by paragraphs (a), (b) and (g) hereof,
     7    (2)  such deduction shall not include any net operating loss sustained
     8  during any taxable year  beginning  prior  to  January  first,  nineteen
     9  hundred  sixty-one, or during any taxable year in which the taxpayer was
    10  not subject to the tax imposed by this article,
    11    (3) such deduction shall not exceed the deduction for the taxable year
    12  allowed under section one hundred seventy-two of  the  internal  revenue
    13  code,  or  the  deduction  for  the  taxable  year which would have been
    14  allowed if the taxpayer had not made an election under subchapter  s  of
    15  chapter one of the internal revenue code,
    16    (4)  in the case of a New York S corporation, such deduction shall not
    17  include any net operating loss sustained during a New  York  C  year  or
    18  during a New York S year beginning prior to nineteen hundred ninety, and
    19  in  the  case  of  a  New  York  C corporation, such deduction shall not
    20  include any net operating loss sustained  during  a  New  York  S  year,
    21  provided,  however, a New York S year shall be treated as a taxable year
    22  for purposes of determining the number of taxable years to which  a  net
    23  operating loss may be carried back or carried forward, and
    24    (5) the net operating loss deduction allowed under section one hundred
    25  seventy-two  of  the  internal  revenue  code shall for purposes of this
    26  paragraph be determined as  if  the  taxpayer  had  elected  under  such
    27  section  to  relinquish  the entire carryback period with respect to net
    28  operating losses, except with respect to the first ten thousand  dollars
    29  of each of such losses, sustained during taxable years ending after June
    30  thirtieth, nineteen hundred eighty-nine.
    31    (g)  For  taxable  years  commencing  prior to January first, nineteen
    32  hundred eighty-seven, at the election of the taxpayer, a deduction shall
    33  be allowed for expenditures paid or incurred during the taxable year for
    34  the construction, reconstruction,  erection  or  improvement  of  either
    35  industrial  waste  treatment facilities or air pollution control facili-
    36  ties, or, with respect to taxable years beginning on  or  after  January
    37  first, nineteen hundred seventy-seven and before January first, nineteen
    38  hundred eighty-one, industrial waste treatment controlled process facil-
    39  ities or air pollution controlled process facilities.
    40    (1)  (A)  (1)  The  term "industrial waste treatment facilities" shall
    41  mean facilities for the treatment, neutralization  or  stabilization  of
    42  industrial  waste  and other wastes (as the terms "industrial waste" and
    43  "other wastes" are defined  in  section  17-0105  of  the  environmental
    44  conservation  law)  from a point immediately preceding the point of such
    45  treatment, neutralization or stabilization to  the  point  of  disposal,
    46  including the necessary pumping and transmitting facilities.
    47    (2)  The term "industrial waste treatment controlled process facility"
    48  shall mean such portion of the cost of an industrial production facility
    49  designed for the purpose of obviating  the  need  for  industrial  waste
    50  treatment  facilities  as  defined  in  item one of this clause as shall
    51  exceed the cost of an industrial production facility of equal production
    52  capacity which if constructed would require industrial  waste  treatment
    53  facilities  to meet emission standards in compliance with the provisions
    54  of the environmental conservation law and the codes, rules, regulations,
    55  permits or orders issued pursuant thereto but only to the extent of  the
    56  cost of such industrial waste treatment facilities.

        S. 6359--D                         22                         A. 8559--D

     1    (B) (1) The term "air pollution control facilities" shall mean facili-
     2  ties which remove, reduce, or render less noxious air contaminants emit-
     3  ted from an air contamination source (as the terms "air contaminant" and
     4  "air  contamination  source" are defined in section 19-0107 of the envi-
     5  ronmental conservation law) from a point immediately preceding the point
     6  of  such  removal,  reduction  or rendering to the point of discharge of
     7  air, meeting emission standards as  established  by  the  department  of
     8  environmental  conservation, but excluding such facilities installed for
     9  the primary purpose of salvaging materials which are usable in the manu-
    10  facturing process or are marketable and excluding those facilities which
    11  rely for their efficacy on dilution, dispersion or assimilation  of  air
    12  contaminants  in the ambient air after emission. Such term shall further
    13  include flue gas desulfurization equipment and attendant sludge disposal
    14  facilities, fluidized bed boilers, precombustion coal  cleaning  facili-
    15  ties  or  other  facilities that conform with this subdivision and which
    16  comply with the provisions of the state acid deposition control act  set
    17  forth  in  title nine of article nineteen of the environmental conserva-
    18  tion law.
    19    (2) The term "air pollution controlled process  facility"  shall  mean
    20  such  portion  of the cost of an industrial production facility designed
    21  for the purpose of obviating the need for air pollution control  facili-
    22  ties  as  defined in item one of this clause as shall exceed the cost of
    23  an industrial production facility of equal productive capacity which  if
    24  constructed  would  require  air  pollution  control facilities to inert
    25  emission standards as established pursuant to  title  three  of  article
    26  nineteen of the environmental conservation law but only to the extent of
    27  the cost of such air pollution control facilities.
    28    (2) However, such deduction shall be allowed only
    29    (A)  with  respect to tangible property which is depreciable, pursuant
    30  to section one hundred sixty-seven of the internal revenue code,  having
    31  a  situs in this state and used in the taxpayer's trade or business, the
    32  construction, reconstruction, erection or improvement of which,  in  the
    33  case  of industrial waste treatment facilities, is initiated on or after
    34  January first, nineteen hundred sixty-five or which, in the case of  air
    35  pollution  control  facilities,  is initiated on or after January first,
    36  nineteen hundred sixty-six, or which in the  case  of  industrial  waste
    37  treatment  controlled  process  facilities  or  air pollution controlled
    38  process facilities is initiated on and  after  January  first,  nineteen
    39  hundred seventy-seven, and
    40    (B) on condition that such facilities have been certified by the state
    41  commissioner  of  environmental conservation or his designated represen-
    42  tative, pursuant to section 19-0309 of  the  environmental  conservation
    43  law,  as  complying  with  applicable  provisions  of  the environmental
    44  conservation law, the public health law, the  state  sanitary  code  and
    45  codes,  rules,  regulations,  permits or orders issued pursuant thereto,
    46  and
    47    (C) on condition that entire net income for the taxable year  and  all
    48  succeeding  taxable  years  be  computed without any deductions for such
    49  expenditures or for depreciation or amortization of  the  same  property
    50  other  than  the deductions allowed by this paragraph (g), except to the
    51  extent that the basis of the property may  be  attributable  to  factors
    52  other than such expenditures, or in case a deduction is allowable pursu-
    53  ant to this paragraph for only a part of such expenditures, on condition
    54  that  any  deduction  allowed  for  federal income tax purposes for such
    55  expenditures or for depreciation or amortization of the same property be

        S. 6359--D                         23                         A. 8559--D

     1  proportionately reduced in computing entire net income for  the  taxable
     2  year and all succeeding taxable years, and
     3    (D)  where  the  election provided for in paragraph (d) of subdivision
     4  three of section two hundred ten of this chapter has not been  exercised
     5  in respect to the same property.
     6    (3)  (A)  If  expenditures in respect to an industrial waste treatment
     7  facility, an air pollution control facility, an industrial waste  treat-
     8  ment  controlled process facility or an air pollution controlled process
     9  facility have been deducted as provided herein and if within  ten  years
    10  from  the  end  of  the taxable year in which such deduction was allowed
    11  such property or any part thereof is used for  the  primary  purpose  of
    12  salvaging materials which are usable in the manufacturing process or are
    13  marketable,  the  taxpayer shall report such change of use in its report
    14  for the first taxable year during which it occurs, and the  tax  commis-
    15  sion  may  recompute  the  tax  for  the  year  or  years for which such
    16  deduction was allowed and any  carryback  or  carryover  year,  and  may
    17  assess  any  additional tax resulting from such recomputation within the
    18  time fixed by paragraph nine of subsection (c) of  section  ten  hundred
    19  eighty-three of this chapter.
    20    (B) If a deduction is allowed as herein provided for expenditures paid
    21  or  incurred during any taxable year on the basis of a temporary certif-
    22  icate of compliance issued pursuant to  the  environmental  conservation
    23  law  and  if  the  taxpayer  fails  to obtain a permanent certificate of
    24  compliance upon completion of the facilities with respect to which  such
    25  temporary certificate was issued, the taxpayer shall report such failure
    26  in  its  report  for  the  taxable year during which such facilities are
    27  completed, and the tax commission may recompute the tax for the year  or
    28  years  for  which such deduction was allowed and any carryback or carry-
    29  over year, and may assess any additional  tax  resulting  from  in  such
    30  recomputation  within the time fixed by paragraph nine of subsection (c)
    31  of section ten hundred eighty-three.
    32    (C) If a deduction is allowed as herein provided for expenditures paid
    33  or incurred during any taxable year  in  respect  to  an  air  pollution
    34  control  facility  on  the  basis  of a certificate of compliance issued
    35  pursuant to the environmental conservation law and  the  certificate  is
    36  revoked pursuant to subdivision three of section 19-0309 of the environ-
    37  mental  conservation  law,  the tax commission may recompute the tax for
    38  the year or years for which the facility is not or was not in compliance
    39  with the applicable provisions of the  environmental  conservation  law,
    40  the  state sanitary code or codes, rules, regulations, permits or orders
    41  promulgated pursuant thereto, and for which a deduction was allowed,  as
    42  well  as for any carryback or carryover year to which such deduction was
    43  carried, and may assess any additional tax resulting from such  recompu-
    44  tation  within  the  time  fixed  by paragraph nine of subsection (c) of
    45  section ten hundred eighty-three.
    46    (4) In any taxable year when property is sold  or  otherwise  disposed
    47  of,  with respect to which a deduction has been allowed pursuant to this
    48  paragraph, such deduction shall be  disregarded  in  computing  gain  or
    49  loss,  and  the  gain  or  loss on the sale or other disposition of such
    50  property shall be the gain or loss  entering  into  the  computation  of
    51  entire  taxable  income  which the taxpayer is required to report to the
    52  United States treasury department for such taxable year.]
    53    (h) If the period covered by a report under this article is other than
    54  the period covered by the report to the United States  treasury  depart-
    55  ment,

        S. 6359--D                         24                         A. 8559--D
 
     1    (1)  except  as provided in subparagraph two hereof, entire net income
     2  shall be determined by multiplying the taxable income reported  to  such
     3  department  (as  adjusted pursuant to the provisions of this article) by
     4  the number of calendar months or major  parts  thereof  covered  by  the
     5  report  under this article and dividing by the number of calendar months
     6  or major parts thereof covered by the report to such department.  If  it
     7  shall  appear that such method of determining entire net income does not
     8  properly reflect the taxpayer's income during the period covered by  the
     9  report  under  this  article, the [tax commission] commissioner shall be
    10  authorized in its discretion to determine such entire net income  solely
    11  on  the  basis of the taxpayer's income during the period covered by its
    12  report under this article[;].
    13    (2) [in] In the case of a  New  York  S  termination  year,  an  equal
    14  portion of entire net income shall be assigned to each day of such year.
    15  The  portion  of  such entire net income thereby assigned to the S short
    16  year and the C short year shall be included in  the  respective  reports
    17  for  the  S short year and the C short year under this article. However,
    18  where paragraph three of subsection (s) of section six hundred twelve of
    19  this chapter applies, the portion of such entire net income assigned  to
    20  the  S  short year and the C short year shall be determined under normal
    21  tax accounting rules.
    22    (i) With respect to a DISC which during any taxable year or  reporting
    23  year  (1)  received  more  than five percent of its gross sales from the
    24  sale of inventory or other property which it purchased from  its  stock-
    25  holders,  (2)  received more than five percent of its gross rentals from
    26  the rental of property which it purchased or rented from its  stockhold-
    27  ers  or  (3) received more than five percent of its total receipts other
    28  than sales and rentals from its stockholders, the  following  provisions
    29  shall apply.
    30    (A)  For any taxable year in which sub-paragraph (B) of this paragraph
    31  is in effect and not rendered invalid, a DISC  meeting  the  above  test
    32  shall be exempt from all taxes imposed by this article.
    33    (B)  Supplemental to the provisions of subdivision five of section two
    34  hundred eleven of this article, any taxpayer required to compute  a  tax
    35  under  this  article, which during the taxable year being reported was a
    36  stockholder in any DISC meeting the test prescribed in  this  paragraph,
    37  shall  for any taxable year ending after December thirty-first, nineteen
    38  hundred seventy-one adjust each item of its receipts,  expenses,  assets
    39  and  liabilities,  as  otherwise  computed under this article, by adding
    40  thereto its attributable share of each such DISC's  receipts,  expenses,
    41  assets  and  liabilities  as  reportable by each such DISC to the United
    42  States Treasury Department for its annual reporting period ending during
    43  the current taxable year of such taxpayer; provided, however,  (1)  that
    44  all transactions between the taxpayer and each such DISC shall be elimi-
    45  nated  from  the  taxpayer's  adjusted  receipts,  expenses,  assets and
    46  liabilities; (2) that the taxpayer's  entire  net  income  as  otherwise
    47  computed  under this section, shall be reduced by subtracting the amount
    48  of the deemed distribution of current income, if  any,  from  each  such
    49  DISC  already  included  in  the  entire  net income of such taxpayer by
    50  virtue of having been included in its entire  taxable  income  for  that
    51  taxable  year  as reported to the United States Treasury Department; and
    52  (3) that in the event this paragraph should  be  rendered  invalid,  all
    53  DISC's  and  their stockholders taxable hereunder shall be taxed instead
    54  under the remaining portions of this article.
    55    (j) in the case of property placed in service in taxable years  begin-
    56  ning  before  nineteen  hundred ninety-four, for taxable years beginning

        S. 6359--D                         25                         A. 8559--D
 
     1  after December thirty-first, nineteen hundred  eighty-one,  except  with
     2  respect  to  property  subject  to the provisions of section two hundred
     3  eighty-F of the internal  revenue  code  and  property  subject  to  the
     4  provisions  of  section  one hundred sixty-eight of the internal revenue
     5  code which is placed in service in this state in taxable years beginning
     6  after December thirty-first, nineteen hundred eighty-four, and  provided
     7  a  deduction  has  not  been excluded from entire net income pursuant to
     8  subparagraph eight of paragraph (b)  of  this  subdivision,  a  taxpayer
     9  shall  be  allowed  with  respect  to  property  which is subject to the
    10  provisions of section one hundred sixty-eight of  the  internal  revenue
    11  code  the  depreciation  deduction  allowable  under section one hundred
    12  sixty-seven of the internal revenue code  as  such  section  would  have
    13  applied to property placed in service on December thirty-first, nineteen
    14  hundred eighty. This paragraph shall not apply to property of a taxpayer
    15  principally  engaged  in the conduct of aviation (other than air freight
    16  forwarders acting as principal and like indirect air carriers) which  is
    17  placed  in  service  before  taxable years beginning in nineteen hundred
    18  eighty-nine.
    19    (k) QSSS. (1) New York S corporation. In the case  of  a  New  York  S
    20  corporation  which  is the parent of a qualified subchapter S subsidiary
    21  (QSSS) with respect to a taxable year:
    22    (A) where the QSSS is not an excluded corporation,
    23    (i) in determining the entire net income of such  parent  corporation,
    24  all  assets,  liabilities,  income  and  deductions of the QSSS shall be
    25  treated as assets, liabilities, income  and  deductions  of  the  parent
    26  corporation, and
    27    (ii)  the QSSS shall be exempt from all taxes imposed by this article,
    28  and
    29    (B) where the QSSS is an excluded corporation, the entire  net  income
    30  of  the  parent  corporation  shall be determined as if the federal QSSS
    31  election had not been made.
    32    (2) New York C corporation. In the case of a New  York  C  corporation
    33  which is the parent of a QSSS with respect to a taxable year:
    34    (A) where the QSSS is a taxpayer,
    35    (i)  in  determining the entire net income of such parent corporation,
    36  all assets, liabilities, income and deductions  of  the  QSSS  shall  be
    37  treated  as  assets,  liabilities,  income  and deductions of the parent
    38  corporation, and
    39    (ii) the QSSS shall be exempt from all taxes imposed by this  article,
    40  and
    41    (B) where the QSSS is not a taxpayer,
    42    (i) if the QSSS is not an excluded corporation, the parent corporation
    43  may  make  a QSSS inclusion election to include all assets, liabilities,
    44  income and deductions of the QSSS as  assets,  liabilities,  income  and
    45  deductions of the parent corporation, and
    46    (ii) in the absence of such election, or where the QSSS is an excluded
    47  corporation,  the  entire  net income of the parent corporation shall be
    48  determined as if the federal QSSS election had not been made.
    49    (3) Non-New York S corporation not excluded.  In  the  case  of  an  S
    50  corporation which is not a taxpayer and not an excluded corporation, and
    51  which  is  the parent of a QSSS which is a taxpayer, the shareholders of
    52  the parent corporation shall be entitled to make the New York S election
    53  under subsection (a) of section six hundred sixty of this chapter.
    54    (A) For any taxable year for which such election  is  in  effect,  the
    55  parent  corporation  shall be subject to tax under this article as a New

        S. 6359--D                         26                         A. 8559--D
 
     1  York S corporation, and the provisions of clause (A) of subparagraph one
     2  of this paragraph shall apply.
     3    (B) For any taxable year for which such election is not in effect, the
     4  QSSS shall be a New York C corporation, and the entire net income of the
     5  QSSS  shall  be  determined as if the federal QSSS election had not been
     6  made. For purposes of such determination, the taxable year of the parent
     7  corporation shall constitute the taxable year of  the  QSSS,  excluding,
     8  however, any portion of such year during which the QSSS is not a taxpay-
     9  er.
    10    (4)  S  corporation excluded. In the case of an S corporation which is
    11  an excluded corporation and which is the parent of a  QSSS  which  is  a
    12  taxpayer,  the QSSS shall be a New York C corporation and the provisions
    13  of clause (B) of subparagraph three of this paragraph shall apply.
    14    (5) Excluded corporation. The  term  "excluded  corporation"  means  a
    15  corporation  subject  to  tax  under  sections  one hundred eighty-three
    16  through one hundred eighty-six, inclusive, or  article  [thirty-two  or]
    17  thirty-three  of  this  chapter, or a foreign corporation not taxable by
    18  this state which, if it were taxable, would be subject to tax under  any
    19  of such sections or [articles] article.
    20    (6)  Taxpayer.  For  purposes  of  this paragraph, the term "taxpayer"
    21  means a parent corporation or QSSS subject to tax  under  this  article,
    22  determined without regard to the provisions of this paragraph.
    23    (7)  QSSS  inclusion  election.  The  election  under subclause (i) of
    24  clause (B) of subparagraph two of this paragraph shall be effective  for
    25  the  taxable year for which made and for all succeeding taxable years of
    26  the corporation until such election is terminated. An election or termi-
    27  nation shall be made on such form and in such manner as the commissioner
    28  may prescribe by regulation or instruction.
    29    (l) Emerging technology investment deferral. In the case of  any  sale
    30  of a qualified emerging technologies investment held for more than thir-
    31  ty-six months and with respect to which the taxpayer elects the applica-
    32  tion  of this paragraph, gain from such sale shall be recognized only to
    33  the extent that the amount realized on such sale exceeds the cost of any
    34  qualified emerging technologies investment  purchased  by  the  taxpayer
    35  during  the three hundred sixty-five-day period beginning on the date of
    36  such sale, reduced by any portion of such  cost  previously  taken  into
    37  account under this paragraph. For purposes of this paragraph the follow-
    38  ing shall apply:
    39    (1)  A  qualified investment is stock of a corporation or an interest,
    40  other than as a creditor, in a partnership or limited liability  company
    41  that was acquired by the taxpayer as provided in Internal Revenue Code §
    42  1202(c)(1)(B),  except  that  the  reference to the term "stock" in such
    43  section shall be read as "investment," or by the taxpayer from a  person
    44  who had acquired such stock or interest in such a manner.
    45    (2)  A qualified emerging technology investment is a qualified invest-
    46  ment, that was held by the taxpayer for at least thirty-six months, in a
    47  company defined in paragraph (c) of subdivision one of  section  thirty-
    48  one  hundred  two-e  of the public authorities law or an investment in a
    49  partnership or limited liability company that is taxed as a  partnership
    50  to the extent that such partnership or limited liability company invests
    51  in qualified emerging technology companies.
    52    (3)  For  purposes  of  determining whether the nonrecognition of gain
    53  under this subsection  applies  to  a  qualified  emerging  technologies
    54  investment  that is sold, the taxpayer's holding period for such invest-
    55  ment  and  the  qualified  emerging  technologies  investment  that   is

        S. 6359--D                         27                         A. 8559--D
 
     1  purchased  shall be determined without regard to Internal Revenue Code §
     2  1223.
     3    (m)  Amounts deferred. The amount deferred under paragraph (l) of this
     4  subdivision shall be added to entire net income when the reinvestment in
     5  the New York qualified emerging technology  company  which  qualified  a
     6  taxpayer for such deferral is sold.
     7    [(n) Qualified gas transportation contracts.
     8    (1) Any tax paid under this article allocable to receipts attributable
     9  to  a  "qualified  gas  transportation contract" shall be deemed to have
    10  been paid under article nine of this chapter for all purposes of law for
    11  taxable years commencing  on  or  after  January  first,  two  thousand,
    12  computed as hereinafter provided, if all of the following conditions are
    13  met:
    14    (i)  For  periods  ending  prior  to  January first, two thousand, the
    15  taxpayer paid the franchise tax due under section  one  hundred  eighty-
    16  four of this chapter.
    17    (ii)  For  the  taxable  year,  all  of the receipts from the pipeline
    18  transportation of natural gas attributable to the taxpayer and  included
    19  in  the  taxpayer's entire net income (without regard to this paragraph)
    20  are solely from the transportation of natural gas for wholesale  custom-
    21  ers and commercial retail customers.
    22    (iii)  The  taxpayer's  franchise tax liability under this article for
    23  the taxable year (computed without regard to this paragraph)  is  deter-
    24  mined  under paragraph (a) of subdivision one of section two hundred ten
    25  of this article, and such tax liability (without regard  to  this  para-
    26  graph)  is  greater  than the liability the taxpayer would have incurred
    27  under sections one hundred eighty-three and one hundred  eighty-four  of
    28  this  chapter  (as such sections existed on December thirty-first, nine-
    29  teen hundred ninety-nine) based on the same taxable period.
    30    (iv) The taxpayer is  a  party  to  a  "qualified  gas  transportation
    31  contract," as defined herein.
    32    (2)  The provisions of this paragraph shall apply only for the taxable
    33  years during which such qualified gas transportation contract is in full
    34  force and effect, and shall apply only to the receipts of  the  taxpayer
    35  less  any  expenses of the taxpayer (but not less than zero), during the
    36  taxable year, to the extent included in entire  net  income,  which  are
    37  attributable   to  any  such  qualified  gas  transportation  contracts.
    38  Provided, further, in any event, the  characterization  hereunder  shall
    39  expire  and be of no further force and effect for taxable years commenc-
    40  ing on or after January first, two thousand fifteen.
    41    (3) The term "qualified gas  transportation  contract"  shall  mean  a
    42  service  agreement for the transportation of natural gas for an end-user
    43  which is a qualified cogeneration facility with a rated capacity of  one
    44  thousand  megawatts  or  more, which (i) was entered into before January
    45  first, two thousand, and was in full force and effect and binding on the
    46  parties thereto as of such date, (ii) as originally executed, was for  a
    47  term of at least twenty years, and (iii) the terms of which prohibit the
    48  pass-through  to  such  customer of the franchise tax imposed under this
    49  article, while allowing the recovery of the gross earnings  tax  imposed
    50  under  section one hundred eighty-four of this chapter. A contract shall
    51  not qualify as a qualified gas transportation contract if there is:  (i)
    52  any  renewal  or  extension of an otherwise qualified gas transportation
    53  contract occurring on or after January first, two thousand, or (ii)  any
    54  material amendment to, or supplementation of, an otherwise qualified gas
    55  transportation  contract on or after such date. Such renewal, extension,
    56  or material amendment or supplementation shall have the same  force  and

        S. 6359--D                         28                         A. 8559--D

     1  effect  of terminating the characterization hereunder as if the qualify-
     2  ing contract had expired by its own terms.
     3    (o)]  (n-1)  For  taxable years beginning after December thirty-first,
     4  two thousand two, in the case of qualified property described  in  para-
     5  graph  two  of subsection k of section 168 of the internal revenue code,
     6  other than qualified resurgence zone property described in paragraph (q)
     7  of this subdivision, and other than  qualified  New  York  Liberty  Zone
     8  property  described in paragraph two of subsection b of section 1400L of
     9  the internal revenue code (without regard to clause (i) of  subparagraph
    10  (C)  of  such  paragraph),  which was placed in service on or after June
    11  first, two thousand three, a taxpayer shall be allowed with  respect  to
    12  such  property the depreciation deduction allowable under section 167 of
    13  the internal revenue code as such section would  have  applied  to  such
    14  property  had  it  been acquired by the taxpayer on September tenth, two
    15  thousand one.
    16    (o) Related members expense add back.  (1)  Definitions.  (A)  Related
    17  member.  "Related  member" means a related person as defined in subpara-
    18  graph (c) of paragraph three of subsection (b) of section  four  hundred
    19  sixty-five  of  the  internal  revenue code, except that "fifty percent"
    20  shall be substituted for "ten percent".
    21    (B) Effective rate of tax. "Effective rate of tax" means,  as  to  any
    22  state  or  U.S. possession, the maximum statutory rate of tax imposed by
    23  the state or possession on or measured by a related member's net  income
    24  multiplied  by  the  apportionment percentage, if any, applicable to the
    25  related member under the laws of said jurisdiction. For purposes of this
    26  definition, the effective rate of tax as to any state or U.S. possession
    27  is zero where the related member's net  income  tax  liability  in  said
    28  jurisdiction  is reported on a combined or consolidated return including
    29  both the taxpayer and the related member where the reported transactions
    30  between the taxpayer and the related member are  eliminated  or  offset.
    31  Also, for purposes of this definition, when computing the effective rate
    32  of  tax  for  a  jurisdiction  in which a related member's net income is
    33  eliminated or offset by a credit or similar adjustment that is dependent
    34  upon the related member either maintaining or managing intangible  prop-
    35  erty  or  collecting  interest  income in that jurisdiction, the maximum
    36  statutory rate of tax imposed by said jurisdiction shall be decreased to
    37  reflect the statutory rate of tax that applies to the related member  as
    38  effectively reduced by such credit or similar adjustment.
    39    (C) Royalty payments. Royalty payments are payments directly connected
    40  to  the  acquisition,  use,  maintenance or management, ownership, sale,
    41  exchange, or any other disposition of licenses, trademarks,  copyrights,
    42  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
    43  patents and any other similar types of intangible assets  as  determined
    44  by   the   commissioner,  and  include  amounts  allowable  as  interest
    45  deductions under section one hundred sixty-three of the internal revenue
    46  code to the extent such amounts are directly or indirectly for,  related
    47  to  or  in  connection with the acquisition, use, maintenance or manage-
    48  ment, ownership,  sale,  exchange  or  disposition  of  such  intangible
    49  assets.
    50    (D)  Valid  Business  Purpose. A valid business purpose is one or more
    51  business purposes, other than the avoidance or  reduction  of  taxation,
    52  which alone or in combination constitute the primary motivation for some
    53  business  activity or transaction, which activity or transaction changes
    54  in a meaningful way, apart from tax effects, the  economic  position  of
    55  the taxpayer. The economic position of the taxpayer includes an increase

        S. 6359--D                         29                         A. 8559--D
 
     1  in  the  market share of the taxpayer, or the entry by the taxpayer into
     2  new business markets.
     3    (2) Royalty expense add backs. (A) Except where a taxpayer is included
     4  in a combined report with a related member pursuant to [subdivision four
     5  of]  section two hundred [eleven] ten-C of this article, for the purpose
     6  of computing entire net income or  other  applicable  taxable  basis,  a
     7  taxpayer  must  add  back  royalty payments directly or indirectly paid,
     8  accrued, or incurred in connection with one or more direct  or  indirect
     9  transactions with one or more related members during the taxable year to
    10  the extent deductible in calculating federal taxable income.
    11    (B)  Exceptions.  (i)  The adjustment required in this paragraph shall
    12  not apply to the portion of the royalty payment that the taxpayer estab-
    13  lishes, by clear and convincing evidence of the type  and  in  the  form
    14  specified  by the commissioner, meets all of the following requirements:
    15  (I) the related member was subject to tax in this state or another state
    16  or possession of the United States or a foreign nation or some  combina-
    17  tion  thereof  on  a  tax  base  that included the royalty payment paid,
    18  accrued or incurred by the taxpayer; (II) the related member during  the
    19  same  taxable year directly or indirectly paid, accrued or incurred such
    20  portion to a person that is not a related member; and (III)  the  trans-
    21  action  giving  rise to the royalty payment between the taxpayer and the
    22  related member was undertaken for a valid business purpose.
    23    (ii) The adjustment required in this paragraph shall not apply if  the
    24  taxpayer  establishes,  by clear and convincing evidence of the type and
    25  in the form specified by the commissioner, that: (I) the related  member
    26  was  subject  to  tax  on or measured by its net income in this state or
    27  another state or possession of the United  States  or  some  combination
    28  thereof;  (II)  the  tax  base for said tax included the royalty payment
    29  paid, accrued or incurred by  the  taxpayer;  and  (III)  the  aggregate
    30  effective  rate  of tax applied to the related member in those jurisdic-
    31  tions is no less than eighty percent of the statutory rate of  tax  that
    32  applied  to  the  taxpayer under section two hundred ten of this article
    33  for the taxable year.
    34    (iii) The adjustment required in this paragraph shall not apply if the
    35  taxpayer establishes, by clear and convincing evidence of the  type  and
    36  in the form specified by the commissioner, that: (I) the royalty payment
    37  was  paid,  accrued  or incurred to a related member organized under the
    38  laws of a country  other  than  the  United  States;  (II)  the  related
    39  member's  income  from  the  transaction  was subject to a comprehensive
    40  income tax treaty between such country and the United States; (III)  the
    41  related member was subject to tax in a foreign nation on a tax base that
    42  included  the royalty payment paid, accrued or incurred by the taxpayer;
    43  (IV) the related member's income from the transaction was taxed in  such
    44  country  at  an  effective rate of tax at least equal to that imposed by
    45  this state; and (V) the royalty payment was paid,  accrued  or  incurred
    46  pursuant  to  a  transaction  that  was  undertaken for a valid business
    47  purpose and using terms that reflect an arm's length relationship.
    48    (iv) The adjustment required in this paragraph shall not apply if  the
    49  taxpayer and the commissioner agree in writing to the application or use
    50  of alternative adjustments or computations. The commissioner may, in his
    51  or  her  discretion,  agree  to  the  application  or use of alternative
    52  adjustments or computations when he or she concludes that in the absence
    53  of such agreement the income of  the  taxpayer  would  not  be  properly
    54  reflected.
    55    (p) For taxable years beginning after December thirty-first, two thou-
    56  sand  two,  upon  the  disposition  of property to which paragraph [(o)]

        S. 6359--D                         30                         A. 8559--D

     1  (n-1) of this subdivision applies, the amount of any gain or loss inclu-
     2  dible in entire net income shall be adjusted to reflect  the  inclusions
     3  and exclusions from entire net income pursuant to subparagraph seventeen
     4  of  paragraph  (a)  and  subparagraph seventeen of paragraph (b) of this
     5  subdivision attributable to such property.
     6    (q) For purposes of paragraphs [(o)] (n-1) and (p)  of  this  subdivi-
     7  sion,  qualified  resurgence zone property shall mean qualified property
     8  described in paragraph two of subsection k of section 168 of the  inter-
     9  nal  revenue code substantially all of the use of which is in the resur-
    10  gence zone, as defined below, and is in the active conduct of a trade or
    11  business by the taxpayer in such zone, and the original use of which  in
    12  the  resurgence  zone commences with the taxpayer after December thirty-
    13  first, two thousand two. The resurgence zone shall mean the area of  New
    14  York county bounded on the south by a line running from the intersection
    15  of  the Hudson River with the Holland Tunnel, and running thence east to
    16  Canal Street, then running along the centerline of Canal Street  to  the
    17  intersection  of the Bowery and Canal Street, running thence in a south-
    18  easterly direction diagonally across  Manhattan  Bridge  Plaza,  to  the
    19  Manhattan Bridge and thence along the centerline of the Manhattan Bridge
    20  to  the  point where the centerline of the Manhattan Bridge would inter-
    21  sect with the easterly bank of the East River, and bounded on the  north
    22  by  a  line  running  from the intersection of the Hudson River with the
    23  Holland Tunnel and running thence north along West Avenue to the  inter-
    24  section  of  Clarkson  Street  then running east along the centerline of
    25  Clarkson Street to the intersection of Washington Avenue,  then  running
    26  south  along  the centerline of Washington Avenue to the intersection of
    27  West Houston Street, then east along  the  centerline  of  West  Houston
    28  Street,  then at the intersection of the Avenue of the Americas continu-
    29  ing east along the centerline of East Houston  Street  to  the  easterly
    30  bank of the East River.
    31    (r)  Subtraction  modification  for qualified residential loan portfo-
    32  lios. (1)(A) A taxpayer that is either a thrift institution  as  defined
    33  in subparagraph three of this paragraph or a qualified community bank as
    34  defined  in  subparagraph  two  of paragraph (s) of this subdivision and
    35  maintains a qualified residential loan portfolio as defined in  subpara-
    36  graph two of this paragraph shall be allowed as a deduction in computing
    37  entire net income the amount, if any, by which (i) thirty-two percent of
    38  its  entire  net  income  determined  without  regard  to this paragraph
    39  exceeds (ii) the amounts deducted by the taxpayer pursuant  to  sections
    40  166  and  585  of the Internal Revenue Code less any amounts included in
    41  federal taxable income as a result of a recovery of a loan.
    42    (B)(i) If the taxpayer is in  a  combined  report  under  section  two
    43  hundred  ten-C  of  this  article,  this deduction will be computed on a
    44  combined basis. In that instance, the entire net income of the  combined
    45  reporting  group for purposes of this paragraph shall be multiplied by a
    46  fraction, the numerator of which is the average total assets of all  the
    47  thrift  institutions  and  qualified  community  banks  included  in the
    48  combined report and the denominator of which is the average total assets
    49  of all the corporations included in the combined report.
    50    (ii) Measurement of assets. (I) Total assets are those assets that are
    51  properly reflected on a balance sheet, computed in the same manner as is
    52  required by the banking regulator  of  the  taxpayers  included  in  the
    53  combined return.
    54    (II)  Assets  will only be included if the income or expenses of which
    55  are properly reflected (or would have been  properly  reflected  if  not
    56  fully  depreciated  or expensed, or depreciated or expensed to a nominal

        S. 6359--D                         31                         A. 8559--D
 
     1  amount) in the computation of the combined group's entire net income for
     2  the taxable year. Assets will not include deferred tax assets and intan-
     3  gible assets identified as "goodwill".
     4    (III)  Tangible  real  and personal property, such as buildings, land,
     5  machinery, and equipment shall be valued at cost. Leased assets will  be
     6  valued at the annual lease payment multiplied by eight. Intangible prop-
     7  erty,  such  as  loans  and  investments,  shall be valued at book value
     8  exclusive of reserves.
     9    (IV)  Intercorporate  stockholdings  and  bills,  notes  and  accounts
    10  receivable,  and  other  intercorporate  indebtedness between the corpo-
    11  rations included in the combined report shall be eliminated.
    12    (V) Average assets are computed using the assets measured on the first
    13  day of the taxable year, and on the last day of each subsequent  quarter
    14  of the taxable year or month or day during the taxable year.
    15    (2)  Qualified  residential loan portfolio. (A) A taxpayer maintains a
    16  qualified residential loan portfolio if at least sixty  percent  of  the
    17  amount  of  the  total  assets  at  the close of the taxable year of the
    18  thrift institution or qualified community bank consists  of  the  assets
    19  described  in  items (i) through (xii) of this clause, with the applica-
    20  tion of the rule in item (xiii). If  the  taxpayer  is  a  member  of  a
    21  combined  group, the determination of whether there is a qualified resi-
    22  dential loan portfolio will be made by aggregating  the  assets  of  the
    23  thrift  institutions  and  qualified community banks that are members of
    24  the combined group.
    25    Assets:
    26    (i) cash, which includes cash  and  cash  equivalents  including  cash
    27  items  in the process of collection, deposit with other financial insti-
    28  tutions,  including  corporate  credit  unions,  balances  with  federal
    29  reserve  banks and federal home loan banks, federal funds sold, and cash
    30  and cash equivalents on hand. Cash shall not include any balances  serv-
    31  ing as collateral for securities lending transactions;
    32    (ii)  obligations  of  the  United  States  or of a state or political
    33  subdivision thereof, and stock or obligations of a corporation which  is
    34  an  instrumentality  or  a government sponsored enterprise of the United
    35  States or of a state or political subdivision thereof;
    36    (iii) loans secured by a deposit or share of a member;
    37    (iv) loans secured by an interest in real property which is  (or  from
    38  the proceeds of the loan, will become) residential real property or real
    39  property used primarily for church purposes, loans made for the improve-
    40  ment  of  residential  real property or real property used primarily for
    41  church purposes, provided that for purposes of  this  item,  residential
    42  real property shall include single or multi-family dwellings, facilities
    43  in  residential developments dedicated to public use or property used on
    44  a nonprofit basis for residents, and mobile homes not used  on  a  tran-
    45  sient basis;
    46    (v)  property  acquired  through  the  liquidation  of defaulted loans
    47  described in item (iv) of this clause;
    48    (vi) any regular or residual interest in a  REMIC,  as  such  term  is
    49  defined  in  section  860D of the internal revenue code, but only in the
    50  proportion which the assets of such REMIC consist of property  described
    51  in any of the preceding items of this clause, except that if ninety-five
    52  percent  or  more  of  the  assets of such REMIC are assets described in
    53  items (i) through (v) of this clause, the entire interest in  the  REMIC
    54  shall qualify;
    55    (vii)  any  mortgage-backed  security  which represents ownership of a
    56  fractional undivided interest in a trust, the assets  of  which  consist

        S. 6359--D                         32                         A. 8559--D
 
     1  primarily  of  mortgage  loans,  provided  that  the real property which
     2  serves as security for the loans is (or from the proceeds of  the  loan,
     3  will  become) the type of property described in item (iv) of this clause
     4  and  any  collateralized  mortgage  obligation,  the  security for which
     5  consists primarily of mortgage loans that maintain as security the  type
     6  of property described in item (iv) of this clause;
     7    (viii)  certificates  of  deposit in, or obligations of, a corporation
     8  organized under a state law which specifically  authorizes  such  corpo-
     9  ration to insure the deposits or share accounts of member associations;
    10    (ix)  loans  secured by an interest in educational, health, or welfare
    11  institutions or facilities, including structures designed or used prima-
    12  rily for residential purposes for students, residents, and persons under
    13  care, employees, or members of the staff of such institutions or facili-
    14  ties;
    15    (x) loans made for the payment of expenses of  college  or  university
    16  education or vocational training;
    17    (xi)  property  used  by  the  taxpayer  in  support of business which
    18  consists principally of acquiring the savings of the public and  invest-
    19  ing in loans; and
    20    (xii) loans for which the taxpayer is the creditor and which are whol-
    21  ly secured by loans described in item (iv) of this clause.
    22    (xiii)  The  value of accrued interest receivable and any loss-sharing
    23  commitment or other loan guaranty  by  a  governmental  agency  will  be
    24  considered  part of the basis in the loans to which the accrued interest
    25  or loss protection applies.
    26    (B) At the election of  the  taxpayer,  the  percentage  specified  in
    27  clause  (A)  of  this  subparagraph shall be applied on the basis of the
    28  average assets outstanding during the taxable year, in lieu of the close
    29  of the taxable year. The taxpayer can elect to compute an average  using
    30  the assets measured on the first day of the taxable year and on the last
    31  day of each subsequent quarter, or month or day during the taxable year.
    32  This election may be made annually.
    33    (C) For purposes of item (iv) of clause (A) of this subparagraph, if a
    34  multifamily structure securing a loan is used in part for nonresidential
    35  use purposes, the entire loan is deemed a residential real property loan
    36  if  the planned residential use exceeds eighty percent of the property's
    37  planned use (measured, at  the  taxpayer's  election,  by  using  square
    38  footage  or gross rental revenue, and determined as of the time the loan
    39  is made).
    40    (D) For purposes of item (iv) of  clause  (A)  of  this  subparagraph,
    41  loans  made  to  finance the acquisition or development of land shall be
    42  deemed to be loans secured by an interest in residential  real  property
    43  if  there  is a reasonable assurance that the property will become resi-
    44  dential real property within a period of three years from  the  date  of
    45  acquisition  of  such  land;  but  this sentence shall not apply for any
    46  taxable year unless, within such three year period,  such  land  becomes
    47  residential  real  property.  For  purposes  of  determining whether any
    48  interest in a REMIC qualifies under item (vi)  of  clause  (A)  of  this
    49  subparagraph,  any  regular interest in another REMIC held by such REMIC
    50  shall be treated as a loan described in a preceding item  under  princi-
    51  ples  similar  to  the  principle of such item (vi), except that is such
    52  REMICs are part of a tiered structure, they  shall  be  treated  as  one
    53  REMIC for purposes of such item (vi).
    54    (3)  For  purposes  of  this  paragraph,  a  "thrift institution" is a
    55  savings bank, a savings and loan association, or other savings  institu-
    56  tion chartered and supervised as such under federal or state law.

        S. 6359--D                         33                         A. 8559--D
 
     1    (s)  Subtraction  modification  for community banks and small thrifts.
     2  (1) A taxpayer that is a qualified community bank as defined in subpara-
     3  graph two of this paragraph or a small thrift institution as defined  in
     4  subparagraph  two-a  of  this  paragraph shall be allowed a deduction in
     5  computing  entire net income equal to the amount computed under subpara-
     6  graph three of this paragraph.
     7    (2) To be a qualified community bank,  a  taxpayer  must  satisfy  the
     8  following conditions.
     9    (A)  It  is  a bank or trust company organized under or subject to the
    10  provisions of article three of the banking law or a comparable provision
    11  of the laws of another state, or a national banking association.
    12    (B) The average value during the taxable year of  the  assets  of  the
    13  taxpayer,  or the assets of the combined reporting group of the taxpayer
    14  under section two hundred ten-C of this article, must not  exceed  eight
    15  billion dollars.
    16    (2-a)  To  be  a small thrift institution, a taxpayer must satisfy the
    17  following conditions.
    18    (A) It is a savings bank, a savings and  loan  association,  or  other
    19  savings  institution  chartered  and supervised as such under federal or
    20  state law.
    21    (B) The average value during the taxable year of  the  assets  of  the
    22  taxpayer,  or the assets of the combined reporting group of the taxpayer
    23  under section two hundred ten-C of this article, must not  exceed  eight
    24  billion dollars.
    25    (3)(A) The subtraction modification shall be computed as follows:
    26    (i)  Multiply the taxpayer's net interest income from loans during the
    27  taxable year by a fraction, the numerator of which is the gross interest
    28  income during the taxable year from qualifying loans and the denominator
    29  of which is the gross interest income during the taxable year  from  all
    30  loans.
    31    (ii)  Multiply  the  amount determined in clause (i) by fifty percent.
    32  This product is the amount of the deduction  allowed  under  this  para-
    33  graph.
    34    (B)(i) Net interest income from loans shall mean gross interest income
    35  from  loans  less  gross  interest  expense  from  loans. Gross interest
    36  expense from loans is determined by multiplying gross  interest  expense
    37  by  a  fraction,  the  numerator  of which is the average total value of
    38  loans owned by the thrift institution or community bank during the taxa-
    39  ble year and the denominator of which is the average total assets of the
    40  thrift institution or community bank during the taxable year.
    41    (ii) Measurement of assets. (I) Total assets are those assets that are
    42  properly reflected on a balance sheet, computed in the same manner as is
    43  required by the banking regulator  of  the  taxpayers  included  in  the
    44  combined return.
    45    (II)  Assets  will only be included if the income or expenses of which
    46  are properly reflected (or would have been  properly  reflected  if  not
    47  fully  depreciated  or expensed, or depreciated or expensed to a nominal
    48  amount) in the computation of the taxpayer's entire net income  for  the
    49  taxable year. Assets will not include deferred tax assets and intangible
    50  assets identified as "goodwill".
    51    (III)  Tangible  real  and personal property, such as buildings, land,
    52  machinery, and equipment shall be valued at cost. Leased assets will  be
    53  valued    at  the  annual  lease payment multiplied by eight. Intangible
    54  property, such as loans and investments, shall be valued at  book  value
    55  exclusive of reserves.

        S. 6359--D                         34                         A. 8559--D
 
     1    (IV)  Average  assets  are  computed  using the assets measured on the
     2  first day of the taxable year, and on the last day  of  each  subsequent
     3  quarter of the taxable year or month or day during the taxable year.
     4    (C) A qualifying loan is a loan that meets the conditions specified in
     5  subclause (i) of this clause and subclause (ii) of this clause.
     6    (i)  The  loan  is originated by the qualified community bank or small
     7  thrift institution or purchased by the qualified community bank or small
     8  thrift institution immediately after its origination in connection  with
     9  a commitment to purchase made by the bank or thrift institution prior to
    10  the loan's origination.
    11    (ii) The loan is a small business loan or a residential mortgage loan,
    12  the  principal amount of which loan is five million dollars or less, and
    13  either the borrower is located in this state as determined under section
    14  two hundred ten-A of this article and the loan is not  secured  by  real
    15  property, or the loan is secured by real property located in New York.
    16    (iii) A loan that meets the definition of a qualifying loan in a prior
    17  taxable  year (including years prior to the effective date of this para-
    18  graph) remains a qualifying loan in taxable years during and after which
    19  such loan is acquired by another corporation in the taxpayer's  combined
    20  reporting group under section two hundred ten-C of this article.
    21    (t)  A  small  thrift  institution  or  a qualified community bank, as
    22  defined in paragraph (s) of this subdivision, that maintained a  captive
    23  REIT  on  April  first,  two  thousand  fourteen  shall  utilize  a REIT
    24  subtraction equal to one hundred sixty percent  of  the  dividends  paid
    25  deductions allowed to that captive REIT for the taxable year for federal
    26  income  tax purposes and shall not be allowed to utilize the subtraction
    27  modification for qualified residential loan portfolios  under  paragraph
    28  (r)  of  this  subdivision or the subtraction modification for community
    29  banks and small thrifts under paragraph (s) of this subdivision  in  any
    30  tax  year  in  which such thrift institution or community bank maintains
    31  that captive REIT.
    32    10. The term "calendar year" means a period of twelve calendar  months
    33  (or  any  shorter  period  beginning  on  the  date the taxpayer becomes
    34  subject to the tax imposed by this article) ending on  the  thirty-first
    35  day  of  December, provided the taxpayer keeps its books on the basis of
    36  such period or on the basis of any period ending on any day  other  than
    37  the last day of a calendar month, or provided the taxpayer does not keep
    38  books,  and  includes,  in  case  the taxpayer changes the period on the
    39  basis of which it keeps its books from a fiscal year to a calendar year,
    40  the period from the close of its last old fiscal year up to and  includ-
    41  ing  the following December thirty-first. The term "fiscal year" means a
    42  period of twelve calendar months (or any shorter period beginning on the
    43  date the taxpayer becomes subject to the tax imposed  by  this  article)
    44  ending  on  the  last day of any month other than December, provided the
    45  taxpayer keeps its books on the basis of such period, and  includes,  in
    46  case  the  taxpayer changes the period on the basis of which it keeps it
    47  books from a calendar year to a fiscal year or from one fiscal  year  to
    48  another  fiscal year, the period from the close of its last old calendar
    49  or fiscal year up to the date designated as the close of its new  fiscal
    50  year.
    51    11.  The  term  "tangible  personal property" means corporeal personal
    52  property,  such  as  machinery,  tools,  implements,  goods,  wares  and
    53  merchandise,  and  does  not  mean  money,  deposits in banks, shares of
    54  stock, bonds, notes, credits or evidences of an interest in property and
    55  evidences of debt.

        S. 6359--D                         35                         A. 8559--D
 
     1    12. The term elected or appointed officer shall include the  chairman,
     2  president,  vice-president,  secretary,  assistant secretary, treasurer,
     3  assistant treasurer, comptroller, and also any other officer,  irrespec-
     4  tive  of  his title, who is charged with and performs any of the regular
     5  functions  of  any  such  officer, unless the total compensation of such
     6  officer is derived exclusively from the receipt of commissions. A direc-
     7  tor shall be considered an elected  or  appointed  officer  only  if  he
     8  performs duties ordinarily performed by an officer.
     9    [19.  The  term "fulfillment services" shall mean any of the following
    10  services performed by an entity on its premises on behalf of a  purchas-
    11  er:
    12    (a)  the  acceptance  of  orders electronically or by mail, telephone,
    13  telefax or internet;
    14    (b) responses to consumer correspondence or  inquiries  electronically
    15  or by mail, telephone, telefax or internet;
    16    (c) billing and collection activities; or
    17    (d)  the  shipment of orders from an inventory of products offered for
    18  sale by the purchaser.]
    19    § 5. Subdivisions 1, 2, 2-a, 4, 5, 6, 7 and 8 of section  209  of  the
    20  tax  law,  subdivisions 1 and 6 as amended by chapter 817 of the laws of
    21  1987, subdivision 2 as amended by chapter 75 of the laws of 1998, subdi-
    22  vision 2-a as added by chapter 340 of the laws of 1998, subdivision 4 as
    23  amended by section 27 of part S of this act, subdivisions  5  and  7  as
    24  amended by section 2 of part FF-1 of chapter 57 of the laws of 2008, and
    25  subdivision  8 as added by section 1 of part O of chapter 61 of the laws
    26  of 2006, are amended to read as follows:
    27    1. (a) For the privilege of exercising its corporate franchise, or  of
    28  doing business, or of employing capital, or of owning or leasing proper-
    29  ty in this state in a corporate or organized capacity, or of maintaining
    30  an  office  in this state, or of deriving receipts from activity in this
    31  state, for all or any part of each of  its  fiscal  or  calendar  years,
    32  every  domestic or foreign corporation, except corporations specified in
    33  subdivision four of this section, shall annually pay  a  franchise  tax,
    34  upon  the  basis  of its [entire net] business income base, or upon such
    35  other basis as may be  applicable  as  hereinafter  provided,  for  such
    36  fiscal  or  calendar  year  or  part thereof, on a report which shall be
    37  filed, except as hereinafter provided, on or before the fifteenth day of
    38  March next succeeding the close of each such year, or, in the case of  a
    39  corporation  which reports on the basis of a fiscal year, within two and
    40  one-half months after the close of such fiscal year, and shall  be  paid
    41  as hereinafter provided.
    42    (b)  A corporation is deriving receipts from activity in this state if
    43  it has receipts within this state of one million dollars or more in  the
    44  taxable  year.  For  purposes of this section, the term "receipts" means
    45  the receipts that are subject to the apportionment rules  set  forth  in
    46  section two hundred ten-A of this article, and the term "receipts within
    47  this  state"  means the receipts included in the numerator of the appor-
    48  tionment factor determined under section two hundred ten-A of this arti-
    49  cle. For purposes of this paragraph,  receipts  from  processing  credit
    50  card  transactions for merchants include merchant discount fees received
    51  by the corporation.
    52    (c) A corporation is doing business in this state if (i) it has issued
    53  credit cards to one thousand  or  more  customers  who  have  a  mailing
    54  address  within  this state as of the last day of its taxable year, (ii)
    55  it has merchant customer contracts with merchants and the  total  number
    56  of  locations  covered  by  those  contracts equals one thousand or more

        S. 6359--D                         36                         A. 8559--D
 
     1  locations in this state to whom the corporation  remitted  payments  for
     2  credit  card  transactions  during the taxable year, or (iii) the sum of
     3  the number of customers described in subparagraph (i) of this  paragraph
     4  plus  the  number  of  locations  covered  by its contracts described in
     5  subparagraph (ii) of this paragraph equals one thousand or more. As used
     6  in this subdivision, the term "credit card" includes bank, credit, trav-
     7  el and entertainment cards.
     8    (d)(i) A corporation with less than one million dollars but  at  least
     9  ten  thousand  dollars  of  receipts within this state in a taxable year
    10  that is part of a combined reporting group  under  section  two  hundred
    11  ten-C  of  this article is deriving receipts from activity in this state
    12  if the receipts within this state of the members of the combined report-
    13  ing group that have at least ten thousand  dollars  of  receipts  within
    14  this  state  in  the aggregate meet the threshold set forth in paragraph
    15  (b) of this subdivision.
    16    (ii) A corporation that does not meet any of the thresholds set  forth
    17  in  paragraph (c) of this subdivision but has at least ten customers, or
    18  locations, or customers and locations, as described in paragraph (c)  of
    19  this  subdivision,  and  is  part  of  a  combined reporting group under
    20  section two hundred ten-C of this article that is doing business in this
    21  state if the number of customers, locations, or customers and locations,
    22  within this state of the members of the combined  reporting  group  that
    23  have  at  least  ten  customers,  locations, or customers and locations,
    24  within this state in the aggregate meets any of the thresholds set forth
    25  in paragraph (c) of this subdivision.
    26    (e) At the end of each year, the commissioner shall review the cumula-
    27  tive percentage change in the consumer  price  index.  The  commissioner
    28  shall adjust the receipt thresholds set forth in this subdivision if the
    29  consumer  price  index  has changed by ten percent or more since January
    30  first, two thousand fifteen, or since the date that the thresholds  were
    31  last  adjusted  under this subdivision. The thresholds shall be adjusted
    32  to reflect that cumulative  percentage  change  in  the  consumer  price
    33  index. The adjusted thresholds shall be rounded to the nearest one thou-
    34  sand  dollars.  As  used in this paragraph, "consumer price index" means
    35  the consumer price index for all urban consumers (CPI-U) available  form
    36  the bureau of labor statistics of the United States department of labor.
    37  Any  adjustment  shall apply to tax periods that begin after the adjust-
    38  ment is made.
    39    (f) If a partnership is doing business, employing capital,  owning  or
    40  leasing  property  in this state, maintaining an office in the state, or
    41  deriving receipts from activity in this state, any corporation that is a
    42  partner in such partnership shall be subject to tax under  this  article
    43  as described in the regulations of the commissioner.
    44    2.  A  foreign  corporation  shall not be deemed to be doing business,
    45  employing capital, owning or leasing property, or maintaining an  office
    46  in this state, or deriving receipts from activity in this state, for the
    47  purposes  of  this  article,  by  reason  of (a) the maintenance of cash
    48  balances with banks or trust companies in this state, or (b) the  owner-
    49  ship  of  shares of stock or securities kept in this state, if kept in a
    50  safe deposit box,  safe,  vault  or  other  receptacle  rented  for  the
    51  purpose,  or if pledged as collateral security, or if deposited with one
    52  or more banks or trust companies, or brokers who are members of a recog-
    53  nized security exchange, in safekeeping or custody accounts, or (c)  the
    54  taking  of any action by any such bank or trust company or broker, which
    55  is incidental to the rendering of safekeeping or  custodian  service  to
    56  such  corporation,  or (d) the maintenance of an office in this state by

        S. 6359--D                         37                         A. 8559--D

     1  one or more officers or directors of the corporation who are not employ-
     2  ees of the corporation if the corporation otherwise is not  doing  busi-
     3  ness in this state, and does not employ capital or own or lease property
     4  in  this  state, or (e) the keeping of books or records of a corporation
     5  in this state if such books or records are not kept by employees of such
     6  corporation and such corporation does not otherwise do business,  employ
     7  capital,  own  or lease property or maintain an office in this state, or
     8  (f) [the use of fulfillment services of a person other  than  an  affil-
     9  iated  person  and  the  ownership of property stored on the premises of
    10  such person in conjunction with such services, or (g)]  any  combination
    11  of  the foregoing activities. [For purposes of this subdivision, persons
    12  are affiliated persons with respect to each  other  where  one  of  such
    13  persons  has  an  ownership  interest of more than five percent, whether
    14  direct or indirect, in the other, or where an ownership interest of more
    15  than five percent, whether direct or indirect, is held in each  of  such
    16  persons  by  another  person  or  by  a group of other persons which are
    17  affiliated persons with respect to each other. The term "person" in  the
    18  preceding  sentence  and in paragraph (f) of this subdivision shall have
    19  the meaning ascribed  thereto  by  subdivision  (a)  of  section  eleven
    20  hundred one of this chapter.]
    21    2-a.  An  alien  corporation shall not be deemed to be doing business,
    22  employing capital, owning or leasing property, or maintaining an  office
    23  in  this  state,  for the purposes of this article, if its activities in
    24  this state are limited solely to (a) investing or trading in stocks  and
    25  securities  for  its  own  account  within the meaning of clause (ii) of
    26  subparagraph (A) of paragraph (2) of subsection  (b)  of  section  eight
    27  hundred  sixty-four  of  the  internal  revenue code or (b) investing or
    28  trading in commodities for its own account within the meaning of  clause
    29  (ii)  of  subparagraph (B) of paragraph (2) of subsection (b) of section
    30  eight hundred sixty-four of the internal revenue code or (c) any  combi-
    31  nation  of activities described in paragraphs (a) and (b) of this subdi-
    32  vision.  An alien corporation that under any provision of  the  internal
    33  revenue  code  is  not treated as a "domestic corporation" as defined in
    34  section seven thousand seven hundred one of such code and has no  effec-
    35  tively  connected income for the taxable year pursuant to clause (iv) of
    36  the opening paragraph of subdivision nine of section two  hundred  eight
    37  of  this article shall not be subject to tax under this article for that
    38  taxable year. For purposes  of  this  [subdivision]  article,  an  alien
    39  corporation  is  a corporation organized under the laws of a country, or
    40  any political subdivision thereof, other  than  the  United  States,  or
    41  organized  under  the laws of a possession, territory or commonwealth of
    42  the United States.
    43    4. Corporations liable to tax under sections one hundred  eighty-three
    44  to  one  hundred  eighty-four-a,  inclusive,  corporations taxable under
    45  [articles thirty-two and] article  thirty-three  of  this  chapter,  any
    46  trust  company  organized  under a law of this state all of the stock of
    47  which is owned by not less than twenty savings banks organized  under  a
    48  law  of  this state, [bank holding companies filing a combined return in
    49  accordance with subsection (f) of section fourteen hundred sixty-two  of
    50  this  chapter,] a captive REIT or a captive RIC filing a combined return
    51  under [either subsection (f) of section fourteen hundred  sixty-two  or]
    52  subdivision  (f) of section fifteen hundred fifteen of this chapter, and
    53  housing companies organized and operating pursuant to the provisions  of
    54  article two or article five of the private housing finance law and hous-
    55  ing  development  fund companies organized pursuant to the provisions of

        S. 6359--D                         38                         A. 8559--D
 
     1  article eleven of the private housing finance law shall not  be  subject
     2  to tax under this article.
     3    5.  For  any taxable year of a real estate investment trust as defined
     4  in section eight hundred fifty-six of the internal revenue code in which
     5  such trust is subject to federal income  taxation  under  section  eight
     6  hundred  fifty-seven  of such code, such trust shall be subject to a tax
     7  computed under either paragraph (a) [, (c)] or (d) of subdivision one of
     8  section two  hundred  ten  of  this  chapter,  whichever  is  [greatest]
     9  greater,  and  shall not be subject to any tax under article [thirty-two
    10  or article] thirty-three of this  chapter  except  for  a  captive  REIT
    11  required  to  file  a  combined return under [subdivision (f) of section
    12  fourteen hundred  sixty-two  or]  subdivision  (f)  of  section  fifteen
    13  hundred  fifteen  of  this  chapter.  In  the case of such a real estate
    14  investment trust, including a captive REIT as defined in section two  of
    15  this chapter, the term "entire net income" means "real estate investment
    16  trust  taxable income" as defined in paragraph two of subdivision (b) of
    17  section eight hundred fifty-seven (as modified by section eight  hundred
    18  fifty-eight)  of the internal revenue code plus the amount taxable under
    19  paragraph three of subdivision (b) of section eight hundred  fifty-seven
    20  of  such  code,  subject to the [modification] modifications required by
    21  subdivision nine of section two hundred eight of  this  article  [(other
    22  than  the  modification  required  by  subparagraph two of paragraph (a)
    23  thereof) including the modifications required by paragraphs (d) and  (e)
    24  of subdivision three of section two hundred ten of this article].
    25    6. For any taxable year of a DISC, not exempt from tax under paragraph
    26  (i)  of  subdivision  nine of section two hundred eight of this article,
    27  the taxes imposed by subdivision one of this section shall  be  computed
    28  only under either paragraph (b) or (d) of subdivision one of section two
    29  hundred ten of this chapter, whichever is greater[, and paragraph (e) of
    30  such subdivision].
    31    7. For any taxable year, beginning on or after January first, nineteen
    32  hundred  eighty of a regulated investment company, as defined in section
    33  eight hundred fifty-one of the internal  revenue  code,  in  which  such
    34  company  is  subject  to  federal  income  taxation  under section eight
    35  hundred fifty-two of such code, such company shall be subject to  a  tax
    36  computed  under either paragraph (a)[, (c)] or (d) of subdivision one of
    37  section two  hundred  ten  of  this  chapter,  whichever  is  [greatest]
    38  greater,  and  shall not be subject to any tax under article [thirty-two
    39  or article] thirty-three of  this  chapter  except  for  a  captive  RIC
    40  required  to  file  a  combined return under [subdivision (f) of section
    41  fourteen hundred  sixty-two  or]  subdivision  (f)  of  section  fifteen
    42  hundred fifteen of this chapter. In the case of such a regulated invest-
    43  ment  company, including a captive RIC as defined in section two of this
    44  chapter, the term "entire net income" means "investment company  taxable
    45  income"  as defined in paragraph two of subdivision (b) of section eight
    46  hundred fifty-two, as modified by section eight hundred  fifty-five,  of
    47  the  internal revenue code plus the amount taxable under paragraph three
    48  of subdivision (b) of section  eight  hundred  fifty-two  of  such  code
    49  subject to the [modification] modifications required by subdivision nine
    50  of  section two hundred eight of this chapter[, other than the modifica-
    51  tion required by subparagraph two of paragraph (a) and by paragraph  (f)
    52  thereof,  including  the modification required by paragraphs (d) and (e)
    53  of subdivision three of section two hundred ten of this chapter].
    54    8. For any taxable year beginning on or after January first, two thou-
    55  sand six, a corporation that is  no  longer  doing  business,  employing
    56  capital, or owning or leasing property, or deriving receipts from activ-

        S. 6359--D                         39                         A. 8559--D
 
     1  ity  in this state in a corporate or organized capacity that has filed a
     2  final tax return with the department for the last tax year it was  doing
     3  business  and has no outstanding tax liability for such final tax return
     4  or  any  tax  return  for prior tax years shall be exempt from all taxes
     5  imposed by paragraph (d) of subdivision one of section two  hundred  ten
     6  of  this  article for tax years following the last year such corporation
     7  was doing business.
     8    § 6. Section 209-A of the tax law is REPEALED.
     9    § 7. The section heading and subdivision 1 of section 209-B of the tax
    10  law, the section heading as amended by chapter 11 of the  laws  of  1983
    11  and subdivision 1 as amended by section 4 of part A of chapter 59 of the
    12  laws of 2013, are amended to read as follows:
    13    [Temporary  metropolitan]  Metropolitan  transportation  business  tax
    14  surcharge.  1. (a) For the privilege of exercising its  corporate  fran-
    15  chise,  or  of  doing business, or of employing capital, or of owning or
    16  leasing property in a corporate or organized capacity, or of maintaining
    17  an office, or of deriving receipts from  activity  in  the  metropolitan
    18  commuter  transportation  district,  for  all or any part of its taxable
    19  year, there is hereby imposed on every corporation,  other  than  a  New
    20  York  S  corporation,  subject  to tax under section two hundred nine of
    21  this article, or any receiver, referee, trustee, assignee or other fidu-
    22  ciary, or any officer or agent appointed by any court, who conducts  the
    23  business  of  any such corporation, [for the taxable years commencing on
    24  or after January first, nineteen hundred eighty-two  but  ending  before
    25  December thirty-first, two thousand eighteen,] a tax surcharge, in addi-
    26  tion  to the tax imposed under section two hundred nine of this article,
    27  to be computed at the rate of [eighteen percent of the tax imposed under
    28  such section two hundred nine for such taxable years or any part of such
    29  taxable years ending  before  December  thirty-first,  nineteen  hundred
    30  eighty-three  after  the  deduction  of  any credits otherwise allowable
    31  under this article, and at the rate of] seventeen  percent  of  the  tax
    32  imposed  under  such  section for such taxable years or any part of such
    33  taxable years ending on or after December thirty-first, nineteen hundred
    34  eighty-three and before January first, two thousand  fifteen  after  the
    35  deduction  of  any  credits  otherwise  allowable  under  this article[;
    36  provided, however, that], at the  rate  of  twenty-five  and  six-tenths
    37  percent  of  the tax imposed under such section for taxable years begin-
    38  ning on or after January first, two thousand fifteen and before  January
    39  first,  two  thousand sixteen before the deduction of any credits other-
    40  wise allowable under this article, and at the  rate  determined  by  the
    41  commissioner  pursuant  to  paragraph (f) of this subdivision of the tax
    42  imposed under such section, for taxable  years  beginning  on  or  after
    43  January  first, two thousand sixteen before the deduction of any credits
    44  otherwise allowable under this article.  However, such [rates]  rate  of
    45  tax  surcharge  shall be applied only to that portion of the tax imposed
    46  under section two hundred  nine  of  this  article  [after]  before  the
    47  deduction of any credits otherwise allowable under this article which is
    48  attributable  to  the taxpayer's business activity carried on within the
    49  metropolitan commuter transportation district;  and  provided,  further,
    50  [that  the  tax  surcharge  imposed by this section shall not be imposed
    51  upon any taxpayer for more than four hundred thirty-two months. Provided
    52  however, that for taxable years commencing on or after July first, nine-
    53  teen hundred ninety-eight, such surcharge shall be calculated as if  the
    54  tax  imposed  under section two hundred ten of this article were imposed
    55  under the law in effect for taxable years commencing on  or  after  July
    56  first,  nineteen  hundred  ninety-seven  and before July first, nineteen

        S. 6359--D                         40                         A. 8559--D

     1  hundred ninety-eight. Provided however, that for taxable years  commenc-
     2  ing  on or after January first, two thousand seven, such surcharge shall
     3  be calculated using the highest of the tax  bases  imposed  pursuant  to
     4  paragraphs  (a),  (b),  (c)  or  (d)  of  subdivision one of section two
     5  hundred ten of this article and the amount imposed under  paragraph  (e)
     6  of  subdivision  one  of  such  section two hundred ten, for the taxable
     7  year; and, provided further that, if such highest amount is the tax base
     8  imposed under paragraph (a), (b) or (c) of such  subdivision,  then  the
     9  surcharge  shall  be  computed as if the tax rates and limitations under
    10  such paragraph were the tax rates and limitations under  such  paragraph
    11  in  effect for taxable years commencing on or after July first, nineteen
    12  hundred ninety-seven and before July  first,  nineteen  hundred  ninety-
    13  eight]  the  surcharge  computed  on  a  combined report shall include a
    14  surcharge on the fixed  dollar  minimum  tax  for  each  member  of  the
    15  combined group subject to the surcharge under this subdivision.
    16    (b)  A corporation is deriving receipts from activity in the metropol-
    17  itan commuter transportation district if  it  has  receipts  within  the
    18  metropolitan  commuter transportation district of one million dollars or
    19  more in  a  taxable  year.  For  purposes  of  this  section,  the  term
    20  "receipts"  means  the  receipts  that  are subject to the apportionment
    21  rules set forth in section two hundred ten-A of this  article,  and  the
    22  term "receipts within the metropolitan commuter transportation district"
    23  means the receipts included in the numerator of the apportionment factor
    24  determined  under  subdivision two of this section. For purposes of this
    25  paragraph,  receipts  from  processing  credit  card  transactions   for
    26  merchants include merchant discount fees received by the corporation.
    27    (c)  A  corporation  is  doing  business  in the metropolitan commuter
    28  transportation district if (i) it has issued credit cards to  one  thou-
    29  sand  or  more customers who have a mailing address within the metropol-
    30  itan commuter transportation district as of the last day of its  taxable
    31  year,  (ii)  it  has  merchant customer contracts with merchants and the
    32  total number of locations covered by those contracts equals one thousand
    33  or more locations in the metropolitan commuter  transportation  district
    34  to  whom  the corporation remitted payments for credit card transactions
    35  during the taxable year, or (iii) the sum of  the  number  of  customers
    36  described  in  subparagraph  (i)  of  this  paragraph plus the number of
    37  locations covered by its contracts described  in  subparagraph  (ii)  of
    38  this  paragraph  equals one thousand or more. As used in this paragraph,
    39  the term "credit card" includes bank, credit, travel  and  entertainment
    40  cards.
    41    (d)(i)  A  corporation with less than one million dollars but at least
    42  ten thousand dollars of receipts within the metropolitan commuter trans-
    43  portation district in a taxable year that is part of a combined  report-
    44  ing  group  under  section two hundred ten-C of this article is deriving
    45  receipts from  activity  in  the  metropolitan  commuter  transportation
    46  district if the receipts within the metropolitan commuter transportation
    47  district  of  the  members  of the combined reporting group that have at
    48  least ten thousand dollars of receipts within the metropolitan  commuter
    49  transportation district in the aggregate meet the threshold set forth in
    50  paragraph (b) of this subdivision.
    51    (ii)  A corporation that does not meet any of the thresholds set forth
    52  in paragraph (c) of this subdivision but has at least ten customers,  or
    53  locations,  or  customers  and locations, as described in paragraph (c),
    54  and is part of a combined reporting  group  under  section  two  hundred
    55  ten-C  of this article that is doing business in the metropolitan commu-
    56  ter transportation district if the number of  customers,  locations,  or

        S. 6359--D                         41                         A. 8559--D
 
     1  customers and locations, within the metropolitan commuter transportation
     2  district  of  the  members  of the combined reporting group that have at
     3  least ten customers, locations, or customers and locations,  within  the
     4  metropolitan commuter transportation district in the aggregate meets any
     5  of the thresholds set forth in paragraph (c) of this subdivision.
     6    (e) At the end of each year, the commissioner shall review the cumula-
     7  tive  percentage  change  in  the consumer price index. The commissioner
     8  shall adjust the receipt thresholds set forth in this subdivision if the
     9  consumer price index has changed by ten percent or more since the  Janu-
    10  ary  first,  two  thousand fifteen or since the date that the thresholds
    11  were last adjusted under  this  subdivision.  The  thresholds  shall  be
    12  adjusted  to  reflect  that cumulative percentage change in the consumer
    13  price index. The adjusted thresholds shall be rounded to the nearest one
    14  thousand dollars. As used in  this  paragraph,  "consumer  price  index"
    15  means the consumer price index for all urban consumers (CPI-U) available
    16  from  the  bureau of labor statistics of the United States department of
    17  labor. Any adjustment shall apply to tax periods that  begin  after  the
    18  adjustment is made.
    19    (f) The commissioner shall determine the rate of tax for taxable years
    20  beginning  on  or after January first, two thousand sixteen by adjusting
    21  the rate for taxable years beginning on  or  after  January  first,  two
    22  thousand  fifteen  and  before  January  first,  two thousand sixteen as
    23  necessary to ensure that the receipts attributable to such surcharge, as
    24  impacted by the chapter of the laws of two thousand fourteen which added
    25  this paragraph, will meet and not exceed the financial  projections  for
    26  state  fiscal  year  two  thousand  sixteen-two  thousand  seventeen, as
    27  reflected in state fiscal year two thousand fifteen-two thousand sixteen
    28  enacted budget. The commissioner shall annually determine the rate ther-
    29  eafter using the financial projections for the state  fiscal  year  that
    30  commences  in  the  year for which the rate is to be set as reflected in
    31  the enacted budget for the fiscal year commencing on the previous  April
    32  first.
    33    §  8.  Subdivision  2  of  section 209-B of the tax law, as amended by
    34  chapter 11 of the laws of 1983, paragraph (a) as amended by chapter  760
    35  of  the  laws  of 1992 and subparagraph 2 of paragraph (b) as amended by
    36  section 3 of part K of chapter 63 of the laws of  2000,  is  amended  to
    37  read as follows:
    38    2.  The  portion of the taxpayer's business activity carried on within
    39  the metropolitan commuter transportation district shall be determined by
    40  multiplying the tax imposed under section two hundred nine of this arti-
    41  cle before the deduction of any credits otherwise allowable  under  this
    42  article by a percentage to be determined as follows:
    43    (a) ascertaining the percentage which the average value of the taxpay-
    44  er's real and tangible personal property, whether owned or rented to it,
    45  within  the  metropolitan  commuter  transportation  district during the
    46  period covered by its report bears to  the  average  value  of  all  the
    47  taxpayer's  real and tangible personal property, whether owned or rented
    48  to it, within the state during  such  period;  provided  that  the  term
    49  "value  of  the  taxpayer's  real  and tangible personal property" shall
    50  [have the same meaning as is ascribed to that term by  subparagraph  one
    51  of  paragraph  (a) of subdivision three of section two hundred ten] mean
    52  the adjusted bases of such properties for federal  income  tax  purposes
    53  (except  that  in  the case of rented property such value shall mean the
    54  product of (i) eight and (ii) the gross rents payable for the rental  of
    55  such  property  during  the  taxable  year); provided, however, that the
    56  taxpayer may make a one-time, revocable  election  to  use  fair  market

        S. 6359--D                         42                         A. 8559--D
 
     1  value  as  the  value of all of its real and tangible personal property,
     2  provided that such election is made on or before the due date for filing
     3  a report under section two hundred eleven for the taxpayer's first taxa-
     4  ble  year commencing on or after January first, two thousand fifteen and
     5  provided that such election shall not apply to  any  taxable  year  with
     6  respect  to  which  the taxpayer is included on a combined report unless
     7  each of the taxpayers included on such report has made such an  election
     8  which remains in effect for such year;
     9    (b)  ascertaining  the percentage [which the receipts of the taxpayer,
    10  computed on the cash  or  accrual  basis  according  to  the  method  of
    11  accounting  used  in  the  computation of its entire net income, arising
    12  during such period from:
    13    (1) sales of its tangible personal property where shipments  are  made
    14  to points within the metropolitan commuter transportation district,
    15    (2) services performed within the metropolitan commuter transportation
    16  district,  provided, however, that (i) in the case of a taxpayer engaged
    17  in the business of publishing newspapers or periodicals, receipts  aris-
    18  ing  from  sales of advertising contained in such newspapers and period-
    19  icals shall be deemed to arise from services performed within the metro-
    20  politan  commuter  transportation  district  to  the  extent  that  such
    21  newspapers  and periodicals are delivered to points within the metropol-
    22  itan commuter transportation district, (ii) receipts from an  investment
    23  company  from  the  sale  of  management, administration or distribution
    24  services to such investment  company  shall  be  deemed  to  arise  from
    25  services  performed  within  the  metropolitan  commuter  transportation
    26  district to the extent set forth in subparagraph six of paragraph (a) of
    27  subdivision three of section two hundred ten  of  this  chapter  (except
    28  that  references  in such subparagraph six to the state shall be deemed,
    29  for purposes of application to this clause,  to  be  references  to  the
    30  metropolitan  commuter  transportation  district),  (iii) in the case of
    31  taxpayers principally engaged in the activity of air freight  forwarding
    32  acting as principal and like indirect air carriage receipts arising from
    33  such  activity  shall arise from services performed within the metropol-
    34  itan commuter transportation district as follows: one hundred percent of
    35  such receipts if both the  pickup  and  delivery  associated  with  such
    36  receipts  are  made in the metropolitan commuter transportation district
    37  and fifty percent of such receipts if  either  the  pickup  or  delivery
    38  associated  with  such  receipts  is  made  in the metropolitan commuter
    39  transportation district, and (iv) in the case of a taxpayer which  is  a
    40  registered  securities  or  commodities  broker  or dealer, the receipts
    41  specified in subparagraph nine of paragraph (a) of subdivision three  of
    42  section  two  hundred  ten of this article shall be deemed to arise from
    43  services  performed  within  the  metropolitan  commuter  transportation
    44  district  to the extent set forth in such subparagraph nine (except that
    45  references in such subparagraph nine to the state shall be  deemed,  for
    46  purposes  of  the  application  of  this clause, to be references to the
    47  metropolitan commuter transportation district),
    48    (3) rentals from property situated  and  royalties  from  the  use  of
    49  patents  or  copyrights  within the metropolitan commuter transportation
    50  district, and receipts from the sales of rights for  closed-circuit  and
    51  cable  television transmissions of an event (other than events occurring
    52  on a regularly scheduled basis) taking  place  within  the  metropolitan
    53  commuter  transportation  district  as  a  result  of  the  rendition of
    54  services by employees of the corporation, as athletes,  entertainers  or
    55  performing  artists,  but  only  to  the  extent  that such receipts are

        S. 6359--D                         43                         A. 8559--D

     1  attributable to such transmissions  received  or  exhibited  within  the
     2  metropolitan communter transportation district, and
     3    (4)  all other business receipts earned within the metropolitan commu-
     4  ter transportation district, bear to the total amount of the  taxpayer's
     5  receipts,  similarly computed, arising during such period from all sales
     6  of  its  tangible  personal  property,  services,  rentals,   royalties,
     7  receipts  from  the  sales  of rights for closed-circuit and cable tele-
     8  vision transmissions and all other  business  transactions,  within  the
     9  state;]  of  the  taxpayer's  receipts  within the metropolitan commuter
    10  transportation district pursuant to the method prescribed in section two
    11  hundred ten-A of this article, except that
    12    (i) the numerator of the apportionment fraction under such section two
    13  hundred ten-A shall be the denominator  of  the  apportionment  fraction
    14  under this paragraph,
    15    (ii)  the numerator of the apportionment fraction under this paragraph
    16  shall be determined by applying the rules in such  section  two  hundred
    17  ten-A  relating  to  the  numerator  of the apportionment fraction as if
    18  those rules referenced the metropolitan commuter transportation district
    19  rather than this state,
    20    (iii) to the extent that a provision in such section two hundred ten-A
    21  provides that eight percent of the receipts specified in that  provision
    22  should be included in the numerator of the apportionment fraction, nine-
    23  ty  percent  of such eight percent amount shall be considered within the
    24  metropolitan commuter transportation district and one hundred percent of
    25  such eight percent amount shall be considered to be  within  the  state,
    26  and
    27    (iv)  to the extent that a provision in such section two hundred ten-A
    28  of this article provides that the receipts specified in  that  provision
    29  shall  not  be  included  in the numerator of the apportionment fraction
    30  under such section  two  hundred  ten-A,  such  receipts  shall  not  be
    31  included  in determining the portion of the taxpayer's business activity
    32  carried on within the metropolitan commuter transportation district;
    33    (c) ascertaining the percentage of the total wages, salaries and other
    34  personal service compensation, similarly computed, during  such  period,
    35  of  employees  within the metropolitan commuter transportation district,
    36  except general executive officers, to  the  total  wages,  salaries  and
    37  other  personal  service  compensation,  similarly computed, during such
    38  period, of all the taxpayer's employees within the state, except general
    39  executive officers; and
    40    (d) adding together the percentages so  determined  and  dividing  the
    41  result by the number of percentages.
    42    § 9. Intentionally omitted.
    43    §  10.  Subdivisions  2-a  and 2-b of section 209-B of the tax law are
    44  REPEALED.
    45    § 11. Subdivisions 3 and 5 of section 209-B of the tax  law,  subdivi-
    46  sion 3 as amended by chapter 11 of the laws of 1983 and subdivision 5 as
    47  amended  by  chapter  166  of  the  laws of 1991, are amended to read as
    48  follows:
    49    3. A corporation shall not be deemed to be doing  business,  employing
    50  capital, owning or leasing property, or maintaining an office, or deriv-
    51  ing  receipts  from activity in the metropolitan commuter transportation
    52  district, for the purposes of this section, by reason of (a) the mainte-
    53  nance of cash balances with banks or trust companies in the metropolitan
    54  commuter transportation district, or (b)  the  ownership  of  shares  of
    55  stock  or  securities  kept  in the metropolitan commuter transportation
    56  district, if kept in a safe deposit box, safe, vault or other receptacle

        S. 6359--D                         44                         A. 8559--D
 
     1  rented for the purpose, or if pledged  as  collateral  security,  or  if
     2  deposited  with one or more banks or trust companies, or brokers who are
     3  members of a recognized security exchange,  in  safekeeping  or  custody
     4  accounts,  or  (c)  the  taking  of any action by any such bank or trust
     5  company or broker, which is incidental to the rendering  of  safekeeping
     6  or  custodian  service to such corporation, or (d) the maintenance of an
     7  office in the metropolitan commuter transportation district  by  one  or
     8  more  officers  or directors of the corporation who are not employees of
     9  the corporation if the corporation otherwise is not  doing  business  in
    10  the  metropolitan  commuter transportation district, and does not employ
    11  capital or own or lease property in the metropolitan commuter  transpor-
    12  tation district, or (e) the keeping of books or records of a corporation
    13  in  the  metropolitan  commuter transportation district if such books or
    14  records are not kept by employees of such corporation  and  such  corpo-
    15  ration  does  not  otherwise  do  business, employ capital, own or lease
    16  property or maintain an office in the metropolitan commuter  transporta-
    17  tion district, or (f) any combination of the foregoing activities.
    18    5.  The  provisions  concerning  reports  under [section] sections two
    19  hundred ten-C and  two  hundred  eleven  shall  be  applicable  to  this
    20  section,  except  that  for  purposes  of an automatic extension for six
    21  months for filing a report covering the tax surcharge  imposed  by  this
    22  section,  such  automatic  extension shall be allowed only if a taxpayer
    23  files with the commissioner an application for extension in such form as
    24  said commissioner may prescribe by regulation and pays on or before  the
    25  date of such filing in addition to any other amounts required under this
    26  article,  either  ninety percent of the entire tax surcharge required to
    27  be paid under this section for the applicable period, or not  less  than
    28  the tax surcharge shown on the taxpayer's return for the preceding taxa-
    29  ble  year,  if  such preceding taxable year was a taxable year of twelve
    30  months; provided, however, that in no event shall such  amount  be  less
    31  than  the  product of the following three amounts: (1) the tax surcharge
    32  rate in effect for the taxable year pursuant to subdivision one of  this
    33  section,  (2)  the  fixed  dollar minimum applicable to such taxpayer as
    34  determined under paragraph (d) of subdivision one of section two hundred
    35  ten of this chapter for the taxable year, and (3) the percentage  deter-
    36  mined  under  subdivision  two of this section for the preceding taxable
    37  year, unless the taxpayer was not subject to the tax  surcharge  imposed
    38  pursuant  to  this section with respect to such year, in which case such
    39  percentage shall be deemed to be one hundred percent. The tax  surcharge
    40  imposed  by this section shall be payable to the commissioner in full at
    41  the time the report is required to be filed, and such tax  surcharge  or
    42  the  balance  thereof,  imposed on any taxpayer which ceases to exercise
    43  its franchise or be subject to the tax surcharge imposed by this section
    44  shall be payable to the commissioner at the time the report is  required
    45  to be filed, provided such tax surcharge of a domestic corporation which
    46  continues to possess its franchise shall be subject to adjustment as the
    47  circumstances  may require; all other tax surcharges of any such taxpay-
    48  er, which pursuant to the foregoing provisions  of  this  section  would
    49  otherwise  be  payable subsequent to the time such report is required to
    50  be filed, shall nevertheless  be  payable  at  such  time.  All  of  the
    51  provisions  of  this  article presently applicable are applicable to the
    52  tax surcharge imposed by this section.
    53    § 12. Subdivision 1 of section 210 of the tax law, as added by chapter
    54  817 of the laws of 1987, the opening paragraph as amended by  section  1
    55  of part D and paragraph (g) as amended by section 2 of part A of chapter
    56  63 of the laws of 2000, paragraph (a) as amended by  section 2 of part N

        S. 6359--D                         45                         A. 8559--D
 
     1  of  chapter  60  of the laws of 2007, subparagraph 2 of paragraph (b) as
     2  amended by section 1 of part GG-1 of chapter 57 of  the  laws  of  2008,
     3  subparagraph 3 of paragraph (b) as added by section 2 of part Z of chap-
     4  ter  59  of  the  laws  of  2013,  subparagraph (ii) of paragraph (c) as
     5  amended by section 2 of part C and subparagraph 5 of  paragraph  (d)  as
     6  added by section 3 of part C of chapter 56 of the laws of 2011, subpara-
     7  graph (vi) of paragraph (a) as amended by section 1 of part C of chapter
     8  56 of the laws of 2011, subparagraph (vii) as added by section 1 of part
     9  Z of chapter 59 of the laws of 2013, subparagraph (iii) of paragraph (c)
    10  as  added  by  section  3  of  part Z of chapter 59 of the laws of 2013,
    11  subparagraph 6 of paragraph (d) as added by section 4 of part Z of chap-
    12  ter 59 of the laws of 2013, paragraph (b) as amended  by  section  1  of
    13  part  GG1,  subparagraph  3  of paragraph (d) as amended by section 3 of
    14  part AA1, subparagraph 4 of paragraph (d) as added by section 2 of  part
    15  AA1  and subparagraph 1 of paragraph (g) as amended by section 4 of part
    16  AA1 of chapter 57 of the laws of  2008,  paragraph  (c)  as  amended  by
    17  section  10  of part A and subparagraph 1 of paragraph (d) as amended by
    18  section 12 of part A of chapter 56 of the laws of 1998, paragraph (d) as
    19  amended by chapter 760 of the laws of 1992, paragraph (e) as amended  by
    20  section  1  of  part P of chapter 407 of the laws of 1999, and paragraph
    21  (f) as amended by section 2 of part E of chapter 61 of the laws of 2005,
    22  is amended to read as follows:
    23    1. The tax imposed by subdivision one of section two hundred  nine  of
    24  this chapter shall be: (A) in the case of each taxpayer other than a New
    25  York  S  corporation  or a qualified homeowners association, the [sum of
    26  (1) the] highest of the amounts prescribed in paragraphs (a), (b), [(c)]
    27  and (d) of this subdivision [and (2) the amount prescribed in  paragraph
    28  (e)  of  this  subdivision],  (B)  in the case of each New York S corpo-
    29  ration, the amount prescribed in paragraph [(g)] (d)  of  this  subdivi-
    30  sion,  and  (C)  in  the case of a qualified homeowners association, the
    31  [sum of (1) the] highest of the amounts prescribed in paragraphs  (a)[,]
    32  and  (b) [and (c)] of this subdivision [and (2) the amount prescribed in
    33  paragraph (e) of this subdivision]. For purposes of this paragraph,  the
    34  term  "qualified homeowners association" means a homeowners association,
    35  as such term is defined in subsection (c) of section five hundred  twen-
    36  ty-eight of the internal revenue code without regard to subparagraph (E)
    37  of  paragraph  one of such subsection (relating to elections to be taxed
    38  pursuant to such section), which has no homeowners  association  taxable
    39  income,  as  such  term  is  defined  in subsection (d) of such section.
    40  Provided, however, that in the case of a small business taxpayer  (other
    41  than  a  New  York  S  corporation)  as defined in paragraph (f) of this
    42  subdivision, for taxable years beginning before January first, two thou-
    43  sand sixteen, if the amount prescribed in such paragraph (b)  is  higher
    44  than the amount prescribed in such paragraph (a) solely by reason of the
    45  application  of  the  rate  applicable to small business taxpayers, then
    46  with respect to such taxpayer  the  tax  referred  to  in  the  previous
    47  sentence  shall  be  [the  sum of (1) the highest] higher of the amounts
    48  prescribed in paragraphs (a)[, (c)] and (d) of this subdivision [and (2)
    49  the amount prescribed in paragraph (e) of this subdivision].
    50    (a) [Entire net] Business income base. [For  taxable  years  beginning
    51  before  July  first, nineteen hundred ninety-nine, the amount prescribed
    52  by this paragraph shall be computed at the rate of nine percent  of  the
    53  taxpayer's  entire  net  income  base. For taxable years beginning after
    54  June thirtieth, nineteen hundred ninety-nine and before July first,  two
    55  thousand,  the  amount prescribed by this paragraph shall be computed at
    56  the rate of eight and one-half percent  of  the  taxpayer's  entire  net

        S. 6359--D                         46                         A. 8559--D

     1  income base. For taxable years beginning after June thirtieth, two thou-
     2  sand  and  before July first, two thousand one, the amount prescribed by
     3  this paragraph shall be computed at the rate of  eight  percent  of  the
     4  taxpayer's  entire  net  income  base. For taxable years beginning after
     5  June thirtieth, two thousand one and before January first, two  thousand
     6  seven,  the amount prescribed by this paragraph shall be computed at the
     7  rate of seven and one-half percent of the taxpayer's entire  net  income
     8  base.]  For  taxable years beginning [on or after] before January first,
     9  two thousand [seven] sixteen, the amount prescribed  by  this  paragraph
    10  shall  be  computed  at  the  rate of seven and one-tenth percent of the
    11  taxpayer's [entire net] business income base. For taxable  years  begin-
    12  ning  on  or  after  January  first,  two  thousand  sixteen, the amount
    13  prescribed by this paragraph shall be six and one-half  percent  of  the
    14  taxpayer's  business  income  base. The taxpayer's [entire net] business
    15  income base shall mean the portion of the taxpayer's [entire net]  busi-
    16  ness income allocated within the state as hereinafter provided[, subject
    17  to  any  modification  required by paragraphs (d) and (e) of subdivision
    18  three of this section]. However, in the case of a small business taxpay-
    19  er, as  defined  in  paragraph  (f)  of  this  subdivision,  the  amount
    20  prescribed  by this paragraph shall be computed pursuant to subparagraph
    21  (iv) of this paragraph and in the case of a manufacturer, as defined  in
    22  subparagraph (vi) of this paragraph, the amount prescribed by this para-
    23  graph shall be computed pursuant to subparagraph (vi) of this paragraph.
    24    [(i)  if the entire net income base is not more than two hundred thou-
    25  sand dollars, (1) for taxable years beginning before July  first,  nine-
    26  teen  hundred  ninety-nine,  the  amount  shall  be eight percent of the
    27  entire net income base; (2) for taxable years beginning after June thir-
    28  tieth, nineteen hundred ninety-nine and before July first, two  thousand
    29  three,  the amount shall be seven and one-half percent of the entire net
    30  income base; and (3) for taxable years beginning after  June  thirtieth,
    31  two  thousand  three  and  before  January first, two thousand five, the
    32  amount shall be 6.85 percent of the entire net income base;
    33    (ii) if the entire net income base is more than two  hundred  thousand
    34  dollars  but not over two hundred ninety thousand dollars, (1) for taxa-
    35  ble years beginning before July first, nineteen hundred ninety-nine, the
    36  amount shall be the sum  of  (a)  sixteen  thousand  dollars,  (b)  nine
    37  percent  of  the  excess  of the entire net income base over two hundred
    38  thousand dollars and (c) five percent of the excess of  the  entire  net
    39  income  base  over  two  hundred fifty thousand dollars; (2) for taxable
    40  years beginning after June thirtieth, nineteen hundred  ninety-nine  and
    41  before  July  first,  two  thousand,  the amount shall be the sum of (a)
    42  fifteen thousand dollars, (b) eight and one-half percent of  the  excess
    43  of  the entire net income base over two hundred thousand dollars and (c)
    44  five percent of the excess of  the  entire  net  income  base  over  two
    45  hundred  fifty  thousand  dollars; (3) for taxable years beginning after
    46  June thirtieth, two thousand and before July first,  two  thousand  one,
    47  the  amount  shall be the sum of (a) fifteen thousand dollars, (b) eight
    48  percent of the excess of the entire net income  base  over  two  hundred
    49  thousand  dollars  and (c) two and one-half percent of the excess of the
    50  entire net income base over two hundred fifty thousand dollars; (4)  for
    51  taxable  years  beginning  after  June  thirtieth,  two thousand one and
    52  before July first, two thousand three, the amount  shall  be  seven  and
    53  one-half  percent  of  the  entire  net income base; and (5) for taxable
    54  years beginning after June thirtieth,  two  thousand  three  and  before
    55  January  first,  two  thousand  five, the amount shall be the sum of (a)
    56  thirteen thousand seven hundred dollars, (b) 7.5 percent of  the  excess

        S. 6359--D                         47                         A. 8559--D

     1  of  the entire net income base over two hundred thousand dollars and (c)
     2  3.25 percent of the excess of  the  entire  net  income  base  over  two
     3  hundred fifty thousand dollars;
     4    (iii) for taxable years beginning on or after January first, two thou-
     5  sand  five  and  ending before January first, two thousand seven, if the
     6  entire net income base is not more  than  two  hundred  ninety  thousand
     7  dollars  the  amount shall be six and one-half percent of the entire net
     8  income base; if the entire net income base  is  more  than  two  hundred
     9  ninety  thousand  dollars  but  not  over  three hundred ninety thousand
    10  dollars the amount shall be the  sum  of  (1)  eighteen  thousand  eight
    11  hundred  fifty  dollars, (2) seven and one-half percent of the excess of
    12  the entire net income base over two hundred ninety thousand dollars  but
    13  not  over  three  hundred ninety thousand dollars and (3) seven and one-
    14  quarter percent of the excess of the entire net income base  over  three
    15  hundred  fifty  thousand dollars but not over three hundred ninety thou-
    16  sand dollars;]
    17    (iv) for taxable years beginning [on or after] before  January  first,
    18  two  thousand  [seven] sixteen, if the [entire net] business income base
    19  is not more than two hundred ninety thousand dollars the amount shall be
    20  six and one-half percent of the [entire net] business  income  base;  if
    21  the  [entire  net]  business income base is more than two hundred ninety
    22  thousand dollars but not over three hundred ninety thousand dollars  the
    23  amount  shall  be  the  sum of (1) eighteen thousand eight hundred fifty
    24  dollars, (2) seven and one-tenth percent of the excess  of  the  [entire
    25  net]  business  income base over two hundred ninety thousand dollars but
    26  not over three hundred ninety thousand dollars and (3) four and  thirty-
    27  five  hundredths  percent  of  the  excess  of the [entire net] business
    28  income base over three hundred fifty thousand dollars but not over three
    29  hundred ninety thousand dollars;
    30    (v) if the taxable period to which [subparagraphs  (i),  (ii),  (iii),
    31  and]  subparagraph  (iv)  of this paragraph [apply] applies is less than
    32  twelve months, the amount prescribed by this paragraph shall be computed
    33  as follows:
    34    (A) Multiply the [entire net] business income base for  such  taxpayer
    35  by twelve;
    36    (B)  Divide  the result obtained in (A) by the number of months in the
    37  taxable year;
    38    (C) Compute an amount pursuant to [subparagraphs (i) and (ii)] subpar-
    39  agraph (iv) as if the result obtained in (B) were the taxpayer's [entire
    40  net] business income base;
    41    (D) Multiply the result obtained in (C) by the number of months in the
    42  taxpayer's taxable year;
    43    (E) Divide the result obtained in (D) by twelve.
    44    (vi) for taxable years beginning on or  after  January  [thirty-first]
    45  first,  two  thousand  [seven]  fourteen,  the amount prescribed by this
    46  paragraph for a taxpayer which is a  qualified  New  York  manufacturer,
    47  shall  be  computed at the rate of [six and one-half (6.5)] zero percent
    48  of the taxpayer's [entire net] business income base. [For taxable  years
    49  beginning  on  or  after  January  first, two thousand twelve and before
    50  January first, two thousand fifteen, the amount prescribed by this para-
    51  graph for a taxpayer which is an eligible qualified New York manufactur-
    52  er shall be computed at the rate of three and one-quarter (3.25) percent
    53  of the taxpayer's entire net income base.] The term "manufacturer" shall
    54  mean a taxpayer which during the taxable year is principally engaged  in
    55  the production of goods by manufacturing, processing, assembling, refin-
    56  ing,  mining,  extracting, farming, agriculture, horticulture, floricul-

        S. 6359--D                         48                         A. 8559--D

     1  ture, viticulture or commercial fishing.  However,  the  generation  and
     2  distribution  of  electricity,  the distribution of natural gas, and the
     3  production of steam associated with the generation of electricity  shall
     4  not be qualifying activities for a manufacturer under this subparagraph.
     5  Moreover,  the  combined  group shall be considered a "manufacturer" for
     6  purposes of this subparagraph only if  the  combined  group  during  the
     7  taxable  year is principally engaged in the activities set forth in this
     8  paragraph, or any combination thereof. A taxpayer or  a  combined  group
     9  shall  be "principally engaged" in activities described above if, during
    10  the taxable year, more than fifty percent of the gross receipts  of  the
    11  taxpayer or combined group, respectively, are derived from receipts from
    12  the  sale  of goods produced by such activities. In computing a combined
    13  group's gross receipts, intercorporate receipts shall be  eliminated.  A
    14  "qualified  New  York manufacturer" is a manufacturer which has property
    15  in New York which is described in [clause (A)  of  subparagraph  (i)  of
    16  paragraph  (b)  of]  subdivision [twelve of this section] one of section
    17  two hundred ten-B of this article and either (I) the adjusted  basis  of
    18  such  property for federal income tax purposes at the close of the taxa-
    19  ble year is at least one million dollars or (II) all  of  its  real  and
    20  personal property is located in New York. [In addition, a "qualified New
    21  York  manufacturer"  means  a  taxpayer  which is defined as a qualified
    22  emerging technology company under paragraph (c) of  subdivision  one  of
    23  section  thirty-one  hundred two-e of the public authorities law regard-
    24  less of the ten million dollar limitation expressed in subparagraph  one
    25  of  such  paragraph (c). The commissioner shall establish guidelines and
    26  criteria that specify requirements by which a manufacturer may be  clas-
    27  sified  as  an  eligible  qualified  New York manufacturer. Criteria may
    28  include but not be limited to factors such as regional unemployment, the
    29  economic impact that manufacturing has  on  the  surrounding  community,
    30  population decline within the region and median income within the region
    31  in  which  the manufacturer is located. In establishing these guidelines
    32  and criteria, the commissioner shall endeavor that the total annual cost
    33  of the lower rates shall not  exceed  twenty-five  million  dollars.]  A
    34  taxpayer  or,  in  the case of a combined report, a combined group, that
    35  does not satisfy the principally engaged test may  be  a  qualified  New
    36  York  manufacturer  if the taxpayer or the combined group employs during
    37  the taxable year at least two thousand five hundred employees  in  manu-
    38  facturing in New York and the taxpayer or the combined group has proper-
    39  ty  in  the state used in manufacturing, the adjusted basis of which for
    40  federal income tax purposes at the close of the taxable year is at least
    41  one hundred million dollars.
    42    (vii) For a taxpayer that is defined as a qualified [New York manufac-
    43  turer, as defined in subparagraph  (vi)  of  this  paragraph,]  emerging
    44  technology  company  under  paragraph  (c) of subdivision one of section
    45  thirty-one hundred two-e of the public authorities law regardless of the
    46  ten million dollar limitation expressed  in  subparagraph  one  of  such
    47  paragraph  (c) the rate at which the tax is computed in effect for taxa-
    48  ble years beginning on or after January first, two thousand thirteen and
    49  before January first, two thousand fourteen for such qualified [New York
    50  manufacturers] emerging technology companies shall be  reduced  by  nine
    51  and  two-tenths percent for taxable years commencing on or after January
    52  first, two thousand fourteen and  before  January  first,  two  thousand
    53  fifteen, twelve and three-tenths percent for taxable years commencing on
    54  or  after  January first, two thousand fifteen and before January first,
    55  two thousand sixteen, fifteen and four-tenths percent for taxable  years
    56  commencing  on  or  after January first, two thousand sixteen and before

        S. 6359--D                         49                         A. 8559--D
 
     1  January first, two thousand eighteen, and twenty-five percent for  taxa-
     2  ble years beginning on or after January first, two thousand eighteen.
     3    (viii)  (A)  In computing the business income base, taxpayers shall be
     4  allowed both a prior net operating  loss  conversion  subtraction  under
     5  this  subparagraph and a net operating loss deduction under subparagraph
     6  (ix)  of  this  paragraph.  The  prior  net  operating  loss  conversion
     7  subtraction  computed  under  this subparagraph shall be applied against
     8  the business  income  base  before  the  net  operating  loss  deduction
     9  computed under subparagraph (ix) of this paragraph.
    10    (B) Prior net operating loss conversion subtraction.
    11    (1) Definitions.
    12    (I)  "Base  year"  means  the  last taxable year beginning on or after
    13  January first, two thousand fourteen and before January first, two thou-
    14  sand fifteen.
    15    (II) "Unabsorbed net operating loss" means the unabsorbed  portion  of
    16  net operating loss as calculated under paragraph (f) of subdivision nine
    17  of  section  two  hundred  eight  of this article or subsection (k-1) of
    18  section fourteen hundred fifty-three of this chapter  as  such  sections
    19  were in effect on December thirty-first, two thousand fourteen, that was
    20  not  deductible in previous taxable years and was eligible for carryover
    21  on the last day  of  the  base  year  subject  to  the  limitations  for
    22  deduction   under  such  sections,  including  any  net  operating  loss
    23  sustained by the taxpayer during the base year.
    24    (III)  "Base  year  BAP"  means  the  taxpayer's  business  allocation
    25  percentage  as  calculated  under  paragraph (a) of subdivision three of
    26  this section for the base year, or the taxpayer's allocation  percentage
    27  as  calculated under section fourteen hundred fifty-four of this chapter
    28  for purposes of calculating entire net income for the base year, as such
    29  sections were in effect on December thirty-first, two thousand fourteen.
    30    (IV) "Base year tax rate" means the taxpayer's tax rate for  the  base
    31  year  as  calculated  under  this paragraph or subsection (a) of section
    32  fourteen hundred fifty-five of this chapter, as such provisions were  in
    33  effect on December thirty-first, two thousand fourteen.
    34    (2)  The  prior  net  operating  loss  conversion subtraction shall be
    35  calculated as follows:
    36    (I) The taxpayer shall first calculate the tax value of its unabsorbed
    37  net operating loss for the base year. The value is equal to the  product
    38  of  (I) the amount of the taxpayer's unabsorbed net operating loss, (II)
    39  the taxpayer's base year BAP, and (III) the  taxpayer's  base  year  tax
    40  rate.
    41    (II)  The  product determined under item (I) of this subclause is then
    42  divided by six and one-half percent, or in the case of a  qualified  New
    43  York  manufacturer,  five  and  seven-tenths  percent. This result shall
    44  equal the taxpayer's prior net  operating  loss  conversion  subtraction
    45  pool.
    46    (III)  The  taxpayer's prior net operating loss conversion subtraction
    47  for the taxable year shall equal one-tenth of  its  net  operating  loss
    48  conversion  subtraction pool plus any amount of unused prior net operat-
    49  ing loss conversion subtraction from preceding taxable years.  Provided,
    50  however, the prior net operating loss conversion subtraction of a  small
    51  business  corporation,  as defined in paragraph (f) of this subdivision,
    52  as of the last day of the base year, shall not be subject  to  the  one-
    53  tenth limitation in the previous sentence.
    54    (IV)  In  lieu  of  the  subtraction  described  in item (III) of this
    55  subclause, if the taxpayer so elects, the taxpayer's prior net operating
    56  loss conversion subtraction for the tax  years  beginning  on  or  after

        S. 6359--D                         50                         A. 8559--D
 
     1  January  first, two thousand fifteen and before January first, two thou-
     2  sand seventeen shall equal in each year, not more than one-half  of  its
     3  net  operating loss conversion subtraction pool. The taxpayer shall make
     4  such election on its return for the tax year beginning on or after Janu-
     5  ary  first,  two thousand fifteen and before January first, two thousand
     6  sixteen by the due date for  such  return  (determined  with  regard  to
     7  extensions).
     8    (3)  Combined  groups.  (I)  Where a taxpayer was properly included or
     9  required to be included in a combined report for the base year  pursuant
    10  to section two hundred eleven of this article or a combined return under
    11  section  fourteen  hundred  sixty-two  of this chapter, as such sections
    12  were in effect on December thirty-first, two thousand fourteen, and  the
    13  members  of  the  combined  group  for the base year are the same as the
    14  members of the combined group for the taxable year immediately  succeed-
    15  ing  the  base  year,  the  combined group shall calculate its prior net
    16  operating loss conversion subtraction pool using  the  combined  group's
    17  total  unabsorbed  net  operating loss, base year BAP, and base year tax
    18  rate.
    19    (II) If a combined group includes additional members  in  the  taxable
    20  year  immediately succeeding the base year that were not included in the
    21  combined group during the base year, each base year combined  group  and
    22  each  taxpayer that filed separately in the base year but is included in
    23  the combined group in the taxable year succeeding the  base  year  shall
    24  calculate  its prior net operating loss conversion subtraction pool, and
    25  the sum of the pools shall be the  combined  prior  net  operating  loss
    26  conversion subtraction pool of the combined group.
    27    (III) If a taxpayer was properly included in a combined report for the
    28  base year and files a separate report in a subsequent taxable year, then
    29  the  amount of remaining prior net operating loss conversion subtraction
    30  allowed to the taxpayer filing such separate  report  shall  be  propor-
    31  tionate  to  the  amount that such taxpayer contributed to the prior net
    32  operating loss conversion subtraction pool on a combined basis, and  the
    33  remaining prior net operating loss conversion subtraction allowed to the
    34  remaining members of the combined group shall be reduced accordingly.
    35    (IV)  If  a  taxpayer filed a separate report for the base year and is
    36  properly included in a combined report in  a  subsequent  taxable  year,
    37  then  the  prior  net  operating loss conversion subtraction pool of the
    38  combined group shall be increased by the amount  of  the  remaining  net
    39  operating  loss  conversion  subtraction  allowed to the taxpayer at the
    40  time the taxpayer is properly included in the combined group.
    41    (4) The prior net operating loss conversion subtraction may be used to
    42  reduce the taxpayer's tax on allocated business income to the higher  of
    43  the  tax  on the capital base under paragraph (b) of this subdivision or
    44  the fixed dollar minimum under paragraph (d) of  this  subdivision.  Any
    45  amount  of unused subtraction shall be carried forward to subsequent tax
    46  year or years until tax years beginning on or after January  first,  two
    47  thousand  thirty-six.   Such amount carried forward shall not be subject
    48  to the one-tenth limitation for the subsequent tax year or years. Howev-
    49  er, if the taxpayer elects to  compute  its  prior  net  operating  loss
    50  conversion  subtraction  pursuant  to item (IV) of subclause two of this
    51  clause, the  taxpayer  shall  not  carry  forward  any  amount  of  such
    52  subtraction beyond its tax year beginning on or after January first, two
    53  thousand sixteen and before January first, two thousand seventeen.
    54    (ix)  Net  operating loss deduction.  In computing the business income
    55  base, a net operating loss deduction shall be allowed. A  net  operating
    56  loss deduction is the amount of net operating loss or losses from one or

        S. 6359--D                         51                         A. 8559--D
 
     1  more taxable years that are carried forward to a particular income year.
     2  A  net  operating  loss  is  the amount of a business loss incurred in a
     3  particular tax year multiplied by the apportionment factor for that year
     4  as determined under section two hundred ten-A of this article. The maxi-
     5  mum  net  operating  deduction  that is allowed in a taxable year is the
     6  amount that reduces the taxpayer's tax on allocated business  income  to
     7  the  higher  of the tax on the capital base or the fixed dollar minimum.
     8  Such deduction and loss are determined in accordance with the following:
     9    (1) Such net operating loss deduction is not  limited  to  the  amount
    10  allowed  under  section  one hundred seventy-two of the internal revenue
    11  code or the amount that would have been allowed if the taxpayer had  not
    12  made  an  election  under  subchapter  S  of chapter one of the internal
    13  revenue code.
    14    (2) Such net operating loss deduction shall not include any net  oper-
    15  ating  loss  incurred during any taxable year beginning prior to January
    16  first, two thousand fifteen, or during any taxable  year  in  which  the
    17  taxpayer was not subject to the tax imposed by this article.
    18    (3) A taxpayer that files as part of a federal consolidated return but
    19  on  a  separate  basis  for  purposes  of  this article must compute its
    20  deduction and loss as if it were filing on a separate basis for  federal
    21  income tax purposes.
    22    (4)  A net operating loss may be carried forward to each of the twenty
    23  taxable years following the taxable year of the loss.  A  net  operating
    24  loss  may  be  carried back to each of the three taxable years preceding
    25  the taxable year of the loss; provided, however no loss can  be  carried
    26  back  to  a  tax year prior to a tax year beginning on or after January,
    27  first, two thousand fifteen. A taxpayer must apply both of these limita-
    28  tions in computing such net operating loss deduction.
    29    (5) Such net operating loss deduction shall not include any net  oper-
    30  ating  loss  incurred during a New York S year; provided, however, a New
    31  York S year must be treated as a taxable year for purposes of  determin-
    32  ing  the  number  of  taxable years to which a net operating loss may be
    33  carried forward.
    34    (6) Where there are two or more allocated  net  operating  losses,  or
    35  portions  thereof,  carried forward to be deducted in one particular tax
    36  year  from  allocated  business  income,  the  earliest  allocated  loss
    37  incurred must be applied first.
    38    (b)  Capital  base.  (1)  The [amount prescribed by this paragraph for
    39  taxable years beginning before January first, two thousand  eight  shall
    40  be  computed  at .178  percent  for  each dollar of the taxpayer's total
    41  business and investment capital, or the portion thereof allocated within
    42  the state as hereinafter provided. For taxable  years  beginning  on  or
    43  after  January first, two thousand eight, the] amount prescribed by this
    44  paragraph shall be computed  at .15  percent  for  each  dollar  of  the
    45  taxpayer's total business [and investment] capital, or the portion ther-
    46  eof allocated within the state as hereinafter provided for taxable years
    47  beginning  before  January  first, two thousand sixteen. However, in the
    48  case of a cooperative housing corporation as  defined  in  the  internal
    49  revenue  code,  the  applicable  rate shall be .04 percent until taxable
    50  years beginning on or after January first, two  thousand  twenty.    The
    51  rate  of  tax for subsequent tax years shall be as follows: .125 percent
    52  for taxable years beginning on or  after  January  first,  two  thousand
    53  sixteen  and  before January first, two thousand seventeen; .100 percent
    54  for taxable years beginning on or  after  January  first,  two  thousand
    55  seventeen  and before January first, two thousand eighteen; .075 percent
    56  for taxable years beginning on or  after  January  first,  two  thousand

        S. 6359--D                         52                         A. 8559--D
 
     1  eighteen  and  before January first, two thousand nineteen; .050 percent
     2  for taxable years beginning on or  after  January  first,  two  thousand
     3  nineteen and before January first, two thousand twenty; .025 percent for
     4  taxable  years  beginning on or after January first, two thousand twenty
     5  and before January first, two thousand twenty-one; and zero percent  for
     6  years beginning on or after January first, two thousand twenty-one.  The
     7  rate  of  tax for a qualified New York manufacturer for tax years subse-
     8  quent to taxable years beginning on or after January first, two thousand
     9  fifteen and before January first, two thousand  sixteen  shall  be  .106
    10  percent for taxable years beginning on or after January first, two thou-
    11  sand  sixteen  and  before  January  first, two thousand seventeen, .085
    12  percent for taxable years beginning on or after January first, two thou-
    13  sand seventeen and before January first,  two  thousand  eighteen;  .056
    14  percent for taxable years beginning on or after January first, two thou-
    15  sand  eighteen  and  before  January  first, two thousand nineteen; .038
    16  percent for taxable years beginning on or after January first, two thou-
    17  sand nineteen and before January first, thousand  twenty;  .019  percent
    18  for  taxable  years  beginning  on  or after January first, two thousand
    19  twenty and before January  first,  two  thousand  twenty-one;  and  zero
    20  percent  for  years  beginning  on  or after January first, two thousand
    21  twenty-one. In no event shall the amount prescribed  by  this  paragraph
    22  exceed  three  hundred  fifty  thousand  dollars  for qualified New York
    23  manufacturers and for all other taxpayers  [ten]  five  million  dollars
    24  [for  taxable  years  beginning  on or after January first, two thousand
    25  eight but before January first, two  thousand  eleven  and  one  million
    26  dollars for taxable years beginning on or after January first, two thou-
    27  sand eleven].
    28    (2)  For  purposes  of  subparagraph  one  of this paragraph, the term
    29  "manufacturer" shall mean a taxpayer which during the  taxable  year  is
    30  principally  engaged  in the production of goods by manufacturing, proc-
    31  essing, assembling, refining, mining, extracting, farming,  agriculture,
    32  horticulture, floriculture, viticulture or commercial fishing. Moreover,
    33  for  purposes  of  computing  the capital base in a combined report, the
    34  combined group shall be considered a "manufacturer" for purposes of this
    35  subparagraph only if the combined group during the taxable year is prin-
    36  cipally engaged in the activities set forth in this subparagraph, or any
    37  combination thereof. A taxpayer or a combined group shall be "principal-
    38  ly engaged" in activities described above if, during the  taxable  year,
    39  more  than  fifty  percent  of  the  gross  receipts  of the taxpayer or
    40  combined group, respectively, are derived from receipts from the sale of
    41  goods produced by such activities. In computing a combined group's gross
    42  receipts, intercorporate receipts shall be eliminated. A "qualified  New
    43  York  manufacturer" is a manufacturer that has property in New York that
    44  is described in [clause (A) of subparagraph (i)  of  paragraph  (b)  of]
    45  subdivision  [twelve of this section] one of section 210-B of this arti-
    46  cle and either (i) the adjusted  basis  of  that  property  for  federal
    47  income  tax  purposes  at  the close of the taxable year is at least one
    48  million dollars or (ii) all of its real and personal property is located
    49  in New York. In addition, a "qualified New York  manufacturer"  means  a
    50  taxpayer  that  is  defined  as  a qualified emerging technology company
    51  under paragraph (c) of subdivision one  of  section  thirty-one  hundred
    52  two-e of the public authorities law regardless of the ten million dollar
    53  limitation  expressed in subparagraph one of such paragraph.  A taxpayer
    54  or, in the case of a combined report, a combined group,  that  does  not
    55  satisfy  the  principally  engaged  test  may  be  a  qualified New York
    56  manufacturer if the taxpayer or the combined group  employs  during  the

        S. 6359--D                         53                         A. 8559--D

     1  taxable year at least two thousand five hundred employees in manufactur-
     2  ing  in  New York and the taxpayer or the combined group has property in
     3  the state used in manufacturing, the adjusted basis of which for federal
     4  income  tax  purposes  at  the close of the taxable year is at least one
     5  hundred million dollars.
     6    [(3) For a qualified New York manufacturer, as defined in subparagraph
     7  two of this paragraph, the rate at which the tax is computed  in  effect
     8  for  taxable  years  beginning  on  or after January first, two thousand
     9  thirteen and before  January  first,  two  thousand  fourteen  shall  be
    10  reduced  by  nine and two-tenths percent for taxable years commencing on
    11  or after January first, two thousand fourteen and before January  first,
    12  two  thousand fifteen, twelve and three-tenths percent for taxable years
    13  commencing on or after January first, two thousand  fifteen  and  before
    14  January first, two thousand sixteen, fifteen and four-tenths percent for
    15  taxable years commencing on or after January first, two thousand sixteen
    16  and before January first, two thousand eighteen, and twenty-five percent
    17  for  taxable  years  beginning  on  or after January first, two thousand
    18  eighteen.
    19    (c) Minimum taxable income bases.  (i)  For  taxable  years  beginning
    20  after  nineteen  hundred  eighty-six and before nineteen hundred eighty-
    21  nine, the amount prescribed by this paragraph shall be computed  at  the
    22  rate  of  three  and  one-half  percent  of  the taxpayer's pre-nineteen
    23  hundred ninety minimum taxable income base. For taxable years  beginning
    24  in nineteen hundred eighty-nine, the amount prescribed by this paragraph
    25  shall  be  computed  at  the rate of five percent of the taxpayer's pre-
    26  nineteen hundred ninety minimum taxable income base. A "taxpayer's  pre-
    27  nineteen  hundred  ninety  minimum  taxable  income base" shall mean the
    28  portion of the taxpayer's entire net income allocated within  the  state
    29  as  hereinafter  provided, subject to any modification required by para-
    30  graphs (d) and (e) of subdivision three of this section;
    31    (ii) (A) For taxable years beginning on or after  January  first,  two
    32  thousand  seven,  the  amount  prescribed  by  this  paragraph  shall be
    33  computed at the rate of one and one-half percent of the taxpayer's mini-
    34  mum taxable income base. The "taxpayer's minimum  taxable  income  base"
    35  shall  mean  the  portion of the taxpayer's minimum taxable income allo-
    36  cated within the state as hereinafter provided, subject to any modifica-
    37  tions required by paragraphs (d) and (e) of subdivision  three  of  this
    38  section.
    39    (B)  For  taxable years beginning on or after January first, two thou-
    40  sand twelve and before January first, two thousand fifteen,  the  amount
    41  prescribed by this paragraph for an eligible qualified New York manufac-
    42  turer  shall  be  computed  at the rate of seventy-five hundredths (.75)
    43  percent of the taxpayer's minimum taxable income base. For  purposes  of
    44  this  clause,  the term "eligible qualified New York manufacturer" shall
    45  have the same meaning as in subparagraph (vi) of paragraph (a)  of  this
    46  subdivision.
    47    (iii)  For  a  qualified New York manufacturer, as defined in subpara-
    48  graph (vi) of paragraph (a) of this subdivision, the rate at  which  the
    49  tax  is computed in effect for taxable years beginning on or after Janu-
    50  ary first, two thousand thirteen and before January first, two  thousand
    51  fourteen  for  qualified New York manufacturers shall be reduced by nine
    52  and two-tenths percent for taxable years commencing on or after  January
    53  first,  two  thousand  fourteen  and  before January first, two thousand
    54  fifteen, twelve and three-tenths percent for taxable years commencing on
    55  or after January first, two thousand fifteen and before  January  first,
    56  two  thousand sixteen, fifteen and four-tenths percent for taxable years

        S. 6359--D                         54                         A. 8559--D

     1  commencing on or after January first, two thousand  sixteen  and  before
     2  January  first, two thousand eighteen, and twenty-five percent for taxa-
     3  ble years beginning on or after January first, two thousand eighteen.]
     4    (d) Fixed dollar minimum. (1) The [amount prescribed by this paragraph
     5  shall be for a taxpayer which during the taxable year has:
     6    (A)  a gross payroll of six million two hundred fifty thousand dollars
     7  or more, one thousand five hundred dollars;
     8    (B) a gross payroll of less than six million two hundred  fifty  thou-
     9  sand dollars but more than one million dollars, four hundred twenty-five
    10  dollars;
    11    (C)  a gross payroll of no more than one million dollars but more than
    12  five hundred thousand dollars, three hundred twenty-five dollars;
    13    (D) a gross payroll of no more than five hundred thousand dollars  but
    14  more  than  two  hundred fifty thousand dollars, two hundred twenty-five
    15  dollars;
    16    (E) a gross payroll of two hundred  fifty  thousand  dollars  or  less
    17  (except  as  prescribed in clause (F) of this subparagraph), one hundred
    18  dollars;
    19    (F) a gross payroll of  one  thousand  dollars  or  less,  with  total
    20  receipts  within and without this state of one thousand dollars or less,
    21  and the average value of the assets of which are one thousand dollars or
    22  less, eight hundred dollars.
    23    (2) For purposes of this paragraph:
    24    (A) gross payroll shall be the same as the total wages,  salaries  and
    25  other  personal  service  compensation  of all the taxpayer's employees,
    26  within and without this state, as defined in subparagraph three of para-
    27  graph (a) of subdivision three of  this  section,  except  that  general
    28  executive officers shall not be excluded.
    29    (B)  total  receipts  shall be the same as receipts within and without
    30  this state as defined in subparagraph two of paragraph (a)  of  subdivi-
    31  sion three of this section.
    32    (C)  average  value  of  the assets shall be the same as prescribed by
    33  subdivision two of this section without reduction for liabilities.
    34    (3) If the taxable  year  is  less  than  twelve  months,  the  amount
    35  prescribed  by this paragraph shall be reduced by twenty-five percent if
    36  the period for which the taxpayer is subject to tax  is  more  than  six
    37  months  but not more than nine months and by fifty percent if the period
    38  for which the taxpayer is subject to tax is not more  than  six  months.
    39  Provided,  however,  that in determining the amount of gross payroll and
    40  total receipts for purposes of subparagraph one of this paragraph, where
    41  the taxable year is less than twelve months, the amount of each shall be
    42  determined by dividing the amount of each with respect  to  the  taxable
    43  year  by  the  number of months in such taxable year and multiplying the
    44  result by twelve. If the taxable year is less than  twelve  months,  the
    45  amount  of  New  York receipts for purposes of subparagraph four of this
    46  paragraph is determined by dividing the amount of the receipts  for  the
    47  taxable year by the number of months in the taxable year and multiplying
    48  the result by twelve.
    49    (4)  Notwithstanding  subparagraphs one and two of this paragraph, for
    50  taxable years beginning on or after January first, two  thousand  eight,
    51  the]  amount  prescribed  by  this paragraph for New York S corporations
    52  will be determined in accordance with the following table:

    53  If New York receipts are:                The fixed dollar minimum tax is:
    54   not more than $100,000                               $   25
    55   more than $100,000 but not over $250,000             $   50

        S. 6359--D                         55                         A. 8559--D
 
     1   more than $250,000 but not over $500,000             $  175
     2   more than $500,000 but not over $1,000,000           $  300
     3   more than $1,000,000 but not over $5,000,000         $1,000
     4   more than $5,000,000 but not over $25,000,000        $3,000
     5   Over $25,000,000                                     $4,500
 
     6  [Otherwise the amount prescribed by this paragraph will be determined in
     7  accordance with the following table:]
     8  Provided  further,  the amount prescribed by this paragraph for a quali-
     9  fied New York manufacturer, as defined in subparagraph (vi) of paragraph
    10  (a) of this subdivision, and a  qualified  emerging  technology  company
    11  under  paragraph  (c)  of  subdivision one of section thirty-one hundred
    12  two-e of the public authorities law regardless of the ten million dollar
    13  limitation expressed in subparagraph one of such paragraph (c)  will  be
    14  determined in accordance with the following tables:
    15  For  tax  years beginning on or after January 1, 2014 and before January
    16  1, 2015:
 
    17  If New York receipts are:                The fixed dollar minimum tax is:
    18   not more than $100,000                               $   23
    19   more than $100,000 but not over $250,000             $   68
    20   more than $250,000 but not over $500,000             $  159
    21   more than $500,000 but not over $1,000,000           $  454
    22   more than $1,000,000 but not over $5,000,000         $1,362
    23   more than $5,000,000 but not over $25,000,000        $3,178
    24   Over $25,000,000                                     $4,500
 
    25  For tax years beginning on or after January 1, 2015 and  before  January
    26  1, 2016:
 
    27  If New York receipts are:                The fixed dollar minimum tax is:
    28   not more than $100,000                               $   22
    29   more than $100,000 but not over $250,000             $   66
    30   more than $250,000 but not over $500,000             $  153
    31   more than $500,000 but not over $1,000,000           $  439
    32   more than $1,000,000 but not over $5,000,000         $1,316
    33   more than $5,000,000 but not over $25,000,000        $3,070
    34   Over $25,000,000                                     $4,385
 
    35  For  tax  years beginning on or after January 1, 2016 and before January
    36  1, 2018:
 
    37  If New York receipts are:                The fixed dollar minimum tax is:
    38   not more than $100,000                               $   21
    39   more than $100,000 but not over $250,000             $   63
    40   more than $250,000 but not over $500,000             $  148
    41   more than $500,000 but not over $1,000,000           $  423
    42   more than $1,000,000 but not over $5,000,000         $1,269
    43   more than $5,000,000 but not over $25,000,000        $2,961
    44   Over $25,000,000                                     $4,230
 
    45  For tax years beginning on or after January 1, 2018:
 
    46  If New York receipts are:                The fixed dollar minimum tax is:
    47   not more than $100,000                               $   19
    48   more than $100,000 but not over $250,000             $   56

        S. 6359--D                         56                         A. 8559--D

     1   more than $250,000 but not over $500,000             $  131
     2   more than $500,000 but not over $1,000,000           $  375
     3   more than $1,000,000 but not over $5,000,000         $1,125
     4   more than $5,000,000 but not over $25,000,000        $2,625
     5   Over $25,000,000                                     $3,750
 
     6  Otherwise  the amount prescribed by this paragraph will be determined in
     7  accordance with the following table:
 
     8  If New York receipts are:                The fixed dollar minimum tax is:
     9   not more than $100,000                               $   25
    10   more than $100,000 but not over $250,000             $   75
    11   more than $250,000 but not over $500,000             $  175
    12   more than $500,000 but not over $1,000,000           $  500
    13   more than $1,000,000 but not over $5,000,000         $1,500
    14   more than $5,000,000 but not over $25,000,000        $3,500
    15   [Over] more than $25,000,000
    16   but not over $50,000,000                             $5,000
    17   more than $50,000,000 but not over $100,000,000      $10,000
    18   more than $100,000,000 but not over $250,000,000     $20,000
    19   more than $250,000,000 but not over $500,000,000     $50,000
    20   more than $500,000,000 but not over $1,000,000,000   $100,000
    21   Over $1,000,000,000                                  $200,000
 
    22  For purposes of this paragraph,  New  York  receipts  are  the  receipts
    23  [computed in accordance with subparagraph two of paragraph (a) of subdi-
    24  vision  three  of  this]  included in the numerator of the apportionment
    25  factor determined under section two hundred ten-A for the taxable year.
    26    (2) If the taxable year is less than twelve months, the amount of  New
    27  York  receipts  is determined by dividing the amount of the receipts for
    28  the taxable year by the number of months in the taxable year and  multi-
    29  plying  the result by twelve. In the case of a termination year of a New
    30  York S corporation, the sum of the tax computed under this paragraph for
    31  the S short year and for the C short year shall not  be  less  than  the
    32  amount  computed  under  this paragraph as if the corporation were a New
    33  York C corporation for the entire taxable year.
    34    [(5) For taxable years beginning on or after January first, two  thou-
    35  sand  twelve and before January first, two thousand fifteen, the amounts
    36  prescribed in subparagraphs one and four of this paragraph as the  fixed
    37  dollar minimum tax for an eligible qualified New York manufacturer shall
    38  be  one-half  of the amounts stated in those subparagraphs. For purposes
    39  of this subparagraph, the term "eligible qualified New York  manufactur-
    40  er" shall have the same meaning as in subparagraph (vi) of paragraph (a)
    41  of this subdivision.
    42    (6)  For a qualified New York manufacturer, as defined in subparagraph
    43  (vi) of paragraph (a) of this subdivision,  the  amounts  prescribed  in
    44  subparagraphs one and four of this paragraph in effect for taxable years
    45  beginning  on  or  after January first, two thousand thirteen and before
    46  January first, two thousand fourteen for qualified New York  manufactur-
    47  ers  shall  be  reduced by nine and two-tenths percent for taxable years
    48  commencing on or after January first, two thousand fourteen  and  before
    49  January first, two thousand fifteen, twelve and three-tenths percent for
    50  taxable years commencing on or after January first, two thousand fifteen
    51  and  before January first, two thousand sixteen, fifteen and four-tenths
    52  percent for taxable years commencing on  or  after  January  first,  two
    53  thousand  sixteen  and  before January first, two thousand eighteen, and

        S. 6359--D                         57                         A. 8559--D

     1  twenty-five percent for taxable years  beginning  on  or  after  January
     2  first, two thousand eighteen.
     3    (e)  Subsidiary  capital base. (1) The amount prescribed by this para-
     4  graph shall be computed at the rate of nine-tenths of a  mill  for  each
     5  dollar  of  the  portion  of the taxpayer's subsidiary capital allocated
     6  within the state as hereinafter provided.
     7    (2) For purposes of this paragraph,  the  amount  of  such  subsidiary
     8  capital,  prior  to  allocation,  shall  be  reduced  by  the applicable
     9  percentage of the taxpayer's (i) investments in the stock  of,  and  any
    10  indebtedness from, subsidiaries subject to tax under section one hundred
    11  eighty-six  of this chapter (but only to the extent such indebtedness is
    12  included in subsidiary capital), and (ii) investments in the  stock  of,
    13  and  any  indebtedness  from,  subsidiaries subject to tax under article
    14  thirty-two or thirty-three of this chapter (but only to the extent  such
    15  indebtedness  is included in subsidiary capital). For purposes of clause
    16  (i) of this subparagraph, the  applicable  percentage  shall  be  thirty
    17  percent  for  taxable  years  beginning in two thousand, and one hundred
    18  percent for taxable years beginning after two thousand. For purposes  of
    19  clause (ii) of this subparagraph, the applicable percentage shall be one
    20  hundred percent for taxable years beginning after nineteen hundred nine-
    21  ty-nine.]
    22    (f)  For  purposes of this section, the term "small business taxpayer"
    23  shall mean a taxpayer (i) which has an entire net  income  of  not  more
    24  than  three  hundred  ninety thousand dollars for the taxable year; (ii)
    25  [which constitutes a small business as defined in section 1244(c)(3)  of
    26  internal revenue code (without regard to the second sentence of subpara-
    27  graph (A) thereof) as of the last day of the taxable year] the aggregate
    28  amount  of  money  and  other  property  received by the corporation for
    29  stock, as a contribution to capital, and as paid-in  surplus,  does  not
    30  exceed  one  million dollars; [and] (iii) which is not part of an affil-
    31  iated group, as defined in section 1504 of the  internal  revenue  code,
    32  unless  such  group,  if  it  had filed a report under this article on a
    33  combined basis, would have itself qualified as a "small business taxpay-
    34  er" pursuant to this subdivision; and (iv) which has an  average  number
    35  of individuals, excluding general executive officers, employed full-time
    36  in  the  state  during the taxable year of one hundred or fewer.  If the
    37  taxable period to which subparagraph (i) of this  paragraph  applies  is
    38  less than twelve months, entire net income under such subparagraph shall
    39  be  placed  on  an  annual basis by multiplying the entire net income by
    40  twelve and dividing the result by the number of months  in  the  period.
    41  For  purposes  of  subparagraph (ii) of this paragraph, the amount taken
    42  into account with respect to any property other than money shall be  the
    43  amount  equal  to the adjusted basis to the corporation of such property
    44  for determining gain, reduced by any liability to which the property was
    45  subject or which was assumed by the corporation. The determination under
    46  the preceding sentence shall be made as of the  time  the  property  was
    47  received  by the corporation. For purposes of subparagraph (iii) of this
    48  section, "average number of  individuals,  excluding  general  executive
    49  officers,  employed  full-time"  shall  be  computed by ascertaining the
    50  number of such individuals employed by the taxpayer on the  thirty-first
    51  day  of March, the thirtieth day of June, the thirtieth day of September
    52  and the thirty-first day of December during each taxable year  or  other
    53  applicable  period,  by  adding  together the number of such individuals
    54  ascertained on each of such dates and dividing the sum  so  obtained  by
    55  the  number  of  such  dates occurring within such taxable year or other
    56  applicable period. An individual employed full-time means an employee in

        S. 6359--D                         58                         A. 8559--D
 
     1  a job consisting of at least thirty-five hours per week, or two or  more
     2  employees  who  are in jobs that together constitute the equivalent of a
     3  job at least thirty-five hours per week  (full-time  equivalent).  Full-
     4  time  equivalent employees in the state includes all employees regularly
     5  connected with or working out of an office or place of business  of  the
     6  taxpayer within the state.
     7    [(g)  New  York S corporations.  (1) General. The amount prescribed by
     8  this paragraph shall be, in the case of each New York S corporation, (i)
     9  the higher of the amounts prescribed in paragraphs (a) and (d)  of  this
    10  subdivision  (other  than  the  amount prescribed in the final clause of
    11  subparagraph one of that paragraph (d))  (ii)  reduced  by  the  article
    12  twenty-two  tax  equivalent;  provided,  however,  that  the amount thus
    13  determined shall not be less than the lowest of the  amounts  prescribed
    14  in  subparagraph  one  of that paragraph (d) (applying the provisions of
    15  subparagraph three of that paragraph as necessary).  Provided,  however,
    16  notwithstanding any provision of this paragraph, in taxable years begin-
    17  ning  in  two  thousand  three and before two thousand eight, the amount
    18  prescribed by this paragraph shall be the amount prescribed in  subpara-
    19  graph one of that paragraph (d) (applying the provisions of subparagraph
    20  three  of  that  paragraph as necessary) and applying the calculation of
    21  that amount in the case of a termination year as set forth  in  subpara-
    22  graph four of this paragraph as necessary. In taxable years beginning in
    23  two  thousand  eight and thereafter, the amount prescribed by this para-
    24  graph is the amount prescribed in subparagraph four  of  that  paragraph
    25  (d)  (applying the provisions of subparagraph three of that paragraph as
    26  necessary) and applying the calculation of that amount in the case of  a
    27  termination  year as set forth in subparagraph four of this paragraph as
    28  necessary.
    29    (2) Article twenty-two tax equivalent.  For  taxable  years  beginning
    30  before  July first, nineteen hundred ninety-nine, the article twenty-two
    31  tax equivalent is the amount computed under paragraph (a) of this subdi-
    32  vision by substituting for the rate therein the rate of  7.875  percent.
    33  For taxable years beginning after June thirtieth, nineteen hundred nine-
    34  ty-nine  and before July first, two thousand, the article twenty-two tax
    35  equivalent is the amount computed under paragraph (a) of  this  subdivi-
    36  sion by substituting for the rate therein the rate of 7.525 percent. For
    37  taxable  years  beginning  after June thirtieth, two thousand and before
    38  July first, two thousand one, the article twenty-two tax  equivalent  is
    39  the  amount  computed under paragraph (a) of this subdivision by substi-
    40  tuting for the rate therein the rate of 7.175 percent. For taxable years
    41  beginning after June thirtieth, two thousand one and before July  first,
    42  two  thousand three, the article twenty-two tax equivalent is the amount
    43  computed under paragraph (a) of this subdivision by substituting for the
    44  rate therein the rate of 6.85 percent. For taxable years beginning after
    45  June thirtieth, two thousand three, the article  twenty-two  tax  equiv-
    46  alent  is the amount computed under paragraph (a) of this subdivision by
    47  substituting for the rate therein the rate of 7.1425 percent.
    48    (3)  Small  business  taxpayers.  Notwithstanding  the  provisions  of
    49  subparagraphs one and two of this paragraph, in the case of a New York S
    50  corporation  which is a small business taxpayer, as defined in paragraph
    51  (f) of this subdivision, the following provisions shall apply:
    52    (A) For taxable years beginning before July  first,  nineteen  hundred
    53  ninety-nine,  the  article  twenty-two  tax  equivalent  is  the  amount
    54  computed under paragraph (a) of this subdivision by substituting for the
    55  rate therein the rate of 7.875 percent.

        S. 6359--D                         59                         A. 8559--D

     1    (B) For taxable years beginning after June thirtieth, nineteen hundred
     2  ninety-nine and before  July  first,  two  thousand  three,  the  amount
     3  computed  under  paragraph  (a)  of  this subdivision, as referred to in
     4  subparagraph one of this paragraph, shall be  computed  by  substituting
     5  for the rate therein the rate of 7.5 percent, and the article twenty-two
     6  tax equivalent under paragraph (a) of this subdivision shall be computed
     7  as follows:
     8    (i)  if  the entire net income base is not more than two hundred thou-
     9  sand dollars, the  article  twenty-two  tax  equivalent  is  the  amount
    10  computed under paragraph (a) of this subdivision by substituting for the
    11  rate therein the rate of 7.45 percent;
    12    (ii)  if  the entire net income base is more than two hundred thousand
    13  dollars but not over two hundred ninety thousand  dollars,  the  article
    14  twenty-two  tax  equivalent shall be computed as the sum of (I) fourteen
    15  thousand nine hundred  dollars,  (II)  six  and  eighty-five  hundredths
    16  percent  of the first fifty thousand dollars in excess of the entire net
    17  income base over two hundred  thousand  dollars,  and  (III)  three  and
    18  eighty-five  hundredths percent of the excess, if any, of the entire net
    19  income base over two hundred fifty thousand dollars.
    20    (C) For taxable years beginning after  June  thirtieth,  two  thousand
    21  three,  the  amount computed under paragraph (a) of this subdivision, as
    22  referred to in subparagraph one of this paragraph, shall be computed  by
    23  substituting for the rate therein the rate of 7.5 percent, and the arti-
    24  cle  twenty-two  tax  equivalent under paragraph (a) of this subdivision
    25  shall be computed as follows:
    26    (i) if the entire net income base is not more than two  hundred  thou-
    27  sand  dollars,  the  article  twenty-two  tax  equivalent  is the amount
    28  computed under paragraph (a) of this subdivision by substituting for the
    29  rate therein the rate of 7.4725 percent;
    30    (ii) if the entire net income base is more than two  hundred  thousand
    31  dollars  but  not  over two hundred ninety thousand dollars, the article
    32  twenty-two tax equivalent shall be computed as the sum of  (I)  fourteen
    33  thousand  nine  hundred  forty-five  dollars, (II) 7.1425 percent of the
    34  first fifty thousand dollars in excess of the  entire  net  income  base
    35  over  two  hundred  thousand  dollars,  and  (III) 5.4925 percent of the
    36  excess, if any, of the entire net income base  over  two  hundred  fifty
    37  thousand dollars.
    38    (4)  Termination  year. In the case of a termination year, the tax for
    39  the S short year shall be computed under this paragraph  without  regard
    40  to  the  fixed  dollar  minimum  tax prescribed in paragraph (d) of this
    41  subdivision, and the tax for the C short year shall  be  computed  under
    42  the  opening  paragraph  of this subdivision without regard to the fixed
    43  dollar minimum tax prescribed under such paragraph (d), but in no  event
    44  shall  the  sum  of  the  tax for the S short year and the tax for the C
    45  short year be less than the fixed dollar minimum tax under paragraph (d)
    46  of this subdivision computed as if the corporation were  a  New  York  C
    47  corporation for the entire taxable year.]
    48    §  13.  Subdivision  1-c  of section 210 of the tax law, as amended by
    49  chapter 1043 of the laws of 1981, the opening  paragraph  and  paragraph
    50  (a)  as amended by chapter 817 of the laws of 1987, and paragraph (b) as
    51  amended by section 12 of part Y of chapter 63 of the laws  of  2000,  is
    52  amended to read as follows:
    53    1-c. The computations specified in paragraph (b) of subdivision one of
    54  this section shall not apply to the first two taxable years of a taxpay-
    55  er  which,  for  one or both such years, is a small business [concern. A
    56  small business concern:

        S. 6359--D                         60                         A. 8559--D

     1    (a) is a taxpayer which is a small business corporation as defined  in
     2  paragraph  three  of subsection (c) of section twelve hundred forty-four
     3  of the internal revenue code (without regard to the second  sentence  of
     4  subparagraph (A) thereof) as of the last day of the taxable year,
     5    (b) is not a corporation over fifty percent of the number of shares of
     6  stock of which entitling the holders thereof to vote for the election of
     7  directors or trustees is owned by a taxpayer which (1) is subject to tax
     8  under this article; section one hundred eighty-three, one hundred eight-
     9  y-four or one hundred eighty-five of article nine; article thirty-two or
    10  thirty-three  of this chapter, and (2) does not qualify as a small busi-
    11  ness corporation as defined in paragraph  three  of  subsection  (c)  of
    12  section  twelve hundred forty-four of the internal revenue code (without
    13  regard to the second sentence of subparagraph (A)  thereof)  as  of  the
    14  last  day  of its taxable year ending within or with the taxable year of
    15  the taxpayer,
    16    (c) is not a corporation which is substantially similar  in  operation
    17  and  in  ownership to a business entity (or entities) taxable, or previ-
    18  ously taxable, under this article; section one hundred eighty-three, one
    19  hundred eighty-four, one hundred eighty-five or one  hundred  eighty-six
    20  of  article  nine;  article  thirty-two or thirty-three of this chapter;
    21  article twenty-three of this chapter or which would have been subject to
    22  tax under such article twenty-three (as such article was  in  effect  on
    23  January  first,  nineteen  hundred  eighty) or the income (or losses) of
    24  which is (or was) includable under article twenty-two of  this  chapter,
    25  and
    26    (d)  at least ninety percent of the assets of such corporation (valued
    27  at original cost) were located and employed in  this  state  during  the
    28  taxable year and eighty percent of the employees of such corporation (as
    29  ascertained within the meaning and intent of subparagraph three of para-
    30  graph  (a)  of  subdivision  three  of  this  section)  were principally
    31  employed in this state during the taxable year] taxpayer as  defined  in
    32  paragraph (f) of subdivision one of this section.
    33    § 14. Subdivision 2 of section 210 of the tax law, as amended by chap-
    34  ter 760 of the laws of 1992, is amended to read as follows:
    35    2. The amount of [subsidiary capital,] investment capital and business
    36  capital  shall  each  be  determined  by taking the average value of the
    37  assets included therein (less liabilities deductible therefrom  pursuant
    38  to  the provisions of subdivisions [four,] five and seven of section two
    39  hundred eight), and, if the period covered by the report is other than a
    40  period of twelve calendar months,  by  multiplying  such  value  by  the
    41  number  of calendar months or major parts thereof included in such peri-
    42  od, and dividing the product thus obtained by twelve.  For  purposes  of
    43  this  subdivision,  real  property  and  marketable  securities shall be
    44  valued at fair market value and the value  of  personal  property  other
    45  than marketable securities shall be the value thereof shown on the books
    46  and  records  of  the  taxpayer  in  accordance  with generally accepted
    47  accounting principles.
    48    § 15. Subdivisions 3, 3-a, 4, 5, 6, 7, 8, 9, 10, 11, 12,  12-A,  12-B,
    49  12-C,  12-D, 12-E, 12-F, 12-G, 13, 14, 15, 16, 17, 18, 19, 20, 21, 21-a,
    50  22, 23, 23-a, 24, 25, 25-a, 26, 26-a, 27, 28, 30, 31, 32,  33,  34,  35,
    51  36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 of section 210 of the
    52  tax law are REPEALED.
    53    § 15-a. Section 210 of the tax law is amended by adding a new subdivi-
    54  sion 3 to read as follows:
    55    3.  A corporation that is a partner in a partnership shall compute tax
    56  under this article using the aggregate method as defined  in  the  regu-

        S. 6359--D                         61                         A. 8559--D
 
     1  lations  of  the  commissioner, unless another method for computing such
     2  tax is required or allowed by  such  regulations.  Under  the  aggregate
     3  method,  a  corporation  that is a partner in a partnership is viewed as
     4  having  an  undivided interest in the partnership's assets, liabilities,
     5  and items of receipts, income,  gain,  loss  and  deduction.  Under  the
     6  aggregate  method, the corporation that is a partner in a partnership is
     7  treated as participating in the partnership's  transactions  and  activ-
     8  ities.
     9    §  16. The tax law is amended by adding a new section 210-A to read as
    10  follows:
    11    § 210-A. Apportionment. 1. General. Business income and capital  shall
    12  be  apportioned  to  the  state  by  the apportionment factor determined
    13  pursuant to this section. The apportionment factor is a fraction, deter-
    14  mined by including only those receipts, net income, net gains, and other
    15  items described in this section that are included in the computation  of
    16  the  taxpayer's  business income for the taxable year.  The numerator of
    17  the apportionment fraction shall be equal to the sum of all the  amounts
    18  required  to  be included in the numerator pursuant to the provisions of
    19  this section and the denominator of the apportionment fraction shall  be
    20  equal  to  the  sum  of  all  the amounts required to be included in the
    21  denominator pursuant to the provisions of this section.
    22    2. Sales of tangible personal property, electricity, and real  proper-
    23  ty.  (a)  Receipts  from sales of tangible personal property where ship-
    24  ments are made to points within the state  or  the  destination  of  the
    25  property  is  a point in the state shall be included in the numerator of
    26  the apportionment fraction. Receipts from  sales  of  tangible  personal
    27  property where shipments are made to points within and without the state
    28  or  the destination is within and without the state shall be included in
    29  the denominator of the apportionment fraction.
    30    (b) Receipts from sales of electricity delivered to points within  the
    31  state  shall be included in the numerator of the apportionment fraction.
    32  Receipts from sales of electricity delivered to points within and  with-
    33  out  the state shall be included in the denominator of the apportionment
    34  fraction.
    35    (c) Receipts from sales of tangible personal property and  electricity
    36  that are traded as commodities as described in section 475 of the inter-
    37  nal  revenue  code are included in the apportionment fraction in accord-
    38  ance with clause (I) of subparagraph two of paragraph (a) of subdivision
    39  five of this section.
    40    (d) Net gains (not less than zero) from the  sales  of  real  property
    41  located  within  the  state  shall  be  included in the numerator of the
    42  apportionment fraction. Net gains (not less than zero) from the sales of
    43  real property located within and without the state shall be included  in
    44  the denominator of the apportionment fraction.
    45    3. Rentals and royalties. (a) Receipts from rentals of real and tangi-
    46  ble  personal  property  located  within  the  state are included in the
    47  numerator of the apportionment fraction. Receipts from rentals  of  real
    48  and  tangible  personal  property  located  within and without the state
    49  shall be included in the denominator of the apportionment fraction.
    50    (b) Receipts of royalties from the use of patents, copyrights,  trade-
    51  marks,  and  similar  intangible  personal property within the state are
    52  included in the numerator of the  apportionment  fraction.  Receipts  of
    53  royalties  from  the  use of patents, copyrights, trademarks and similar
    54  intangibles within and without the state are included in the denominator
    55  of the apportionment fraction. A patent, copyright, trademark or similar

        S. 6359--D                         62                         A. 8559--D
 
     1  intangible property is used in the state to the extent that  the  activ-
     2  ities thereunder are carried on in the state.
     3    (c)  Receipts  from  the  sales of rights for closed-circuit and cable
     4  television transmissions of an event (other than events occurring  on  a
     5  regularly  scheduled basis) taking place within the state as a result of
     6  the rendition of services by employees of the corporation, as  athletes,
     7  entertainers  or performing artists are included in the numerator of the
     8  apportionment fraction to the extent that such receipts are attributable
     9  to such transmissions received or exhibited within the  state.  Receipts
    10  from  all sales of rights for closed-circuit and cable television trans-
    11  missions of an event are included in the denominator of  the  apportion-
    12  ment fraction.
    13    4. Digital products. (a) For purposes of determining the apportionment
    14  fraction  under this section, the term "digital product" means any prop-
    15  erty or service, or combination thereof, of whatever nature delivered to
    16  the purchaser through the use of wire, cable, fiber-optic, laser, micro-
    17  wave, radio wave, satellite or similar successor media, or any  combina-
    18  tion  thereof. Digital product includes, but is not limited to, an audio
    19  work, audiovisual work, visual work,  book  or  literary  work,  graphic
    20  work,  game,  information  or  entertainment service, storage of digital
    21  products and computer software by whatever  means  delivered.  The  term
    22  "delivered  to"  includes  furnished  or  provided  to or accessed by. A
    23  digital product does not include legal, medical,  accounting,  architec-
    24  tural, research, analytical, engineering or consulting services provided
    25  by the taxpayer.
    26    (b)  Receipts  from the sale of, licence to use, or granting of remote
    27  access to digital products within the state, determined according to the
    28  hierarchy of methods set forth in  subparagraphs  one  through  four  of
    29  paragraph (c) of this subdivision, shall be included in the numerator of
    30  the  apportionment  fraction. Receipts from the sale of, license to use,
    31  or granting of remote access to digital products within and without  the
    32  state  shall  be  included in the denominator of the apportionment frac-
    33  tion. The  taxpayer  must  exercise  due  diligence  under  each  method
    34  described  in  paragraph (c) of this subdivision before rejecting it and
    35  proceeding to the next method in the hierarchy, and must base its deter-
    36  mination on information known to the taxpayer or information that  would
    37  be  known to the taxpayer upon reasonable inquiry.  If the receipt for a
    38  digital product is comprised of a combination of property and  services,
    39  it  cannot  be  divided into separate components and is considered to be
    40  one receipt regardless of whether it is separately  stated  for  billing
    41  purposes. The entire receipt must be allocated by this hierarchy.
    42    (c)  Hierarchy  of  sourcing  methods.  (1) The customer's primary use
    43  location of the digital product;
    44    (2) The location where the digital product is received by the  custom-
    45  er, or is received by a person designated for receipt by the customer;
    46    (3) The apportionment fraction determined pursuant to this subdivision
    47  for the preceding taxable year for such digital product; or
    48    (4)  The  apportionment fraction in the current taxable year for those
    49  digital products that can be sourced using  the  hierarchy  of  sourcing
    50  methods in subparagraphs one and two of this paragraph.
    51    5.  Financial  transactions.  (a)  Financial  instruments. A financial
    52  instrument is a "qualified financial instrument"  if  it  is  marked  to
    53  market  under  section 475 or section 1256 of the internal revenue code,
    54  provided that loans secured by real  property  shall  not  be  qualified
    55  financial  instruments. A financial instrument is a "nonqualified finan-
    56  cial instrument" if it is not a qualified financial instrument.

        S. 6359--D                         63                         A. 8559--D
 
     1    (1) Fixed percentage method for qualified  financial  instruments.  In
     2  determining  the  inclusion  of  receipts  and  net gains from qualified
     3  financial instruments in the apportionment fraction, taxpayers may elect
     4  to use the fixed percentage method described in  this  subparagraph  for
     5  qualified financial instruments. The election is irrevocable, applies to
     6  all qualified financial instruments, and must be made on an annual basis
     7  on  the taxpayer's original, timely filed return. If the taxpayer elects
     8  the fixed percentage method, then all income, gain or loss, from  quali-
     9  fied financial instruments constitutes business income, gain or loss. If
    10  the  taxpayer  does  not  elect to use the fixed percentage method, then
    11  receipts and net gains are included in  the  apportionment  fraction  in
    12  accordance  with  the customer sourcing method described in subparagraph
    13  two of this paragraph. Under the fixed percentage method, eight  percent
    14  of  all net income (not less than zero) from qualified financial instru-
    15  ments is included in the numerator of the  apportionment  fraction.  All
    16  net  income (not less than zero) from qualified financial instruments is
    17  included in the denominator of the apportionment fraction.
    18    (2) Customer sourcing method. Receipts and net  gains  from  qualified
    19  financial  instruments, in cases where the taxpayer did not elect to use
    20  the fixed percentage method described in subparagraph one of this  para-
    21  graph,  and  from nonqualified financial instruments are included in the
    22  apportionment  fraction  in  accordance  with  this  subparagraph.   For
    23  purposes of this paragraph, an individual is deemed to be located in the
    24  state  if  his or her billing address is in the state. A business entity
    25  is deemed to be located in the  state  if  its  commercial  domicile  is
    26  located in the state.
    27    (A)  Loans.  (i)  Receipts constituting interest from loans secured by
    28  real property located within the state shall be included in the  numera-
    29  tor  of  the apportionment fraction. Receipts constituting interest from
    30  loans secured by real property located  within  and  without  the  state
    31  shall be included in the denominator of the apportionment fraction.
    32    (ii)  Receipts  constituting  interest  from loans not secured by real
    33  property shall be included in the numerator of the  apportionment  frac-
    34  tion  if  the  borrower  is  located in the state. Receipts constituting
    35  interest from loans not secured by real property, whether  the  borrower
    36  is located within or without the state, shall be included in the denomi-
    37  nator of the apportionment fraction.
    38    (iii)  Net  gains  (not less than zero) from sales of loans secured by
    39  real property are included in the numerator of the  apportionment  frac-
    40  tion  as  provided  in  this subclause. The amount of net gains from the
    41  sale of loans secured by real property included in the numerator of  the
    42  apportionment  fraction  is determined by multiplying the net gains by a
    43  fraction the numerator of which is the amount  of  gross  proceeds  from
    44  sales of loans secured by real property located within the state and the
    45  denominator  of  which is the gross proceeds from sales of loans secured
    46  by real property within and without the state. Gross proceeds  shall  be
    47  determined after the deduction of any cost incurred to acquire the loans
    48  but  shall  not  be  less than zero. Net gains (not less than zero) from
    49  sales of loans secured by real property within and without the state are
    50  included in the denominator of the apportionment fraction.
    51    (iv) Net gains (not less than zero) from sales of loans not secured by
    52  real property are included in the numerator of the  apportionment  frac-
    53  tion  as  provided  in  this subclause. The amount of net gains from the
    54  sale of loans not secured by real property included in the numerator  of
    55  the apportionment fraction is determined by multiplying the net gains by
    56  a  fraction, the numerator of which is the amount of gross proceeds from

        S. 6359--D                         64                         A. 8559--D
 
     1  sales of loans not secured by real property to purchasers located within
     2  the state and the denominator of which is the amount of  gross  receipts
     3  from  sales  of loans not secured by real property to purchasers located
     4  within  and  without the state. Gross proceeds shall be determined after
     5  the deduction of any cost incurred to acquire the loans but shall not be
     6  less than zero.  Net gains (not less than zero) from sales of loans  not
     7  secured  by  real property are included in the denominator of the appor-
     8  tionment fraction.
     9    (B) Federal, state, and municipal debt. Receipts constituting interest
    10  and net gains from sales  of  debt  instruments  issued  by  the  United
    11  States,  any  state,  or  political  subdivision of a state shall not be
    12  included in  the  numerator  of  the  apportionment  fraction.  Receipts
    13  constituting  interest  and net gains (not less than zero) from sales of
    14  debt instruments issued by the United States and the state of  New  York
    15  or  its  political  subdivisions shall be included in the denominator of
    16  the apportionment fraction. Fifty percent of the  receipts  constituting
    17  interest  and  net gains (not less than zero) from sales of debt instru-
    18  ments issued by other states or their political  subdivisions  shall  be
    19  included in the denominator of the apportionment fraction.
    20    (C)  Asset  backed securities and other government agency debt.  Eight
    21  percent of the interest income from asset  backed  securities  or  other
    22  securities  issued  by government agencies, including but not limited to
    23  securities  issued  by  the  Government  National  Mortgage  Association
    24  (GNMA),  the  Federal  National Mortgage Association (FNMA), the Federal
    25  Home Loan Mortgage Corporation (FHLMC), or the Small  Business  Adminis-
    26  tration,  or  asset  backed securities issued by other entities shall be
    27  included in the numerator of the apportionment fraction.  Eight  percent
    28  of  the  net  gains  (not less than zero) from (i) sales of asset backed
    29  securities or other securities issued by government agencies,  including
    30  but  not limited to securities issued by GNMA, FNMA, or FHLMC, the Small
    31  Business Administration, or (ii) sales of other asset backed  securities
    32  that  are  sold  through  a  registered  securities  broker or dealer or
    33  through a licensed exchange, shall be included in the numerator  of  the
    34  apportionment  fraction.  The  amount  of net gains (not less than zero)
    35  from sales of other asset backed securities not referenced in  subclause
    36  (i)  or  (ii) of this clause included in the numerator of the apportion-
    37  ment fraction is determined by multiplying such net gains by a fraction,
    38  the numerator of which is the amount of gross proceeds from  such  sales
    39  to  purchasers  located in the state and the denominator of which is the
    40  amount of gross proceeds from such sales to  purchasers  located  within
    41  and  without the state. Receipts constituting interest from asset backed
    42  securities and other securities referenced in this clause and net  gains
    43  (not  less  than  zero)  from sales of asset backed securities and other
    44  securities referenced in this clause are included in the denominator  of
    45  the apportionment fraction. Gross proceeds shall be determined after the
    46  deduction  of  any  cost to acquire the securities but shall not be less
    47  than zero.
    48    (D) Corporate bonds. Receipts  constituting  interest  from  corporate
    49  bonds are included in the numerator of the apportionment fraction if the
    50  commercial  domicile  of the issuing corporation is in the state.  Eight
    51  percent of the net gains (not less than zero) from  sales  of  corporate
    52  bonds sold through a registered securities broker or dealer or through a
    53  licensed  exchange  is  included  in  the numerator of the apportionment
    54  fraction. The amount of net gains (not less than zero) from other  sales
    55  of  corporate bonds included in the numerator of the apportionment frac-
    56  tion is determined by multiplying such net  gains  by  a  fraction,  the

        S. 6359--D                         65                         A. 8559--D
 
     1  numerator  of  which  is the amount of gross proceeds from such sales to
     2  purchasers located in the state and the  denominator  of  which  is  the
     3  amount  of  gross  proceeds  from sales to purchasers located within and
     4  without  the state. Receipts constituting interest from corporate bonds,
     5  whether the issuing corporation's commercial domicile is within or with-
     6  out the state, and net gains (not less than zero) from sales  of  corpo-
     7  rate  bonds  to  purchasers within and without the state are included in
     8  the denominator of the apportionment fraction. Gross proceeds  shall  be
     9  determined  after  the  deduction  of  any cost to acquire the bonds but
    10  shall not be less than zero.
    11    (E) Reverse repurchase agreements and securities borrowing agreements.
    12  Eight percent of net interest income (not less than zero)  from  reverse
    13  repurchase  agreements  and  securities  borrowing  agreements  shall be
    14  included in the numerator of the apportionment  fraction.  Net  interest
    15  income (not less than zero) from reverse repurchase agreements and secu-
    16  rities borrowing agreements is included in the denominator of the appor-
    17  tionment  fraction.  Net  interest income from reverse repurchase agree-
    18  ments and securities borrowing agreements is determined for purposes  of
    19  this  subdivision  after  the deduction of the interest expense from the
    20  taxpayer's repurchase agreements and securities lending  agreements  but
    21  cannot  be  less  than  zero.  For  this calculation, the amount of such
    22  interest expense is the interest expense associated with the sum of  the
    23  value   of   the  taxpayer's  repurchase  agreements  where  it  is  the
    24  seller/borrower plus the value  of  the  taxpayer's  securities  lending
    25  agreements  where  it  is  the  securities  lender, provided such sum is
    26  limited to the sum of the value of  the  taxpayer's  reverse  repurchase
    27  agreements  where  it  is  the  purchaser/lender  plus  the value of the
    28  taxpayer's securities lending agreements  where  it  is  the  securities
    29  borrower.
    30    (F)  Federal  funds.  Eight percent of the net interest (not less than
    31  zero) from federal funds is included in the numerator of the  apportion-
    32  ment  fraction. The net interest (not less than zero) from federal funds
    33  is included in the denominator of the apportionment fraction. Net inter-
    34  est from federal funds is determined after deduction of interest expense
    35  from federal funds.
    36    (G) Dividends and net gains from sales of stock or partnership  inter-
    37  ests. Dividends from stock, net gains (not less than zero) from sales of
    38  stock  and  net  gains (not less than zero) from the sale of partnership
    39  interests are not included in either the numerator or denominator of the
    40  apportionment fraction unless the commissioner  determines  pursuant  to
    41  subdivision  eleven of this section that inclusion of such dividends and
    42  net gains (not less than zero) is  necessary  to  properly  reflect  the
    43  business income or capital of the taxpayer.
    44    (H)  Other  financial  instruments. (i) Receipts constituting interest
    45  from other financial instruments shall be included in the  numerator  of
    46  the  apportionment  fraction  if  the  payor  is  located  in the state.
    47  Receipts constituting interest from other financial instruments, whether
    48  the payor is within or without the state, are included in the  denomina-
    49  tor of the apportionment fraction.
    50    (ii)  Net  gains  (not  less  than zero) from sales of other financial
    51  instruments and other income (not less than zero) from  other  financial
    52  instruments  where  the  purchaser  or payor is located in the state are
    53  included in the numerator of the apportionment fraction, provided  that,
    54  if the purchaser or payor is a registered securities broker or dealer or
    55  the  transaction is made through a licensed exchange, then eight percent
    56  of the net gains (not less than zero) or other  income  (not  less  than

        S. 6359--D                         66                         A. 8559--D
 
     1  zero)  is  included  in the numerator of the apportionment fraction. Net
     2  gains (not less than zero) from sales of other financial instruments and
     3  other income (not less than zero) from other financial  instruments  are
     4  included in the denominator of the apportionment fraction.
     5    (I)  Physical  commodities. Net income (not less than zero) from sales
     6  of physical commodities are included in the numerator of the  apportion-
     7  ment fraction as provided in this subparagraph. The amount of net income
     8  from  sales  of  physical  commodities  included in the numerator of the
     9  apportionment fraction is determined by multiplying the net income  from
    10  sales  of  physical commodities by a fraction, the numerator of which is
    11  the amount of receipts  from  sales  of  physical  commodities  actually
    12  delivered  to points within the state or, if there is no actual delivery
    13  of the physical commodity, sold to purchasers located in the state,  and
    14  the  denominator  of which is the amount of receipts from sales of phys-
    15  ical commodities actually delivered to points  within  and  without  the
    16  state  or  sold  to purchasers located within and without the state. Net
    17  income (not less that  zero)  from  sales  of  physical  commodities  is
    18  included  in  the  denominator of the apportionment fraction. Net income
    19  (not less than zero) from sales of physical  commodities  is  determined
    20  after  the  deduction  of  the  cost  to acquire or produce the physical
    21  commodities.
    22    (b) Other receipts from broker or dealer  activities.  Receipts  of  a
    23  registered  securities  broker  or dealer from securities or commodities
    24  broker or dealer activities described in this paragraph shall be  deemed
    25  to  be  generated  within  the  state  as described in subparagraphs one
    26  through eight of this paragraph. Receipts from such activities generated
    27  within the state shall be included in the numerator of the apportionment
    28  fraction. Receipts from such activities generated within and without the
    29  state shall be included in the denominator of  the  apportionment  frac-
    30  tion.  For  the  purposes of this paragraph, the term "securities" shall
    31  have the same meaning as in section 475(c)(2) of  the  internal  revenue
    32  code  and  the  term  "commodities"  shall  have  the same meaning as in
    33  section 475(e)(2) of the internal revenue code.
    34    (1) Receipts  constituting  brokerage  commissions  derived  from  the
    35  execution  of securities or commodities purchase or sales orders for the
    36  accounts of customers shall be deemed to be generated within  the  state
    37  if  the  mailing  address in the records of the taxpayer of the customer
    38  who is responsible for paying such commissions is within the state.
    39    (2) Receipts constituting margin interest earned on behalf of  broker-
    40  age  accounts  shall  be  deemed to be generated within the state if the
    41  mailing address in the records of the taxpayer of the  customer  who  is
    42  responsible for paying such margin interest is within the state.
    43    (3)(A)  Receipts constituting fees earned by the taxpayer for advisory
    44  services to a customer in connection with the underwriting of securities
    45  for such customer (such customer being the entity that is  contemplating
    46  issuing  or  is  issuing  securities) or fees earned by the taxpayer for
    47  managing an underwriting shall be deemed  to  be  generated  within  the
    48  state  if  the  mailing  address  in the records of the taxpayer of such
    49  customer who is responsible for paying such fees is within the state.
    50    (B) Receipts constituting the primary  spread  of  selling  concession
    51  from  underwritten securities shall be deemed to be generated within the
    52  state if the customer is located in the state.
    53    (C) The term "primary spread" means the difference between  the  price
    54  paid  by the taxpayer to the issuer of the securities being marketed and
    55  the price received from the subsequent sale of the underwritten  securi-
    56  ties  at  the initial public offering price, less any selling concession

        S. 6359--D                         67                         A. 8559--D
 
     1  and any fees paid to the taxpayer for advisory services or any manager's
     2  fees, if such fees are not paid by the customer to  the  taxpayer  sepa-
     3  rately.  The term "public offering price" means the price agreed upon by
     4  the taxpayer and the issuer at which the securities are to be offered to
     5  the  public.  The term "selling concession" means the amount paid to the
     6  taxpayer for participating in the underwriting of a security  where  the
     7  taxpayer is not the lead underwriter.
     8    (4)  Receipts constituting account maintenance fees shall be deemed to
     9  be generated within the state if the mailing address in  the  record  of
    10  the  taxpayer of the customer who is responsible for paying such account
    11  maintenance fees is within the state.
    12    (5) Receipts constituting fees for management  or  advisory  services,
    13  including  fees  for advisory services in relation to merger or acquisi-
    14  tion activities, but excluding fees paid for services described in para-
    15  graph (d) of this subdivision, shall be deemed to  be  generated  within
    16  the  state  if the mailing address in the records of the taxpayer of the
    17  customer who is responsible for paying such fees is within the state.
    18    (6) Receipts constituting interest earned by the taxpayer on loans and
    19  advances made by the taxpayer  to  a  corporation  affiliated  with  the
    20  taxpayer  but  with  which  the taxpayer is not permitted or required to
    21  file a combined report pursuant to section two  hundred  ten-C  of  this
    22  article  shall be deemed to arise from services performed at the princi-
    23  pal place of business of such affiliated corporation.
    24    (7) If the taxpayer receives any of the receipts enumerated in subpar-
    25  agraphs one through four of this paragraph as a result of  a  securities
    26  correspondent  relationship  such  taxpayer  has  with another broker or
    27  dealer with the taxpayer acting in this  relationship  as  the  clearing
    28  firm,  such receipts shall be deemed to be generated within the state to
    29  extent set forth in each of  such  subparagraphs.  The  amount  of  such
    30  receipts shall exclude the amount the taxpayer is required to pay to the
    31  correspondent  firm for such correspondent relationship. If the taxpayer
    32  receives any of the receipts enumerated  in  subparagraphs  one  through
    33  four  of  this  paragraph  as  as  result  of a securities correspondent
    34  relationship such taxpayer has with another broker or  dealer  with  the
    35  taxpayer  acting  in  this  relationship  as  the introducing firm, such
    36  receipts shall be deemed to be generated within the state to the  extent
    37  set forth in each of such subparagraphs.
    38    (8) If, for purposes of subparagraphs one, two, clause (A) of subpara-
    39  graph three, four, or five of this paragraph the taxpayer is unable from
    40  its  records  to  determine  the  mailing address of the customer, eight
    41  percent of the receipts is included in the numerator of  the  apportion-
    42  ment fraction.
    43    (c)  Receipts from credit card and similar activities. Receipts relat-
    44  ing to the  bank,  credit,  travel  and  entertainment  card  activities
    45  described  in  this paragraph shall be deemed to be generated within the
    46  state as described in subparagraphs one through four of this  paragraph.
    47  Receipts  from  such  activities  generated  within  the  state shall be
    48  included in the numerator of the apportionment fraction.  Receipts  from
    49  such activities generated within and without the state shall be included
    50  in the denominator of the apportionment fraction.
    51    (1)  Receipts  constituting  interest,  and  fees and penalties in the
    52  nature of interest, from bank, credit,  travel  and  entertainment  card
    53  receivables  shall  be  deemed  to  be generated within the state if the
    54  mailing address of the card holder in the records of the taxpayer is  in
    55  the state;

        S. 6359--D                         68                         A. 8559--D
 
     1    (2)  Receipts  from  service charges and fees from such cards shall be
     2  deemed to be generated within the state if the mailing  address  of  the
     3  card holder in the records of the taxpayer is in the state; and
     4    (3)  Receipts  from merchant discounts shall be deemed to be generated
     5  within the state if the merchant is located within  the  state.  In  the
     6  case  of  a  merchant  with  locations  both within and without New York
     7  state, only receipts from merchant discounts attributable to sales  made
     8  from locations within New York state are allocated to New York state. It
     9  shall  be  presumed  that the location of the merchant is the address of
    10  the merchant shown on the invoice  submitted  by  the  merchant  to  the
    11  taxpayer.
    12    (4)  Receipts  from credit card authorization processing, and clearing
    13  and settlement processing received by credit card  processors  shall  be
    14  deemed to be generated within the state if the location where the credit
    15  card  processor's  customer accesses the credit card processor's network
    16  is located within the state. The amount of all other  receipts  received
    17  by credit card processors not specifically addressed in subdivisions one
    18  through  nine  of  this  section deemed to be generated within the state
    19  shall be determined by  multiplying  the  total  amount  of  such  other
    20  receipts by the average of (i) eight percent and (ii) the percent of its
    21  New  York  access  points.  The percent of New York access points is the
    22  number of locations in New York from which the credit  card  processor's
    23  customers  access  the  credit  card  processor's network divided by the
    24  total number of locations in the United States  where  the  credit  card
    25  processor's customers access the credit card processor's network.
    26    (d)  Receipts from certain services to investment companies.  Receipts
    27  received from an investment company arising from the sale of management,
    28  administration or distribution services to such investment  company  are
    29  included  in the denominator of the apportionment fraction.  The portion
    30  of such receipts included in the numerator of the apportionment fraction
    31  (such portion referred to herein as  the  New  York  portion)  shall  be
    32  determined as provided in this paragraph.
    33    (1)  The  New  York  portion shall be the product of the total of such
    34  receipts from the sale of such services and a fraction. The numerator of
    35  that fraction is the sum of the monthly percentages (as defined  herein-
    36  after)  determined  for  each  month of the investment company's taxable
    37  year for federal income tax purposes which taxable year ends within  the
    38  taxable  year  of the taxpayer (but excluding any month during which the
    39  investment company had no outstanding shares).  The  monthly  percentage
    40  for  each  such  month is determined by dividing the number of shares in
    41  the investment company that are owned on the last day of  the  month  by
    42  shareholders that are located in the state by the total number of shares
    43  in  the investment company outstanding on that date.  The denominator of
    44  the fraction is the number of such monthly percentages.
    45    (2)(A) For purposes of this paragraph, an individual, estate or  trust
    46  is  deemed to be located in the state if his, her or its mailing address
    47  on the records of the investment company is in  the  state.  A  business
    48  entity  is  deemed to be located in the state if its commercial domicile
    49  is located in the state.
    50    (B) For purposes of this  paragraph,  the  term  "investment  company"
    51  means  a  regulated investment company, as defined in section 851 of the
    52  internal revenue code, and a partnership to which section 7704(a) of the
    53  internal revenue code applies (by virtue of section 7704(c)(3)  of  such
    54  code)  and  that  meets the requirements of section 851(b) of such code.
    55  The preceding sentence shall be applied to the taxable year for  federal
    56  income  tax  purposes of the business entity that is asserted to consti-

        S. 6359--D                         69                         A. 8559--D
 
     1  tute an investment company that ends within  the  taxable  year  of  the
     2  taxpayer.
     3    (C)  For purposes of this paragraph the term "receipts from an invest-
     4  ment company" includes amounts  received  directly  from  an  investment
     5  company  as  well  as  amounts  received  from  the shareholders in such
     6  investment company, in their capacity as such.
     7    (D) For purposes of this paragraph,  the  term  "management  services"
     8  means  the  rendering  of  investment  advice  to an investment company,
     9  making determinations as to when sales and purchases of  securities  are
    10  to  be  made  on  behalf  of  an  investment  company, or the selling or
    11  purchasing of securities constituting assets of an  investment  company,
    12  and  related  activities, but only where such activity or activities are
    13  performed pursuant to a contract with  the  investment  company  entered
    14  into  pursuant to section 15(a) of the federal investment company act of
    15  nineteen hundred forty, as amended.
    16    (E) For purposes of this paragraph, the term  "distribution  services"
    17  means  the services of advertising, servicing investor accounts (includ-
    18  ing redemptions), marketing shares or selling shares  of  an  investment
    19  company,  but,  in  the case of advertising, servicing investor accounts
    20  (including redemptions) or marketing shares, only where such service  is
    21  performed by a person who is (or was, in the case of a closed end compa-
    22  ny)  also  engaged in the service of selling such shares. In the case of
    23  an open end company, such service of selling shares  must  be  performed
    24  pursuant  to  a  contract  entered into pursuant to section 15(b) of the
    25  federal investment company act of nineteen hundred forty, as amended.
    26    (F) For purposes of this paragraph, the term "administration services"
    27  includes clerical, accounting, bookkeeping,  data  processing,  internal
    28  auditing, legal and tax services performed for an investment company but
    29  only if the provider of such service or services during the taxable year
    30  in  which  such  service  or  services are sold also sells management or
    31  distribution services, as defined hereinabove, to such investment compa-
    32  ny.
    33    (e) For purposes of this subdivision, a taxpayer shall use the follow-
    34  ing hierarchy to determine the commercial domicile of a business entity,
    35  based on the information known to the taxpayer or information that would
    36  be known upon reasonable inquiry: (i) the location of the treasury func-
    37  tion of the business entity; (ii) the seat of management and control  of
    38  the business entity; and (iii) the billing address of the business enti-
    39  ty  in the taxpayer's records.  The taxpayer must exercise due diligence
    40  before rejecting a method in this hierarchy and proceeding to  the  next
    41  method.
    42    (f)  For purposes of this subdivision, the term "registered securities
    43  broker or dealer" means a broker or dealer registered  as  such  by  the
    44  securities  and  exchange commission or a broker or dealer registered as
    45  such by the commodities futures trading commission, and shall include an
    46  OTC derivatives dealer as defined under regulations  of  the  securities
    47  and exchange commission at title 17, part 240, section 3b-12 of the code
    48  of federal regulations (17 CFR 240.3b-12).
    49    6.  Receipts  from  railroad  and trucking business. Receipts from the
    50  conduct of a railroad business (including surface railroad,  whether  or
    51  not operated by steam, subway railroad, elevated railroad, palace car or
    52  sleeping car business) or a trucking business are included in the numer-
    53  ator  of  the  apportionment fraction as follows. The amount of receipts
    54  from the conduct of a railroad business or a trucking business  included
    55  in  the  numerator of the apportionment fraction is determined by multi-
    56  plying the amount of receipts from such  business  by  a  fraction,  the

        S. 6359--D                         70                         A. 8559--D
 
     1  numerator of which is the miles in such business within the state during
     2  the period covered by the taxpayer's report and the denominator of which
     3  is  the  miles in such business within and without the state during such
     4  period.   Receipts from the conduct of the railroad business or a truck-
     5  ing business are included in the denominator of the apportionment  frac-
     6  tion.
     7    7.  Receipts  from  aviation  services.  (a)  Air  freight forwarding.
     8  Receipts of a taxpayer from  the  activity  of  air  freight  forwarding
     9  acting  as principal and like indirect air carrier receipts arising from
    10  such activity shall be included in the numerator  of  the  apportionment
    11  fraction  as  follows:  one hundred percent of such receipts if both the
    12  pickup and delivery associated with such receipts are made in the  state
    13  and  fifty  percent  of  such  receipts if either the pickup or delivery
    14  associated with such receipts is made in this  state.    Such  receipts,
    15  whether the pickup or delivery associated with the receipts is within or
    16  without  the  state,  shall be included in the denominator of the appor-
    17  tionment fraction.
    18    (b) Other aviation services. (1)(A)  The  portion  of  receipts  of  a
    19  taxpayer  from aviation services (other than services described in para-
    20  graph (a) of this subdivision) to be included in the  numerator  of  the
    21  apportionment  fraction  shall be determined by multiplying its receipts
    22  from such aviation services by a percentage which is equal to the arith-
    23  metic average of the following three percentages:
    24    (i) the  percentage  determined  by  dividing  sixty  percent  of  the
    25  aircraft  arrivals  and  departures  within  this  state by the taxpayer
    26  during the period covered by its report by the total  aircraft  arrivals
    27  and  departures  within  and  without  this  state  during  such period;
    28  provided, however, arrivals and departures  solely  for  maintenance  or
    29  repair,  refueling  (where  no  debarkation  or  embarkation  of traffic
    30  occurs), arrivals and departures of ferry and personnel training flights
    31  or arrivals and departures in the event of  emergency  situations  shall
    32  not  be  included  in  computing  such arrival and departure percentage;
    33  provided, further, the commissioner may also exempt from such percentage
    34  aircraft arrivals and departures of all  non-revenue  flights  including
    35  flights  involving the transportation of officers or employees receiving
    36  air transportation to perform maintenance or repair  services  or  where
    37  such  officers or employees are transported in conjunction with an emer-
    38  gency situation or the investigation of an air disaster (other than on a
    39  scheduled flight); provided, however, that arrivals  and  departures  of
    40  flights transporting officers and employees receiving air transportation
    41  for purposes other than specified above (without regard to remuneration)
    42  shall be included in computing such arrival and departure percentage;
    43    (ii) the percentage determined by dividing sixty percent of the reven-
    44  ue  tons  handled  by  the taxpayer at airports within this state during
    45  such period by the total revenue tons handled by it at  airports  within
    46  and without this state during such period; and
    47    (iii)  the  percentage  determined  by  dividing  sixty percent of the
    48  taxpayer's originating revenue within this state for such period by  its
    49  total originating revenue within and without this state for such period.
    50    (B)  As  used herein the term "aircraft arrivals and departures" means
    51  the number of landings and takeoffs of the aircraft of the taxpayer  and
    52  the number of air pickups and deliveries by the aircraft of such taxpay-
    53  er;  the  term  "originating revenue" means revenue to the taxpayer from
    54  the transportation or revenue  passengers  and  revenue  property  first
    55  received  by the taxpayer either as originating or connecting traffic at
    56  airports; and the  term  "revenue  tons  handled"  by  the  taxpayer  at

        S. 6359--D                         71                         A. 8559--D
 
     1  airports  means the weight in tons of revenue passengers (at two hundred
     2  pounds per passenger) and revenue cargo first received either as  origi-
     3  nating  or  connecting  traffic or finally discharged by the taxpayer at
     4  airports;
     5    (2)  All  such receipts of a taxpayer from aviation services described
     6  in this paragraph are included in the denominator of  the  apportionment
     7  fraction.
     8    8. Receipts from sales of advertising. (a) The amount of receipts from
     9  sales of advertising in newspapers or periodicals included in the numer-
    10  ator  of  the  apportionment  fraction  is determined by multiplying the
    11  total of such receipts by a fraction, the  numerator  of  which  is  the
    12  number  of  newspapers  and  periodicals  delivered to points within the
    13  state and the denominator of which is the number of newspapers and peri-
    14  odicals delivered to points within and without the state. The  total  of
    15  such  receipts from sales of advertising in newspapers or periodicals is
    16  included in the denominator of the apportionment fraction.
    17    (b) The amount of receipts from sales of advertising on television  or
    18  radio  included in the apportionment fraction is determined by multiply-
    19  ing the total of such receipts by a fraction, the numerator of which  is
    20  the  number of viewers or listeners within the state and the denominator
    21  of which is the number of viewers or listeners within  and  without  the
    22  state.  The  total  of  such receipts from sales of advertising on tele-
    23  vision and radio is included in the  denominator  of  the  apportionment
    24  fraction.
    25    (c)  The amount of receipts from sales of advertising not described in
    26  paragraph (a) or (b) of this subdivision that is furnished, provided  or
    27  delivered  to,  or accessed by the viewer or listener through the use of
    28  wire, cable, fiber-optic, laser, microwave,  radio  wave,  satellite  or
    29  similar  successor  media  or  any  combination thereof, included in the
    30  numerator of the apportionment fraction is determined by multiplying the
    31  total of such receipts by a fraction, the  numerator  of  which  is  the
    32  number  of  viewers or listeners within the state and the denominator of
    33  which is the number of viewers  or  listeners  within  and  without  the
    34  state. The total of such receipts from sales of advertising described in
    35  this paragraph is included in the denominator of the apportionment frac-
    36  tion.
    37    9.  Receipts from transportation or transmission of gas through pipes.
    38  Receipts from the transportation or transmission of  gas  through  pipes
    39  are  included in the numerator of the apportionment fraction as follows.
    40  The amount of receipts from the transportation or  transmission  of  gas
    41  through pipes included in the numerator of the apportionment fraction is
    42  determined  by  multiplying the total amount of such receipts by a frac-
    43  tion, the numerator of which  is  the  taxpayer's  transportation  units
    44  within  the  state and the denominator of which is the taxpayer's trans-
    45  portation units within and without the state. A transportation  unit  is
    46  the transportation of one cubic foot of gas over a distance of one mile.
    47  The  total amount of receipts from the transportation or transmission of
    48  gas through pipes is included in the denominator  of  the  apportionment
    49  fraction.
    50    10.  (a)  Receipts  from  other  services and other business receipts.
    51  Receipts from services not addressed in subdivisions one through nine of
    52  this section and other business receipts not addressed in such  subdivi-
    53  sions  shall  be included in the numerator of the apportionment fraction
    54  if the location of the customer is within the state. Such receipts  from
    55  customers  within  and without the state are included in the denominator
    56  of the apportionment fraction. Whether the receipts are included in  the

        S. 6359--D                         72                         A. 8559--D
 
     1  numerator  of  the apportionment fraction is determined according to the
     2  hierarchy of method set forth in paragraph (b) of this subdivision.  The
     3  taxpayer must exercise due diligence under each method described in such
     4  paragraph  (b)  before rejecting it and proceeding to the next method in
     5  the hierarchy, and must base its determination on information  known  to
     6  the  taxpayer  or  information  that would be known to the taxpayer upon
     7  reasonable inquiry.
     8    (b) Hierarchy of methods. (1) The benefit is received in this state;
     9    (2) Delivery destination;
    10    (3) The apportionment fraction for  such  receipts  within  the  state
    11  determined  pursuant to this subdivision for the preceding taxable year;
    12  or
    13    (4) The apportionment fraction in the current taxable year  determined
    14  pursuant  to  this  subdivision  for  those receipts that can be sourced
    15  using the hierarchy of sourcing methods in subparagraphs one and two  of
    16  this paragraph.
    17    11.  If  it  shall  appear  that the apportionment fraction determined
    18  pursuant to this section does not result in a proper reflection  of  the
    19  taxpayer's business income or capital within the state, the commissioner
    20  is authorized in his or her discretion to adjust it, or the taxpayer may
    21  request  that  the  commissioner adjust it, by (a) excluding one or more
    22  items in such determination, (b) including one or more  other  items  in
    23  such  determination, or (c) any other similar or different method calcu-
    24  lated to effect a fair and proper apportionment of the  business  income
    25  and  capital  reasonably attributed to the state.  The party seeking the
    26  adjustment shall bear the burden of proof to demonstrate that the appor-
    27  tionment fraction determined pursuant to this section does not result in
    28  a proper reflection of the taxpayer's business income or capital  within
    29  the state and that the proposed adjustment is appropriate.
    30    §  17. The tax law is amended by adding a new section 210-B to read as
    31  follows:
    32    § 210-B. Credits. 1. Investment tax credit  (ITC).    (a)  A  taxpayer
    33  shall  be  allowed  a  credit,  to  be computed as hereinafter provided,
    34  against the tax imposed by this article. The amount of the credit  shall
    35  be  the  percent provided for hereinbelow of the investment credit base.
    36  The investment credit base is the cost or other basis for federal income
    37  tax purposes of tangible personal property and other tangible  property,
    38  including buildings and structural components of buildings, described in
    39  paragraph  (b)  of this subdivision, less the amount of the nonqualified
    40  nonrecourse financing with respect to such property to the  extent  such
    41  financing  would  be excludible from the credit base pursuant to section
    42  46(c)(8) of the internal revenue code (treating such property as section
    43  thirty-eight property irrespective of whether or not it in fact  consti-
    44  tutes section thirty-eight property). If, at the close of a taxable year
    45  following the taxable year in which such property was placed in service,
    46  there  is  a  net  decrease  in  the  amount of nonqualified nonrecourse
    47  financing with respect to such property,  such  net  decrease  shall  be
    48  treated  as  if it were the cost or other basis of property described in
    49  paragraph (b) of this subdivision acquired,  constructed,  reconstructed
    50  or erected during the year of the decrease in the amount of nonqualified
    51  nonrecourse financing. In the case of a combined report the term invest-
    52  ment  credit  base  shall  mean the sum of the investment credit base of
    53  each corporation included on such report. The percentage to be  used  to
    54  compute  the  credit  allowed pursuant to this subdivision shall be five
    55  percent with respect to the first three hundred fifty million dollars of
    56  the investment credit base, and four percent with respect to the invest-

        S. 6359--D                         73                         A. 8559--D
 
     1  ment credit base in excess  of  three  hundred  fifty  million  dollars,
     2  except  that  in  the  case  of research and development property at the
     3  option of the taxpayer the applicable percentage shall be nine.
     4    (b)  (i) A credit shall be allowed under this subdivision with respect
     5  to tangible personal property and  other  tangible  property,  including
     6  buildings and structural components of buildings, which are: depreciable
     7  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
     8  code, have a useful life of four years or more, are acquired by purchase
     9  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
    10  revenue code, have a situs in this state and are (A) principally used by
    11  the  taxpayer  in  the production of goods by manufacturing, processing,
    12  assembling, refining, mining, extracting, farming,  agriculture,  horti-
    13  culture, floriculture, viticulture or commercial fishing, (B) industrial
    14  waste  treatment facilities or air pollution control facilities, used in
    15  the taxpayer's trade or business, (C) research and development property,
    16  or (D) principally used in the ordinary course of the  taxpayer's  trade
    17  or  business  as  a  broker or dealer in connection with the purchase or
    18  sale (which shall include but not be limited to the  issuance,  entering
    19  into,  assumption,  offset,  assignment,  termination,  or  transfer) of
    20  stocks, bonds or other securities as defined  in  section  four  hundred
    21  seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
    22  defined in section four hundred seventy-five (e) of the Internal Revenue
    23  Code, (E) principally used in the  ordinary  course  of  the  taxpayer's
    24  trade  or business of providing investment advisory services for a regu-
    25  lated investment company as defined in section eight  hundred  fifty-one
    26  of the Internal Revenue Code, or lending, loan arrangement or loan orig-
    27  ination  services  to  customers in connection with the purchase or sale
    28  (which shall include but not be limited to the issuance, entering  into,
    29  assumption,  offset, assignment, termination, or transfer) of securities
    30  as defined in section four hundred seventy-five (c)(2) of  the  Internal
    31  Revenue  Code, (F) originally used in the ordinary course of the taxpay-
    32  er's business  as  an  exchange  registered  as  a  national  securities
    33  exchange  within the meaning of sections 3(a)(1) and 6(a) of the Securi-
    34  ties Exchange Act of 1934 or a board of  trade  as  defined  in  section
    35  1410(a)(1) of the New York Not-for-Profit Corporation Law or as an enti-
    36  ty  that  is  wholly  owned  by  one  or  more  such national securities
    37  exchanges or boards of trade and that provides automation  or  technical
    38  services thereto, or (G) principally used as a qualified film production
    39  facility  including  qualified film production facilities having a situs
    40  in an empire zone designated as such pursuant to article  eighteen-B  of
    41  the general municipal law, where the taxpayer is providing three or more
    42  services  to  any  qualified film production company using the facility,
    43  including such services as a studio lighting  grid,  lighting  and  grip
    44  equipment,  multi-line  phone  service, broadband information technology
    45  access, industrial scale electrical capacity,  food  services,  security
    46  services,  and  heating,  ventilation  and  air  conditioning. Provided,
    47  however, a taxpayer shall not be allowed the credit provided by  clauses
    48  (D),  (E) and (F) of this subparagraph unless (i) eighty percent or more
    49  of the employees performing the  administrative  and  support  functions
    50  resulting  from  or related to the qualifying uses of such equipment are
    51  located in this state or (ii)  the  average  number  of  employees  that
    52  perform  the  administrative  and  support  functions  resulting from or
    53  related to the qualifying uses of such equipment and are located in this
    54  state during the taxable year for which the credit is claimed  is  equal
    55  to  or greater than ninety-five percent of the average number of employ-
    56  ees that perform these functions and are located in  this  state  during

        S. 6359--D                         74                         A. 8559--D
 
     1  the thirty-six months immediately preceding the year for which the cred-
     2  it  is  claimed,  or (iii) the number of employees located in this state
     3  during the taxable year for which the credit is claimed is equal  to  or
     4  greater  than  ninety percent of the number of employees located in this
     5  state on December thirty-first, nineteen hundred ninety-eight or, if the
     6  taxpayer was not a calendar year taxpayer in  nineteen  hundred  ninety-
     7  eight,  the  last  day  of  its first taxable year ending after December
     8  thirty-first, nineteen hundred ninety-eight.  If  the  taxpayer  becomes
     9  subject  to  tax in this state after the taxable year beginning in nine-
    10  teen hundred ninety-eight, then the taxpayer is not required to  satisfy
    11  the  employment test provided in the preceding sentence of this subpara-
    12  graph for its first taxable year. For purposes of clause (iii)  of  this
    13  subparagraph  the employment test will be based on the number of employ-
    14  ees located in this state on the last day of the first taxable year  the
    15  taxpayer  is  subject to tax in this state.  If the uses of the property
    16  must be aggregated to determine whether the property is principally used
    17  in qualifying uses, then either each affiliate using the  property  must
    18  satisfy  this  employment test or this employment test must be satisfied
    19  through the aggregation of the employees of the taxpayer, its affiliated
    20  regulated broker, dealer, and registered investment  adviser  using  the
    21  property.   For purposes of this subdivision, the term "goods" shall not
    22  include electricity.
    23    (ii) For purposes of this paragraph, the following  definitions  shall
    24  apply--
    25    (A) Manufacturing shall mean the process of working raw materials into
    26  wares  suitable  for  use  or which gives new shapes, new quality or new
    27  combinations to matter which already has gone  through  some  artificial
    28  process  by  the  use  of machinery, tools, appliances and other similar
    29  equipment. Property used  in  the  production  of  goods  shall  include
    30  machinery,  equipment  or  other  tangible property which is principally
    31  used in the repair and service of other machinery,  equipment  or  other
    32  tangible  property used principally in the production of goods and shall
    33  include all facilities used in the production operation, including stor-
    34  age of material to be used in production and of the  products  that  are
    35  produced.
    36    (B)  Research  and  development  property shall mean property which is
    37  used for purposes of research and development  in  the  experimental  or
    38  laboratory sense. Such purposes shall not be deemed to include the ordi-
    39  nary testing or inspection of materials or products for quality control,
    40  efficiency  surveys,  management studies, consumer surveys, advertising,
    41  promotions, or research in connection with literary, historical or simi-
    42  lar projects.
    43    (C) Industrial waste treatment facilities shall mean property  consti-
    44  tuting  facilities for the treatment, neutralization or stabilization of
    45  industrial waste and other wastes (as the terms "industrial  waste"  and
    46  "other  wastes"  are  defined  in  section  17-0105 of the environmental
    47  conservation law) from a point immediately preceding the point  of  such
    48  treatment,  neutralization  or  stabilization  to the point of disposal,
    49  including the necessary pumping and transmitting facilities, but exclud-
    50  ing such facilities installed for the primary purpose of salvaging mate-
    51  rials which are usable in the manufacturing process or are marketable.
    52    (D) Air pollution control facilities shall mean property  constituting
    53  facilities which remove, reduce, or render less noxious air contaminants
    54  emitted from an air contamination source (as the terms "air contaminant"
    55  and  "air  contamination  source"  are defined in section 19-0107 of the
    56  environmental conservation law) from a point immediately  preceding  the

        S. 6359--D                         75                         A. 8559--D
 
     1  point  of such removal, reduction or rendering to the point of discharge
     2  of air, meeting emission standards as established by the  department  of
     3  environmental  conservation, but excluding such facilities installed for
     4  the primary purpose of salvaging materials which are usable in the manu-
     5  facturing process or are marketable and excluding those facilities which
     6  rely  for  their efficacy on dilution, dispersion or assimilation of air
     7  contaminants in the ambient air after emission. Such term shall  further
     8  include flue gas desulfurization equipment and attendant sludge disposal
     9  facilities,  fluidized  bed boilers, precombustion coal cleaning facili-
    10  ties or other facilities that conform with this  subdivision  and  which
    11  comply  with the provisions of the state acid deposition control act set
    12  forth in title nine of article nineteen of the  environmental  conserva-
    13  tion law.
    14    (E) The terms "qualified film production facility" and "qualified film
    15  production  company"  shall  have the same meaning as in section twenty-
    16  four of this chapter.
    17    (iii) However, such credit shall be allowed with respect to industrial
    18  waste treatment facilities and air pollution control facilities only  on
    19  condition  that such facilities have been certified by the state commis-
    20  sioner of environmental conservation or his  designated  representative,
    21  pursuant  to  subdivision  one  of section 17-0707 or subdivision one of
    22  section 19-0309 of the environmental conservation law, as complying with
    23  applicable provisions of the environmental conservation law, the  public
    24  health  law,  the  state  sanitary  code  and codes, rules, regulations,
    25  permits or orders issued pursuant thereto.
    26    (c) A taxpayer shall not be allowed a credit  under  this  subdivision
    27  with  respect to tangible personal property and other tangible property,
    28  including buildings and structural components  of  buildings,  which  it
    29  leases to any other person or corporation except where a taxpayer leases
    30  property  to  an affiliated regulated broker, dealer, registered invest-
    31  ment adviser, national securities exchange or board of trade  (or  other
    32  entity  described  in clause (F) of subparagraph (i) of paragraph (b) of
    33  this subdivision) that uses such property in accordance with clause (D),
    34  (E) or (F) of subparagraph (i) of paragraph  (b)  of  this  subdivision.
    35  For  purposes  of  the  preceding sentence, any contract or agreement to
    36  lease or rent or for a license to use such property shall be  considered
    37  a  lease.  Provided, however, in determining whether a taxpayer shall be
    38  allowed a credit under this subdivision with respect to  such  property,
    39  any  election  made  with  respect  to  such  property  pursuant  to the
    40  provisions of paragraph eight of subsection (f) of section  one  hundred
    41  sixty-eight  of  the  internal  revenue  code,  as such paragraph was in
    42  effect for agreements entered into  prior  to  January  first,  nineteen
    43  hundred  eighty-four,  shall  be disregarded. For purposes of this para-
    44  graph, the use of a qualified film production facility  by  a  qualified
    45  film production company shall not be considered a lease of such facility
    46  to such company.
    47    (d) Except as otherwise provided in this paragraph, the credit allowed
    48  under this subdivision for any taxable year shall not reduce the tax due
    49  for such year to less than the higher of the amounts prescribed in para-
    50  graphs  (c)  and (d) of subdivision one of this section. However, if the
    51  amount of credit allowable under this subdivision for any  taxable  year
    52  reduces the tax to such amount, any amount of credit allowed for a taxa-
    53  ble year commencing prior to January first, nineteen hundred eighty-sev-
    54  en  and  not  deductible in such taxable year may be carried over to the
    55  following year or years and may be deducted from the taxpayer's tax  for
    56  such  year or years but in no event shall such credit be carried over to

        S. 6359--D                         76                         A. 8559--D

     1  taxable years commencing on or after January first,  two  thousand  two,
     2  and  any  amount  of  credit allowed for a taxable year commencing on or
     3  after January first, nineteen hundred eighty-seven and not deductible in
     4  such  year may be carried over to the fifteen taxable years next follow-
     5  ing such taxable year and may be deducted from the  taxpayer's  tax  for
     6  such  year  or years. In lieu of such carryover, any such taxpayer which
     7  qualifies as a new business under paragraph (j) of this subdivision  may
     8  elect  to treat the amount of such carryover as an overpayment of tax to
     9  be credited or refunded in accordance with the provisions of section ten
    10  hundred eighty-six of this chapter, provided, however, the provisions of
    11  subsection (c) of section  ten  hundred  eighty-eight  of  this  chapter
    12  notwithstanding, no interest shall be paid thereon.
    13    (e)  (1)  With  respect  to  property which is depreciable pursuant to
    14  section one hundred sixty-seven of the internal revenue code but is  not
    15  subject  to  the  provisions  of section one hundred sixty-eight of such
    16  code and which is disposed of or ceases to be in qualified use prior  to
    17  the  end  of  the  taxable  year in which the credit is to be taken, the
    18  amount of the credit shall be that portion of the credit provided for in
    19  this subdivision which represents the ratio which the months  of  quali-
    20  fied  use bear to the months of useful life. If property on which credit
    21  has been taken is disposed of or ceases to be in qualified use prior  to
    22  the  end of its useful life, the difference between the credit taken and
    23  the credit allowed for actual use must be added  back  in  the  year  of
    24  disposition. Provided, however, if such property is disposed of or ceas-
    25  es  to  be  in qualified use after it has been in qualified use for more
    26  than twelve consecutive years, it shall not be necessary to add back the
    27  credit as provided in this subparagraph. The amount  of  credit  allowed
    28  for actual use shall be determined by multiplying the original credit by
    29  the ratio which the months of qualified use bear to the months of useful
    30  life.  For  purposes of this subparagraph, useful life of property shall
    31  be the same as the taxpayer uses for depreciation purposes when  comput-
    32  ing his federal income tax liability.
    33    (2) Except with respect to that property to which subparagraph four of
    34  this  paragraph applies, with respect to three-year property, as defined
    35  in subsection (e) of section one hundred  sixty-eight  of  the  internal
    36  revenue  code,  which  is  disposed  of or ceases to be in qualified use
    37  prior to the end of the taxable year in which the credit is to be taken,
    38  the amount of the credit shall be that portion of  the  credit  provided
    39  for  in  this subdivision which represents the ratio which the months of
    40  qualified use bear to thirty-six. If property on which credit  has  been
    41  taken  is  disposed of or ceases to be in qualified use prior to the end
    42  of thirty-six months, the difference between the credit  taken  and  the
    43  credit allowed for actual use must be added back in the year of disposi-
    44  tion. The amount of credit allowed for actual use shall be determined by
    45  multiplying  the original credit by the ratio which the months of quali-
    46  fied use bear to thirty-six.
    47    (3) Except with respect to that property to which subparagraph four of
    48  this  paragraph  applies,  with  respect  to  property  subject  to  the
    49  provisions  of  section  one hundred sixty-eight of the internal revenue
    50  code, other than three-year property as defined  in  subsection  (e)  of
    51  such  section  one hundred sixty-eight which is disposed of or ceases to
    52  be in qualified use prior to the end of the taxable year  in  which  the
    53  credit is to be taken, the amount of the credit shall be that portion of
    54  the  credit  provided for in this subdivision which represents the ratio
    55  which the months of qualified use bear to sixty. If  property  on  which
    56  credit  has  been  taken is disposed of or ceases to be in qualified use

        S. 6359--D                         77                         A. 8559--D
 
     1  prior to the end of sixty months,  the  difference  between  the  credit
     2  taken  and  the  credit allowed for actual use must be added back in the
     3  year of disposition. The amount of credit allowed for actual  use  shall
     4  be  determined by multiplying the original credit by the ratio which the
     5  months of qualified use bear to sixty.
     6    (4) With respect to any property to which section one  hundred  sixty-
     7  eight  of  the  internal  revenue code applies, which is a building or a
     8  structural component of a building and which is disposed of or ceases to
     9  be in qualified use prior to the end of the taxable year  in  which  the
    10  credit is to be taken, the amount of the credit shall be that portion of
    11  the  credit  provided for in this subdivision which represents the ratio
    12  which the months of qualified use bear to the  total  number  of  months
    13  over  which the taxpayer chooses to deduct the property under the inter-
    14  nal revenue code. If property on which credit has been taken is disposed
    15  of or ceases to be in qualified use prior to the end of the period  over
    16  which  the  taxpayer  chooses  to deduct the property under the internal
    17  revenue code, the difference between the credit  taken  and  the  credit
    18  allowed  for  actual  use must be added back in the year of disposition.
    19  Provided, however, if such property is disposed of or ceases  to  be  in
    20  qualified  use  after  it has been in qualified use for more than twelve
    21  consecutive years, it shall not be necessary to add back the  credit  as
    22  provided  in  this subparagraph. The amount of credit allowed for actual
    23  use shall be determined by multiplying the original credit by the  ratio
    24  which  the  months  of  qualified use bear to the total number of months
    25  over which the taxpayer chooses to deduct the property under the  inter-
    26  nal revenue code.
    27    (5) For purposes of this paragraph, property (i) which is described in
    28  subparagraph  two,  three  or  four of this paragraph, and (ii) which is
    29  subject to subparagraph eleven of paragraph (a) of subdivision nine  and
    30  subparagraph  ten  of  paragraph  (b) of subdivision nine of section two
    31  hundred eight of this chapter, shall be treated  as  property  which  is
    32  depreciable  pursuant to section one hundred sixty-seven of the internal
    33  revenue code but is not subject to section one  hundred  sixty-eight  of
    34  such code.
    35    (6)  For  purposes  of  this paragraph, where a credit is allowed with
    36  respect to an air pollution control facility on the basis of  a  certif-
    37  icate  of  compliance  issued pursuant to the environmental conservation
    38  law and the certificate is revoked  pursuant  to  subdivision  three  of
    39  section  19-0309  of the environmental conservation law, such revocation
    40  shall constitute a disposal or cessation of qualified use,  unless  such
    41  facility is described in clause (A) or (C) of subparagraph (ii) of para-
    42  graph  (b)  of this subdivision. Also for purposes of this subparagraph,
    43  the use of an air pollution control  facility  or  an  industrial  waste
    44  treatment  facility for the primary purpose of salvaging materials which
    45  are usable in the manufacturing process or are marketable shall  consti-
    46  tute  a cessation of qualified use, unless such facility is described in
    47  clause (A) or (C) of subparagraph (ii) of paragraph (b) of this subdivi-
    48  sion.
    49    (7) For taxable years commencing on or after January  first,  nineteen
    50  hundred  eighty-seven,  the amount required to be added back pursuant to
    51  this paragraph shall be augmented by an amount equal to the  product  of
    52  such  amount  and  the  underpayment rate of interest (without regard to
    53  compounding), set by the commissioner of taxation and  finance  pursuant
    54  to  subsection  (e) of section one thousand ninety-six, in effect on the
    55  last day of the taxable year.

        S. 6359--D                         78                         A. 8559--D

     1    (8) If, as of the close of the taxable year, there is a  net  increase
     2  with  respect  to the taxpayer in the amount of nonqualified nonrecourse
     3  financing (within the meaning of  section  46(c)  (8)  of  the  internal
     4  revenue  code)  with  respect  to any property with respect to which the
     5  credit under this subdivision was limited based on attributable nonqual-
     6  ified  nonrecourse  financing,  then  an amount equal to the decrease in
     7  such credit which would have resulted from reducing, by  the  amount  of
     8  such  net  increase,  the  cost  or  other basis taken into account with
     9  respect to such property must be added back in such  taxable  year.  The
    10  amount  of  nonqualified  nonrecourse  financing shall not be treated as
    11  increased by reason of a transfer of  (or  agreement  to  transfer)  any
    12  evidence  of  an indebtedness if such transfer occurs (or such agreement
    13  is entered into) more than one year after the date such indebtedness was
    14  incurred.
    15    (9) (A) Where property with respect to which credit has  been  allowed
    16  under  this  subdivision is disposed of by transfer to the taxpayer in a
    17  qualified transaction, and such disposition requires, pursuant  to  this
    18  paragraph  (without  regard  to  this  subparagraph) that such credit be
    19  decreased (where the disposition occurs in the taxable year in which the
    20  property is placed in service by the transferor) or that  a  portion  of
    21  such  credit  be added back by the transferor, then clause (B) or clause
    22  (C) of this subparagraph shall apply.
    23    (B) If the taxpayer and the transferor jointly elect, at such time and
    24  in such manner as the commissioner may prescribe,  the  following  shall
    25  apply:
    26    (i)  such  portion  shall  not  be  required  to  be added back by the
    27  transferor,
    28    (ii) the amount of unused credit shall not be deducted from tax other-
    29  wise due by the transferor on any return (including an amended  return),
    30  and  shall  not  be  so  deducted as part of any audit adjustment or any
    31  other determination, and
    32    (iii) the amount of unused credit shall be treated  as  an  amount  of
    33  credit  of  the  taxpayer  under this subdivision carried forward by the
    34  taxpayer to its taxable year in which such transfer occurred, as if  the
    35  credit  allowed  to  the  transferor  with  respect to such property had
    36  originally been allowed to the taxpayer both as to amount and first date
    37  of qualified use, and as if the period of qualified use by the  transfe-
    38  ror prior to the transfer had been a period of such use by the taxpayer.
    39  Any  amount  of  credit  treated  as carried forward to the taxable year
    40  pursuant to this subparagraph shall be applied as provided in clause (H)
    41  of this subparagraph.
    42    (C) If the taxpayer and  the  transferor  do  not  make  the  election
    43  described  in clause (B) of this subparagraph, then the amount of credit
    44  required pursuant to this paragraph to be added back by  the  transferor
    45  shall  be  treated  as  an  amount  of credit of the taxpayer under this
    46  subdivision to be carried forward by the taxpayer to its taxable year in
    47  which such transfer occurred, as if the credit allowed to the transferor
    48  with respect to such property had originally been allowed to the taxpay-
    49  er both as to amount and first date of qualified  use,  and  as  if  the
    50  period of qualified use by the transferor prior to the transfer had been
    51  a  period  of  such use by the taxpayer. Any amount of credit treated as
    52  carried forward to the taxable year pursuant to this subparagraph  shall
    53  be applied as provided in clause (H) of this subparagraph.
    54    (D) The term "qualified transaction" shall mean a transaction which is
    55  a  reorganization  described  in  section  368(a)(1)(D)  of the internal
    56  revenue code, wherein  (i)  substantially  all  of  the  assets  of  the

        S. 6359--D                         79                         A. 8559--D
 
     1  transferor  necessary  to  continue the operation of a division or divi-
     2  sions of the transferor are transferred to the taxpayer in a transaction
     3  to which section 351 of such code applies, and (ii) stock or  securities
     4  of  the  taxpayer  held  by  the  transferor are distributed pursuant to
     5  section 355 of such code.
     6    (E) The term "unused credit" shall mean the amount of credit shown  as
     7  carried  forward  to the transaction year on the transferor's tax return
     8  for its taxable year immediately preceding  the  transaction  year  with
     9  respect to the property described in clause (A) of this subparagraph.
    10    (F)  The  term  "transaction year" means the taxable year in which the
    11  qualified transaction occurs.
    12    (G) Notwithstanding any other provision of law to the contrary, in the
    13  case of allowance of credit pursuant to this subparagraph to a  taxpayer
    14  the  commissioner shall have the authority to reveal to the taxpayer any
    15  information, with respect to the credit of the transferor, which is  the
    16  basis  for  the denial in whole or in part of the credit claimed by such
    17  taxpayer.
    18    (H) Where a credit is allowed to a taxpayer pursuant to this  subpara-
    19  graph,  the  taxpayer may treat the amount of such credit as an overpay-
    20  ment of tax to be credited or refunded in accordance with the provisions
    21  of section ten hundred eighty-six of this  chapter,  provided,  however,
    22  the  provisions of subsection (c) of section ten hundred eighty-eight of
    23  this chapter notwithstanding, no interest shall be  paid  thereon.  Such
    24  credit  shall  be  allowed  against the tax imposed by this article with
    25  respect to the second succeeding taxable year next following the  trans-
    26  action  year,  provided  that  not more than one-fourth of the amount of
    27  such credit may be applied by the taxpayer, whether to reduce tax other-
    28  wise due or to be treated as an overpayment to be credited or  refunded,
    29  with respect to such second succeeding taxable year and each of the next
    30  three taxable years following such second succeeding taxable year.
    31    (f)  For purposes of paragraph (d) of this subdivision, a new business
    32  shall include any corporation, except a corporation which:
    33    (1) over fifty percent of the number of shares of stock entitling  the
    34  holders  thereof  to  vote  for the election of directors or trustees is
    35  owned or controlled,  either  directly  or  indirectly,  by  a  taxpayer
    36  subject to tax under this article; section one hundred eighty-three, one
    37  hundred eighty-four or one hundred eighty-five of article nine; or arti-
    38  cle thirty-three of this chapter; or
    39    (2)  is substantially similar in operation and in ownership to a busi-
    40  ness entity (or entities) taxable, or  previously  taxable,  under  this
    41  article;  section  one  hundred  eighty-three,  one hundred eighty-four,
    42  former section one hundred eighty-five or  former  section  one  hundred
    43  eighty-six  of  article nine; article thirty-two of this chapter as such
    44  article was in effect on December thirty-first, two  thousand  fourteen;
    45  article thirty-three of this chapter; article twenty-three of this chap-
    46  ter  or  which would have been subject to tax under such article twenty-
    47  three (as such article was in effect on January first, nineteen  hundred
    48  eighty)  or the income (or losses) of which is (or was) includable under
    49  article twenty-two of this chapter whereby the  intent  and  purpose  of
    50  this  paragraph  and  paragraph  (d) of this subdivision with respect to
    51  refunding of credit to new business would be evaded; or
    52    (3) has been subject to tax under this article or former article thir-
    53  ty-two of this chapter for more than five taxable years (excluding short
    54  taxable years).
    55    2. Employment Incentive Credit (EIC). (a)(i)  Application  of  credit.
    56  Where  a  taxpayer  is  allowed  a  credit under subdivision one of this

        S. 6359--D                         80                         A. 8559--D
 
     1  section, other than at the optional  rate  applicable  to  research  and
     2  development property, the taxpayer shall be allowed a credit for each of
     3  the  two  years  next  succeeding  the taxable year for which the credit
     4  under  such  subdivision  one  is allowed with respect to such property,
     5  whether or not deductible in such taxable year or in subsequent  taxable
     6  years  pursuant  to  paragraph  (d)  of  such subdivision one. Provided,
     7  however, that the credit allowable under this subdivision for any  taxa-
     8  ble year shall be allowed only if the average number of employees during
     9  such  taxable  year  is  at least one hundred one percent of the average
    10  number of employees during the employment base year. The employment base
    11  year shall be the taxable year immediately preceding  the  taxable  year
    12  for  which  the credit under such subdivision one is allowed except that
    13  if the taxpayer was not subject to tax and did not have a  taxable  year
    14  immediately  preceding  the taxable year for which the credit under such
    15  subdivision one of this section is allowed,  the  employment  base  year
    16  shall be the taxable year in which the credit under such subdivision one
    17  is allowed.
    18    (ii)  Amount  of  credit.  The amount of the credit allowed under this
    19  subdivision shall be as set forth in the following table:
    20  Average number of employees during the      Credit allowed under this
    21  taxable year expressed as a percentage      subdivision expressed as a
    22  of average employees in employment          percentage of the applicable
    23  base years                                  investment credit basis
    24  Less than 102%                              1.5%
    25  At least 102% and less than 103%            2%
    26  At least 103%                               2.5%
    27    (b) Average number of employees. The average number of employees in  a
    28  taxable  year  shall be computed by ascertaining the number of employees
    29  within the state, except general executive  officers,  employed  by  the
    30  taxpayer  on  the  thirty-first day of March, the thirtieth day of June,
    31  the thirtieth day of September and the thirty-first day of  December  in
    32  the taxable year, by adding together the number of employees ascertained
    33  on  each of such dates and dividing the sum so obtained by the number of
    34  such above mentioned dates occurring within the taxable  year.  However,
    35  with respect to the employment base year, there shall be excluded there-
    36  from  any  employee  with  respect  to  whom a credit provided for under
    37  subdivision six of this section is claimed, for the taxable year,  based
    38  on  employment within a zone equivalent area designated as such pursuant
    39  to article eighteen-B of the general municipal law.
    40    (c) Carryover. In no event shall the credit  herein  provided  for  be
    41  allowed  in an amount which will reduce the tax payable to less than the
    42  fixed dollar minimum amount prescribed in paragraph (d)  of  subdivision
    43  one  of  section two hundred ten of this article. However, if the amount
    44  of credit allowable under this subdivision for any taxable year  reduces
    45  the  tax  to  such amount or if the taxpayer otherwise pays tax based on
    46  the fixed dollar minimum amount, any amount of credit not deductible  in
    47  such taxable year may be carried over to the fifteen taxable years imme-
    48  diately following such taxable year and may be deducted from the taxpay-
    49  er's tax for such year or years.
    50    3. Empire zone investment tax credit (EZ-ITC). (a) A taxpayer shall be
    51  allowed  a  credit,  to  be computed as herein provided, against the tax
    52  imposed by this article if the taxpayer has been certified  pursuant  to
    53  article eighteen-B of the general municipal law. The amount of the cred-
    54  it  shall  be  ten percent of the cost or other basis for federal income
    55  tax purposes of tangible personal property and other tangible  property,
    56  including buildings and structural components of buildings, described in

        S. 6359--D                         81                         A. 8559--D
 
     1  paragraph  (b)  of  this  subdivision, which is located within an empire
     2  zone designated as such pursuant to article eighteen-B of such law,  but
     3  only  if  the  acquisition,  construction, reconstruction or erection of
     4  such  property  occurred  or  was commenced on or after the date of such
     5  designation and prior to the expiration thereof. Provided, however, that
     6  in the case of an acquisition, construction, reconstruction or  erection
     7  which was commenced during such period and continued or completed subse-
     8  quently,  such credit shall be ten percent of the portion of the cost or
     9  other basis for federal income tax purposes attributable to such period,
    10  which portion shall be ascertained by multiplying such cost or basis  by
    11  a  fraction  the  numerator  of  which shall be the expenditures paid or
    12  incurred during such period for such purposes  and  the  denominator  of
    13  which  shall  be the total of all expenditures paid or incurred for such
    14  acquisition, construction, reconstruction or erection.
    15    (b) Qualified property. A credit shall be allowed under this  subdivi-
    16  sion with respect to tangible personal property and other tangible prop-
    17  erty, including buildings and structural components of buildings, which
    18    (i) are depreciable pursuant to section one hundred sixty-seven of the
    19  internal revenue code,
    20    (ii) have a useful life of four years or more,
    21    (iii)  are  acquired  by  purchase  as  defined in section one hundred
    22  seventy-nine (d) of the internal revenue code,
    23    (iv) have a situs in an empire zone designated  as  such  pursuant  to
    24  article eighteen-B of the general municipal law, and
    25    (v)  are  (A)  principally  used  by the taxpayer in the production of
    26  goods  by  manufacturing,  processing,  assembling,  refining,   mining,
    27  extracting,  farming,  agriculture, horticulture, floriculture, viticul-
    28  ture or commercial fishing,
    29    (B) industrial waste treatment facilities  or  air  pollution  control
    30  facilities used in the taxpayer's trade or business,
    31    (C) research and development property,
    32    (D) principally used in the ordinary course of the taxpayer's trade or
    33  business  as  a broker or dealer in connection with the purchase or sale
    34  (which shall include but not be limited to the issuance, entering  into,
    35  assumption,  offset,  assignment,  termination,  or transfer) of stocks,
    36  bonds or other securities as defined in section  four  hundred  seventy-
    37  five  (c)(2)  of the Internal Revenue Code, or of commodities as defined
    38  in section four hundred seventy-five (e) of the Internal Revenue Code,
    39    (E) principally used in the ordinary course of the taxpayer's trade or
    40  business of providing  investment  advisory  services  for  a  regulated
    41  investment  company as defined in section eight hundred fifty-one of the
    42  Internal Revenue Code, or lending, loan arrangement, or loan origination
    43  services to customers in connection with the  purchase  or  sale  (which
    44  shall include but not be limited to the issuance, entering into, assump-
    45  tion,  offset,  assignment,  termination  or  transfer) of securities as
    46  defined in section four hundred  seventy-five  (c)(2)  of  the  Internal
    47  Revenue Code,
    48    (E-1)  principally used in the ordinary course of the taxpayer's trade
    49  or business of providing investment advisory services or the service  of
    50  managing investment portfolios to achieve specific investment objectives
    51  for  accounts  over one million dollars of accredited investors (as that
    52  term is defined in rule 501 of regulation D of  the  Securities  Act  of
    53  1933), if the taxpayer satisfies the following criteria:
    54    (I)  the taxpayer is a regulated broker or dealer or an affiliate of a
    55  regulated broker or dealer,

        S. 6359--D                         82                         A. 8559--D
 
     1    (II) the taxpayer is registered as an investment adviser under section
     2  two hundred three of the Investment Advisers Act of  1940,  as  amended,
     3  and
     4    (III)  at  least  one client of the taxpayer is a regulated investment
     5  company as defined in section eight hundred fifty-one  of  the  internal
     6  revenue code that has assets of one hundred million dollars, or
     7    (F) principally used in the ordinary course of the taxpayer's business
     8  as  an  exchange registered as a national securities exchange within the
     9  meaning of sections 3(a)(1) and 6(a) of the Securities Exchange  Act  of
    10  1934  or a board of trade as defined in subdivision one of paragraph (a)
    11  of section fourteen hundred ten of the not-for-profit corporation law or
    12  as an entity that is wholly owned by one or more such  national  securi-
    13  ties  exchanges or boards or trade and that provides automation or tech-
    14  nical services thereto.
    15    (vi) For purposes of clauses (D), (E), (E-1) and (F)  of  subparagraph
    16  (v)  of this paragraph, property purchased by a taxpayer affiliated with
    17  a regulated broker,  dealer,  registered  investment  adviser,  national
    18  securities  exchange  or  board  of trade is allowed a credit under this
    19  subdivision if the property is used by its affiliated regulated  broker,
    20  dealer, registered investment adviser or national securities exchange or
    21  board  of  trade  in  accordance  with this subdivision. For purposes of
    22  determining if the property is principally used in qualifying uses,  the
    23  uses by the taxpayer described in clauses (D), (E) and (E-1) of subpara-
    24  graph  (v) of this paragraph may be aggregated. In addition, the uses by
    25  the taxpayer, its affiliated regulated  broker,  dealer  and  registered
    26  investment  adviser  under  any  of  those  clauses  may  be aggregated.
    27  Provided, however, a taxpayer shall not be allowed the  credit  provided
    28  by clauses (D), (E), (E-1) and (F) of subparagraph (v) of this paragraph
    29  unless
    30    (I) eighty percent or more of the employees performing the administra-
    31  tive  and  support functions resulting from or related to the qualifying
    32  uses of such equipment are located in this state, or
    33    (II) the average number of employees that perform  the  administrative
    34  and  support  functions resulting from or related to the qualifying uses
    35  of such equipment and are located in this state during the taxable  year
    36  for  which the credit is claimed is equal to or greater than ninety-five
    37  percent of the average number of employees that perform these  functions
    38  and  are  located in this state during the thirty-six months immediately
    39  preceding the year for which the credit is claimed, or
    40    (III) the number of employees located in this state during the taxable
    41  year for which the credit is claimed is equal to or greater than  ninety
    42  percent  of  the  number  of employees located in this state on December
    43  thirty-first, nineteen hundred ninety-eight or, if the taxpayer was  not
    44  a  calendar year taxpayer in nineteen hundred ninety-eight, the last day
    45  of its first taxable year ending after December  thirty-first,  nineteen
    46  hundred  ninety-eight.  If  the  taxpayer becomes subject to tax in this
    47  state after the taxable year beginning in nineteen hundred ninety-eight,
    48  then the taxpayer  is  not  required  to  satisfy  the  employment  test
    49  provided  in  the  preceding sentence of this subparagraph for its first
    50  taxable year.
    51    (vii) For the purposes of clause (III) of subparagraph  (vi)  of  this
    52  paragraph  the  employment test will be based on the number of employees
    53  located in this state on the last day of  the  first  taxable  year  the
    54  taxpayer  is  subject  to tax in this state. If the uses of the property
    55  must be aggregated to determine whether the property is principally used
    56  in qualifying uses, then either each affiliate using the  property  must

        S. 6359--D                         83                         A. 8559--D

     1  satisfy  this  employment test or this employment test must be satisfied
     2  through the aggregation of the employees of the taxpayer, its affiliated
     3  regulated broker, dealer, and registered investment  adviser  using  the
     4  property.
     5    (viii) For the purpose of this subdivision, the term "goods" shall not
     6  include electricity.
     7    (ix)  For purposes of this subdivision, "manufacturing" shall mean the
     8  process of working raw materials into wares suitable for  use  or  which
     9  gives  new  shapes,  new  quality  or  new  combinations to matter which
    10  already has gone through some artificial process by the use  of  machin-
    11  ery, tools, appliances and other similar equipment. Property used in the
    12  production of goods shall include machinery, equipment or other tangible
    13  property  which  is  principally used in the repair and service of other
    14  machinery, equipment or other tangible property used principally in  the
    15  production  of  goods  and  shall  include  all  facilities  used in the
    16  production operation, including  storage  of  material  to  be  used  in
    17  production  and  of the products that are produced. For purposes of this
    18  subdivision, the terms "research and development property",  "industrial
    19  waste  treatment  facilities",  and  "air  pollution control facilities"
    20  shall have the meanings ascribed thereto by clauses (B),  (C)  and  (D),
    21  respectively,  of  subparagraph (iv) of paragraph (b) of subdivision one
    22  of this section, and the provisions of subparagraph (v)  of  such  para-
    23  graph (b) shall apply.
    24    (c)  Nonqualified  property.  A taxpayer shall not be allowed a credit
    25  under this subdivision with respect to any  tangible  personal  property
    26  and  other  tangible property, including buildings and structural compo-
    27  nents of buildings, which it leases to any other person  or  corporation
    28  except  where  a  taxpayer  leases  property  to an affiliated regulated
    29  broker,  dealer,  registered  investment  adviser,  national  securities
    30  exchange  or  board  of trade or other entity described in clause (F) of
    31  subparagraph (v) of paragraph (b) of this  subdivision  that  uses  such
    32  property  in  accordance  with clause (D), (E), (E-1) or (F) of subpara-
    33  graph (v) of paragraph (b) of this  subdivision.  For  purposes  of  the
    34  preceding  sentence, any contract or agreement to lease or rent or for a
    35  license to use such property shall be considered  a  lease.    Provided,
    36  however,  in  determining  whether  a taxpayer shall be allowed a credit
    37  under this subdivision with respect to such property, any election  made
    38  with  respect  to  such property pursuant to the provisions of paragraph
    39  eight of subsection (f) of section one hundred sixty-eight of the inter-
    40  nal revenue code, as such paragraph was in effect for agreements entered
    41  into prior to January first,  nineteen  hundred  eighty-four,  shall  be
    42  disregarded.
    43    (d) Carryover. The credit allowed under this subdivision for any taxa-
    44  ble  year  shall  not  reduce the tax due for such year to less than the
    45  fixed dollar minimum amount prescribed in paragraph (d)  of  subdivision
    46  one  of section two hundred ten of this article. Provided, however, that
    47  if the amount of credit allowed under this subdivision for  any  taxable
    48  year  reduces  the  tax to such amount or if the taxpayer otherwise pays
    49  tax based on the fixed dollar minimum amount, any amount of  credit  not
    50  deductible  in  such  taxable  year may be carried over to the following
    51  year or years and may be deducted from the taxpayer's tax for such  year
    52  or  years.  In lieu of such carryover, any such taxpayer which qualifies
    53  as a new business under paragraph (f) of subdivision one of this section
    54  may elect, on its report for its taxable year with respect to which such
    55  credit is allowed, to treat fifty percent of the amount of  such  carry-
    56  over  as  an overpayment of tax to be credited or refunded in accordance

        S. 6359--D                         84                         A. 8559--D
 
     1  with the provisions of section one thousand eighty-six of this  chapter.
     2  In  addition, any taxpayer which is approved as the owner of a qualified
     3  investment project or a significant capital investment project  pursuant
     4  to  subdivision  (w)  of  section nine hundred fifty-nine of the general
     5  municipal law, on its report for its taxable year with respect to  which
     6  such  credit  is  allowed, in lieu of such carryover, may elect to treat
     7  fifty percent of the amount of such carryover which is  attributable  to
     8  the  credit allowed under this subdivision for property which is part of
     9  such project as an overpayment of tax to  be  credited  or  refunded  in
    10  accordance  with  the  provisions  of section one thousand eighty-six of
    11  this chapter. Provided, however, such owner shall be allowed such refund
    12  for a maximum of ten  taxable  years  with  respect  to  such  qualified
    13  investment  project  and  each  significant  capital investment project,
    14  starting with the first taxable year in which property  comprising  such
    15  project is placed in service. Provided, further, however, the provisions
    16  of  subsection  (c) of section one thousand eighty-eight of this chapter
    17  notwithstanding, no interest shall be paid thereon.
    18    (d-1) Any carryover of a credit from prior taxable years will  not  be
    19  allowed  if  an empire zone retention certificate is not issued pursuant
    20  to subdivision (w) of section nine hundred  fifty-nine  of  the  general
    21  municipal  law  to  the empire zone enterprise which is the basis of the
    22  credit.
    23    (e) At the option of the taxpayer, the taxpayer may  choose  to  claim
    24  the  credit  described in paragraph (a) of this subdivision for property
    25  which also qualifies for the credit provided under  subdivision  one  of
    26  this section. A taxpayer shall not be allowed a credit under this subdi-
    27  vision  with  respect to any property described in paragraph (a) of this
    28  subdivision if a credit is taken pursuant to  subdivision  one  of  this
    29  section.
    30    (f)  Recapture.  (i)  With  respect  to  property which is depreciable
    31  pursuant to section one hundred sixty-seven of the internal revenue code
    32  but is not subject to the provisions of section one hundred  sixty-eight
    33  of  such  code and which is disposed of or ceases to be in qualified use
    34  prior to the end of the taxable year in which the credit is to be taken,
    35  the amount of the credit shall be that portion of  the  credit  provided
    36  for  in  this subdivision which represents the ratio which the months of
    37  qualified use bear to the months of useful life. If  property  on  which
    38  credit  has  been  taken is disposed of or ceases to be in qualified use
    39  prior to the end of its useful life, the difference between  the  credit
    40  taken  and  the  credit allowed for actual use must be added back in the
    41  year of disposition. Provided, however, if such property is disposed  of
    42  or  ceases to be in qualified use after it has been in qualified use for
    43  more than twelve consecutive years, it shall not  be  necessary  to  add
    44  back  the  credit as provided in this subparagraph. The amount of credit
    45  allowed for actual use shall be determined by multiplying  the  original
    46  credit by the ratio which the months of qualified use bear to the months
    47  of  useful life. For purposes of this subparagraph, useful life of prop-
    48  erty shall be the same as the taxpayer uses  for  depreciation  purposes
    49  when computing his federal income tax liability.
    50    (ii)  Except  with respect to that property to which subparagraph (iv)
    51  of this paragraph applies,  with  respect  to  three-year  property,  as
    52  defined  in  subsection  (e)  of  section one hundred sixty-eight of the
    53  internal revenue code, which is disposed of or ceases to be in qualified
    54  use prior to the end of the taxable year in which the credit  is  to  be
    55  taken,  the  amount  of  the  credit shall be that portion of the credit
    56  provided for in this subdivision which represents the  ratio  which  the

        S. 6359--D                         85                         A. 8559--D
 
     1  months  of qualified use bear to thirty-six. If property on which credit
     2  has been taken is disposed of or ceases to be in qualified use prior  to
     3  the  end  of  thirty-six months, the difference between the credit taken
     4  and  the credit allowed for actual use must be added back in the year of
     5  disposition. The amount of credit allowed for actual use shall be deter-
     6  mined by multiplying the original credit by the ratio which  the  months
     7  of qualified use bear to thirty-six.
     8    (iii)  Except with respect to that property to which subparagraph (iv)
     9  of this paragraph applies, with  respect  to  property  subject  to  the
    10  provisions  of  section  one hundred sixty-eight of the internal revenue
    11  code other than three-year property as defined in subsection (e) of such
    12  section one hundred sixty-eight which is disposed of or ceases to be  in
    13  qualified  use  prior to the end of the taxable year in which the credit
    14  is to be taken, the amount of the credit shall be that  portion  of  the
    15  credit provided for in this subdivision which represents the ratio which
    16  the  months  of qualified use bear to sixty. If property on which credit
    17  has been taken is disposed of or ceases to be in qualified use prior  to
    18  the end of sixty months, the difference between the credit taken and the
    19  credit allowed for actual use must be added back in the year of disposi-
    20  tion. The amount of credit allowed for actual use shall be determined by
    21  multiplying  the original credit by the ratio which the months of quali-
    22  fied use bear to sixty.
    23    (iv) With respect to any property to which section one hundred  sixty-
    24  eight  of  the  internal  revenue code applies, which is a building or a
    25  structural component of a building and which is disposed of or ceases to
    26  be in qualified use prior to the end of the taxable year  in  which  the
    27  credit is to be taken, the amount of the credit shall be that portion of
    28  the  credit  provided for in this subdivision which represents the ratio
    29  which the months of qualified use bear to the  total  number  of  months
    30  over  which the taxpayer chooses to deduct the property under the inter-
    31  nal revenue code. If property on which credit has been taken is disposed
    32  of or ceases to be in qualified use prior to the end of the period  over
    33  which  the  taxpayer  chooses  to deduct the property under the internal
    34  revenue code, the difference between the credit  taken  and  the  credit
    35  allowed  for  actual  use must be added back in the year of disposition.
    36  Provided, however, if such property is disposed of or ceases  to  be  in
    37  qualified  use  after  it has been in qualified use for more than twelve
    38  consecutive years, it shall not be necessary to add back the  credit  as
    39  provided  in  this subparagraph. The amount of credit allowed for actual
    40  use shall be determined by multiplying the original credit by the  ratio
    41  which  the  months  of  qualified use bear to the total number of months
    42  over which the taxpayer chooses to deduct the property under the  inter-
    43  nal revenue code.
    44    (v) For purposes of this paragraph, disposal or cessation of qualified
    45  use  shall not be deemed to have occurred solely by reason of the termi-
    46  nation or expiration of an empire zone's designation as such.
    47    (vi)(A) For purposes of this paragraph, the decertification of a busi-
    48  ness enterprise with respect  to  an  empire  zone  shall  constitute  a
    49  disposal  or  cessation  of  qualified  use of the property on which the
    50  credit was taken which is located in the zone  to  which  the  decertif-
    51  ication applies, on the effective date of such decertification.
    52    (B)  Where a business enterprise has been decertified based on a find-
    53  ing pursuant to clause one, two, or five of subdivision (a)  of  section
    54  nine  hundred  fifty-nine  of  the  general  municipal  law,  the amount
    55  required to be added back by reason of this paragraph shall be  (I)  the
    56  amount  of  credit, with respect to the property which is disposed of or

        S. 6359--D                         86                         A. 8559--D
 
     1  ceases to be in qualified use, which was deducted  from  the  taxpayer's
     2  tax  otherwise  due  under  this  article  for  all prior taxable years,
     3  reduced (but not below zero) by (II) the credit allowed for actual  use.
     4  For  purposes of this subparagraph, the attribution to specific property
     5  of credit amounts deducted from tax shall be established  in  accordance
     6  with  the  date  of  placement in service of such property in the empire
     7  zone.
     8    (C) In no event shall the amount of the  credit  allowed  pursuant  to
     9  this  subdivision  be  rendered,  solely by reason of clause (A) of this
    10  subparagraph, less than the amount of the credit to which  the  taxpayer
    11  would otherwise be entitled under subdivision one of this section.
    12    (D)  Notwithstanding  any  other provision of this subdivision, in the
    13  case of a business enterprise which has been decertified, any amount  of
    14  credit  allowed with respect to the property of such business enterprise
    15  located in the zone  to  which  the  decertification  applies  which  is
    16  carried  over pursuant to paragraph (d) of this subdivision shall not be
    17  carried over beyond the seventh taxable year next following the  taxable
    18  year  with  respect to which the credit provided for in this subdivision
    19  was allowed.
    20    (vii) For purposes of this paragraph, where a credit is  allowed  with
    21  respect  to  an air pollution control facility on the basis of a certif-
    22  icate of compliance issued pursuant to  the  environmental  conservation
    23  law  and  the  certificate  is  revoked pursuant to subdivision three of
    24  section 19-0309 of the environmental conservation law,  such  revocation
    25  shall  constitute  a disposal or cessation of qualified use, except with
    26  respect to property contained in or comprising such  facility  which  is
    27  described  in  clause  (A), (B), or (C) of subparagraph (v) of paragraph
    28  (b) of this subdivision other than as  part  of  or  comprising  an  air
    29  pollution control facility. Also for purposes of this paragraph, the use
    30  of  an  air  pollution control facility or an industrial waste treatment
    31  facility for the primary purpose of salvaging materials which are usable
    32  in the manufacturing process or are marketable shall constitute a cessa-
    33  tion of qualified use, except with respect to property contained  in  or
    34  comprising  such  facility  which  is  described in clause (A) or (C) of
    35  subparagraph (v) of paragraph (b) of this subdivision.
    36    (viii) Except as provided in this subparagraph, this  paragraph  shall
    37  not  apply to a credit allowed by this subdivision to a taxpayer that is
    38  a partner in a  partnership  in  the  case  of  manufacturing  property;
    39  provided,  at the time such property was placed in service by such part-
    40  nership in an empire zone the basis for federal income tax purposes  for
    41  such  property  (or  a  project  that includes such property) equaled or
    42  exceeded three hundred million dollars and such partner owned its  part-
    43  nership  interest  for  at least three years from the date such property
    44  was placed in service. If such property ceases to be  in  qualified  use
    45  after  it is placed in service, this paragraph shall apply to such part-
    46  ner in the year such property ceases to be in qualifying use.
    47    (ix) If a taxpayer, which is approved by the commissioner of  economic
    48  development  as the owner of a qualified investment project or a signif-
    49  icant capital investment project pursuant to subdivision (w) of  section
    50  nine  hundred  fifty-nine  of  the  general  municipal law, fails to (A)
    51  create at least the minimum number of jobs at such project  as  required
    52  by  the  provisions  of  subdivision  (s) or (t) of section nine hundred
    53  fifty-seven and subdivision (w) of section nine  hundred  fifty-nine  of
    54  the  general  municipal  law or (B) place in service property comprising
    55  such qualified investment  project  or  significant  capital  investment
    56  project with a basis for federal income tax purposes equaling or exceed-

        S. 6359--D                         87                         A. 8559--D
 
     1  ing  the  applicable minimum required basis as provided in such subdivi-
     2  sion (s) or (t), whichever is relevant, by the last  day  of  the  fifth
     3  taxable  year  following  the  taxable  year  in which a credit is first
     4  allowed  under  this  subdivision  for the property which comprises such
     5  qualified investment project  or  such  significant  capital  investment
     6  project,  the  total amount of the credit allowed under this subdivision
     7  for all taxable years with respect to the property which comprises  such
     8  project  which has been refunded to such taxpayer shall be added back in
     9  such taxable year.
    10    (g) Notwithstanding the expiration of the empire zones  program  under
    11  article  eighteen-B  of  the  general  municipal law, a taxpayer that is
    12  certified as a qualified investment project  pursuant  to  such  article
    13  eight-B  on  the  day  immediately  preceding  the  day the empire zones
    14  program expired shall continue to be deemed certified under such article
    15  eighteen-B for purposes of this subdivision for  the  remainder  of  the
    16  taxable  year in which the expiration occurred and for the next succeed-
    17  ing nine taxable years. In addition,  the  areas  designated  as  empire
    18  zones  in  which  the  taxpayer  is  certified as a qualified investment
    19  project on the day  immediately  preceding  the  day  the  empire  zones
    20  program expired shall continue to be deemed empire zones for purposes of
    21  this  subdivision  for  the  remainder  of the taxable year in which the
    22  expiration occurred and for the next succeeding nine taxable years.
    23    (h) Notwithstanding the expiration of the empire zones  program  under
    24  article  eighteen-B  of the general municipal law and except as provided
    25  in paragraph (g) of this subdivision, a taxpayer that is certified as an
    26  empire zone business pursuant to such  article  eighteen-B  on  the  day
    27  immediately  preceding  the  day  the  empire zone program expired shall
    28  continue to be  deemed  certified  under  such  article  eighteen-B  for
    29  purposes  of  this subdivision until April first, two thousand fourteen.
    30  In addition, the areas designated as empire zones in which the  taxpayer
    31  is certified as an empire zone business on the day immediately preceding
    32  the  day  the  empire  zones program expired shall continue to be deemed
    33  empire zones for purposes of this subdivisions until  April  first,  two
    34  thousand fourteen.
    35    4.  Empire  zone employment incentive credit (EZ-EIC). (a) Application
    36  of credit. Where a taxpayer is allowed a credit under subdivision  three
    37  of  this section, the taxpayer shall be allowed a credit for each of the
    38  three years next succeeding the taxable year for which the credit  under
    39  such subdivision three is allowed, with respect to such property, wheth-
    40  er or not deductible in such taxable year or in subsequent taxable years
    41  pursuant  to  paragraph (d) of such subdivision three, of thirty percent
    42  of the credit allowable under such subdivision three; provided, however,
    43  that the credit allowable under this subdivision for  any  taxable  year
    44  shall only be allowed if the average number of employees employed by the
    45  taxpayer  in  the empire zone, designated pursuant to article eighteen-B
    46  of the general municipal law, in which such property is  located  during
    47  such  taxable  year  is  at least one hundred one percent of the average
    48  number of employees employed by the taxpayer in such empire zone, during
    49  the taxable year immediately preceding the taxable year  for  which  the
    50  credit  under  such  subdivision three is allowed and provided, further,
    51  that if the taxpayer was not subject to tax and did not have  a  taxable
    52  year  immediately  preceding the taxable year for which the credit under
    53  subdivision three of this section is allowed, the credit allowable under
    54  this subdivision for any taxable year shall be allowed  if  the  average
    55  number of employees employed in such empire zone in such taxable year is
    56  at least one hundred one percent of the average number of such employees

        S. 6359--D                         88                         A. 8559--D
 
     1  during the taxable year in which the credit under such subdivision three
     2  is allowed.
     3    (b)  Average  number  of  employees.  The  average number of employees
     4  employed in an empire zone in a taxable year shall be computed by ascer-
     5  taining the number of such employees within  such  zone  except  general
     6  executive  officers, employed by the taxpayer on the thirty-first day of
     7  March, the thirtieth day of June, the thirtieth day of September and the
     8  thirty-first day of December in the taxable year, by adding together the
     9  number of employees ascertained on each of such dates and  dividing  the
    10  sum  so  obtained  by the number of such above-mentioned dates occurring
    11  within the taxable year.
    12    (c) Carryover. In no event shall the credit  herein  provided  for  be
    13  allowed  in an amount which will reduce the tax payable to less than the
    14  fixed dollar minimum amount prescribed in paragraph (d)  of  subdivision
    15  one  of section two hundred ten of this article. Provided, however, that
    16  if the amount of credit allowable under this subdivision for any taxable
    17  year reduces the tax to such amount or if the  taxpayer  otherwise  pays
    18  tax  based  on the fixed dollar minimum amount, any amount of credit not
    19  deductible in such taxable year may be carried  over  to  the  following
    20  year  or years and may be deducted from the taxpayer's tax for such year
    21  or years. In lieu  of  such  carryover,  any  such  taxpayer,  which  is
    22  approved as the owner of a qualified investment project or a significant
    23  capital  investment  project pursuant to subdivision (v) of section nine
    24  hundred fifty-nine of the general  municipal  law,  may  elect,  on  its
    25  report  for  its  taxable  year  with  respect  to  which such credit is
    26  allowed, to treat fifty percent of the amount of such  carryover  as  an
    27  overpayment  of  tax  to  be credited or refunded in accordance with the
    28  provisions of section one thousand eighty-six of this chapter. Provided,
    29  however, in the case of such owner of a qualified investment project  or
    30  a  significant  capital  investment  project,  only fifty percent of the
    31  amount of such carryover which is attributable  to  the  credit  allowed
    32  under  this  subdivision  with respect to property which is part of such
    33  project shall be allowed to be credited or refunded and such owner shall
    34  be allowed such credit or refund only for those taxable years  in  which
    35  such  owner  would  be  allowed  a  credit  or refund of the empire zone
    36  investment tax credit pursuant to paragraph (d) of subdivision three  of
    37  this  section.  Provided, further, however, the provisions of subsection
    38  (c) of section one thousand eighty-eight of this  chapter  notwithstand-
    39  ing, no interest shall be paid thereon.
    40    (c-1)  Any  carryover of a credit from prior taxable years will not be
    41  allowed if an empire zone retention certificate is not  issued  pursuant
    42  to  subdivision  (w)  of  section nine hundred fifty-nine of the general
    43  municipal law to the empire zone enterprise which is the  basis  of  the
    44  credit.
    45    (d)  Notwithstanding  the expiration of the empire zones program under
    46  article eighteen-B of the general municipal  law,  a  taxpayer  that  is
    47  certified  as  a  qualified  investment project pursuant to such article
    48  eighteen-B on the day immediately preceding the  day  the  empire  zones
    49  program expired shall continue to be deemed certified under such article
    50  eighteen-B  for  purposes  of  this subdivision for the remainder of the
    51  taxable year in which the expiration occurred and for the next  succeed-
    52  ing  nine  taxable  years.  In  addition, the areas designated as empire
    53  zones in which the taxpayer  is  certified  as  a  qualified  investment
    54  project  on  the  day  immediately  preceding  the  day the empire zones
    55  program expired shall continue to be deemed empire zones for purposes of

        S. 6359--D                         89                         A. 8559--D
 
     1  this subdivision for the remainder of the  taxable  year  in  which  the
     2  expiration occurred and for the next succeeding nine taxable years.
     3    (e)  Notwithstanding  the expiration of the empire zones program under
     4  article eighteen-B of the general municipal law and except  as  provided
     5  in paragraph (d) of this subdivision, a taxpayer that is certified as an
     6  empire  zone  business  pursuant  to  such article eighteen-B on the day
     7  immediately preceding the day the empire  zones  program  expired  shall
     8  continue  to  be  deemed  in  the  empire zone in which the taxpayer was
     9  certified as an empire zone business on the  day  immediately  preceding
    10  the  day  the  empire  zones program expired for each of the three years
    11  next succeeding the taxable year for which the credit under  subdivision
    12  three of this section is allowed.
    13    5.  QEZE  credit  for  real property taxes. (a) Allowance of credit. A
    14  taxpayer which is a qualified empire zone enterprise shall be allowed  a
    15  credit  for  eligible real property taxes, to be computed as provided in
    16  section fifteen of this chapter, against the tax imposed by  this  arti-
    17  cle.
    18    (b)  Application  of credit. The credit allowed under this subdivision
    19  for any taxable year shall not reduce the tax due for such year to  less
    20  than  the  fixed  dollar  minimum  amount prescribed in paragraph (d) of
    21  subdivision one of section two hundred ten of this article. However,  if
    22  the amount of credit allowed under this subdivision for any taxable year
    23  reduces  the  tax  to  such amount or if the taxpayer otherwise pays tax
    24  based on the fixed dollar minimum amount, any amount of credit thus  not
    25  deductible  in  such  taxable year shall be treated as an overpayment of
    26  tax to be credited or refunded in  accordance  with  the  provisions  of
    27  section  one thousand eighty-six of this chapter. Provided, however, the
    28  provisions of subsection (c) of section  one  thousand  eighty-eight  of
    29  this chapter notwithstanding, no interest shall be paid thereon.
    30    6.  QEZE  tax  reduction  credit.  (a) Allowance of credit. A taxpayer
    31  which is a qualified empire zone enterprise shall be allowed a QEZE  tax
    32  reduction  credit, to be computed as provided in section sixteen of this
    33  chapter, against the tax imposed by this article.
    34    (b) Application of credit. The credit allowed under  this  subdivision
    35  for  any taxable year shall not reduce the tax due for such year to less
    36  than the fixed dollar minimum amount  prescribed  in  paragraph  (d)  of
    37  subdivision  one  of  section two hundred ten of this article. Provided,
    38  however, this paragraph shall not apply to a taxpayer with a zone  allo-
    39  cation factor of one hundred percent.
    40    7. Qualified emerging technology company employment credit. (a) Appli-
    41  cation  of  credit. A taxpayer shall be allowed a credit, to be computed
    42  as hereinafter provided,  against  the  tax  imposed  by  this  article,
    43  provided:
    44    (i)  the  taxpayer is a qualified emerging technology company pursuant
    45  to the provisions of section thirty-one  hundred  two-e  of  the  public
    46  authorities law; and
    47    (ii)  the  average  number  of  individuals  employed full time by the
    48  taxpayer in New York state during the  taxable  year  is  at  least  one
    49  hundred  one  percent  of  the  taxpayer's base year employment. For the
    50  purposes of this subdivision, "base year employment" means  the  average
    51  number  of  individuals  employed full-time by the taxpayer in the state
    52  during the three taxable years immediately preceding the  first  taxable
    53  year  in  which the credit is claimed. Where the taxpayer provided full-
    54  time employment within the state during only a portion  of  such  three-
    55  year  period,  then  the  first  effective  date for the company to take
    56  advantage of this credit shall be the next year following the first full

        S. 6359--D                         90                         A. 8559--D
 
     1  taxable year that the company  had  full-time  employment  in  New  York
     2  state.  For  the purposes of this paragraph the term "three years" shall
     3  be deemed to refer instead to  the  prior  year's  full-time  employment
     4  after  the  first  year  and  the average of the first eight quarters of
     5  employment after the first two taxable years in New York state.
     6    (b) Credit limitation. The credit shall be allowed only in  the  first
     7  taxable  year in which the credit is claimed and in each of the next two
     8  taxable years, provided that the conditions of  paragraph  (a)  of  this
     9  subdivision are satisfied in each taxable year.
    10    (c) Average number of individuals employed full-time. For the purposes
    11  of  this  subdivision,  average number of individuals employed full-time
    12  shall be computed by adding the number of such individuals  employed  by
    13  the  taxpayer  at  the  end  of each quarter during each taxable year or
    14  other applicable period and dividing the sum so obtained by  the  number
    15  of  such quarters occurring within such taxable year or other applicable
    16  period; provided however, except that in computing base year employment,
    17  there shall be excluded therefrom any employee with respect  to  whom  a
    18  credit provided for under subdivision six of this section is claimed for
    19  the taxable year.
    20    (d) Amount of credit. The amount of the credit shall equal the product
    21  of  one  thousand dollars times the number of individuals employed full-
    22  time by the taxpayer in the taxable year  that  are  in  excess  of  one
    23  hundred percent of the taxpayer's base year employment.
    24    (e) Carryover. The credit allowed under this subdivision for any taxa-
    25  ble  year  shall  not  reduce the tax due for such year to less than the
    26  fixed dollar minimum amount prescribed in paragraph (d)  of  subdivision
    27  one  of  section two hundred ten of this article. However, if the amount
    28  of credit allowed under this subdivision for any  taxable  year  reduces
    29  the  tax  to  such amount or if the taxpayer otherwise pays tax based on
    30  the fixed dollar minimum amount, any amount of credit thus  not  deduct-
    31  ible  in  such taxable year shall be treated as an overpayment of tax to
    32  be credited or refunded in accordance with the provisions of section one
    33  thousand eighty-six of this chapter. Provided, however,  the  provisions
    34  of  subsection  (c) of section one thousand eighty-eight of this chapter
    35  notwithstanding, no interest shall be paid thereon.
    36    8. Qualified emerging  technology  company  capital  tax  credit.  (a)
    37  Amount  of  credit. A taxpayer shall be allowed a credit against the tax
    38  imposed by this article. The amount of the credit shall be equal to  one
    39  of  the following percentages, per each qualified investment in a quali-
    40  fied emerging  technology  company  as  defined  in  section  thirty-one
    41  hundred  two-e  of  the  public authorities law, made during the taxable
    42  year, and certified by the commissioner, either:
    43    (1) ten percent of qualified investments in qualified  emerging  tech-
    44  nology  companies,  except  for  investments  made by or on behalf of an
    45  owner of the business, including, but not  limited  to,  a  stockholder,
    46  partner or sole proprietor, or any related person, as defined in subpar-
    47  agraph  (C) of paragraph three of subsection (b) of section four hundred
    48  sixty-five of the internal revenue code, and provided, however, that the
    49  taxpayer certifies to the commissioner  that  the  qualified  investment
    50  will  not  be  sold, transferred, traded, or disposed of during the four
    51  years following the year in which the credit is first claimed; or
    52    (2) twenty percent of  qualified  investments  in  qualified  emerging
    53  technology  companies, except for investments made by or on behalf of an
    54  owner of the business, including, but not  limited  to,  a  stockholder,
    55  partner or sole proprietor, or any related person, as defined in subpar-
    56  agraph  (C) of paragraph three of subsection (b) of section four hundred

        S. 6359--D                         91                         A. 8559--D
 
     1  sixty-five of the internal revenue code, and provided, however, that the
     2  taxpayer certifies to the commissioner  that  the  qualified  investment
     3  will  not  be  sold, transferred, traded, or disposed of during the nine
     4  years following the year in which the credit is first claimed.
     5    (b)  Qualified  investment.  "Qualified investment" means the contrib-
     6  ution of property to a corporation in exchange for original issue  capi-
     7  tal stock or other ownership interest, the contribution of property to a
     8  partnership  in exchange for an interest in the partnership, and similar
     9  contributions in the case of a business entity not in corporate or part-
    10  nership form in exchange for an ownership interest in such entity.   The
    11  total  amount of credit allowable to a taxpayer under this provision for
    12  all years, taken in the aggregate, shall not exceed  one  hundred  fifty
    13  thousand  dollars  in  the case of investments made pursuant to subpara-
    14  graph one of paragraph (a) of this  subdivision  and  shall  not  exceed
    15  three  hundred thousand dollars in the case of investments made pursuant
    16  to subparagraph two of paragraph (a) of this subdivision.
    17    (c) Carryover. In no event shall the  credit  and  carryover  of  such
    18  credit  allowed  under  this  subdivision  for  any taxable year, in the
    19  aggregate, reduce the tax due for such  year  to  less  than  the  fixed
    20  dollar  minimum amount prescribed in paragraph (d) of subdivision one of
    21  section two hundred ten of this chapter. However, if the amount of cred-
    22  it or carryovers of such credit, or both, allowed under this subdivision
    23  for any taxable year reduces the tax to such amount or if  the  taxpayer
    24  otherwise  pays  tax based on the fixed dollar minimum amount, or if any
    25  part of the credit or carryovers of such credit may not be deducted from
    26  the tax otherwise due by reason of the final sentence of this paragraph,
    27  any amount of credit or carryovers of such credit thus not deductible in
    28  such taxable year may be carried over to the following year or years and
    29  may be deducted from the tax for such year or years.  In  addition,  the
    30  amount  of  such  credit,  and  carryovers of such credit to the taxable
    31  year, deducted from the tax otherwise due may  not,  in  the  aggregate,
    32  exceed  fifty  percent of the tax imposed under section two hundred nine
    33  of this article computed without regard to any credit  provided  for  by
    34  this section.
    35    (d)  Recapture.  (1)  Where  a  taxpayer sells, transfers or otherwise
    36  disposes of corporate stock, a partnership interest or  other  ownership
    37  interest arising from the making of a qualified investment which was the
    38  basis, in whole or in part, for the allowance of the credit provided for
    39  under subparagraph one of paragraph (a) of this subdivision, or where an
    40  investment  which  was  the  basis for such allowance is, in whole or in
    41  part, recovered by such  taxpayer,  and  such  disposition  or  recovery
    42  occurs  during  the  taxable  year or within forty-eight months from the
    43  close of the taxable year with respect to which such credit is  allowed,
    44  the  taxpayer  shall add back, with respect to the taxable year in which
    45  the disposition or  recovery  described  above  occurred,  the  required
    46  portion of the credit originally allowed.
    47    (2)  Where a taxpayer sells, transfers or otherwise disposes of corpo-
    48  rate stock, a partnership interest or other ownership  interest  arising
    49  from  the making of a qualified investment which was the basis, in whole
    50  or in part, for the allowance of the credit provided for under  subpara-
    51  graph  two  of paragraph (a) of this subdivision, or where an investment
    52  which was the basis for such allowance is in any manner, in whole or  in
    53  part,  recovered  by  such  taxpayer,  and  such disposition or recovery
    54  occurs during the taxable year or within one hundred eight  months  from
    55  the  close  of  the  taxable  year  with respect to which such credit is
    56  allowed, the taxpayer shall add back, with respect to the  taxable  year

        S. 6359--D                         92                         A. 8559--D
 
     1  in  which  the  disposition or recovery described in subparagraph one of
     2  this paragraph occurred the required portion of  the  credit  originally
     3  allowed.
     4    (3) The required portion of the credit originally allowed shall be the
     5  product  of  (A) the portion of such credit attributable to the property
     6  disposed of and (B) the applicable percentage.
     7    (4) The applicable percentage shall be:
     8    (A) for credits allowed pursuant to subparagraph one of paragraph  (a)
     9  of this subdivision:
    10    (i)  one hundred percent, if the disposition or recovery occurs within
    11  the taxable year with respect to which the credit is allowed  or  within
    12  twelve months of the end of such taxable year,
    13    (ii)  seventy-five percent, if the disposition or recovery occurs more
    14  than twelve but not more than twenty-four months after the  end  of  the
    15  taxable year with respect to which the credit is allowed,
    16    (iii)  fifty  percent, if the disposition or recovery occurs more than
    17  twenty-four months but not more than thirty-six months after the end  of
    18  the taxable year with respect to which the credit is allowed, or
    19    (iv)  twenty-five  percent, if the disposition or recovery occurs more
    20  than thirty-six months but not more than forty-eight  months  after  the
    21  end of the taxable year with respect to which the credit is allowed; or
    22    (B)  for credits allowed pursuant to subparagraph two of paragraph (a)
    23  of this subdivision:
    24    (i) one hundred percent, if the disposition or recovery occurs  within
    25  the  taxable  year with respect to which the credit is allowed or within
    26  twelve months of the end of such taxable year,
    27    (ii) eighty percent, if the disposition or recovery occurs  more  than
    28  twelve but not more than forty-eight months after the end of the taxable
    29  year with respect to which the credit is allowed,
    30    (iii)  sixty  percent, if the disposition or recovery occurs more than
    31  forty-eight months but not more than seventy-two months after the end of
    32  the taxable year with respect to which the credit is allowed,
    33    (iv) forty percent, if the disposition or recovery  occurs  more  than
    34  seventy-two  months but not more than ninety-six months after the end of
    35  the taxable year with respect to which the credit is allowed, or
    36    (v) twenty percent, if the disposition or recovery  occurs  more  than
    37  ninety-six  months  but not more than one hundred eight months after the
    38  end of the taxable year with respect to which the credit is allowed.
    39    9. Credit for the  special  additional  mortgage  recording  tax.  (a)
    40  Application of credit. A taxpayer shall be allowed a credit, to be cred-
    41  ited against the tax imposed by this article, equal to the amount of the
    42  special  additional mortgage recording tax paid by the taxpayer pursuant
    43  to the provisions of subdivision one-a of  section  two  hundred  fifty-
    44  three of this chapter or mortgages recorded. Provided, however, no cred-
    45  it  shall be allowed with respect to a mortgage of real property princi-
    46  pally improved or to be improved by one or more structures containing in
    47  the aggregate not more than six residential dwelling units, each  dwell-
    48  ing  unit  having  its  own  separate cooking facilities, where the real
    49  property is located in one or more of the counties comprising the metro-
    50  politan commuter transportation  area.  Provided  further,  however,  no
    51  credit  shall  be  allowed  with  respect to a mortgage of real property
    52  principally improved or  to  be  improved  by  one  or  more  structures
    53  containing  in  the  aggregate  not  more  than six residential dwelling
    54  units, each dwelling unit having its own  separate  cooking  facilities,
    55  where the real property is located in the county of Erie.

        S. 6359--D                         93                         A. 8559--D
 
     1    (b)  Carryover.  In  no  event shall the credit herein provided for be
     2  allowed in an amount which will reduce the tax payable to less than  the
     3  fixed  dollar  minimum amount prescribed in paragraph (d) of subdivision
     4  one of section two hundred ten of this article. If, however, the  amount
     5  of credit allowable under this subdivision for any taxable year, includ-
     6  ing  any  credit carried over from a prior taxable year, reduces the tax
     7  to such amount or if the taxpayer otherwise pays tax based on the  fixed
     8  dollar minimum amount, any amount of credit not deductible in such taxa-
     9  ble  year  may be carried over to the following year or years and may be
    10  deducted from the taxpayer's tax for such year or years.
    11    10. Credit for servicing certain mortgages. (a) General. Every taxpay-
    12  er meeting the requirements of the state of  New  York  mortgage  agency
    13  applicable  to the servicing of mortgages acquired by such agency pursu-
    14  ant to the state of New York  mortgage  agency  act,  which  shall  have
    15  entered  into  a  contract with the state of New York mortgage agency to
    16  service mortgages acquired by such agency pursuant to the state  of  New
    17  York  mortgage  agency act, shall have credited to it annually an amount
    18  equal to two and ninety-three one hundredths per  centum  of  the  total
    19  principal and interest collected by the taxpayer during its taxable year
    20  on  each  such  mortgage  secured by a lien on real estate improved by a
    21  one-family to four-family residential structure and an amount  equal  to
    22  the  interest  collected by the taxpayer during its taxable year on each
    23  such mortgage secured by a lien on real property improved by a structure
    24  occupied as the residence of five or more families living  independently
    25  of  each  other, multiplied by a fraction the denominator of which shall
    26  be the interest rate payable on the mortgage (computed to  five  decimal
    27  places) and the numerator of which shall be .00125 in the case of such a
    28  mortgage  acquired by such agency for less than one million dollars, and
    29  .00100 in the case of such a mortgage acquired by such  agency  for  one
    30  million dollars or more. In no event shall the credit allowed under this
    31  subdivision  reduce the tax to less than the fixed dollar minimum amount
    32  prescribed in paragraph (d) of subdivision one of  section  two  hundred
    33  ten  of  this article. In computing such tax credit for the servicing of
    34  mortgages on  one-family  to  four-family  residential  structures,  the
    35  taxpayer  shall not be entitled to credit for the collection of curtail-
    36  ment or payments in discharge of any such mortgage. For the purposes  of
    37  this subdivision,
    38    (b)(i) a "curtailment" shall mean amounts paid by mortgagors
    39    (A)  in  excess  of  the  monthly  constant  due  during  the month of
    40  collection and
    41    (B) in reduction of the unpaid principal balance of the  mortgage;  in
    42  the absence of clear evidence to the contrary, amounts paid in excess of
    43  the  monthly constant due during the month of collection shall be deemed
    44  to be in reduction of the unpaid principal balance of the mortgage; and
    45    (ii) "monthly constant" shall mean the amount of principal and  inter-
    46  est which is due and payable according to the mortgage documents on each
    47  periodic payment date.
    48    11.  Agricultural  property  tax credit. (a) General. In the case of a
    49  taxpayer which is an eligible farmer or an eligible farmer who has  paid
    50  taxes  pursuant  to a land contract, there shall be allowed a credit for
    51  the allowable school district property taxes. The term "allowable school
    52  district property taxes" means the school district property  taxes  paid
    53  during  the  taxable year on qualified agricultural property, subject to
    54  the acreage limitation provided in paragraph (e) of this subdivision and
    55  the income limitation provided in paragraph (f) of this subdivision.

        S. 6359--D                         94                         A. 8559--D
 
     1    (b) Eligible farmer.  For  purposes  of  this  subdivision,  the  term
     2  "eligible farmer" means a taxpayer whose federal gross income from farm-
     3  ing  for the taxable year is at least two-thirds of excess federal gross
     4  income. The term "eligible farmer" also  includes  a  corporation  other
     5  than  the  taxpayer  of record for qualified agricultural land which has
     6  paid the school district property taxes  on  such  land  pursuant  to  a
     7  contract for the future purchase of such land; provided that such corpo-
     8  ration  has  a  federal  gross  income from farming for the taxable year
     9  which is at  least  two-thirds  of  excess  federal  gross  income;  and
    10  provided further that, in determining such income eligibility, a taxpay-
    11  er  may,  for  any  taxable  year, use the average of such federal gross
    12  income from farming for that taxable year and such income  for  the  two
    13  consecutive  taxable  years  immediately  preceding  such  taxable year.
    14  Excess federal gross income means the amount  of  federal  gross  income
    15  from  all  sources  for  the  taxable  year in excess of thirty thousand
    16  dollars. For the purposes of this paragraph, payments from  the  state's
    17  farmland  protection program, administered by the department of agricul-
    18  ture and markets, shall be included as federal gross income from farming
    19  for otherwise eligible farmers.
    20    (c) School district property taxes. For purposes of this  subdivision,
    21  the  term  "school  district  property  taxes" means all property taxes,
    22  special ad valorem levies and special assessments, exclusive  of  penal-
    23  ties  and interest, levied for school district purposes on the qualified
    24  agricultural property owned by the taxpayer.
    25    (d) Qualified agricultural property. For purposes of this subdivision,
    26  the term "qualified agricultural property" means land  located  in  this
    27  state  which  is used in agricultural production, and land improvements,
    28  structures and buildings (excluding buildings used  for  the  taxpayer's
    29  residential  purpose) located on such land which are used or occupied to
    30  carry out such production. Qualified agricultural property also includes
    31  land set aside or retired under a  federal  supply  management  or  soil
    32  conservation  program  or  land that at the time it becomes subject to a
    33  conservation easement met the requirements under this paragraph.
    34    (e) Acreage limitation. (i) Eligible taxes.  In  the  event  that  the
    35  qualified  agricultural  property owned by the taxpayer includes land in
    36  excess of the base acreage as provided in this paragraph, the amount  of
    37  school  district  property taxes eligible for credit under this subdivi-
    38  sion shall be that portion of the school district property  taxes  which
    39  bears  the  same  ratio to the total school district property taxes paid
    40  during the taxable year, as the acreage allowable under  this  paragraph
    41  bears to the entire acreage of such land.
    42    (ii)  Allowable  acreage. The allowable acreage is the sum of the base
    43  acreage set forth below and fifty percent of  the  incremental  acreage.
    44  The incremental acreage is the excess of the entire acreage of qualified
    45  agricultural land owned by the taxpayer over the base acreage. Except as
    46  provided  in  subparagraph  (iii) of this paragraph, the base acreage is
    47  three hundred fifty acres.
    48  The total base acreage may be  increased  by  any  acreage  enrolled  or
    49  participating during the taxable year in a federal environmental conser-
    50  vation  acreage  reserve  program pursuant to title three of the federal
    51  agriculture improvement and reform act of nineteen hundred ninety-six.
    52    (iii) Base acreage of related persons. Where the taxpayer and  one  or
    53  more  related  persons  each  own qualified agricultural property on the
    54  first day of March of any year, the base acreage under subparagraph (ii)
    55  of this paragraph shall  be  divided  equally  and  allotted  among  the
    56  taxpayer  and  such related persons, and the taxpayer's base acreage for

        S. 6359--D                         95                         A. 8559--D
 
     1  the taxable year which includes such March first shall be limited to its
     2  allotted share. Provided, however, if the taxpayer and all such  related
     3  persons consent (at such time and in such manner as the commissioner may
     4  prescribe)  to an unequal division, the taxpayer's base acreage for such
     5  taxable year shall be limited to its allotted share under  such  unequal
     6  division.
     7    (iv)  Related  persons. (A) For purposes of subparagraph (iii) of this
     8  paragraph, the term "related person" means:
     9    (I) a corporation subject to tax under this article, where the taxpay-
    10  er and the corporation are members of  the  same  controlled  group,  as
    11  defined in section 267(f) of the internal revenue code;
    12    (II)  an  individual,  partnership,  estate  or trust, where more than
    13  fifty percent in value of the  outstanding  stock  of  the  taxpayer  is
    14  owned,  directly  or indirectly, by or for such individual, partnership,
    15  estate or trust or by or for the grantor of such trust;
    16    (III) a corporation subject to tax under this article, or  a  partner-
    17  ship,  estate  or trust, if the same person owns more than fifty percent
    18  in value of the outstanding stock of the taxpayer and  more  than  fifty
    19  percent  in  value of  the outstanding stock of the corporation, or more
    20  than fifty percent of the capital or profits interest  in  the  partner-
    21  ship,  or  more  than  fifty  percent  of the beneficial interest in the
    22  estate or trust;
    23    (IV) a partnership, estate  or  trust  of  which  the  taxpayer  owns,
    24  directly  or indirectly, more than fifty percent of the capital, profits
    25  or beneficial interest.
    26    (B) In determining whether a person is a  related  person  within  the
    27  meaning of this subparagraph:
    28    (I)  stock  owned,  directly  or  indirectly, by or for a corporation,
    29  partnership, estate or trust shall be considered as being owned  propor-
    30  tionately by or for its shareholders, partners or beneficiaries;
    31    (II)  an  individual  shall  be  considered as owning the stock owned,
    32  directly or indirectly, by or for his spouse;
    33    (III) stock constructively owned by a person by reason of the applica-
    34  tion of item (I) of this clause shall, for the purpose of applying  item
    35  (I) or (II) of this clause, be treated as actually owned by such person.
    36    (f)  Income  limitation. (i) In the event that the modified entire net
    37  income of the taxpayer exceeds two hundred thousand dollars, the  allow-
    38  able school district property taxes under paragraph (a) of this subdivi-
    39  sion shall be the eligible taxes under subparagraph (i) of paragraph (e)
    40  of  this subdivision reduced by the product of the amount of such eligi-
    41  ble taxes and a percentage, such percentage to be determined  by  multi-
    42  plying  one hundred percent by a fraction, the numerator of which is the
    43  lesser of one hundred thousand dollars or the excess of  the  taxpayer's
    44  modified  entire  net  income  over two hundred thousand dollars and the
    45  denominator of which is one hundred thousand dollars.  For  purposes  of
    46  the  preceding  sentence,  the  term "eligible taxes", where the acreage
    47  limitation of paragraph (e) of this subdivision does  not  apply,  shall
    48  mean  the  total  school district property taxes paid during the taxable
    49  year.
    50    (ii) The term "modified entire net income" means the entire net income
    51  for the taxable year reduced by the amount of  principal  paid  on  farm
    52  indebtedness during the taxable year. The term "farm indebtedness" means
    53  debt incurred or refinanced which is secured by farm property, where the
    54  proceeds  of  the  debt  are  disbursed for expenditures incurred in the
    55  business of farming.

        S. 6359--D                         96                         A. 8559--D
 
     1    (g) Carryover. In no event shall the credit provided herein be allowed
     2  in an amount which will reduce the tax payable to less  than  the  fixed
     3  dollar  minimum amount prescribed in paragraph (d) of subdivision one of
     4  section two hundred ten of this article.  If,  however,  the  amount  of
     5  credit allowable under this subdivision for any taxable year reduces the
     6  tax  to  such  amount or if the taxpayer otherwise pays tax based on the
     7  fixed dollar minimum amount, any amount of credit not deductible in such
     8  taxable year may be carried over to the following year or years and  may
     9  be  deducted  from  the taxpayer's tax for such year or years. Provided,
    10  however, in lieu of carrying over the unused portion of such credit, the
    11  taxpayer may elect to treat such unused portion as an overpayment of tax
    12  to be credited or refunded in accordance with the provisions of  section
    13  one thousand eighty-six of this chapter except that no interest shall be
    14  paid on such overpayment.
    15    (h)  Nonqualified  use. (i) No credit in conversion year. In the event
    16  that qualified agricultural property is converted  by  the  taxpayer  to
    17  nonqualified  use,  credit  under  this subdivision shall not be allowed
    18  with respect to such property for the taxable year  of  conversion  (the
    19  conversion year).
    20    (ii)  Credit recapture. If the conversion by the taxpayer of qualified
    21  agricultural property to nonqualified use occurs during  the  period  of
    22  the  two  taxable  years following the taxable year for which the credit
    23  under this subdivision was first claimed with respect to such  property,
    24  the  credit  allowed with respect to such property for the taxable years
    25  prior to the conversion year must be added back in the conversion  year.
    26  Where  the property converted includes land, and where the conversion is
    27  of only a portion of such land, the credit allowed with respect  to  the
    28  property  converted shall be determined by multiplying the entire credit
    29  under this subdivision for the taxable years  prior  to  the  conversion
    30  year  by a fraction, the numerator of which is the acreage converted and
    31  the denominator of which is the entire acreage of such land owned by the
    32  taxpayer immediately prior to the conversion.
    33    (iii) Exception to recapture.  Subparagraph  (ii)  of  this  paragraph
    34  shall not apply to the conversion of property where the conversion is by
    35  reason  of  involuntary  conversion,  within  the meaning of section one
    36  thousand thirty-three of the internal revenue code.
    37    (iv) Conversion to nonqualified use. For purposes of this paragraph, a
    38  sale or other disposition of qualified agricultural property alone shall
    39  not constitute a conversion to a nonqualified use.
    40    (i) Special rules. For purposes of this subdivision, the term "federal
    41  gross  income  from  farming"  shall  include  gross  income  from   the
    42  production of maple syrup, cider, Christmas trees derived from a managed
    43  Christmas  tree  operation whether dug for transplanting or cut from the
    44  stump, or from a commercial  horse  boarding  operation  as  defined  in
    45  subdivision thirteen of section three hundred one of the agriculture and
    46  markets  law,  or  from  the sale of wine from a licensed farm winery as
    47  provided for in article six of the alcoholic beverage  control  law,  or
    48  from  the  sale  of cider from a licensed farm cidery as provided for in
    49  section fifty-eight-c of the alcoholic beverage control law.
    50    (j) Election to deem gross income of New York C corporation to  share-
    51  holders.  For  purposes  of  this subdivision, federal gross income from
    52  farming shall be zero for any taxable year of a New York  C  corporation
    53  for which the election under paragraph nine of subsection (n) of section
    54  six hundred six of this chapter is in effect.
    55    12.  Credit for employment of persons with disabilities. (a) Allowance
    56  of credit. A taxpayer shall be allowed a credit, to be computed as here-

        S. 6359--D                         97                         A. 8559--D
 
     1  inafter provided, against the tax imposed by this article, for employing
     2  within the state a qualified employee.
     3    (b) Qualified employee. A qualified employee is an individual:
     4    (1) who is certified by the education department, or in the case of an
     5  individual  who  is  blind  or visually handicapped, by the state agency
     6  responsible for provision of vocational rehabilitation services  to  the
     7  blind  and visually handicapped: (i) as a person with a disability which
     8  constitutes or results in a substantial handicap to employment and  (ii)
     9  as  having  completed  or  as receiving services under an individualized
    10  written rehabilitation plan approved  by  the  education  department  or
    11  other  state  agency responsible for providing vocational rehabilitation
    12  services to such individual; and
    13    (2) who has worked on a full-time basis for the employer who is claim-
    14  ing the credit for at least one hundred  eighty  days  or  four  hundred
    15  hours.
    16    (c)  Amount  of  credit.  Except  as provided in paragraph (d) of this
    17  subdivision, the amount of credit shall be thirty-five  percent  of  the
    18  first  six thousand dollars in qualified first-year wages earned by each
    19  qualified employee. "Qualified first-year wages"  means  wages  paid  or
    20  incurred  by the taxpayer during the taxable year to qualified employees
    21  which are attributable, with respect to any such employee,  to  services
    22  rendered  during the one-year period beginning with the day the employee
    23  begins work for the taxpayer.
    24    (d) Credit where federal work opportunity  tax  credit  applies.  With
    25  respect to any qualified employee whose qualified first-year wages under
    26  paragraph  (c)  of this subdivision also constitute qualified first-year
    27  wages for purposes of the work opportunity  tax  credit  for  vocational
    28  rehabilitation referrals under section fifty-one of the internal revenue
    29  code,  the amount of credit under  this subdivision shall be thirty-five
    30  percent of the first six thousand dollars in qualified second-year wages
    31  earned by each such employee. "Qualified second-year wages" means  wages
    32  paid  or  incurred  by the taxpayer during the taxable year to qualified
    33  employees which are attributable, with respect to any such employee,  to
    34  services  rendered  during  the one-year period beginning one year after
    35  the employee begins work for the taxpayer.
    36    (e) Carryover. The credit allowed under this subdivision for any taxa-
    37  ble year shall not reduce the tax due for such year  to  less  than  the
    38  fixed  dollar  minimum amount prescribed in paragraph (d) of subdivision
    39  one of section two hundred ten of this chapter. However, if  the  amount
    40  of  credit allowable under this subdivision for any taxable year reduces
    41  the tax to such amount or if the taxpayer otherwise pays  tax  based  on
    42  the  fixed dollar minimum amount, any amount of credit not deductible in
    43  such taxable year may be carried over to the following  year  or  years,
    44  and may be deducted from the taxpayer's tax for such year or years.
    45    (f)  Coordination  with  federal  work  opportunity  tax  credit.  The
    46  provisions of section fifty-one and fifty-two of  the  internal  revenue
    47  code,  as such sections applied on October first, nineteen hundred nine-
    48  ty-six, that apply to the federal work opportunity tax credit for  voca-
    49  tional  rehabilitation  referrals  shall  apply to the credit under this
    50  subdivision to the extent that such sections  are  consistent  with  the
    51  specific provisions of this subdivision, provided that in the event of a
    52  conflict the provisions of this subdivision shall control.
    53    13.  Credit  for  purchase  of  an automated external defibrillator. A
    54  taxpayer shall be allowed  a  credit,  to  be  computed  as  hereinafter
    55  provided,  against  the  tax  imposed by this article, for the purchase,
    56  other than for resale, of an automated external defibrillator,  as  such

        S. 6359--D                         98                         A. 8559--D
 
     1  term  is  defined  in section three thousand-b of the public health law.
     2  The amount of credit shall be the cost  to  the  taxpayer  of  automated
     3  external  defibrillators  purchased during the taxable year, such credit
     4  not  to exceed five hundred dollars with respect to each unit purchased.
     5  The credit allowed under this subdivision for any taxable year shall not
     6  reduce the tax due for such year to less than the fixed  dollar  minimum
     7  amount  prescribed  in  paragraph  (d) of subdivision one of section two
     8  hundred ten of this chapter.
     9    14. Credit for purchase of long-term care insurance.  (a)  General.  A
    10  taxpayer shall be allowed a credit against the tax imposed by this arti-
    11  cle  equal to twenty percent of the premium paid during the taxable year
    12  for long-term care insurance. In order to qualify for such  credit,  the
    13  taxpayer's premium payment must be for the purchase of or for continuing
    14  coverage under a long-term care insurance policy that qualifies for such
    15  credit  pursuant  to  section  one thousand one hundred seventeen of the
    16  insurance law.
    17    (b) Carryover. The credit allowed under this subdivision for any  year
    18  shall not reduce the tax due for such year to less than the fixed dollar
    19  minimum amount prescribed in paragraph (d) of subdivision one of section
    20  two  hundred  ten  of  this  article.  If, however, the amount of credit
    21  allowable under this subdivision for any taxable year reduces the tax to
    22  such amount or if the taxpayer otherwise pays tax  based  on  the  fixed
    23  dollar minimum amount, any amount of credit not deductible in such taxa-
    24  ble  year  may be carried over to the following year or years and may be
    25  deducted from the taxpayer's tax for such year or years.
    26    15. Low-income housing credit. (a) Allowance  of  credit.  A  taxpayer
    27  shall  be  allowed a credit against the tax imposed by this article with
    28  respect to the ownership of eligible low-income buildings,  computed  as
    29  provided in section eighteen of this chapter.
    30    (b)  Application  of  credit. The credit and carryovers of such credit
    31  allowed under this subdivision for any taxable year shall  not,  in  the
    32  aggregate,  reduce  the  tax  due  for  such year to less than the fixed
    33  dollar minimum amount prescribed in paragraph (d) of subdivision one  of
    34  section two hundred ten of this article. However, if the amount of cred-
    35  it or carryovers of such credit, or both, allowed under this subdivision
    36  for  any  taxable year reduces the tax to such amount or if the taxpayer
    37  otherwise pays tax based on the fixed dollar minimum amount, any  amount
    38  of credit or carryovers of such credit thus not deductible in such taxa-
    39  ble  year  may be carried over to the following year or years and may be
    40  deducted from the tax for such year or years.
    41    (c) Credit recapture. For provisions requiring  recapture  of  credit,
    42  see subdivision (b) of section eighteen of this chapter.
    43    16.  Green  building credit. (a) Allowance of credit. A taxpayer shall
    44  be allowed a credit, to be computed as provided in section  nineteen  of
    45  this chapter, against the tax imposed by this article.
    46    (b) Carryovers. The credit and carryovers of such credit allowed under
    47  this  subdivision  for  any  taxable  year  shall not, in the aggregate,
    48  reduce the tax due for such year to less than the fixed  dollar  minimum
    49  amount  prescribed  in  paragraph  (d) of subdivision one of section two
    50  hundred ten of this article. However, if the amount of credit or  carry-
    51  overs  of  such  credit, or both, allowed under this subdivision for any
    52  taxable year reduces the tax to such amount or if the taxpayer otherwise
    53  pays tax based on the fixed dollar minimum amount, any amount of  credit
    54  or  carryovers  of  such credit thus not deductible in such taxable year
    55  may be carried over to the following year or years and may  be  deducted
    56  from the tax for such year or years.

        S. 6359--D                         99                         A. 8559--D
 
     1    17.  Brownfield  redevelopment  tax credit. (a) Allowance of credit. A
     2  taxpayer shall be allowed a  credit,  to  be  computed  as  provided  in
     3  section  twenty-one  of  this  chapter,  against the tax imposed by this
     4  article.
     5    (b)  Application  of credit. The credit allowed under this subdivision
     6  for any taxable year shall not reduce the tax due for such year to  less
     7  than  the  fixed  dollar  minimum  amount prescribed in paragraph (d) of
     8  subdivision one of section two hundred ten of this article. However,  if
     9  the  amount  of  credits  allowed under this subdivision for any taxable
    10  year reduces the tax to such amount or if the  taxpayer  otherwise  pays
    11  tax  based on the fixed dollar minimum amount, any amount of credit thus
    12  not deductible in such taxable year shall be treated as  an  overpayment
    13  of  tax  to be credited or refunded in accordance with the provisions of
    14  section one thousand eighty-six of this chapter. Provided, however,  the
    15  provisions  of  subsection  (c)  of section one thousand eighty-eight of
    16  this chapter notwithstanding, no interest shall be paid thereon.
    17    18. Remediated brownfield credit for real property taxes for qualified
    18  sites. (a) Allowance of credit. A taxpayer which is  a  developer  of  a
    19  qualified  site  shall  be  allowed  a credit for eligible real property
    20  taxes, to be computed as provided in subdivision (b) of section  twenty-
    21  two  of  this  chapter,  against  the  tax  imposed by this article. For
    22  purposes of this subdivision, the terms "qualified site" and "developer"
    23  shall have the same meaning as set forth in paragraphs  two  and  three,
    24  respectively, of subdivision (a) of section twenty-two of this chapter.
    25    (b)  Application  of credit. The credit allowed under this subdivision
    26  for any taxable year shall not reduce the tax due for such year to  less
    27  than  the  fixed  dollar  minimum  amount prescribed in paragraph (d) of
    28  subdivision one of section two hundred ten of this article. However,  if
    29  the amount of credit allowed under this subdivision for any taxable year
    30  reduces  the  tax  to  such amount or if the taxpayer otherwise pays tax
    31  based on the fixed dollar minimum amount, any amount of credit thus  not
    32  deductible  in  such  taxable year shall be treated as an overpayment of
    33  tax to be credited or refunded in  accordance  with  the  provisions  of
    34  section  one thousand eighty-six of this chapter. Provided, however, the
    35  provisions of subsection (c) of section  one  thousand  eighty-eight  of
    36  this chapter notwithstanding, no interest shall be paid thereon.
    37    19. Environmental remediation insurance credit. (a) Allowance of cred-
    38  it.  A taxpayer shall be allowed a credit, to be computed as provided in
    39  section  twenty-three  of  this chapter, against the tax imposed by this
    40  article.
    41    (b) Application of credit. The credit allowed under  this  subdivision
    42  for  any taxable year shall not reduce the tax due for such year to less
    43  than the fixed dollar minimum amount  prescribed  in  paragraph  (d)  of
    44  subdivision  one of section two hundred ten of this article. However, if
    45  the amount of credits allowed under this  subdivision  for  any  taxable
    46  year  reduces  the  tax to such amount or if the taxpayer otherwise pays
    47  tax based on the fixed dollar minimum amount, any amount of credit  thus
    48  not  deductible  in such taxable year shall be treated as an overpayment
    49  of tax to be credited or refunded in accordance with the  provisions  of
    50  section  one thousand eighty-six of this chapter. Provided, however, the
    51  provisions of subsection (c) of section  one  thousand  eighty-eight  of
    52  this chapter notwithstanding, no interest shall be paid thereon.
    53    20.  Empire  state  film production credit. (a) Allowance of credit. A
    54  taxpayer who is eligible pursuant to section twenty-four of this chapter
    55  shall be allowed a credit to be computed as  provided  in  such  section
    56  twenty-four against the tax imposed by this article.

        S. 6359--D                         100                        A. 8559--D
 
     1    (b)  Application  of credit. The credit allowed under this subdivision
     2  for any taxable year shall not reduce the tax due for such year to  less
     3  than  the  fixed  dollar  minimum  amount prescribed in paragraph (d) of
     4  subdivision one of section two hundred ten of  this  article.  Provided,
     5  however,  that if the amount of the credit allowable under this subdivi-
     6  sion for any taxable year reduces the tax  to  such  amount  or  if  the
     7  taxpayer  otherwise  pays  tax based on the fixed dollar minimum amount,
     8  the excess shall be treated as an overpayment of tax to be  credited  or
     9  refunded  in  accordance  with  the  provisions  of section one thousand
    10  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    11  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    12  notwithstanding, no interest shall be paid thereon.
    13    21. Security training tax credit. (a) Allowance of credit. A  taxpayer
    14  shall  be  allowed a credit, to be computed as provided in section twen-
    15  ty-six of this chapter, against the tax imposed by this article.
    16    (b) Application of credit. The credit allowed under  this  subdivision
    17  for  any taxable year shall not reduce the tax due for such year to less
    18  than the fixed dollar minimum amount  prescribed  in  paragraph  (d)  of
    19  subdivision  one of section two hundred ten of this chapter. However, if
    20  the amount of credits allowed under this  subdivision  for  any  taxable
    21  year  reduces  the  tax to such amount or if the taxpayer otherwise pays
    22  tax based on the fixed dollar minimum amount, any amount of credit  thus
    23  not  deductible  in such taxable year shall be treated as an overpayment
    24  of tax to be credited or refunded in accordance with the  provisions  of
    25  section  one thousand eighty-six of this chapter. Provided, however, the
    26  provisions of subsection (c) of section  one  thousand  eighty-eight  of
    27  this chapter notwithstanding, no interest shall be paid thereon.
    28    22.  Conservation easement tax credit. (a) Credit allowed. In the case
    29  of a taxpayer who owns land that is subject to a  conservation  easement
    30  held  by a public or private conservation agency, there shall be allowed
    31  a credit for twenty-five percent of the allowable school district, coun-
    32  ty and town real property taxes on such land. In no such case shall  the
    33  credit  allowed  under  this  subdivision  in combination with any other
    34  credit for such school district, county and  town  real  property  taxes
    35  under this section exceed such taxes.
    36    (b)  Conservation easement. For purposes of this subdivision, the term
    37  "conservation easement" means a  perpetual  and  permanent  conservation
    38  easement as defined in article forty-nine of the environmental conserva-
    39  tion  law  that serves to protect open space, scenic, natural resources,
    40  biodiversity,  agricultural,  watershed  and/or  historic   preservation
    41  resources.  Any  conservation easement for which a tax credit is claimed
    42  under this subdivision shall be filed with the  department  of  environ-
    43  mental  conservation, as provided for in article forty-nine of the envi-
    44  ronmental conservation law and such conservation easement  shall  comply
    45  with  the  provisions of title three of such article, and the provisions
    46  of subdivision (h) of section 170 of the internal  revenue  code.  Dedi-
    47  cations  of  land  for  open space through the execution of conservation
    48  easements for the purpose of fulfilling density requirements  to  obtain
    49  subdivision  or  building permits shall not be considered a conservation
    50  easement under this subdivision.
    51    (c) Land. For purposes of this subdivision, the term  "land"  means  a
    52  fee simple title to real property located in this state, with or without
    53  improvements  thereon;  rights  of way; water and riparian rights; ease-
    54  ments; privileges and all other rights  or  interests  of  any  land  or
    55  description  in,  relating to or connected with real property, excluding
    56  buildings, structures, or improvements.

        S. 6359--D                         101                        A. 8559--D
 
     1    (d) Public or private conservation agency. For purposes of this subdi-
     2  vision, the term "public  or  private  conservation  agency"  means  any
     3  state,  local, or federal governmental body; or any private not-for-pro-
     4  fit charitable corporation or trust which is authorized to  do  business
     5  in  the state of New York, is organized and operated to protect land for
     6  natural resources, conservation or historic  preservation  purposes,  is
     7  exempt  from  federal  income  taxation  under  section 501(c)(3) of the
     8  internal revenue code, and has the power to acquire, hold  and  maintain
     9  land and/or interests in land for such purposes.
    10    (e) Credit limitation. The amount of the credit that may be claimed by
    11  a  taxpayer  pursuant  to this subsection shall not exceed five thousand
    12  dollars in any given year.
    13    (f) Application of the credit. The credit allowed under this  subdivi-
    14  sion  for any taxable year shall not reduce the tax due for such year to
    15  less than the fixed dollar minimum amount prescribed in paragraph (d) of
    16  subdivision one of section two hundred ten of this article. However,  if
    17  the  amount of the credit allowed under this subdivision for any taxable
    18  year reduces the tax to such amount or if the  taxpayer  otherwise  pays
    19  tax  based  on the fixed dollar minimum amount, any amount of the credit
    20  thus not deductible in such taxable year shall be treated as an overpay-
    21  ment of tax to be credited or refunded in accordance with the provisions
    22  of subsection (c) of section one thousand eighty-eight of this  chapter,
    23  except that, no interest shall be paid thereon.
    24    23.  Empire state commercial production credit. (a) Allowance of cred-
    25  it.  A taxpayer that is eligible pursuant to provisions of section twen-
    26  ty-eight of this chapter shall be allowed a credit  to  be  computed  as
    27  provided in such section against the tax imposed by this article.
    28    (b)  Application  of credit. The credit allowed under this subdivision
    29  for any taxable year shall not reduce the tax due for such year to  less
    30  than  the  fixed  dollar  minimum  amount prescribed in paragraph (d) of
    31  subdivision one of section two hundred ten of  this  article.  Provided,
    32  however,  that if the amount of the credit allowable under this subdivi-
    33  sion for any taxable year reduces the tax  to  such  amount  or  if  the
    34  taxpayer  otherwise  pays  tax based on the fixed dollar minimum amount,
    35  fifty percent of the excess shall be treated as an overpayment of tax to
    36  be credited or refunded in accordance with the provisions of section one
    37  thousand eighty-six of this chapter. Provided, however,  the  provisions
    38  of  subsection  (c) of section one thousand eighty-eight of this chapter
    39  notwithstanding, no interest shall be paid thereon. The balance of  such
    40  credit not credited or refunded in such taxable year may be carried over
    41  to  the immediately succeeding taxable year and may be deducted from the
    42  taxpayer's tax for such year. The excess, if any, of the amount of cred-
    43  it over the tax for such succeeding year shall be treated as an overpay-
    44  ment of tax to be credited or refunded in accordance with the provisions
    45  of section one thousand eighty-six of this chapter.  Provided,  however,
    46  the provisions of subsection (c) of section one thousand eighty-eight of
    47  this chapter notwithstanding, no interest shall be paid thereon.
    48    (c)  Expiration  of  credit. The credit allowed under this subdivision
    49  shall not be applicable to taxable years beginning on or after  December
    50  thirty-first, two thousand seventeen.
    51    24.  Biofuel  production  credit.  (a)  General.  A  taxpayer shall be
    52  allowed a credit, to be computed as provided in section twenty-eight  of
    53  this  chapter  added  as  part X of chapter sixty-two of the laws of two
    54  thousand six, against the  tax  imposed  by  this  article.  The  credit
    55  allowed under this subdivision for any taxable year shall not reduce the
    56  tax  due  for  such  year  to  less than the fixed dollar minimum amount

        S. 6359--D                         102                        A. 8559--D
 
     1  prescribed in paragraph (d) of subdivision one of  section  two  hundred
     2  ten  of  this  article.   However, if the amount of credit allowed under
     3  this subdivision for any taxable year reduces the tax to such amount  or
     4  if  the  taxpayer  otherwise  pays tax based on the fixed dollar minimum
     5  amount, any amount of credit thus not deductible in  such  taxable  year
     6  shall  be treated as an overpayment of tax to be credited or refunded in
     7  accordance with the provisions of section  one  thousand  eighty-six  of
     8  this  chapter.  Provided,  however,  the provisions of subsection (c) of
     9  section one thousand eighty-eight of this  chapter  notwithstanding,  no
    10  interest  shall be paid thereon. The tax credit allowed pursuant to this
    11  section shall apply to taxable years beginning before January first, two
    12  thousand twenty.
    13    25. Clean heating fuel  credit.  (a)  General.  A  taxpayer  shall  be
    14  allowed  a  credit against the tax imposed by this article. Such credit,
    15  to be computed as hereinafter provided, shall be  allowed  for  bioheat,
    16  used  for space heating or hot water production for residential purposes
    17  within this state purchased before January first,  two  thousand  seven-
    18  teen.  Such credit shall be $0.01 per percent of biodiesel per gallon of
    19  bioheat, not to exceed  twenty  cents  per  gallon,  purchased  by  such
    20  taxpayer.
    21    (b) Definitions. For purposes of this subdivision, the following defi-
    22  nitions shall apply:
    23    (i)  "Biodiesel" shall mean a fuel comprised exclusively of mono-alkyl
    24  esters of long chain fatty acids derived from vegetable oils  or  animal
    25  fats, designated B100, which meets the specifications of American Socie-
    26  ty of Testing and Materials designation D 6751.
    27    (ii)  "Bioheat"  shall mean a fuel comprised of biodiesel blended with
    28  conventional home heating oil, which meets  the  specifications  of  the
    29  American Society of Testing and Materials designation D 396 or D 975.
    30    (c)  Application  of credit. The credit allowed under this subdivision
    31  for any taxable year shall not reduce the tax due for such year to  less
    32  than  the  fixed  dollar  minimum  amount prescribed in paragraph (d) of
    33  subdivision one of section two hundred ten of this article. However,  if
    34  the amount of credit allowed under this subdivision for any taxable year
    35  reduces  the  tax  to  such amount or if the taxpayer otherwise pays tax
    36  based on the fixed dollar minimum amount, any amount of credit thus  not
    37  deductible  in  such  taxable year shall be treated as an overpayment of
    38  tax to be credited or refunded in  accordance  with  the  provisions  of
    39  section  one thousand eighty-six of this chapter. Provided, however, the
    40  provisions of subsection (c) of section  one  thousand  eighty-eight  of
    41  this chapter notwithstanding, no interest shall be paid thereon.
    42    26.  Credit for rehabilitation of historic properties. (a) Application
    43  of credit. (i) For taxable years beginning on or  after  January  first,
    44  two  thousand  ten,  and  before  January  first, two thousand twenty, a
    45  taxpayer shall be allowed a credit as hereinafter provided, against  the
    46  tax  imposed  by this article, in an amount equal to one hundred percent
    47  of the amount of credit allowed the taxpayer for the same  taxable  year
    48  with  respect  to a certified historic structure under subsection (c)(2)
    49  of section 47 of the internal revenue code with respect to  a  certified
    50  historic  structure  located  within  the  state. Provided, however, the
    51  credit shall not exceed five million dollars.
    52    (ii) For taxable years beginning on or after January first, two  thou-
    53  sand  twenty,  a  taxpayer  shall  be  allowed  a  credit as hereinafter
    54  provided, against the tax imposed by this article, in an amount equal to
    55  thirty percent of the amount of credit allowed the taxpayer for the same
    56  taxable year with  respect  to  a  certified  historic  structure  under

        S. 6359--D                         103                        A. 8559--D
 
     1  subsection  (c)(3)  of  section  47  of  the  internal revenue code with
     2  respect to a certified historic  structure  located  within  the  state.
     3  Provided,  however,  the  credit  shall  not exceed one hundred thousand
     4  dollars.
     5    (B)  If the taxpayer is a partner in a partnership or a shareholder in
     6  a New York S corporation, then the credit caps imposed  in  subparagraph
     7  (A)  of this paragraph shall be applied at the entity level, so that the
     8  aggregate credit allowed to all the partners  or  shareholders  of  each
     9  such  entity  in the taxable year does not exceed the credit cap that is
    10  applicable in that taxable year.
    11    (b) Tax credits allowed pursuant to this subdivision shall be  allowed
    12  in  the  taxable  year  that  the  qualified rehabilitation is placed in
    13  service under section 167 of the federal internal revenue code.
    14    (c) If the credit allowed the taxpayer pursuant to section 47  of  the
    15  internal  revenue  code  with  respect  to a qualified rehabilitation is
    16  recaptured pursuant to subsection (a) of  section  50  of  the  internal
    17  revenue code, a portion of the credit allowed under this subsection must
    18  be added back in the same taxable year and in the same proportion as the
    19  federal credit.
    20    (d)  The  credit  allowed  under this subdivision for any taxable year
    21  shall not reduce the tax due for such  year  to  less  than  the  amount
    22  prescribed  in  paragraph  (d) of subdivision one of section two hundred
    23  ten of this article. However, if the amount of the credit allowed  under
    24  this  subdivision for any taxable year reduces the tax to such amount or
    25  if the taxpayer otherwise pays tax based on  the  fixed  dollar  minimum
    26  amount,  any  amount  of credit thus not deductible in such taxable year
    27  shall be treated as an overpayment of tax to be recredited  or  refunded
    28  in  accordance with the provisions of section one thousand eighty-six of
    29  this chapter. Provided, however, the provisions  of  subsection  (c)  of
    30  section  one  thousand  eighty-eight of this chapter notwithstanding, no
    31  interest shall be paid thereon.
    32    (e) To be eligible for the credit allowable  under  this  subdivision,
    33  the rehabilitation project shall be in whole or in part located within a
    34  census  tract  which  is  identified  as  being  at or below one hundred
    35  percent of the state median family income as calculated  as  of  January
    36  first  of  each  year  using the most recent five year estimate from the
    37  American community survey published by the United States Census bureau.
    38    27. Credits of New York S corporations. (a)  General.  Notwithstanding
    39  the  provisions  of  this section, no carryover of credit allowable in a
    40  New York C year shall be deducted from the tax otherwise due under  this
    41  article  in  a  New York S year, and no credit allowable in a New York S
    42  year, or carryover of such  credit,  shall  be  deducted  from  the  tax
    43  imposed by this article.  However, a New York S year shall be treated as
    44  a  taxable  year for purposes of determining the number of taxable years
    45  to which a credit may be carried over under this section.  Notwithstand-
    46  ing  the first sentence of this subdivision, however, the credit for the
    47  special additional mortgage recording tax shall be allowed  as  provided
    48  in  subdivision  fifteen  of this section, and the carryover of any such
    49  credit shall be determined without  regard  to  whether  the  credit  is
    50  carried from a New York C year to a New York S year or vice-versa.
    51    29.  Hire  a  vet  credit.  (a) Allowance of credit. For taxable years
    52  beginning on or after January first, two  thousand  fifteen  and  before
    53  January  first,  two  thousand  seventeen, a taxpayer shall be allowed a
    54  credit, to be computed as provided in this subdivision, against the  tax
    55  imposed by this article, for hiring and employing, for not less than one
    56  year  and  for  not  less  than thirty-five hours each week, a qualified

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     1  veteran within the state. The taxpayer may claim the credit in the  year
     2  in  which  the qualified veteran completes one year of employment by the
     3  taxpayer. If the taxpayer claims the credit allowed under this  subdivi-
     4  sion, the taxpayer may not use the hiring of a qualified veteran that is
     5  the basis for this credit in the basis of any other credit allowed under
     6  this article.
     7    (b) Qualified veteran. A qualified veteran is an individual:
     8    (1)  who  served  on  active duty in the United States army, navy, air
     9  force, marine corps, coast guard or the reserves thereof, or who  served
    10  in  active military service of the United States as a member of the army
    11  national guard, air national guard, New York guard  or  New  York  naval
    12  militia;  who  was  released  from  active  duty by general or honorable
    13  discharge after September eleventh, two thousand one;
    14    (2) who commences employment by the qualified  taxpayer  on  or  after
    15  January  first,  two  thousand  fourteen,  and before January first, two
    16  thousand sixteen; and
    17    (3) who certifies by signed affidavit, under penalty of perjury,  that
    18  he or she has not been employed for thirty-five or more hours during any
    19  week  in  the  one hundred eighty day period immediately prior to his or
    20  her employment by the taxpayer.
    21    (c) Employer prohibition. An employer shall not discharge an  employee
    22  and  hire  a qualifying veteran solely for the purpose of qualifying for
    23  this credit.
    24    (d) Amount of credit. The amount of the credit shall be ten percent of
    25  the total amount of wages paid  to  the  qualified  veteran  during  the
    26  veteran's first full year of employment. Provided, however, that, if the
    27  qualified  veteran is a disabled veteran, as defined in paragraph (b) of
    28  subdivision one of section eighty-five of the  civil  service  law,  the
    29  amount  of  the  credit  shall be fifteen percent of the total amount of
    30  wages paid to the qualified veteran during the veteran's first full year
    31  of employment. The credit allowed pursuant to this subdivision shall not
    32  exceed in any taxable year, five  thousand  dollars  for  any  qualified
    33  veteran  and fifteen thousand dollars for any qualified veteran who is a
    34  disabled veteran.
    35    (e) Carryover. The credit allowed under this subdivision for any taxa-
    36  ble year shall not reduce the tax due for such year  to  less  than  the
    37  amount  prescribed  in  paragraph  (d) of subdivision one of section two
    38  hundred ten of this article. However, if the amount of credit  allowable
    39  under  this  subdivision  for  any  taxable year reduces the tax to such
    40  amount or if the taxpayer otherwise pays tax based on the  fixed  dollar
    41  minimum amount, any amount of credit not deductible in such taxable year
    42  may  be  carried  over  to the following three years and may be deducted
    43  from the taxpayer's tax for such year or years.
    44    30. Alternative fuels and electric vehicle recharging property credit.
    45  (a) General. A taxpayer shall be allowed a credit,  to  be  computed  as
    46  hereinafter provided, against the tax imposed by this article for alter-
    47  native  fuel  vehicle refueling and electric vehicle recharging property
    48  placed in service during the taxable year.
    49    (b) Alternative fuel vehicle refueling property and  electric  vehicle
    50  recharging  property.  The credit under this subdivision for alternative
    51  fuel vehicle refueling property and electric vehicle recharging property
    52  shall equal for each installation of property the lesser of  five  thou-
    53  sand dollars or fifty percent of the cost of any such property:
    54    (i) which is located in this state;
    55    (ii)  which constitutes alternative fuel vehicle refueling property or
    56  electric vehicle recharging property; and

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     1    (iii) for which none of the cost has been paid for from  the  proceeds
     2  of  grants, including grants from the New York state energy research and
     3  development authority or the New York power authority.
     4    (c)  Definitions.  (i)  The  term  "alternative fuel vehicle refueling
     5  property" means all of the equipment needed  to  dispense  any  fuel  at
     6  least eighty-five percent of the volume of which consists of one or more
     7  of the following: natural gas, liquified natural gas, liquified petrole-
     8  um, or hydrogen.
     9    (ii)  The term "electric vehicle recharging property" means all of the
    10  equipment needed to convey electric power  from  the  electric  grid  or
    11  another power source to an onboard vehicle energy storage system.
    12    (d) Carryovers. In no event shall the credit under this subdivision be
    13  allowed  in an amount which will reduce the tax payable to less than the
    14  amount prescribed in paragraph (d) of subdivision  one  of  section  two
    15  hundred  ten  of  this article. Provided, however, that if the amount of
    16  credit allowable under this subdivision for any taxable year reduces the
    17  tax to such amount or if the taxpayer otherwise pays tax  based  on  the
    18  fixed dollar minimum amount, any amount of credit not deductible in such
    19  taxable  year may be carried over to the following year or years and may
    20  be deducted from the taxpayer's tax for such year or years.
    21    (e) Credit recapture. If, at any time before the end of  its  recovery
    22  period,  alternative fuel vehicle refueling or electric vehicle recharg-
    23  ing property ceases to be qualified, a recapture amount  must  be  added
    24  back in the year in which such cessation occurs.
    25    (i)  Alternative  fuel  vehicle refueling property or electric vehicle
    26  recharging property ceases to be qualified if:
    27    (I) the property no longer qualifies as alternative fuel vehicle refu-
    28  eling property or electric vehicle recharging property; or
    29    (II) fifty percent or more of the use of the  property  in  a  taxable
    30  year is other than in a trade or business in this state; or
    31    (III)  the  taxpayer receiving the credit under this subdivision sells
    32  or disposes of the property and knows or has reason  to  know  that  the
    33  property  will  be used in a manner described in clauses (I) and (II) of
    34  this subparagraph.
    35    (ii) Recapture amount. The recapture amount is  equal  to  the  credit
    36  allowable under this subdivision multiplied by a fraction, the numerator
    37  of  which is the total recovery period for the property minus the number
    38  of recovery years prior to, but not including, the recapture  year,  and
    39  the denominator of which is the total recovery period.
    40    (f)  Termination. The credit allowed by paragraph (b) of this subdivi-
    41  sion shall not apply in taxable years beginning after  December  thirty-
    42  first, two thousand seventeen.
    43    31. Excelsior jobs program credit. (a) Allowance of credit. A taxpayer
    44  will  be allowed a credit, to be computed as provided in section thirty-
    45  one of this chapter, against the tax imposed by this article.
    46    (b) Application of credit. The credit allowed under  this  subdivision
    47  for  any  taxable  year may not reduce the tax due for such year to less
    48  than the amount prescribed  in  paragraph  (d)  of  subdivision  one  of
    49  section two hundred ten of this article. However, if the amount of cred-
    50  it  allowed  under this subdivision for any taxable year reduces the tax
    51  to such amount or if the taxpayer otherwise pays tax based on the  fixed
    52  dollar  minimum amount, any amount of credit thus not deductible in such
    53  taxable year will be treated as an overpayment of tax to be credited  or
    54  refunded  in  accordance  with  the  provisions  of section one thousand
    55  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of

        S. 6359--D                         106                        A. 8559--D
 
     1  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
     2  notwithstanding, no interest will be paid thereon.
     3    32. Empire state film post production credit. (a) Allowance of credit.
     4  A  taxpayer who is eligible pursuant to section thirty-one of this chap-
     5  ter shall be allowed a credit to be computed as provided in such section
     6  thirty-one against the tax imposed by this article.
     7    (b) Application of credit. The credit allowed under  this  subdivision
     8  for  any taxable year shall not reduce the tax due for such year to less
     9  than the amount prescribed  in  paragraph  (d)  of  subdivision  one  of
    10  section  two hundred ten of this article. Provided, however, that if the
    11  amount of the credit allowable under this subdivision  for  any  taxable
    12  year  reduces  the  tax to such amount or if the taxpayer otherwise pays
    13  tax based on the fixed dollar  minimum  amount,  fifty  percent  of  the
    14  excess  shall  be  treated  as  an  overpayment of tax to be credited or
    15  refunded in accordance with  the  provisions  of  section  one  thousand
    16  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    17  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    18  notwithstanding,  no interest shall be paid thereon. The balance of such
    19  credit not credited or refunded in such taxable year may be a  carryover
    20  to  the immediately succeeding taxable year and may be deducted from the
    21  taxpayer's tax for such year. The excess, if any, of the amount  of  the
    22  credit  over  the  tax  for  such succeeding year shall be treated as an
    23  overpayment of tax to be credited or refunded  in  accordance  with  the
    24  provisions of section one thousand eighty-six of this chapter. Provided,
    25  however, the provisions of subsection (c) of section one thousand eight-
    26  y-eight of this chapter notwithstanding, no interest shall be paid ther-
    27  eon.
    28    33.  Temporary  deferral nonrefundable payout credit. (a) Allowance of
    29  credit. A taxpayer shall be allowed a credit, to be computed as provided
    30  in subdivision one of section thirty-four of this chapter,  against  the
    31  tax imposed by this article.
    32    (b)  Application  of credit. The credit allowed under this subdivision
    33  for any taxable year shall not reduce the tax due for that year to  less
    34  than  the  amount  prescribed  in  paragraph  (d)  of subdivision one of
    35  section two hundred ten of this article. However, if the amount of cred-
    36  it allowed under this subdivision for any taxable year reduces  the  tax
    37  to  such amount or if the taxpayer otherwise pays tax based on the fixed
    38  dollar minimum amount, any amount of credit thus not deductible in  such
    39  taxable  year may be carried over to the following year or years and may
    40  be deducted from the taxpayer's tax for such year or years.
    41    34. Temporary deferral refundable  payout  credit.  (a)  Allowance  of
    42  credit. A taxpayer shall be allowed a credit, to be computed as provided
    43  in  subdivision  two of section thirty-four of this chapter, against the
    44  tax imposed by this article.
    45    (b) Application of credit. In no event shall  the  credit  under  this
    46  subdivision  be  allowed  in an amount which will reduce the tax to less
    47  than the amount prescribed  in  paragraph  (d)  of  subdivision  one  of
    48  section  two  hundred  ten  of  this article. If, however, the amount of
    49  credit allowed under this subdivision for any taxable year  reduces  the
    50  tax  to  such  amount or if the taxpayer otherwise pays tax based on the
    51  fixed dollar minimum amount, any amount of credit not deductible in such
    52  taxable year shall be treated as an overpayment of tax to be refunded in
    53  accordance with the provisions of section  one  thousand  eighty-six  of
    54  this chapter, provided however, that no interest shall be paid thereon.
    55    35.  Economic  transformation  and  facility redevelopment program tax
    56  credit. (a) Allowance of credit. A taxpayer shall be allowed  a  credit,

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     1  to  be  computed  as  provided  in  section thirty-five of this chapter,
     2  against the tax imposed by this article.
     3    (b)  Application  of credit. The credit allowed under this subdivision
     4  for any taxable year may not reduce the tax due for such  year  to  less
     5  than  the  amount  prescribed  in  paragraph  (d)  of subdivision one of
     6  section two hundred ten of this article. However, if the amount of cred-
     7  it allowed under this subdivision for any taxable year reduces  the  tax
     8  to  such amount or if the taxpayer otherwise pays tax based on the fixed
     9  dollar minimum amount, any amount of credit thus not deductible in  such
    10  taxable  year will be treated as an overpayment of tax to be credited or
    11  refunded in accordance with  the  provisions  of  section  one  thousand
    12  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    13  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    14  notwithstanding, no interest will be paid thereon.
    15    36.  New  York  youth  works  tax credit. (a) A taxpayer that has been
    16  certified by the commissioner of labor as a qualified employer  pursuant
    17  to  section  twenty-five-a  of  the  labor law shall be allowed a credit
    18  against the tax imposed by  this  article  equal  to  (i)  five  hundred
    19  dollars  per  month for up to six months for each qualified employee the
    20  employer employs in a full-time job or two  hundred  fifty  dollars  per
    21  month  for  up  to  six  months for each qualified employee the employer
    22  employs in a part-time job of at least twenty  hours  per  week  or  ten
    23  hours  per  week  when the qualified employee is enrolled in high school
    24  full-time, (ii) one thousand dollars for each qualified employee who  is
    25  employed for at least an additional six months by the qualified employer
    26  in  a  full-time job or five hundred dollars for each qualified employee
    27  who is employed for at least an additional six months by  the  qualified
    28  employer  in  a  part-time  job of at least twenty hours per week or ten
    29  hours per week when the qualified employee is enrolled  in  high  school
    30  full-time,  and (iii) an additional one thousand dollars for each quali-
    31  fied employee who is employed for at least an additional year after  the
    32  first  year  of the employee's employment by the qualified employer in a
    33  full-time job or five hundred dollars for each qualified employee who is
    34  employed for at least an additional year after the  first  year  of  the
    35  employee's employment by the qualified employer in a part-time job of at
    36  least  twenty  hours  per  week or ten hours per week when the qualified
    37  employee is enrolled in high school  full-time.  For  purposes  of  this
    38  subdivision,  the  term "qualified employee" shall have the same meaning
    39  as set forth in subdivision (b) of section twenty-five-a  of  the  labor
    40  law.  The  portion  of  the credit described in subparagraph (i) of this
    41  paragraph shall be allowed for the taxable year in which the  wages  are
    42  paid  to the qualified employee, and the portion of the credit described
    43  in subparagraph (ii) of this paragraph shall be allowed in  the  taxable
    44  year in which the additional six month period ends.
    45    (b) The credit allowed under this subdivision for any taxable year may
    46  not  reduce the tax due for that year to less than the amount prescribed
    47  in paragraph (d) of subdivision one of section two hundred ten  of  this
    48  article.  However, if the amount of the credit allowed under this subdi-
    49  vision for any taxable year reduces the tax to that  amount  or  if  the
    50  taxpayer  otherwise  pays  tax based on the fixed dollar minimum amount,
    51  any amount of credit not deductible in that taxable year will be treated
    52  as an overpayment of tax to be credited or refunded in  accordance  with
    53  the  provisions  of  section  one  thousand  eighty-six of this chapter.
    54  Provided, however, no interest will be paid thereon.
    55    (c) The taxpayer may be required to  attach  to  its  tax  return  its
    56  certificate  of eligibility issued by the commissioner of labor pursuant

        S. 6359--D                         108                        A. 8559--D
 
     1  to section twenty-five-a of the labor law. In no event shall the taxpay-
     2  er be allowed a credit greater than the amount of the credit  listed  on
     3  the  certificate  of  eligibility. Notwithstanding any provision of this
     4  chapter  to the contrary, the commissioner and the commissioner's desig-
     5  nees may release the names and addresses of any taxpayer  claiming  this
     6  credit  and  the amount of the credit earned by the taxpayer.  Provided,
     7  however, if a taxpayer claims this credit because it is a  member  of  a
     8  limited liability company or a partner in a partnership, only the amount
     9  of  credit  earned by the entity and not the amount of credit claimed by
    10  the taxpayer may be released.
    11    37. Empire state jobs retention program credit. (a) Allowance of cred-
    12  it.  A taxpayer will be allowed a credit, to be computed as provided  in
    13  section  thirty-six  of  this chapter, against the taxes imposed by this
    14  article.
    15    (b) Application of credit. The credit allowed under  this  subdivision
    16  for  any  taxable year will not reduce the tax due for such year to less
    17  than the amount prescribed  in  paragraph  (d)  of  subdivision  one  of
    18  section two hundred ten of this article. However, if the amount of cred-
    19  it  allowed  under this subdivision for any taxable year reduces the tax
    20  to such amount or if the taxpayer otherwise pays tax based on the  fixed
    21  dollar  minimum amount, any amount of credit thus not deductible in such
    22  taxable year will be treated as an overpayment of tax to be credited  or
    23  refunded  in  accordance  with  the  provisions  of section one thousand
    24  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    25  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    26  notwithstanding, no interest will be paid thereon.
    27    38. Credit for companies who  provide  transportation  to  individuals
    28  with  disabilities.  (a) Allowance and amount of credit. A taxpayer, who
    29  provides a taxicab service as defined  in  section  one  hundred  forty-
    30  eight-a  of  the vehicle and traffic law, or a livery service as defined
    31  in section one hundred twenty-one-e of  the  vehicle  and  traffic  law,
    32  shall  be  allowed a credit, to be computed as provided in this subdivi-
    33  sion, against the tax imposed by this article. The amount of the  credit
    34  shall be equal to the incremental cost associated with upgrading a vehi-
    35  cle so that it is accessible by individuals with disabilities as defined
    36  in paragraph (b) of this subdivision. Provided, however, that such cred-
    37  it  shall  not  exceed ten thousand dollars per vehicle. For purposes of
    38  this subdivision, purchases of new vehicles that are initially  manufac-
    39  tured  to  be accessible for individuals with disabilities and for which
    40  there is no comparable make and model that does not include  the  equip-
    41  ment  necessary  to  provide accessibility to individuals with disabili-
    42  ties, the credit shall be ten thousand dollars per vehicle.
    43    (b) Definition. The term "accessible by individuals with disabilities"
    44  shall, for the purposes of this subdivision, refer  to  a  vehicle  that
    45  complies  with federal regulations promulgated pursuant to the Americans
    46  with Disabilities Act  applicable  to  vans  under  twenty-two  feet  in
    47  length,  by the federal Department of Transportation, in Code of Federal
    48  Regulations, title 49, parts 37 and 38, and by the federal  Architecture
    49  and  Transportation  Barriers Compliance Board, in Code of Federal Regu-
    50  lations, title 36, section 1192.23, and the Federal Motor Vehicle Safety
    51  Standards, Code of Federal Regulations, title 49, part 57.
    52    (c) Application of credit. In no event shall the credit allowed  under
    53  this  subdivision  for any taxable year reduce the tax due for such year
    54  to less than the amount prescribed in paragraph (d) of  subdivision  one
    55  of  section  two  hundred ten of this article. However, if the amount of
    56  credit allowed under this subdivision for any taxable year  reduces  the

        S. 6359--D                         109                        A. 8559--D
 
     1  tax  to  such  amount or if the taxpayer otherwise pays tax based on the
     2  fixed dollar minimum amount, any amount of credit thus not deductible in
     3  such taxable year shall be carried over to the following year or  years,
     4  and may be deducted from the taxpayer's tax for such year or years.
     5    39.  Beer  production credit. A taxpayer shall be allowed a credit, to
     6  be computed as provided in section thirty-seven of this chapter, against
     7  the tax imposed by this article. In no event shall  the  credit  allowed
     8  under  this subdivision for any taxable year reduce the tax due for such
     9  year to less than the amount prescribed in paragraph (d) of  subdivision
    10  one  of  section two hundred ten of this article. However, if the amount
    11  of credit allowed under this subdivision for any  taxable  year  reduces
    12  the  tax  to  such amount or if the taxpayer otherwise pays tax based on
    13  the fixed dollar minimum amount, any amount of credit thus  not  deduct-
    14  ible  in  such taxable year shall be treated as an overpayment of tax to
    15  be credited or refunded in accordance with the provisions of section one
    16  thousand eighty-six of this chapter. Provided, however,  the  provisions
    17  of  subsection  (c) of section one thousand eighty-eight of this chapter
    18  notwithstanding, no interest shall be paid thereon.
    19    40. Minimum wage reimbursement credit.  (a)  Allowance  of  credit.  A
    20  taxpayer  shall  be  allowed  a  credit,  to  be computed as provided in
    21  section thirty-eight of this chapter, against the tax  imposed  by  this
    22  article.
    23    (b)  Application  of credit. The credit allowed under this subdivision
    24  for any taxable year may not reduce the tax due for such  year  to  less
    25  than  the  amount  prescribed  in  paragraph  (d)  of subdivision one of
    26  section two hundred ten of this article. However, if the amount of cred-
    27  it allowed under this subdivision for any taxable year reduces  the  tax
    28  to  such amount or if the taxpayer otherwise pays tax based on the fixed
    29  dollar minimum amount, any amount of credit thus not deductible in  such
    30  taxable  year will be treated as an overpayment of tax to be credited or
    31  refunded in accordance with  the  provisions  of  section  one  thousand
    32  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    33  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    34  notwithstanding, no interest will be paid thereon.
    35    41.  The  tax-free NY area tax elimination credit. A taxpayer shall be
    36  allowed a credit to be computed as provided in  section  forty  of  this
    37  chapter,  against  the  tax imposed by this article. Unless the taxpayer
    38  has a tax-free NY area allocation factor of  one  hundred  percent,  the
    39  credit  allowed  under  this  subdivision for any taxable year shall not
    40  reduce the tax due for such year to less than the amount  prescribed  in
    41  paragraph  (d)  of  subdivision  one  of section two hundred ten of this
    42  article. However, any amount of credit not deductible  in  such  taxable
    43  year  shall  be  treated  as  an  overpayment  of  tax to be credited or
    44  refunded in accordance with  the  provisions  of  section  one  thousand
    45  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    46  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    47  notwithstanding, no interest shall be paid thereon.
    48    42.  Alternative  base credit. (a) If the tax imposed on a taxpayer by
    49  subdivision one of section two hundred  nine  of  this  article  is  the
    50  amount  prescribed  in  paragraph  (b) of subdivision one of section two
    51  hundred ten of this article, the taxpayer  shall  be  allowed  a  credit
    52  against  the  tax  imposed under this article equal to the amount of tax
    53  paid to another state computed on a tax base identical to the  tax  base
    54  prescribed  in  such  paragraph (b). If the tax imposed on a taxpayer by
    55  subdivision one of section two hundred  nine  of  this  article  is  the
    56  amount  prescribed  in  paragraph  (d) of subdivision one of section two

        S. 6359--D                         110                        A. 8559--D
 
     1  hundred ten of this article, the taxpayer  shall  be  allowed  a  credit
     2  against  the  tax  imposed under this article equal to the amount of tax
     3  paid to another state computed on a tax base identical to the  tax  base
     4  prescribed in such paragraph (d).
     5    (b)  In  no  event shall the credit allowed under this subdivision for
     6  any taxable year reduce the tax due for  such  year  to  less  than  the
     7  amount  prescribed  in  paragraph  (d) of subdivision one of section two
     8  hundred ten of this article. However, if the amount  of  credit  allowed
     9  under  this  subdivision  for  any  taxable year reduces the tax to such
    10  amount or if the taxpayer otherwise pays tax based on the  fixed  dollar
    11  minimum amount, any amount of credit thus not deductible in such taxable
    12  year  shall  be  carried over to the following year or years, and may be
    13  deducted from the taxpayer's tax for such year or years.
    14    43. Real property tax credit for manufacturers. (a)  A  qualified  New
    15  York  manufacturer,  as defined in subparagraph (vi) of paragraph (a) of
    16  subdivision one of section two hundred ten  of  this  article,  will  be
    17  allowed  a  credit  equal  to twenty percent of the real property tax it
    18  paid during the taxable year for real property owned by such manufactur-
    19  er in New York which was principally used during the  taxable  year  for
    20  manufacturing  to  the  extent  not deducted in determining   entire net
    21  income. This credit will not be allowed if the real property taxes  that
    22  are the basis for this credit are included in the calculation of another
    23  credit claimed by the taxpayer.
    24    (b)  (1)  For purposes of this subdivision, the term real property tax
    25  means a charge imposed upon real property by or on behalf of  a  county,
    26  city,  town, village or school district for municipal or school district
    27  purposes, provided that the charge is  levied  for  the  general  public
    28  welfare  by  the  proper  taxing  authorities at a like rate against all
    29  property over which such authorities  have  jurisdiction,  and  provided
    30  that  where taxes are levied pursuant to article eighteen or nineteen of
    31  the real property tax law, the property must have been taxed at the rate
    32  determined for the class in which it is contained, as provided  by  such
    33  article  eighteen  or  nineteen,  whichever is applicable. The term real
    34  property tax does not include a charge for local benefits, including any
    35  portion of that charge that is properly allocated to the costs attribut-
    36  able to maintenance or interest, when (i) the property  subject  to  the
    37  charge is limited to the property that benefits from the charge, or (ii)
    38  the  amount  of  the charge is determined by the benefit to the property
    39  assessed, or (iii) the improvement for  which  the  charge  is  assessed
    40  tends to increase the property value.
    41    (2) In addition, the term real property tax includes taxes paid by the
    42  taxpayer  upon real property principally used during the taxable year by
    43  the taxpayer in manufacturing where the taxpayer leases such real  prop-
    44  erty  from  an  unrelated  third  party  if the following conditions are
    45  satisfied: (i) the tax must be paid by the taxpayer as  lessee  pursuant
    46  to  explicit  requirements  in a written lease, and (ii) the taxpayer as
    47  lessee has paid such taxes directly to  the  taxing  authority  and  has
    48  received a written receipt for payment of taxes from the taxing authori-
    49  ty.  In  the  case  of a combined group that constitutes a qualified New
    50  York manufacturer, the conditions in the preceding sentence  are  satis-
    51  fied  if one corporation in the combined group is the lessee and another
    52  corporation in the combined group  makes  the  payments  to  the  taxing
    53  authority.
    54    (3)  The term real property tax does not include a payment made by the
    55  taxpayer in connection with an agreement for  the  payment  in  lieu  of

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     1  taxes  on real property, whether such property is owned or leased by the
     2  taxpayer.
     3    (4)  The  real property taxes must be paid by the taxpayer in the year
     4  such taxes become a lien on the real property.
     5    (c) Credit recapture. Where a qualified New York  manufacturer's  real
     6  property  taxes  which  were  the  basis for the allowance of the credit
     7  provided for under this subdivision are subsequently reduced as a result
     8  of a final order in any proceeding under article seven of the real prop-
     9  erty tax law or other provision of law, the taxpayer shall add back,  in
    10  the  taxable year in which such final order is issued, the excess of (1)
    11  the amount of credit originally allowed for a taxable year over (2)  the
    12  amount  of credit determined based upon the reduced real property taxes.
    13  If such final order reduces real property taxes for more than one  year,
    14  the  taxpayer  must determine how much of such reduction is attributable
    15  to each year covered by such final order and  calculate  the  amount  of
    16  credit  which  is required by this subdivision to be recaptured for each
    17  year based on such reduction.
    18    (d) The credit allowed under this subdivision  for  any  taxable  year
    19  shall  not  reduce  the  tax  due for such year to less than twenty-five
    20  dollars.
    21    44. The tax-free NY area  excise  tax  on  telecommunication  services
    22  credit.  A  taxpayer  that  is a business or owner of a business that is
    23  located in a tax-free NY area approved pursuant to article twenty-one of
    24  the economic development law shall be allowed  a  credit  equal  to  the
    25  excise  tax on telecommunication services imposed by section one hundred
    26  eighty-six-e of this chapter and passed through to such business  during
    27  the  taxable  year  to  the  extent  not otherwise deducted in computing
    28  entire net income under this article. However, any amount of credit  not
    29  deductible  in  such  taxable year shall be treated as an overpayment of
    30  tax to be credited or refunded in  accordance  with  the  provisions  of
    31  section  one  thousand  eighty-six  of  this chapter. This credit may be
    32  claimed only where any tax imposed by such section one  hundred  eighty-
    33  six-e has been separately stated on a bill from the provider of telecom-
    34  munication  services  and  paid  by  such  business with respect to such
    35  services rendered within a tax-free NY area  during  the  taxable  year.
    36  Unless  the  taxpayer  has  a  tax-free NY area allocation factor of one
    37  hundred percent, the credit allowed under this subdivision for any taxa-
    38  ble year shall not reduce the tax due for such year  to  less  than  the
    39  amount  prescribed  in  paragraph  (d) of subdivision one of section two
    40  hundred ten of  this  chapter.  Provided,  however,  the  provisions  of
    41  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    42  notwithstanding, no interest shall be paid thereon.
    43    45. Order of credits. (a) Credits allowable under this  article  which
    44  cannot  be  carried  over and which are not refundable shall be deducted
    45  first. The credit allowable under subdivision six of this section  shall
    46  be  deducted  immediately  after  the deduction of all credits allowable
    47  under this article which cannot  be  carried  over  and  which  are  not
    48  refundable,  whether  or  not  a  portion  of such credit is refundable.
    49  Credits allowable under this article which  can  be  carried  over,  and
    50  carryovers  of  such credits, shall be deducted next after the deduction
    51  of the credit allowable under subdivision six of this section, and among
    52  such credits, those whose carryover is  of  limited  duration  shall  be
    53  deducted  before those whose carryover is of unlimited duration. Credits
    54  allowable under this article which are refundable (other than the credit
    55  allowable under subdivision six of this section) shall be deducted last.

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     1    46. Notwithstanding the repeal of the credit provisions  contained  in
     2  section two hundred ten of this article or in article thirty-two of this
     3  chapter  and  the  enactment of this section by a chapter of the laws of
     4  two thousand fourteen:
     5    (a) A taxpayer shall be allowed to utilize any carryforward amounts of
     6  credits  to which the taxpayer was entitled as of the close of the taxa-
     7  ble year beginning on or after January first, two thousand fourteen  and
     8  before  January first, two thousand fifteen, other than the carryforward
     9  amount of the minimum tax credit provided under subdivision thirteen  of
    10  section  two  hundred ten, as that subdivision was in effect on December
    11  thirty-first, two thousand fourteen.
    12    (b) A taxpayer shall be required in a taxable  year  beginning  on  or
    13  after January first, two thousand fifteen, to recapture all or a portion
    14  of  a credit allowed under a credit provision in section two hundred ten
    15  or article thirty-two of this chapter for a taxable year beginning prior
    16  to January first, two thousand fifteen  if  recapture  would  have  been
    17  required under such credit provision.
    18    §  18. The tax law is amended by adding a new section 210-C to read as
    19  follows:
    20    § 210-C. Combined reports. 1. Tax. The tax on a combined report  shall
    21  be  the  highest  of (i) the combined business income base multiplied by
    22  the tax rate specified in paragraph (a) of subdivision  one  of  section
    23  two  hundred  ten of this article; (ii) the combined capital base multi-
    24  plied by the tax rate specified in paragraph (b) of subdivision  one  of
    25  section  two  hundred ten of this article, but not exceeding the limita-
    26  tion provided for in that paragraph (b); or (iii) the fixed dollar mini-
    27  mum that is attributable to the designated agent of the combined  group.
    28  In addition, the tax on a combined report shall include the fixed dollar
    29  minimum tax specified in paragraph (d) of subdivision one of section two
    30  hundred ten of this article for each member of the combined group, other
    31  than the designated agent, that is a taxpayer.
    32    (b)  The  combined  business income base is the amount of the combined
    33  business income of the combined group that is apportioned to the  state,
    34  reduced by any net operating loss deduction for the combined group.  The
    35  combined  capital  base  is  the  amount  of the combined capital of the
    36  combined group that is apportioned to the state.
    37    2. Combined reports required. (a) Except as provided in paragraph  (c)
    38  of  this  subdivision,  any  taxpayer  (i) which owns or controls either
    39  directly or indirectly more than fifty percent of the  voting  power  of
    40  the  capital  stock of one or more other corporations, or (ii) more than
    41  fifty percent of the voting power of the capital stock of which is owned
    42  or controlled either directly or indirectly by one or more other  corpo-
    43  rations,  or  (iii)  more  than fifty percent of the voting power of the
    44  capital stock of which and the capital stock of one or more other corpo-
    45  rations, is owned or controlled, directly or  indirectly,  by  the  same
    46  interests,  and  (iv)  that  is engaged in a unitary business with those
    47  corporations (hereinafter referred to as "related corporations"),  shall
    48  make a combined report with those other corporations.
    49    (b)  A corporation required to make a combined report within the mean-
    50  ing of this section shall also include (i) a captive REIT and a  captive
    51  RIC if the captive REIT or captive RIC is not required to be included in
    52  a  combined  report  under  article thirty-three of this chapter; (ii) a
    53  combinable captive insurance company; and  (iii)  an  alien  corporation
    54  that  satisfies  the  conditions in paragraph (a) of this subdivision if
    55  (I) under any provision of the internal revenue code,  that  corporation
    56  is treated as a "domestic corporation" as defined in section seven thou-

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     1  sand  seven  hundred  one  of  the internal revenue code, or (II) it has
     2  effectively connected income for the taxable  year  pursuant  to  clause
     3  (iv) of the opening paragraph of subdivision nine of section two hundred
     4  eight of this article.
     5    (c)  A  corporation  required  or  permitted to make a combined report
     6  under this section does not include (i) a corporation  that  is  taxable
     7  under a franchise tax imposed by article nine or article thirty-three of
     8  this  chapter or would be taxable under a franchise tax imposed by arti-
     9  cle nine or thirty-three of this chapter if subject to tax; (ii) a  REIT
    10  that is not a captive REIT, and a RIC that is not a captive RIC; (iii) a
    11  New  York  S  corporation;  or  (iv) an alien corporation that under any
    12  provision of the internal revenue code is not  treated  as  a  "domestic
    13  corporation"  as  defined in section seven thousand seven hundred one of
    14  such code and has no effectively connected income for the  taxable  year
    15  pursuant  to clause (iv) of the opening paragraph of subdivision nine of
    16  section two hundred eight of this article.  If a corporation is  subject
    17  to  tax  under  this  article  solely  as a result of its ownership of a
    18  limited partner interest in a limited partnership that  is  doing  busi-
    19  ness,  employing  capital,  owning  or  leasing property, maintaining an
    20  office in this state, or deriving receipts from activity in this  state,
    21  and  none  of  the corporation's related corporations are subject to tax
    22  under this article, such corporation shall not be required or  permitted
    23  to  file  a  combined report under this section with such related corpo-
    24  rations.
    25    (d) A combined report shall be filed by the designated  agent  of  the
    26  combined group as determined under subdivision seven of this section.
    27    3.  Commonly  owned  group  election. (a) Subject to the provisions of
    28  paragraph (c) of subdivision two of this section, a taxpayer  may  elect
    29  to  treat as its combined group all corporations that meet the ownership
    30  requirements described in paragraph  (a)  of  subdivision  two  of  this
    31  section  (such corporations collectively referred to in this subdivision
    32  as the "commonly owned group"). If that election is made,  the  commonly
    33  owned group shall calculate the combined business income, combined capi-
    34  tal,  and  fixed  dollar  minimum  bases  of all members of the group in
    35  accordance with paragraph four of this subdivision, whether or not  that
    36  business income or business capital is from a single unitary business.
    37    (b)  The election under this subdivision shall be made on an original,
    38  timely filed return of the combined group. Any  corporation  entering  a
    39  commonly  owned  group  subsequent  to  the  year  of  election shall be
    40  included in the combined group and is  considered  to  have  waived  any
    41  objection to its inclusion in the combined group.
    42    (c)  The election shall be irrevocable, and binding for and applicable
    43  to the taxable year for which it is made and for the  next  six  taxable
    44  years.  The  election  will  automatically  be renewed for another seven
    45  taxable years after it has been in effect for seven taxable years unless
    46  it is  affirmatively  revoked.  The  revocation  shall  be  made  on  an
    47  original,  timely  filed  return  for  the  first taxable year after the
    48  completion of a seven year period  for  which  an  election  under  this
    49  subdivision  was  in  place. In the case of a revocation, a new election
    50  under this subdivision shall not be permitted in any of the  immediately
    51  following  three  taxable years. In determining the seven and three year
    52  periods described in this paragraph, short taxable years  shall  not  be
    53  considered or counted.
    54    4. Computation of tax bases on a combined report. (a) In computing the
    55  tax  bases  for a combined report, the combined group shall generally be
    56  treated as a single  corporation,  except  as  otherwise  provided,  and

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     1  subject to any regulations or guidance issued by the commissioner or the
     2  department.
     3    (b)(i) In computing combined business income, all intercorporate divi-
     4  dends  shall  be  eliminated,  and all other intercorporate transactions
     5  shall be deferred in a manner similar  to  the  United  States  Treasury
     6  regulations  relating to intercompany transactions under section fifteen
     7  hundred two of the internal revenue code.
     8    (ii) In computing combined capital, all intercorporate  stockholdings,
     9  intercorporate  bills,  intercorporate  notes  receivable  and  payable,
    10  intercorporate accounts receivable and payable, and other intercorporate
    11  indebtedness, shall be eliminated.
    12    (c) Qualification for  credits,  including  any  limitations  thereon,
    13  shall  be  determined separately for each of the members of the combined
    14  group, and shall not be determined on a combined group basis, except  as
    15  otherwise  provided.  However,  the credits shall be applied against the
    16  combined tax of the group. To the extent that a provision of section two
    17  hundred ten-B of this article limits a credit to the fixed dollar  mini-
    18  mum amount prescribed in paragraph (d) of subdivision one of section two
    19  hundred  ten  of this article, such fixed dollar minimum amount shall be
    20  the fixed dollar minimum amount that is attributable to  the  designated
    21  agent of the combined group.
    22    (d)(i)  A  net  operating  loss  deduction is allowed in computing the
    23  combined business income base. Such deduction may reduce the tax on  the
    24  combined  business  income base to the higher of the tax on the combined
    25  capital base or the fixed dollar minimum amount that is attributable  to
    26  the  designated  agent  of the combined group.  A combined net operating
    27  loss deduction is equal to the amount of combined net operating loss  or
    28  losses  from  one  or  more  taxable years that are carried forward to a
    29  particular income year. A combined net operating loss  is  the  combined
    30  business  loss  incurred  in a particular taxable year multiplied by the
    31  combined apportionment factor for that year determined  as  provided  in
    32  subdivision five of this section.
    33    (ii)  The combined net operating loss deduction and combined net oper-
    34  ating loss are also subject to the provisions contained in  clauses  one
    35  through  six of subparagraph (ix) of paragraph (a) of subdivision one of
    36  section two hundred ten of this article.
    37    (iii) In the case of a  corporation  that  files  a  combined  report,
    38  either  in the year the net operating loss is incurred or in the year in
    39  which a deduction is claimed on account of the loss,  the  combined  net
    40  operating  loss  deduction  is  determined as if the combined group is a
    41  single corporation and, to the extent possible and not otherwise  incon-
    42  sistent  with  this subdivision, is subject to the same limitations that
    43  would apply for federal income tax purposes under the  internal  revenue
    44  code  and  the  code  of  federal regulations as if such corporation had
    45  filed for such taxable year a consolidated  federal  income  tax  return
    46  with  the same corporations included in the combined report. If a corpo-
    47  ration files a combined report, regardless of whether it filed  a  sepa-
    48  rate  return or consolidated return for federal income tax purposes, the
    49  net operating loss and net operating loss  deduction  for  the  combined
    50  group  must  be  computed as if the corporation had filed a consolidated
    51  return for the same corporations for federal income tax purposes.
    52    (iv) In general, any net operating loss carryover from a year in which
    53  a combined report was filed shall be based on the combined net operating
    54  loss of the group of corporations filing such report. The portion of the
    55  combined loss attributable to any member of the group that files a sepa-
    56  rate report for a succeeding taxable year will be an amount bearing  the

        S. 6359--D                         115                        A. 8559--D
 
     1  same  relation  to  the  combined loss as the net operating loss of such
     2  corporation bears to the total net operating loss of all members of  the
     3  group  having such losses to the extent that they are taken into account
     4  in computing the combined net operating loss.
     5    (d-1)  A  net  operating  loss  conversion  subtraction  is allowed in
     6  computing the combined business income base, as provided in subparagraph
     7  (viii) of paragraph (a) of subdivision one of section two hundred ten of
     8  this article. Such subtraction may reduce the tax on the combined  busi-
     9  ness  income  base to the higher of the tax on the combined capital base
    10  or the fixed dollar minimum amount that is attributable  to  the  desig-
    11  nated agent of the combined group.
    12    (e)  Any  election  made pursuant to paragraph (b) of subdivision six,
    13  and paragraphs (b) and (c) of subdivision six-a of section  two  hundred
    14  eight of this article shall apply to all members of the combined group.
    15    (f)(i)  In  the  case  of a captive REIT or captive RIC required under
    16  this section to be included in a  combined  report,  entire  net  income
    17  shall  be  computed as required under subdivision five (in the case of a
    18  captive REIT) or subdivision seven (in the case of  a  captive  RIC)  of
    19  section  two  hundred nine of this article. However, the deduction under
    20  the internal revenue code for dividends paid  by  the  captive  REIT  or
    21  captive  RIC  to  any  member  of the affiliated group that includes the
    22  corporation that directly or indirectly owns over fifty percent  of  the
    23  voting  stock  of  the captive REIT or captive RIC shall not be allowed.
    24  For purposes of this subparagraph, the  term  "affiliated  group"  means
    25  "affiliated  group"  as  defined  in section fifteen hundred four of the
    26  internal revenue code, but without regard to the exceptions provided for
    27  in subsection (b) of that section.
    28    (ii) In the case of a combinable captive  insurance  company  required
    29  under  this  section  to  be  included  in a combined report, entire net
    30  income shall be computed as required by subdivision nine of section  two
    31  hundred eight of this article.
    32    (g) If more than one member of a combined group is eligible for any of
    33  the  modifications  described in paragraphs (r), (s) and (t) of subdivi-
    34  sion nine of section two hundred eight of this article, all such members
    35  must utilize the same modification.
    36    5. Apportionment on a combined report. (a) In determining  the  appor-
    37  tionment  factor  for  a  combined report, the receipts, net income, net
    38  gains and other items of all members of the combined group,  whether  or
    39  not  they  are  a  taxpayer,  are  included and intercorporate receipts,
    40  income and gains are eliminated. Receipts, net  income,  net  gains  and
    41  other  items  are  sourced, and the amounts allowed in the apportionment
    42  factor are determined, as provided in section two hundred ten-A of  this
    43  article.
    44    (b)  An  election  made  to apportion income and gains from qualifying
    45  financial instruments pursuant to subparagraph one of paragraph  (a)  of
    46  subdivision  five  of  section  two  hundred ten-A of this article shall
    47  apply to all members of the combined group.
    48    6. Liability of combined group members. Every member of  the  combined
    49  group  that  is  subject  to tax under this article shall be jointly and
    50  severally liable for the tax due pursuant to a combined report.
    51    7. Designated agent. Each combined group  shall  have  one  designated
    52  agent,  which  shall  be  a taxpayer. The designated agent is the parent
    53  corporation of the combined group. If there is  no  such  parent  corpo-
    54  ration, or the parent corporation is not a taxpayer, then another member
    55  of  the combined group that is a taxpayer may be appointed as the desig-

        S. 6359--D                         116                        A. 8559--D
 
     1  nated agent. Only the designated agent may act on behalf of the  members
     2  of the combined group for matters relating to the combined report.
     3    §  19.  Subdivisions  2-a,  3,  4 and 5 of section 211 of the tax law,
     4  subdivision 2-a as added and subdivision 5 as amended by chapter 817  of
     5  the laws of 1987, subdivision 3 as amended by chapter 770 of the laws of
     6  1992,  subdivision 4 as amended by section 2 of part T of chapter 407 of
     7  the laws of 1999, the opening  paragraph  and  the  second  undesignated
     8  paragraph  of  paragraph  (a)  of subdivision 4 as amended by section 1,
     9  subparagraph 4 of paragraph (a) of subdivision 4 as amended  by  section
    10  2,  and  subparagraph  5 of paragraph (a) of subdivision 4 as amended by
    11  section 3 of part J of chapter 60 of the laws of 2007, subparagraph 6 of
    12  paragraph (a) of subdivision 4 as added by section  3  of  part  FF1  of
    13  chapter  57  of  the  laws  of  2008, subparagraph 7 of paragraph (a) of
    14  subdivision 4 as added by section 2 and subparagraph 1 of paragraph  (b)
    15  of subdivision 4 as amended by section 3 of part E1 of chapter 57 of the
    16  laws of 2009, are amended to read as follows:
    17    2-a.  The  [tax commission] commissioner may prescribe regulations and
    18  instructions requiring returns of information to be made  and  filed  in
    19  conjunction  with  the reports required to be filed pursuant to [section
    20  two hundred eleven] this article, relating to payments  made  to  share-
    21  holders  owning,  directly  or indirectly, individually or in the aggre-
    22  gate, more than fifty percent of the issued capital stock of the taxpay-
    23  er, where such payments are treated  as  payments  of  interest  in  the
    24  computation of entire net income [or minimum taxable income] reported on
    25  such reports.
    26    3.  If  the  amount  of taxable income [or alternative minimum taxable
    27  income] for any year of any taxpayer (including any taxpayer  which  has
    28  elected  to  be  taxed under subchapter s of chapter one of the internal
    29  revenue code), as returned to the United States treasury  department  is
    30  changed  or  corrected  by the commissioner of internal revenue or other
    31  officer of the United States or other competent authority,  or  where  a
    32  renegotiation  of  a  contract  or  subcontract  with  the United States
    33  results in a change in taxable income [or  alternative  minimum  taxable
    34  income],  such  taxpayer  shall report such changed or corrected taxable
    35  income [or alternative minimum taxable income], or the results  of  such
    36  renegotiation,  within  ninety  days (or one hundred twenty days, in the
    37  case of a taxpayer making a combined report under this article for  such
    38  year)  after  the  final  determination  of such change or correction or
    39  renegotiation, or as required by the commissioner, and shall concede the
    40  accuracy of such determination or state wherein  it  is  erroneous.  The
    41  allowance of a tentative carryback adjustment based upon a net operating
    42  loss  carryback or net capital loss carryback pursuant to section sixty-
    43  four hundred eleven of the internal revenue code, as amended,  shall  be
    44  treated  as  a final determination for purposes of this subdivision. Any
    45  taxpayer filing an amended return with such department shall  also  file
    46  within ninety days (or one hundred twenty days, in the case of a taxpay-
    47  er making a combined report under this article for such year) thereafter
    48  an amended report with the commissioner.
    49    4.  [(a)  Combined  reports permitted or required. Any taxpayer, which
    50  owns or controls either directly or  indirectly  substantially  all  the
    51  capital  stock  of  one or more other corporations, or substantially all
    52  the capital stock of which is owned or  controlled  either  directly  or
    53  indirectly  by  one or more other corporations or by interests which own
    54  or control either directly or indirectly substantially all  the  capital
    55  stock  of  one  or  more other corporations, (hereinafter referred to in
    56  this paragraph as "related corporations"), shall make a combined  report

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     1  covering  any  related corporations if there are substantial intercorpo-
     2  rate transactions among the  related  corporations,  regardless  of  the
     3  transfer price for such intercorporate transactions. It is not necessary
     4  that  there  be  substantial intercorporate transactions between any one
     5  corporation and every other related corporation. It is necessary, howev-
     6  er, that there be substantial intercorporate  transactions  between  the
     7  taxpayer  and  a  related  corporation  or collectively, a group of such
     8  related corporations. The report shall set forth such information as the
     9  commissioner may require, subject to the provisions of subparagraphs one
    10  through five of this paragraph.
    11    In determining whether there  are  substantial  intercorporate  trans-
    12  actions, the commissioner shall consider and evaluate all activities and
    13  transactions  of  the  taxpayer and its related corporations. Activities
    14  and transactions that will be considered include, but  are  not  limited
    15  to:  (i)  manufacturing,  acquiring  goods  or  property,  or performing
    16  services, for related corporations; (ii)  selling  goods  acquired  from
    17  related  corporations;  (iii)  financing  sales of related corporations;
    18  (iv) performing related customer services using  common  facilities  and
    19  employees for related corporations; (v) incurring expenses that benefit,
    20  directly  or  indirectly,  one  or  more  related corporations, and (vi)
    21  transferring assets,  including  such  assets  as  accounts  receivable,
    22  patents or trademarks from one or more related corporations.
    23    (1)  Any  corporation  which owns or controls either directly or indi-
    24  rectly substantially all the capital stock of a DISC not exempt from tax
    25  under paragraph (i) of subdivision nine of section two hundred eight  of
    26  this  article  shall be allowed, at the election of such corporation, to
    27  make a report on a combined basis covering such DISC, but the failure of
    28  such corporation to make such election shall not  prohibit  the  commis-
    29  sioner  from  requiring  a combined report covering such corporation and
    30  such DISC.
    31    (2)(i) No taxpayer may be permitted to make a  report  on  a  combined
    32  basis  covering  any  such other corporations where such taxpayer or any
    33  such other corporation  allocates  in  accordance  with  clause  (A)  of
    34  subparagraph  seven of paragraph (a) of subdivision three of section two
    35  hundred ten of this article (relating to aviation corporations) and such
    36  taxpayer or any such other corporation does not so allocate, unless such
    37  taxpayer or such other corporation is a qualified air freight  forwarder
    38  with  respect  to such other corporation or such taxpayer, respectively,
    39  and all taxpayers included on such combined report elect, by filing such
    40  combined report,  to  have  such  qualified  air  freight  forwarder  so
    41  included.
    42    (ii)  A  corporation is a qualified air freight forwarder with respect
    43  to another corporation:
    44    (A) if it owns or controls either directly or indirectly  all  of  the
    45  capital  stock of such other corporation, or if all of its capital stock
    46  is owned or controlled either  directly  or  indirectly  by  such  other
    47  corporation,  or  if  all  of  the capital stock of both corporations is
    48  owned or controlled either directly or indirectly by the same interests,
    49    (B) if it is principally  engaged  in  the  business  of  air  freight
    50  forwarding, and
    51    (C)  if  its air freight forwarding business is carried on principally
    52  with the airline or airlines operated by such other corporation.
    53    (3) No taxpayer may be permitted to make a report on a combined  basis
    54  covering  any  such  other  corporations where such taxpayer or any such
    55  other corporation allocates in accordance  with  subparagraph  eight  of
    56  paragraph  (a)  of  subdivision three of section two hundred ten of this

        S. 6359--D                         118                        A. 8559--D

     1  article (relating  to  railroad  and  trucking  corporations)  and  such
     2  taxpayer or any such other corporation does not so allocate.
     3    (4)  Except  as  provided  in the first undesignated paragraph of this
     4  paragraph, no combined report covering any corporation shall be required
     5  unless the commissioner  deems  such  a  report  necessary,  because  of
     6  inter-company transactions or some agreement, understanding, arrangement
     7  or transaction referred to in subdivision five of this section, in order
     8  properly to reflect the tax liability under this article.
     9    (5) A corporation organized under the laws of a country other than the
    10  United  States  shall not be required or permitted to make a report on a
    11  combined basis.
    12    (6) (i) For purposes of this subparagraph, the term "closest  control-
    13  ling stockholder" means the corporation that indirectly owns or controls
    14  over fifty percent of the voting stock of a captive REIT or captive RIC,
    15  is subject to tax under this article, article thirty-two or thirty-three
    16  of  this  chapter  or  otherwise  required  to be included in a combined
    17  return or report under this article, article thirty-two or  thirty-three
    18  of  this  chapter,  and  is the fewest tiers of corporations away in the
    19  ownership structure from the captive REIT or captive RIC.   The  commis-
    20  sioner  is  authorized  to prescribe by regulation or published guidance
    21  the criteria for determining the closest controlling stockholder.
    22    (ii) A captive REIT or a captive RIC must be included  in  a  combined
    23  report  with  the  corporation that directly owns or controls over fifty
    24  percent of the voting stock of the captive REIT or captive RIC  if  that
    25  corporation  is  subject to tax or required to be included in a combined
    26  report under this article.
    27    (iii) If over fifty percent of the voting stock of a captive  REIT  or
    28  captive RIC is not directly owned or controlled by a corporation that is
    29  subject  to  tax  or  required to be included in a combined report under
    30  this article, then the captive REIT or captive RIC must be included in a
    31  combined return or report with  the  corporation  that  is  the  closest
    32  controlling stockholder of the captive REIT or captive RIC. If the clos-
    33  est  controlling  stockholder  of  the  captive  REIT  or captive RIC is
    34  subject to tax or otherwise required to be included in a combined report
    35  under this article, then  the  captive  REIT  or  captive  RIC  must  be
    36  included in a combined report under this article.
    37    (iv)  If  the  corporation  that  directly owns or controls the voting
    38  stock of the captive REIT or captive RIC is  described  in  subparagraph
    39  two,  three  or five of this paragraph as a corporation not permitted to
    40  make a combined report, then the provisions  in  clause  (iii)  of  this
    41  subparagraph  must  be  applied  to  determine  the corporation in whose
    42  combined return or report the captive REIT  or  captive  RIC  should  be
    43  included.  If,  under clause (iii) of this subparagraph, the corporation
    44  that is the closest controlling  stockholder  of  the  captive  REIT  or
    45  captive  RIC  is  described  in  subparagraph two, three or five of this
    46  paragraph as a corporation not permitted to make a combined return, then
    47  that corporation is deemed to not be in the ownership structure  of  the
    48  captive  REIT  or  captive  RIC, and the closest controlling stockholder
    49  will be determined without regard to that corporation.
    50    (v) If a captive REIT owns the stock of a  qualified  REIT  subsidiary
    51  (as  defined in paragraph two of subsection (i) of section eight hundred
    52  fifty-six of the internal revenue code), then the qualified REIT subsid-
    53  iary must be included in a combined report with the captive REIT.
    54    (vi) If a captive REIT or a captive RIC is required under this subpar-
    55  agraph to be included in a combined report with another corporation, and
    56  that other corporation is also required to be  included  in  a  combined

        S. 6359--D                         119                        A. 8559--D

     1  report with another related corporation or corporations under this para-
     2  graph, then the captive REIT or the captive RIC must be included in that
     3  combined report with those corporations.
     4    (vii)  If  a  captive  REIT  or  a  captive  RIC is not required to be
     5  included in a combined report with another corporation under clause (ii)
     6  or (iii) of this  subparagraph,  or  in  a  combined  return  under  the
     7  provisions of either subparagraph (v) of paragraph two of subsection (f)
     8  of  section  fourteen hundred sixty-two or paragraph four of subdivision
     9  (f) of section fifteen hundred fifteen of this chapter, then the captive
    10  REIT or captive RIC is subject to the opening provisions of  this  para-
    11  graph  and  the  provisions  of subparagraph four of this paragraph. The
    12  captive REIT or captive RIC must be included in a combined report  under
    13  this  article  with another corporation if either the substantial inter-
    14  corporate transactions requirement in the  opening  provisions  of  this
    15  paragraph or the inter-company transactions or agreement, understanding,
    16  arrangement  or  transaction  requirement  of  subparagraph four of this
    17  paragraph is satisfied and more than fifty percent of the  voting  stock
    18  of  the  captive  REIT  or  the captive RIC and substantially all of the
    19  capital stock of  that  other  corporation  are  owned  and  controlled,
    20  directly or indirectly, by the same corporation.
    21    (7)  (i) For purposes of this subparagraph, the term "closest control-
    22  ling stockholder" means the corporation that indirectly owns or controls
    23  over fifty percent of the voting stock  of  an  overcapitalized  captive
    24  insurance company; is subject to tax under this article or article thir-
    25  ty-two  of  this  chapter,  or is otherwise required to be included in a
    26  combined return or report under this article or  article  thirty-two  of
    27  this chapter; and is the fewest tiers of corporations away in the owner-
    28  ship  structure from the overcapitalized captive insurance company.  The
    29  commissioner is authorized to prescribe by regulation or published guid-
    30  ance the criteria for determining the closest controlling stockholder.
    31    (ii) An overcapitalized captive insurance company must be included  in
    32  a  combined  report  with the corporation that directly owns or controls
    33  over fifty percent of the voting stock of  the  overcapitalized  captive
    34  insurance  company  if that corporation is subject to tax or required to
    35  be included in a combined report under this article.
    36    (iii) If over fifty percent of the voting stock of an  overcapitalized
    37  captive  insurance  company  is  not  directly  owned or controlled by a
    38  corporation that is subject to tax or  required  to  be  included  in  a
    39  combined  report  under  this  article, then the overcapitalized captive
    40  insurance company must be included in a combined return or  report  with
    41  the corporation that is the closest controlling stockholder of the over-
    42  capitalized captive insurance company. If the closest controlling stock-
    43  holder  of  the  overcapitalized captive insurance company is subject to
    44  tax or otherwise required to be included in a combined report under this
    45  article, then the overcapitalized  captive  insurance  company  must  be
    46  included in a combined report under this article.
    47    (iv)  If  the  corporation  that  directly owns or controls the voting
    48  stock of the overcapitalized captive insurance company is  described  in
    49  subparagraph  two, three, or five of this paragraph as a corporation not
    50  permitted to make a combined report, then the provisions in clause (iii)
    51  of this subparagraph must be applied to  determine  the  corporation  in
    52  whose  combined  return  or report the overcapitalized captive insurance
    53  company should be included. If, under clause (iii) of this subparagraph,
    54  the corporation that is the closest controlling stockholder of the over-
    55  capitalized captive insurance company is described in subparagraph  two,
    56  three or five of this paragraph as a corporation not permitted to make a

        S. 6359--D                         120                        A. 8559--D

     1  combined return, then that corporation is deemed not to be in the owner-
     2  ship structure of the overcapitalized captive insurance company, and the
     3  closest  controlling  stockholder  will  be determined without regard to
     4  that corporation.
     5    (v)  If an overcapitalized captive insurance company is required under
     6  this subparagraph to be included  in  a  combined  report  with  another
     7  corporation,  and that other corporation is also required to be included
     8  in a combined report with another related  corporation  or  corporations
     9  under this paragraph, then the overcapitalized captive insurance company
    10  must be included in that combined report with those corporations.
    11    (vi)  If  an overcapitalized captive insurance company is not required
    12  to be included in a  combined  report  with  another  corporation  under
    13  clause (ii) or (iii) of this subparagraph, or in a combined return under
    14  the provisions of subparagraph (v) of paragraph two of subsection (f) of
    15  section  fourteen  hundred sixty-two of this chapter, then the overcapi-
    16  talized captive insurance company is subject to the  opening  provisions
    17  of  this paragraph and the provisions of subparagraph four of this para-
    18  graph. The overcapitalized captive insurance company must be included in
    19  a combined report under this article with another corporation if  either
    20  the  substantial  intercorporate transactions requirement in the opening
    21  provisions of this paragraph or the inter-company transactions or agree-
    22  ment, understanding, arrangement or transaction requirement of  subpara-
    23  graph  four  of  this  paragraph  is satisfied, and both more than fifty
    24  percent of the voting stock of  the  overcapitalized  captive  insurance
    25  company  and substantially all of the capital stock of that other corpo-
    26  ration are owned and controlled, directly or  indirectly,  by  the  same
    27  corporation.
    28    (b) Computation. (1) Tax. (i) In the case of a combined report the tax
    29  shall  be  measured  by the combined entire net income, combined minimum
    30  taxable income, combined pre-nineteen  hundred  ninety  minimum  taxable
    31  income  or  combined  capital,  of  all the corporations included in the
    32  report, including any  captive  REIT,  captive  RIC  or  overcapitalized
    33  captive  insurance company; provided, however, in no event shall the tax
    34  measured by combined capital exceed the limitation provided for in para-
    35  graph (b) of subdivision one of section two hundred ten of this article.
    36    (ii) In the case of a captive REIT or captive RIC required under  this
    37  subdivision  to be included in a combined report, entire net income must
    38  be computed as required under subdivision five (in the case of a captive
    39  REIT) or subdivision seven (in the case of a captive RIC) of section two
    40  hundred nine of this article. However, the deduction under the  internal
    41  revenue  code  for  dividends paid by the captive REIT or captive RIC to
    42  any member of the affiliated group that includes  the  corporation  that
    43  directly  or  indirectly  owns over fifty percent of the voting stock of
    44  the captive REIT or captive RIC shall not be allowed for  taxable  years
    45  beginning  on  or  after  January  first,  two  thousand eight. The term
    46  "affiliated group"  means  "affiliated  group"  as  defined  in  section
    47  fifteen hundred four of the internal revenue code, but without regard to
    48  the exceptions provided for in subsection (b) of that section.
    49    (iii)  In  the  case  of  an overcapitalized captive insurance company
    50  required under this subdivision to be included  in  a  combined  report,
    51  entire  net  income  must be computed as required by subdivision nine of
    52  section two hundred eight of this article.
    53    (2) Tax bases. In computing combined entire net income, combined mini-
    54  mum taxable income or combined pre-nineteen hundred ninety minimum taxa-
    55  ble income intercorporate dividends shall be  eliminated,  in  computing
    56  combined  business  and  investment capital intercorporate stockholdings

        S. 6359--D                         121                        A. 8559--D

     1  and intercorporate bills, notes and accounts receivable and payable  and
     2  other  intercorporate  indebtedness shall be eliminated and in computing
     3  combined subsidiary capital intercorporate stockholdings shall be elimi-
     4  nated, provided, however, that intercorporate dividends from a DISC or a
     5  former  DISC not exempt from tax under paragraph (i) of subdivision nine
     6  of section two hundred eight of this article which are taxable as  busi-
     7  ness income under this article shall not be eliminated.
     8    (3)  Air freight forwarders: allocation. Notwithstanding any provision
     9  of law to the contrary, where a combined report includes a qualified air
    10  freight forwarder and a corporation described in subparagraph  seven  of
    11  paragraph  (a)  of  subdivision three of section two hundred ten of this
    12  chapter (relating to aviation corporations), in computing  the  combined
    13  business  allocation percentage such subparagraph seven shall be applied
    14  with respect to such qualified air  freight  forwarder]  For  provisions
    15  relating  to  combined  reports,  see  section two hundred ten-C of this
    16  article.
    17    5. In case it shall appear to the [tax commission]  commissioner  that
    18  any  agreement, understanding or arrangement exists between the taxpayer
    19  and any other corporation or any person or firm, whereby  the  activity,
    20  business,  income or capital of the taxpayer within the state is improp-
    21  erly or inaccurately reflected, the  [tax  commission]  commissioner  is
    22  authorized  and empowered, in [its] the commissioner's discretion and in
    23  such manner as [it] the commissioner may determine, to adjust  items  of
    24  income, deductions and capital, and to eliminate assets in computing any
    25  [allocation]  apportionment  percentage  provided  only  that any income
    26  directly traceable thereto be also  excluded  from  entire  net  income,
    27  [minimum  taxable  income or pre-nineteen hundred ninety minimum taxable
    28  income,] so as equitably to determine the tax. Where  (a)  any  taxpayer
    29  conducts  its  activity  or business under any agreement, arrangement or
    30  understanding in such manner as either directly or indirectly to benefit
    31  its members or stockholders, or any of them, or any  person  or  persons
    32  directly  or  indirectly  interested  in  such  activity or business, by
    33  entering into any transaction at more or less than a fair  price  which,
    34  but  for  such  agreement, arrangement or understanding, might have been
    35  paid or received therefor, or (b) any taxpayer, a substantial portion of
    36  whose capital stock is owned either directly or  indirectly  by  another
    37  corporation,  enters into any transaction with such other corporation on
    38  such terms as to create an improper loss or net income, the [tax commis-
    39  sion] commissioner may include in the entire net income[, minimum  taxa-
    40  ble income or pre-nineteen hundred ninety minimum taxable income] of the
    41  taxpayer  the fair profits which, but for such agreement, arrangement or
    42  understanding, the taxpayer might have derived  from  such  transaction.
    43  Where any taxpayer owns, directly or indirectly, more than fifty percent
    44  of the capital stock of another corporation subject to tax under section
    45  fifteen hundred two-a of this chapter and fifty percent or less of whose
    46  gross receipts for the taxable year consist of premiums, the commission-
    47  er  may  include  in  the entire net income of the taxpayer, as a deemed
    48  distribution, the amount of the net income of the other corporation that
    49  is in excess of its net premium income.
    50    § 19-a. Subdivision 13 of section 211 of the tax law is REPEALED.
    51    § 20.  Subdivision 11 of section 2 of the tax law, as added by section
    52  1 of part E-1 of chapter 57 of the laws of 2009, is amended to  read  as
    53  follows:
    54    11.  The term "[overcapitalized] combinable captive insurance company"
    55  means an entity that is treated as an association taxable  as  a  corpo-
    56  ration  under  the  internal revenue code (a) more than fifty percent of

        S. 6359--D                         122                        A. 8559--D
 
     1  the voting stock of which is owned or controlled, directly or  indirect-
     2  ly,  by  a  single entity that is treated as an association taxable as a
     3  corporation under the internal revenue code and not exempt from  federal
     4  income  tax;  (b)  that is licensed as a captive insurance company under
     5  the laws of this state  or  another  jurisdiction;  (c)  whose  business
     6  includes  providing,  directly  and indirectly, insurance or reinsurance
     7  covering the risks of its parent and/or members of its affiliated group;
     8  and (d) fifty percent or less of whose gross receipts  for  the  taxable
     9  year consist of premiums from arrangements that constitute insurance for
    10  federal  income  tax purposes. For purposes of this subdivision, "affil-
    11  iated group" has the same meaning as that term is given in section  1504
    12  of the internal revenue code, except that the term "common parent corpo-
    13  ration"  in  that  section  is  deemed to mean any person, as defined in
    14  section 7701 of the internal revenue code[;] and references to "at least
    15  eighty percent" in section 1504 of the internal revenue code are  to  be
    16  read  as  "fifty  percent or more;" section 1504 of the internal revenue
    17  code is to be read without regard to  the  exclusions  provided  for  in
    18  subsection  (b) of that section; "premiums" has the same meaning as that
    19  term is given in paragraph one of subdivision  (c)  of  section  fifteen
    20  hundred  ten  of this chapter, except that it includes consideration for
    21  annuity contracts and excludes any part of the consideration for  insur-
    22  ance,  reinsurance  or  annuity  contracts that do not provide bona fide
    23  insurance,  reinsurance  or  annuity  benefits;  and  "gross   receipts"
    24  includes  the amounts included in gross receipts for purposes of section
    25  501(c) (15) of the internal revenue code, except that those amounts also
    26  include all premiums as defined in this subdivision.
    27    § 21. Subdivision (a) of section 1500 of the tax  law,  as  separately
    28  amended by section 1 of part B-1 and section 8 of part E-1 of chapter 57
    29  of the laws of 2009, is amended to read as follows:
    30    (a)  The  term "insurance corporation" includes a corporation, associ-
    31  ation, joint stock company or association, person, society,  aggregation
    32  or  partnership,  by  whatever  name known, doing an insurance business,
    33  and, notwithstanding the provisions of section fifteen hundred twelve of
    34  this article, shall include (1) a risk retention  group  as  defined  in
    35  subsection  (n)  of section five thousand nine hundred two of the insur-
    36  ance law, (2) the state insurance fund and (3)  a  corporation,  associ-
    37  ation,  joint stock company or association, person, society, aggregation
    38  or partnership doing an insurance business as a member of the  New  York
    39  insurance  exchange described in section six thousand two hundred one of
    40  the  insurance  law.  The  definition  of  the  "state  insurance  fund"
    41  contained  in  this  subdivision  shall  be limited in its effect to the
    42  provisions of this article and the related provisions  of  this  chapter
    43  and  shall  have  no  force  and  effect other than with respect to such
    44  provisions. The  term  "insurance  corporation"  shall  also  include  a
    45  captive insurance company doing a captive insurance business, as defined
    46  in  subsections (c) and (b), respectively, of section seven thousand two
    47  of the insurance law; provided, however, "insurance  corporation"  shall
    48  not include the metropolitan transportation authority, or a public bene-
    49  fit  corporation  or  not-for-profit corporation formed by a city with a
    50  population of one million or more pursuant to subsection (a) of  section
    51  seven  thousand  five  of  the insurance law, each of which is expressly
    52  exempt from the payment of fees, taxes or assessments, whether state  or
    53  local; and provided further "insurance corporation" does not include any
    54  [overcapitalized] combinable captive insurance company. The term "insur-
    55  ance  corporation"  shall also include an unauthorized insurer operating
    56  from  an  office  within  the  state,  pursuant  to  paragraph  five  of

        S. 6359--D                         123                        A. 8559--D
 
     1  subsection  (b)  of  section one thousand one hundred one and subsection
     2  (i) of section two thousand one hundred seventeen of the insurance  law.
     3  The  term  "insurance  corporation"  also  includes a health maintenance
     4  organization required to obtain a certificate of authority under article
     5  forty-four of the public health law.
     6    §  22. Subdivision (a) of section 1502-b of the tax law, as amended by
     7  section 9 of part E-1 of chapter 57 of the laws of 2009 and  as  further
     8  amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
     9  amended to read as follows:
    10    (a) In lieu of the taxes and tax surcharge imposed by sections fifteen
    11  hundred one, fifteen hundred two-a, fifteen hundred five-a, and  fifteen
    12  hundred ten of this article, every captive insurance company licensed by
    13  the  superintendent  of financial services pursuant to the provisions of
    14  article seventy of the insurance law, other than the metropolitan trans-
    15  portation authority and a public benefit corporation  or  not-for-profit
    16  corporation  formed  by  a city with a population of one million or more
    17  pursuant to subsection (a) of section seven thousand five of the  insur-
    18  ance  law,  each  of which is expressly exempt from the payment of fees,
    19  taxes or assessments whether state or local, and other than [an overcap-
    20  italized] combinable captive insurance company, shall, for the privilege
    21  of exercising its corporate franchise, pay a tax on (1) all gross direct
    22  premiums, less return premiums thereon,  written  on  risks  located  or
    23  resident  in  this  state and (2) all assumed reinsurance premiums, less
    24  return premiums thereon, written on risks located or  resident  in  this
    25  state.  The  rate  of  the tax imposed on gross direct premiums shall be
    26  four-tenths of one percent on all  or  any  part  of  the  first  twenty
    27  million  dollars  of premiums, three-tenths of one percent on all or any
    28  part of the second twenty million dollars of premiums, two-tenths of one
    29  percent on all or any part of the third twenty million dollars of premi-
    30  ums, and seventy-five thousandths of  one  percent  on  each  dollar  of
    31  premiums thereafter. The rate of the tax on assumed reinsurance premiums
    32  shall  be  two  hundred twenty-five thousandths of one percent on all or
    33  any part of the first twenty million dollars of  premiums,  one  hundred
    34  and  fifty  thousandths  of one percent on all or any part of the second
    35  twenty million dollars of premiums, fifty thousandths of one percent  on
    36  all  or  any  part  of  the third twenty million dollars of premiums and
    37  twenty-five thousandths of one percent on each dollar of premiums there-
    38  after. The tax imposed by this section shall be equal to the greater  of
    39  (i)  the  sum  of  the  tax imposed on gross direct premiums and the tax
    40  imposed on assumed reinsurance premiums or (ii) five thousand dollars.
    41    § 23. Paragraph 4 of subdivision (f) of section 1515 of the  tax  law,
    42  as amended by section 16 of part FF-1 of chapter 57 of the laws of 2008,
    43  is amended to read as follows:
    44    (4)(i)  For  purposes of this paragraph, the term "closest controlling
    45  stockholder" means the corporation that indirectly owns or controls over
    46  fifty percent of the voting stock of a captive REIT or captive  RIC,  is
    47  subject  to  tax under section fifteen hundred one of this article[,] or
    48  article nine-A [or article thirty-two] of this chapter or required to be
    49  included in a combined return or report under this article[,] or article
    50  nine-A [or article thirty-two] of this chapter, and is the fewest  tiers
    51  of corporations away in the ownership structure from the captive REIT or
    52  captive  RIC.  The commissioner is authorized to prescribe by regulation
    53  or published guidance the criteria for determining the closest  control-
    54  ling stockholder.
    55    (ii)  A  captive  REIT or a captive RIC must be included in a combined
    56  return with the corporation that directly owns or  controls  over  fifty

        S. 6359--D                         124                        A. 8559--D
 
     1  percent  of  the voting stock of the captive REIT or captive RIC if that
     2  corporation is a life insurance corporation and is  subject  to  tax  or
     3  required to be included in a combined return under this article.
     4    (iii)  If  over fifty percent of the voting stock of a captive REIT or
     5  captive RIC is not directly owned or  controlled  by  a  life  insurance
     6  corporation  that  is  subject  to  tax  or required to be included in a
     7  combined return under this article, [then the captive  REIT  or  captive
     8  RIC must be included in a combined report or return with the corporation
     9  that  is  the  closest  controlling  stockholder  of the captive REIT or
    10  captive RIC. If] and the closest controlling stockholder of the  captive
    11  REIT  or  captive RIC is a life insurance corporation that is subject to
    12  tax or required to be included in a combined return under this  article,
    13  then  the  captive  REIT  or  captive RIC must be included in a combined
    14  return with the closest controlling stockholder under this article.
    15    (iv) If a captive REIT owns the stock of a qualified  REIT  subsidiary
    16  (as  defined in paragraph two of subsection (i) of section eight hundred
    17  fifty-six of the internal revenue code) and the captive REIT is required
    18  to be included in a combined return under subparagraphs (ii) or (iii) of
    19  this paragraph, then the qualified REIT subsidiary must be  included  in
    20  any  combined  return  required to be made by the captive REIT that owns
    21  the stock of the qualified REIT subsidiary.
    22    (v) If a captive REIT or a captive RIC is required  under  this  para-
    23  graph  to be included in a combined return with another corporation, and
    24  that other corporation is required to be included in a  combined  return
    25  with  another  [related]  corporation  under  this subdivision, then the
    26  captive REIT or the captive RIC must be included in that combined return
    27  with the other [related] corporation.
    28    § 24. Subdivisions (a), (b) and (c) of section 12 of the tax  law,  as
    29  added  by  chapter  615  of  the  laws  of  1998, are amended to read as
    30  follows:
    31    (a) For purposes of subdivision (b) of this section, the term "person"
    32  shall mean a corporation, joint stock company or association,  insurance
    33  corporation,  or  banking  corporation,  as  such  terms  are defined in
    34  section one  hundred  eighty-three,  one  hundred  eighty-four,  or  one
    35  hundred  eighty-six,  or in article nine-A[, thirty-two] or thirty-three
    36  of this chapter, imposing tax on such entities.
    37    (b) No person shall be subject to the taxes imposed under section  one
    38  hundred eighty-three, one hundred eighty-four or one hundred eighty-six,
    39  or  article nine-A[, thirty-two] or thirty-three of this chapter, solely
    40  by reason of (1)  having its advertising stored on  a  server  or  other
    41  computer  equipment  located in this state (other than a server or other
    42  computer equipment owned or leased by such person), or  (2)  having  its
    43  advertising  disseminated  or displayed on the Internet by an individual
    44  or entity subject to tax under section  one  hundred  eighty-three,  one
    45  hundred  eighty-four or one hundred eighty-six, or article nine-A, twen-
    46  ty-two[, thirty-two] or thirty-three of this chapter.
    47    (c) A person, as such term is defined in subdivision  (a)  of  section
    48  eleven  hundred one of this chapter, shall not be deemed to be a vendor,
    49  for purposes of article twenty-eight of this chapter, solely  by  reason
    50  of  (1)    having  its  advertising stored on a server or other computer
    51  equipment located in this state (other than a server or  other  computer
    52  equipment owned or leased by such person), or (2) having its advertising
    53  disseminated  or  displayed  on  the Internet by an individual or entity
    54  subject to tax under  section  one  hundred  eighty-three,  one  hundred
    55  eighty-four  or  one hundred eighty-six, or article nine-A, twenty-two[,
    56  thirty-two] or thirty-three of this chapter.

        S. 6359--D                         125                        A. 8559--D
 
     1    § 25. Paragraph 1 of subdivision (a) of section 14 of the tax law,  as
     2  amended  by  section 3 of part V1 of chapter 109 of the laws of 2006, is
     3  amended to read as follows:
     4    (1)  except as provided in paragraphs one-a and one-b of this subdivi-
     5  sion, for purposes of section one hundred  eighty-seven-j  and  articles
     6  nine-A,  twenty-two[,  thirty-two] and thirty-three of this chapter, for
     7  each of the taxable years within  the  "business  tax  benefit  period,"
     8  which  period  shall consist of (A) in the case of a business enterprise
     9  with a test date occurring on or before December thirty-first, two thou-
    10  sand one, the first fifteen taxable years beginning on or after  January
    11  first, two thousand one, (B) in the case of a business enterprise with a
    12  test  date  occurring  on  or after January first, two thousand two, but
    13  prior to April first, two thousand five, the fifteen taxable years  next
    14  following  the business enterprise's test year, and (C) in the case of a
    15  business enterprise which is first certified under article eighteen-B of
    16  the general municipal law on or after April first,  two  thousand  five,
    17  the  ten taxable years starting with the taxable year in which the busi-
    18  ness enterprise's first date of certification under  article  eighteen-B
    19  of  the  general  municipal law occurs, but only with respect to each of
    20  such business tax benefit period years for which the employment test  is
    21  met,
    22    §  26.  Subdivision  (f)  of  section 14 of the tax law, as amended by
    23  section 10 of part CC of chapter 85 of the laws of 2002, is  amended  to
    24  read as follows:
    25    (f)  Taxable  year.  The term "taxable year" means the taxable year of
    26  the business enterprise under  section  one  hundred  eighty-three,  one
    27  hundred  eighty-four,  one  hundred  eighty-five  or  former section one
    28  hundred eighty-six of article nine, or  under  article  nine-A,  twenty-
    29  two[,  thirty-two] or thirty-three of this chapter. If a business enter-
    30  prise does not have a taxable year because it is exempt from taxation or
    31  otherwise not required to file a return under any of  such  sections  of
    32  article  nine or under article nine-A, twenty-two[, thirty-two] or thir-
    33  ty-three, then the term "taxable year" means  (i)  the  business  enter-
    34  prise's federal taxable year, or, (ii) if the enterprise does not have a
    35  federal taxable year, the calendar year.
    36    §  27. Paragraph 1 of subdivision (i) of section 14 of the tax law, as
    37  amended by section 5 of part A of chapter 63 of the  laws  of  2005,  is
    38  amended to read as follows:
    39    (1)  for  purposes  of  section  one hundred eighty-seven-j of article
    40  nine, and articles nine-A, twenty-two[, thirty-two] and thirty-three  of
    41  this  chapter, on the first day of the taxable year during which revoca-
    42  tion of its certification under article eighteen-B of the general munic-
    43  ipal law occurs, and
    44    § 28. Paragraphs 1 and 2 of subdivision (j) of section 14 of  the  tax
    45  law,  as  amended  by section 10 of part CC of chapter 85 of the laws of
    46  2002, are amended to read as follows:
    47    (1) A new business shall include any corporation, except a corporation
    48  which is substantially similar in operation and in ownership to a  busi-
    49  ness  entity (or entities) taxable, or previously taxable, under section
    50  one hundred eighty-three, one hundred eighty-four, one  hundred  eighty-
    51  five or one hundred eighty-six of article nine; article nine-A[, article
    52  thirty-two]  or  thirty-three  of  this chapter; article twenty-three of
    53  this chapter or which would have been subject to tax under such  article
    54  twenty-three  (as  such article was in effect on January first, nineteen
    55  hundred eighty), article thirty-two of this chapter or which would  have
    56  been  subject  to tax under such article thirty-two (as such article was

        S. 6359--D                         126                        A. 8559--D
 
     1  in effect on December thirty-first, two thousand fourteen) or the income
     2  (or losses) of which is (or was) includable under article twenty-two  of
     3  this chapter.
     4    (2)  For purposes of article twenty-two of this chapter, an individual
     5  who is either a sole proprietor or a member of a partnership shall qual-
     6  ify as an owner of a new business unless the business of which the indi-
     7  vidual is an owner is substantially similar in operation and  in  owner-
     8  ship  to a business entity taxable, or previously taxable, under section
     9  one hundred eighty-three, one hundred eighty-four, one  hundred  eighty-
    10  five  or  one hundred eighty-six of article nine; article nine-A[, thir-
    11  ty-two] or article thirty-three of this chapter; article twenty-three of
    12  this chapter or which would have been subject to tax under such  article
    13  twenty-three  (as  such article was in effect on January first, nineteen
    14  hundred eighty); article thirty-two of this chapter or which would  have
    15  been subject to tax under such article thirty-two as such article was in
    16  effect on December thirty-first, two thousand fourteen or the income (or
    17  losses) of which is (or was) includable under article twenty-two.
    18    §  29.  Clauses  (i)  and  (ii)  of subparagraph (A) of paragraph 4 of
    19  subdivision (j) of section 14 of the tax law, as added by section  5  of
    20  part  A  of  chapter  63  of  the  laws  of 2005, are amended to read as
    21  follows:
    22    (i) Notwithstanding paragraphs one and two of this subdivision, a  new
    23  business  shall  include any corporation which is identical in operation
    24  and ownership to a business entity (or entities) taxable  under  section
    25  one  hundred eighty-three, one hundred eighty-four or one hundred eight-
    26  y-five of article nine; article nine-A[, article thirty-two] or  thirty-
    27  three  of  this chapter or the income (or losses) of which is includable
    28  under article twenty-two of this chapter, provided such corporation  and
    29  such  business entity or entities are operating in different counties in
    30  the state.
    31    (ii) Notwithstanding paragraphs one and two of  this  subdivision,  an
    32  individual  who is either a sole proprietor or a member of a partnership
    33  shall qualify as an owner of a new business if the business of which the
    34  individual is an owner is identical in operation and in ownership  to  a
    35  business  entity (or entities) taxable under section one hundred eighty-
    36  three, one hundred eighty-four or one  hundred  eighty-five  of  article
    37  nine; article nine-A[, article thirty-two] or thirty-three of this chap-
    38  ter or the income (or losses) of which is includable under article twen-
    39  ty-two  of this chapter, provided such business and such business entity
    40  or entities are operating in different counties in the state.
    41    § 30. Subparagraph (B) of paragraph 4 of subdivision (j) of section 14
    42  of the tax law, as amended by chapter  161  of  the  laws  of  2005,  is
    43  amended to read as follows:
    44    (B) Notwithstanding any provisions of this subdivision to the contrary
    45  and  notwithstanding  subdivision  c  of  section eighteen of part CC of
    46  chapter eighty-five of the laws of two thousand two,  a  corporation  or
    47  partnership,  which  was first certified under article eighteen-B of the
    48  general municipal law before August first, two thousand two, has a  base
    49  period  of  zero  years  or  zero employment for its base period, and is
    50  similar in operation and in ownership to a business entity  or  entities
    51  taxable,  or  previously  taxable, under sections specified in paragraph
    52  one or two of this subdivision or which would have been subject  to  tax
    53  under  article  twenty-three  of  this  chapter  (as such article was in
    54  effect on January first, nineteen hundred eighty) or  which  would  have
    55  been  subject  to  tax under article thirty-two of this chapter (as such
    56  article was in effect on December thirty-first, two  thousand  fourteen)

        S. 6359--D                         127                        A. 8559--D
 
     1  or  the  income  or  losses  of which is or was includable under article
     2  twenty-two of this chapter shall not be deemed a new business if it  was
     3  not  formed  for  a  valid  business purpose, as such term is defined in
     4  clause  (D)  of subparagraph one of paragraph (o) of subdivision nine of
     5  section two hundred eight of this chapter and was formed solely to  gain
     6  empire zone benefits.
     7    §  31.  Subdivision  (k)  of  section 14 of the tax law, as amended by
     8  section 5 of part A of chapter 63 of the laws of  2005,  is  amended  to
     9  read as follows:
    10    (k)  If  the  designation of an area as an empire zone is no longer in
    11  effect because section nine hundred sixty-nine of the general  municipal
    12  law  was not amended to extend the effective date of such designation so
    13  that the designations of all empire zones pursuant to article eighteen-B
    14  of the general municipal law have expired, a  business  enterprise  that
    15  was  certified  pursuant  to article eighteen-B of the general municipal
    16  law on the day immediately preceding the day on which  such  designation
    17  expired  shall  be deemed to continue to be certified under such article
    18  eighteen-B for purposes of this section, and sections fifteen,  sixteen,
    19  section one hundred eighty-seven-j, subdivisions [twenty-seven] five and
    20  [twenty-eight]  six of section two hundred [ten] ten-B, subsections (bb)
    21  and (cc) of section six hundred six, subdivision (z) of  section  eleven
    22  hundred  fifteen[,  subsections  (o) and (p) of section fourteen hundred
    23  fifty-six,] and subdivisions (r) and  (s)  of  section  fifteen  hundred
    24  eleven of this chapter. In addition, if the designation of an area as an
    25  empire  zone  is no longer in effect because section nine hundred sixty-
    26  nine of the general municipal law was not amended to extend  the  effec-
    27  tive  date  of  such  designation so that the designations of all empire
    28  zones pursuant to article eighteen-B of the general municipal  law  have
    29  expired,  all references to empire zones in the provisions of this chap-
    30  ter listed in the previous sentence  shall  be  read  as  meaning  areas
    31  designated  as  empire zones on the day immediately preceding the day on
    32  which such designation expired.
    33    § 32. Subdivisions (a) and (h) of  section  15  of  the  tax  law,  as
    34  amended  by  section  5 of part A of chapter 63 of the laws of 2005, are
    35  amended to read as follows:
    36    (a) Allowance of credit. A taxpayer which is a qualified  empire  zone
    37  enterprise  (QEZE),  or which is a sole proprietor of a QEZE or a member
    38  of a partnership which is a QEZE, and which  is  subject  to  tax  under
    39  article  nine-A,  twenty-two[, thirty-two] or thirty-three of this chap-
    40  ter, shall be allowed  a  credit  against  such  tax,  pursuant  to  the
    41  provisions  referenced  in subdivision (h) of this section, for eligible
    42  real property taxes.
    43    (h) Definitions and cross-references. For definitions of terms used in
    44  this section see section fourteen of this article.  For  application  of
    45  the credit provided for in this section, see the following provisions of
    46  this chapter:
    47    (1) Article 9: Section 187-j.
    48    (2) Article 9-A: Section [210] 210-B: subdivision [27] 5.
    49    (3) Article 22: Section 606: subsections (i) and (bb).
    50    (4) [Article 32: Section 1456: subsection (o).
    51    (5)] Article 33: Section 1511: subdivision (r).
    52    §  33.  Subdivision  (a)  of  section  16  of the tax law, as added by
    53  section 2 of part GG of chapter 63 of the laws of 2000,  is  amended  to
    54  read as follows:
    55    (a)  Allowance  of credit. A taxpayer which is a qualified empire zone
    56  enterprise (QEZE), or which is a sole proprietor of a QEZE or  a  member

        S. 6359--D                         128                        A. 8559--D
 
     1  of  a  partnership  which  is  a QEZE, and which is subject to tax under
     2  article nine-A, twenty-two[, thirty-two] or thirty-three of  this  chap-
     3  ter,  shall  be  allowed  a  credit  against  such  tax, pursuant to the
     4  provisions referenced in subdivision (g) of this section, to be computed
     5  as hereinafter provided.
     6    § 34. Paragraph 1, clause (ii) of subparagraph (B) of paragraph 2, and
     7  subparagraph  (A) of paragraph 3 of subdivision (f) of section 16 of the
     8  tax law, as amended by section 14 of part CC of chapter 85 of  the  laws
     9  of 2002, are amended to read as follows:
    10    (1) General. The tax factor shall be, in the case of article nine-A of
    11  this  chapter,  the [larger of the amounts] amount of tax determined for
    12  the taxable year under [paragraphs] paragraph (a) [and (c)] of  subdivi-
    13  sion  one  of  section  two  hundred ten of such article. The tax factor
    14  shall be, in the case of article twenty-two of  this  chapter,  the  tax
    15  determined  for  the  taxable  year under subsections (a) through (d) of
    16  section six hundred one of such article. [The tax factor  shall  be,  in
    17  the  case  of  article  thirty-two  of  this  chapter, the larger of the
    18  amounts of tax determined for the taxable year under subsection (a)  and
    19  paragraph  two  of subsection (b) of section fourteen hundred fifty-five
    20  of such article.] The tax factor shall be, in the case of article  thir-
    21  ty-three  of  this  chapter, the larger of the amounts of tax determined
    22  for the taxable year under paragraphs one and three of  subdivision  (a)
    23  of section fifteen hundred two of such article.
    24    (ii)  For  purposes of article nine-A[, thirty-two or thirty-three] of
    25  this chapter, the term "partner's income  from  the  partnership"  means
    26  partnership  items  of  income,  gain,  loss and deduction, and New York
    27  modifications thereto, entering  into  [entire  net]  business  income[,
    28  minimum  taxable  income,  alternative  entire  net income or entire net
    29  income plus compensation] and the term "partner's entire  income"  means
    30  [entire  net]  business  income[,  minimum  taxable  income, alternative
    31  entire net income or entire net  income  plus  compensation,]  allocated
    32  within the state.  For purposes of article thirty-three of this chapter,
    33  the term "partner's income from the partnership" means partnership items
    34  of income, gain, loss and deduction, and New York modifications thereto,
    35  entering  into  entire net income or entire net income plus compensation
    36  and the term "partner's entire  income"  means  entire  net  income,  or
    37  entire  net  income  plus  compensation, allocated within the state. For
    38  purposes of article twenty-two of  this  chapter,  the  term  "partner's
    39  income  from  the  partnership" means partnership items of income, gain,
    40  loss and deduction, and New York modifications  thereto,  entering  into
    41  New  York  adjusted gross income, and the term "partner's entire income"
    42  means New York adjusted gross income.
    43    (A) Where the taxpayer is a qualified empire zone  enterprise  and  is
    44  required  or  permitted  to  make a return or report on a combined basis
    45  under article nine-A[, thirty-two] or article thirty-three of this chap-
    46  ter, the taxpayer's tax factor shall be the amount determined  in  para-
    47  graph one of this subdivision which is attributable to the income of the
    48  qualified  empire  zone  enterprise.   Such attribution shall be made in
    49  accordance with the ratio of  the  qualified  empire  zone  enterprise's
    50  income  allocated within the state to the combined group's income, or in
    51  accordance with such other methods as the commissioner may prescribe  as
    52  providing  an apportionment which reasonably reflects the portion of the
    53  combined group's tax attributable to the income of the qualified  empire
    54  zone enterprise. In no event may the ratio so determined exceed 1.0.

        S. 6359--D                         129                        A. 8559--D
 
     1    §  35.  Subdivision  (g)  of  section  16  of the tax law, as added by
     2  section 2 of part GG of chapter 63 of the laws of 2000,  is  amended  to
     3  read as follows:
     4    (g) Definitions and cross-references. For definitions of terms used in
     5  this  section  see  sections  fourteen  and fifteen of this article. For
     6  application of the credit provided for in this section, see the  follow-
     7  ing provisions of this chapter:
     8    (1) Article 9-A: Section [210] 210-B:  subdivision [28]6.
     9    (2) Article 22: Section 606: subsections (i) and (cc).
    10    (3) [Article 32: Section 1456: subsection (p).
    11    (4)] Article 33: Section 1511: subdivision (s).
    12    §  36. Paragraph 1 of subdivision (b) of section 17 of the tax law, as
    13  added by section 43 of part S1 of chapter 57 of the  laws  of  2009,  is
    14  amended to read as follows:
    15    (1)  The  empire  zones tax benefits report must contain the following
    16  information about the empire zone tax  credits  claimed  under  articles
    17  nine,  nine-A, twenty-two[, thirty-two] and thirty-three of this chapter
    18  during the previous calendar year:
    19    (A) the name of each taxpayer claiming a credit; and
    20    (B) the amount of each credit earned by each taxpayer.
    21    § 37. Subdivisions (a) and (d) of section 18 of the tax law, as  added
    22  by  section  2 of part CC of chapter 63 of the laws of 2000, are amended
    23  to read as follows:
    24    (a) Allowance of credit. A  taxpayer  subject  to  tax  under  article
    25  nine-A,  twenty-two[,  thirty-two] or thirty-three of this chapter shall
    26  be allowed a credit against such tax, pursuant to the provisions  refer-
    27  enced  in subdivision (d) of this section, with respect to the ownership
    28  of eligible low-income buildings for which an eligibility statement  has
    29  been  issued  by  the commissioner of housing and community renewal. The
    30  amount of the credit shall be the credit amount for each  such  building
    31  allocated  by  such  commissioner  as  provided  in article two-A of the
    32  public housing law. The credit amount shall be allowed for each  of  the
    33  ten  taxable years in the credit period, and any reduction in first-year
    34  credit as provided in subdivision two of section twenty-two of such  law
    35  shall be allowed in the eleventh taxable year.
    36    (d)  Cross-references.  For  application of the credit provided for in
    37  this section, see the following provisions of this chapter:
    38    (1) Article 9-A: Section [210] 210-B:  subdivision [30] 15,
    39    (2) Article 22: Section 606: subsections (i) and (x),
    40    (3) [Article 32: Section 1456: subsection (l),
    41    (4)] Article 33: Section 1511: subdivision (n).
    42    § 38. Subparagraph (A) of paragraph 1 of subdivision (a) and  subdivi-
    43  sion  (f) of section 19 of the tax law, as added by section 2 of part II
    44  of chapter 63 of the laws of 2000, are amended to read as follows:
    45    (A) Green building credit. A taxpayer subject  to  tax  under  article
    46  nine,  nine-A,  twenty-two[, thirty-two] or thirty-three of this chapter
    47  shall be allowed a green building credit against such tax,  pursuant  to
    48  the  provisions referenced in subdivision (f) of this section. Provided,
    49  however, no credit shall  be  allowed  under  this  section  unless  the
    50  taxpayer  has complied with the applicable requirements of paragraph two
    51  of subdivision (d) of this section (relating to  reports  to  DEC).  The
    52  amount of the credit shall be the sum of the credit components specified
    53  in  paragraphs two through seven of this subdivision. Provided, however,
    54  the amount of each such credit component shall not exceed the limit  set
    55  forth  in  the initial credit component certificate obtained pursuant to
    56  subdivision (c) of this section. In the  determination  of  such  credit

        S. 6359--D                         130                        A. 8559--D
 
     1  components,  no cost paid or incurred by the taxpayer shall be the basis
     2  for more than one such component.
     3    (f)  Cross-references.  For  application of the credit provided for in
     4  this section, see the following provisions of this chapter:
     5    (1) Article nine: Section one hundred eighty-seven-d;
     6    (2) Article nine-A: Subdivision [thirty-one] sixteen  of  section  two
     7  hundred [ten] ten-B;
     8    (3) Article twenty-two: Subsections (i) and (y) of section six hundred
     9  six;
    10    (4)  [Article  thirty-two:  Subsection (m) of section fourteen hundred
    11  fifty-six;
    12    (5)] Article thirty-three: Subdivision (o) of section fifteen  hundred
    13  eleven.
    14    §  39.  Paragraphs 1 and 5 of subdivision (a) of section 21 of the tax
    15  law, as amended by section 1 of part H of chapter 577  of  the  laws  of
    16  2004, are amended to read as follows:
    17    (1)  General.  A  taxpayer  subject to tax under article nine, nine-A,
    18  twenty-two[, thirty-two]  or  thirty-three  of  this  chapter  shall  be
    19  allowed a credit against such tax, pursuant to the provisions referenced
    20  in  subdivision  (f)  of this section. Such credit shall be allowed with
    21  respect to a qualified site, as such term is defined in paragraph one of
    22  subdivision (b) of this section. The amount of the credit in  a  taxable
    23  year  shall  be the sum of the credit components specified in paragraphs
    24  two, three and four of this subdivision applicable in such year.
    25    (5) Applicable percentage. For purposes of paragraphs two,  three  and
    26  four  of  this  subdivision,  the  applicable percentage shall be twelve
    27  percent in the case of credits  claimed  under  article  nine,  nine-A[,
    28  thirty-two] or thirty-three of this chapter, and ten percent in the case
    29  of credits claimed under article twenty-two of this chapter, except that
    30  where  at least fifty percent of the area of the qualified site relating
    31  to the credit provided for in this section is  located  in  an  environ-
    32  mental  zone  as  defined  in  paragraph  six of subdivision (b) of this
    33  section, the applicable percentage shall be increased by  an  additional
    34  eight  percent. Provided, however, as afforded in section 27-1419 of the
    35  environmental conservation law, if the certificate of  completion  indi-
    36  cates  that  the  qualified  site has been remediated to Track 1 as that
    37  term is described in subdivision four of section 27-1415 of the environ-
    38  mental conservation law, the applicable  percentage  set  forth  in  the
    39  first sentence of this paragraph shall be increased by an additional two
    40  percent.
    41    §  39-a.  Subdivisions  (c)  and  (f) of section 21 of the tax law, as
    42  added by section 1 of part H of chapter 1  of  the  laws  of  2003,  are
    43  amended to read as follows:
    44    (c)  Qualifying  property.  Property  which  qualifies  for the credit
    45  provided for under this section and also for a credit provided  for  (1)
    46  under either subdivision [twelve] one or subdivision [twelve-B] three of
    47  section  two  hundred  [ten]  ten-B  of  this  chapter,  or both, or (2)
    48  subsection (a) or subsection (j) of section  six  hundred  six  of  this
    49  chapter,  or  both[, (3) the credit provided for under subsection (i) of
    50  section fourteen hundred fifty-six of this chapter, or  (4)  the  credit
    51  provided under subdivision (q) of section fifteen hundred eleven of this
    52  chapter]  may be the basis for either the credit provided for under this
    53  section or one of the credits enumerated in paragraph  one[,]  or  two[,
    54  three or four] of this subdivision, but not both.
    55    (f)  Cross-references.  For  application of the credit provided for in
    56  this section, see the following provisions of this chapter:

        S. 6359--D                         131                        A. 8559--D
 
     1    (1) Article 9: Section 187-g
     2    (2) Article 9-A: Section [210] 210-B, subdivision [33] 17
     3    (3) Article 22: Section 606, subsections (i) and (dd)
     4    (4) [Article 32: Section 1456, subsection (q)
     5    (5)] Article 33: Section 1511, subdivision (u).
     6    §  40. Paragraph 3 of subdivision (a) and paragraphs 1 and 9 of subdi-
     7  vision (b) of section 22 of the tax law, as amended by section 4 of part
     8  H of chapter 577 of the laws of 2004, are amended to read as follows:
     9    (3) Developer. (i) A "developer" is a  taxpayer  under  article  nine,
    10  nine-A,  twenty-two[, thirty-two] or thirty-three of this chapter who or
    11  which either (I) has  been  issued  a  certificate  of  completion  with
    12  respect  to  a  qualified site or (II) has purchased or in any other way
    13  has been conveyed all or any portion of a qualified site from a taxpayer
    14  or any other party who  or  which  has  been  issued  a  certificate  of
    15  completion  with respect to such site provided, such purchase or convey-
    16  ance occurs within seven years of the effective date of the  certificate
    17  of  completion  issued  with  respect to such qualified site.   Provided
    18  further, that the taxpayer who or which is purchasing all or any portion
    19  of a qualified site and the taxpayer or any other party who or which has
    20  been issued a certificate of completion with respect to  such  site  may
    21  not  be  related persons, as such term is defined in subparagraph (C) of
    22  paragraph three of subsection (b) of section four hundred sixty-five  of
    23  the internal revenue code.
    24    (ii)  Where  the  entity  to whom a certificate of completion has been
    25  issued is a partnership, or where the entity which has purchased all  or
    26  any  portion  of  a qualified site from a taxpayer who or which has been
    27  issued a certificate of completion with respect to such site within  the
    28  applicable  time limit is a partnership, any partner in such partnership
    29  who or which is taxable under article nine, nine-A,  twenty-two[,  thir-
    30  ty-two]  or thirty-three of this chapter shall be a developer under this
    31  paragraph. Where the entity to whom a certificate of completion has been
    32  issued is a New York S  corporation,  or  where  the  entity  which  has
    33  purchased  all or any portion of a qualified site from a taxpayer who or
    34  which has been issued a certificate of completion with respect  to  such
    35  site  within  the applicable time limit is a New York S corporation, any
    36  shareholder in such New York S corporation shall be  a  developer  under
    37  this paragraph.
    38    (1)  Allowance of credit. A developer of a qualified site who or which
    39  is subject to tax under article nine, nine-A,  twenty-two[,  thirty-two]
    40  or  thirty-three of this chapter, shall be allowed a credit against such
    41  tax, pursuant to the provisions referenced in  paragraph  nine  of  this
    42  subdivision, for eligible real property taxes imposed on such site.
    43    (9)  Cross-references.  For  application of the credit provided for in
    44  this subdivision, see the following provisions of this chapter:
    45    (i) Article 9: Section 187-h.
    46    (ii) Article 9-A: Section [210] 210-B:  subdivision [34] 18.
    47    (iii) Article 22: Section 606: subsections (i) and (ee).
    48    (iv) [Article 32: Section 1456: subsection (r).
    49    (v)] Article 33: Section 1511: subdivision (v).
    50    § 41. Subdivision (a) of section 23 of the  tax  law,  as  amended  by
    51  section 10 of part H chapter 577 of the laws of 2004, is amended to read
    52  as follows:
    53    (a)  Allowance  of  credit.  General.  A taxpayer subject to tax under
    54  article nine, nine-A, twenty-two[, thirty-two] or thirty-three  of  this
    55  chapter  shall  be  allowed  a  credit against such tax, pursuant to the
    56  provisions referenced in subdivision (e) of this section. The amount  of

        S. 6359--D                         132                        A. 8559--D
 
     1  such  credit  shall be equal to the lesser of thirty thousand dollars or
     2  fifty percent of the premiums paid on or after the date  of  the  brown-
     3  field site cleanup agreement executed by the taxpayer and the department
     4  of  environmental  conservation pursuant to section 27-1409 of the envi-
     5  ronmental conservation law by the taxpayer for environmental remediation
     6  insurance issued with respect to a qualified site.
     7    § 42. Subdivision (e) of section 23  of  the  tax  law,  as  added  by
     8  section  19  of  part  H of chapter 1 of the laws of 2003, is amended to
     9  read as follows:
    10    (e) Cross-references. For application of the credit  provided  for  in
    11  this section, see the following provisions of this chapter:
    12    (1) Article 9: Section 187-i
    13    (2) Article 9-A: Section [210] 210-B, subdivision [35] 19
    14    (3) Article 22: Section 606, subsections (i) and (ff)
    15    (4) [Article 32: Section 1456, subsection (s)
    16    (5)] Article 33: Section 1511, subdivision (w).
    17    § 43. Paragraphs 1 and 2 of subdivision (a) and clause (i) of subpara-
    18  graph  (D)  of  paragraph  1 of subdivision (b) of section 25 of the tax
    19  law, as added by section 1 of part N of chapter 61 of the laws of  2005,
    20  are amended to read as follows:
    21    (1)  Every  taxpayer,  or  person as defined in section seven thousand
    22  seven hundred one of the internal  revenue  code,  required  to  file  a
    23  disclosure  statement  with  the  internal  revenue  service pursuant to
    24  section six thousand eleven of the internal revenue code, or  the  regu-
    25  lations promulgated thereunder, related to a reportable transaction or a
    26  listed  transaction, as those terms are defined in such section or regu-
    27  lations, must attach a duplicate of such  disclosure  statement  to  the
    28  return or report required to be filed by such taxpayer or person for the
    29  taxable  year  under  article  nine, nine-A, twenty-two[, thirty-two] or
    30  thirty-three of this chapter, and provide such other information related
    31  to such disclosure as prescribed by the  commissioner.  Such  disclosure
    32  shall be made notwithstanding that one member of an affiliated group, as
    33  defined  by  section  fifteen hundred four of the internal revenue code,
    34  may file such disclosure statement with the internal revenue service  on
    35  behalf of its affiliates including such taxpayer or person.
    36    (2)  Every  taxpayer  or  such  person  who participates in a New York
    37  reportable transaction for a taxable year  must  disclose  such  partic-
    38  ipation  with  its  return  or report required to be filed under article
    39  nine, nine-A, twenty-two[, thirty-two] or thirty-three of  this  chapter
    40  for  the  taxable  year  in  a  form prescribed by the commissioner, and
    41  provide such other information related to such transaction as prescribed
    42  by the commissioner. A New York reportable transaction is a  transaction
    43  that  has  the potential to be a tax avoidance transaction as determined
    44  by the commissioner.
    45    (i) the list required to be maintained  by  such  person  pursuant  to
    46  section  six  thousand  one  hundred twelve of the internal revenue code
    47  identifies or is required to identify a taxpayer subject  to  tax  under
    48  article  nine,  nine-A, twenty-two[, thirty-two] or thirty-three of this
    49  chapter, and
    50    § 44. Subdivisions (a) and (f) of section 26 of the tax law, as  added
    51  by chapter 537 of the laws of 2005, are amended to read as follows:
    52    (a)  Allowance  of  credit.  A taxpayer, which is subject to tax under
    53  article nine, nine-A, twenty-two[, thirty-two] or thirty-three  of  this
    54  chapter  and  which  is  a  qualified building owner, shall be allowed a
    55  credit against such tax.  The amount of the credit  allowed  under  this
    56  section shall equal the sum of the number of qualified security officers

        S. 6359--D                         133                        A. 8559--D
 
     1  providing  protection  to  a building or buildings owned by the taxpayer
     2  multiplied by three thousand dollars. Provided,  however,  that  in  the
     3  case  of  a worker not so employed for a full year, such amount shall be
     4  prorated  to  reflect the length of such employment under regulations of
     5  the commissioner.
     6    (f) Cross-references. For application of the credit  provided  for  in
     7  this section, see the following provisions of this chapter:
     8    (1) article 9: section 187-n.
     9    (2) article 9-A: section [210] 210-B:  subdivision [37] 21.
    10    (3) article 22: section 606: subsection (ii).
    11    (4) [article 32: section 1456: subsection (t).
    12    (5)] article 33: section 1511: subdivision (x).
    13    § 45. Paragraph 3 of subdivision (a) and subdivision (c) of section 28
    14  of  the  tax  law,  as added by section 2 of part V of chapter 62 of the
    15  laws of 2006, are amended to read as follows:
    16    (3) No qualified production costs used by a  taxpayer  either  as  the
    17  basis for the allowance of the credit provided for under this section or
    18  used  in  the  calculation of the credit provided for under this section
    19  shall be used by such taxpayer to claim any other credit allowed  pursu-
    20  ant to this chapter.
    21    Notwithstanding  any  provisions  of  this  section to the contrary, a
    22  corporation or partnership, which otherwise  qualifies  as  a  qualified
    23  commercial production company, and is similar in operation and in owner-
    24  ship  to  a  business entity or entities taxable, or previously taxable,
    25  under section one hundred eighty-three, one hundred eighty-four  or  one
    26  hundred  eighty-five  of  article nine; article nine-A[, article thirty-
    27  two] or thirty-three of this chapter or which would have been subject to
    28  tax under article twenty-three of this chapter (as such article  was  in
    29  effect  on  January  first, nineteen hundred eighty) or which would have
    30  been subject to tax under article thirty-two of this  chapter  (as  such
    31  article  was  in effect on December thirty-first, two thousand fourteen)
    32  or the income or losses of which is  or  was  includable  under  article
    33  twenty-two  of  this chapter shall not be deemed a new or separate busi-
    34  ness, and therefore shall not be eligible for  empire  state  commercial
    35  production  benefits, if it was not formed for a valid business purpose,
    36  as such term is defined in clause (D) of subparagraph one  of  paragraph
    37  (o) of subdivision nine of section two hundred eight of this chapter and
    38  was  formed  solely  to  gain  empire state commercial production credit
    39  benefits.
    40    (c) Cross-references. For application of the credit  provided  for  in
    41  this section, see the following provision of this chapter:
    42    (1) article 9-A: section [210] 210-B:  subdivision [38] 23.
    43    (2) article 22: section 606: subsection (jj).
    44    §  46.  Subdivision  (d)  of  section  28  of the tax law, as added by
    45  section 1 of part X of chapter 62 of the laws of  2006,  is  amended  to
    46  read as follows:
    47    (d)  Cross-references.  For  application of the credit provided for in
    48  this section, see the following provisions of this chapter:
    49    (1) Article 9: Section 187-c.
    50    (2) Article 9-A: Section [210] 210-B, subdivision [38] 24.
    51    (3) Article 22: Section 606, subsections (i) and (jj).
    52    § 47. The opening paragraph of subdivision (a)  and  subdivisions  (c)
    53  and  (g) of section 31 of the tax law, the opening paragraph of subdivi-
    54  sion (a) and subdivision (g) as amended by section 7 of part G of  chap-
    55  ter  61  of  the  laws of 2011, subdivision (c) as added by section 2 of

        S. 6359--D                         134                        A. 8559--D
 
     1  part MM of chapter 59 of the laws  of  2010,  are  amended  to  read  as
     2  follows:
     3    General.  A  taxpayer subject to tax under section one hundred eighty-
     4  five, article nine-A, twenty-two[, thirty-two] or thirty-three  of  this
     5  chapter  shall  be  allowed  a  credit against such tax, pursuant to the
     6  provisions referenced in subdivision (g) of this section. The amount  of
     7  the  credit,  allowable  for up to ten consecutive taxable years, is the
     8  sum of the following four credit components:
     9    (c) Election of credit. A taxpayer who or which is qualified to  claim
    10  the  excelsior  investment tax credit component and is also qualified to
    11  claim the investment tax credit provided for under subdivision  [twelve]
    12  one of section two hundred [ten,] ten-B or subsection (a) of section six
    13  hundred  six[,  or subsection (i) of section fourteen hundred fifty-six]
    14  of this chapter, may claim either the excelsior  investment  tax  credit
    15  component  or  the  investment tax credit, but not both with regard to a
    16  particular piece of property. In addition, a taxpayer who  or  which  is
    17  qualified  to claim the excelsior investment tax credit component and is
    18  also qualified to claim the brownfield tangible property  credit  compo-
    19  nent  under  section twenty-one of this article, as added by chapter one
    20  of the laws of two  thousand  three,  may  claim  either  the  excelsior
    21  investment  tax credit component or such tangible property credit compo-
    22  nent, but not both with regard to a particular piece  of  property.  The
    23  election  to  claim  the  excelsior investment tax credit component, the
    24  investment tax credit or the brownfield tangible property credit  compo-
    25  nent, with regard to the same property, is irrevocable.
    26    (g)  Cross-references.  For  application of the credit provided for in
    27  this section, see the following provisions of this chapter:
    28    (1) article 9: section 187-q.
    29    (2) article 9-A: section [210] 210-B: subdivision [41] 31.
    30    (3) article 22: section 606: subsection (qq).
    31    (4) [article 32: section 1456: subsection (u).
    32    (5)] article 33: section 1511: subdivision (y).
    33    § 48. Subdivision (d) of section 31  of  the  tax  law,  as  added  by
    34  section  12  of  part Q of chapter 57 of the laws of 2010, is amended to
    35  read as follows:
    36    (d) Cross-references. For application of the credit  provided  for  in
    37  this section, see the following provisions of this chapter:
    38    (1) article 9-A: section [210] 210-B: subdivision [41] 32.
    39    (2) article 22: section 606: subsection (qq).
    40    §  49. Subdivision 3 of section 34 of the tax law, as added by section
    41  2 of part Y of chapter 57 of the laws of 2010, is  amended  to  read  as
    42  follows:
    43    3.  (a) For application of the temporary deferral nonrefundable payout
    44  credit, see the following provisions of this chapter:
    45    (1) Article 9: section [187-0] 187-o
    46    (2) Article 9-A: section [210(41)] 210-B(33)
    47    (3) Article 22: section 606(qq)
    48    (4) [Article 32: section 1456(v)
    49    (5)] Article 33: section 1511(y)
    50    (b) For application of the temporary deferral refundable payout  cred-
    51  it, see the following provisions of this chapter:
    52    (1) Article 9: section 187-p
    53    (2) Article 9-A: section [210(42)] 210-B(34)
    54    (3) Article 22: section 606(rr)
    55    (4) [Article 32: section 1456(w)
    56    (5)] Article 33: section 1511(z)

        S. 6359--D                         135                        A. 8559--D
 
     1    §  50.  The  opening paragraph of subdivision (a), subparagraph (C) of
     2  paragraph 2 of subdivision (e), and subdivision (f) of section 35 of the
     3  tax law, as added by section 3 of part V of chapter 61 of  the  laws  of
     4  2011, are amended to read as follows:
     5    A taxpayer which is a participant or the owner of a participant in the
     6  economic transformation and facility redevelopment program under article
     7  eighteen  of  the  economic development law that is subject to tax under
     8  section one hundred eighty-five of  article  nine,  or  article  nine-A,
     9  twenty-two[,  thirty-two]  or  thirty-three  of  this  chapter  shall be
    10  allowed the sum of following components against such  tax,  pursuant  to
    11  the provisions referenced in subdivision (f) of this section.
    12    (C) the business entity must not be substantially similar in ownership
    13  and  operation  to  another taxpayer taxable or previously taxable under
    14  section one hundred eighty-three, one hundred eighty-four or one hundred
    15  eighty-five of article nine, former section one  hundred  eighty-six  of
    16  this chapter or article nine-A, twenty-two[, thirty-two] or thirty-three
    17  of  this  chapter  or  former  article thirty-two of this chapter or the
    18  income or losses of which is or was includable under article  twenty-two
    19  of this chapter;
    20    (f)  Cross-references.  For application of the credits provided for in
    21  this section, see the following provisions of this chapter:
    22    (1) section 185: section 187-r.
    23    (2) article 9-A: section [210(43)] 210-B(35).
    24    (3) article 22: section 606 (ss).
    25    (4) [article 32: section 1456(x).
    26    (5)] article 33: section 1511 (aa).
    27    § 51. Subdivisions (a) and (e) of section 36 of the tax law, as  added
    28  by section 2 of part E of chapter 56 of the laws of 2011, are amended to
    29  read as follows:
    30    (a)  Allowance  of  credit.  A  taxpayer  subject to tax under article
    31  nine-A, twenty-two[, thirty-two] or thirty-three of this  chapter  shall
    32  be  allowed a credit against such tax, pursuant to the provisions refer-
    33  enced in subdivision (e) of this section.  The  amount  of  the  credit,
    34  allowable  for  ten consecutive tax years, is equal to the amount deter-
    35  mined pursuant to section  four  hundred  twenty-five  of  the  economic
    36  development law.
    37    (e)  Cross-references.  For  application of the credit provided for in
    38  this section, see the following provisions of this chapter:
    39    (1) article 9-A: section [210] 210-B, subdivision [44] 37;
    40    (2) article 22: section 606, subsection (tt);
    41    (3) [article 32: section 1456, subsection (y);
    42    (4)] article 33, section 1511, subdivision (bb).
    43    § 52. Subdivision (c) of section 37 of the tax law, as added by  chap-
    44  ter 109 of the laws of 2012, is amended to read as follows:
    45    (c)  Cross-references.  For  application of the credit provided for in
    46  this section, see the following provisions of this chapter:
    47    (1) Article 9-A: Section [210] 210-B, subdivision [45] 39.
    48    (2) Article 22: Section 606, subsections (i) and (uu).
    49    § 52-a. Subdivision (c) of section 39 of the tax law is REPEALED.
    50    § 53. Paragraphs 2, 3 and 4 of subdivision (k) of section  39  of  the
    51  tax  law,  paragraphs 2 and 3 as added by section 2 of part A of chapter
    52  68 of the laws of 2013, paragraph 4 as added by section 2 of part  A  of
    53  chapter 68 of the laws of 2013, are amended to read as follows:
    54    [(2) Article 9: section 180, subdivision 3.
    55    (3) Article 9: section 181, subdivision 3.]

        S. 6359--D                         136                        A. 8559--D
 
     1    (4) Article 9-A: section [210] 210-B, subdivision [47] 41 and subdivi-
     2  sion 44.
     3    §  54.  Subdivision  1  of section 171-a of the tax law, as amended by
     4  section 1 of part R of chapter 60 of the laws of  2004,  is  amended  to
     5  read as follows:
     6    1.  All  taxes,  interest, penalties and fees collected or received by
     7  the commissioner or the commissioner's duly authorized agent under arti-
     8  cles nine (except section one hundred eighty-two-a thereof and except as
     9  otherwise  provided  in  section  two  hundred  five  thereof),  nine-A,
    10  twelve-A  (except  as  otherwise provided in section two hundred eighty-
    11  four-d thereof), thirteen, thirteen-A (except as otherwise  provided  in
    12  section  three  hundred  twelve  thereof),  eighteen,  nineteen,  twenty
    13  (except as otherwise provided in section four hundred eighty-two  there-
    14  of),  twenty-one,  twenty-two,  twenty-six,  twenty-six-B,  twenty-eight
    15  (except as otherwise provided in section eleven hundred  two  or  eleven
    16  hundred  three thereof), twenty-eight-A, thirty-one (except as otherwise
    17  provided in section fourteen hundred twenty-one thereof),  [thirty-two,]
    18  thirty-three and thirty-three-A of this chapter shall be deposited daily
    19  in  one  account  with  such  responsible banks, banking houses or trust
    20  companies as may be designated by the comptroller, to the credit of  the
    21  comptroller.  Such  an account may be established in one or more of such
    22  depositories. Such deposits shall be kept separate and  apart  from  all
    23  other  money in the possession of the comptroller. The comptroller shall
    24  require adequate security from  all  such  depositories.  Of  the  total
    25  revenue  collected  or received under such articles of this chapter, the
    26  comptroller shall retain in the comptroller's hands such amount  as  the
    27  commissioner may determine to be necessary for refunds or reimbursements
    28  under  such  articles  of  this chapter [and article ten thereof] out of
    29  which amount the comptroller shall pay any refunds or reimbursements  to
    30  which  taxpayers shall be entitled under the provisions of such articles
    31  of this chapter [and article ten  thereof].  The  commissioner  and  the
    32  comptroller  shall  maintain  a system of accounts showing the amount of
    33  revenue collected or received from each of the  taxes  imposed  by  such
    34  articles.  The  comptroller,  after  reserving  the  amount  to pay such
    35  refunds or reimbursements, shall, on or before the  tenth  day  of  each
    36  month, pay into the state treasury to the credit of the general fund all
    37  revenue deposited under this section during the preceding calendar month
    38  and  remaining  to  the  comptroller's  credit  on  the last day of such
    39  preceding month, (i) except that the comptroller shall pay to the  state
    40  department of social services that amount of overpayments of tax imposed
    41  by  article  twenty-two  of this chapter and the interest on such amount
    42  which is certified to the comptroller by the commissioner as the  amount
    43  to  be  credited against past-due support pursuant to subdivision six of
    44  section one hundred seventy-one-c of this [chapter]  article,  (ii)  and
    45  except  that  the  comptroller  shall  pay  to the New York state higher
    46  education services corporation and the state university of New  York  or
    47  the city university of New York respectively that amount of overpayments
    48  of tax imposed by article twenty-two of this chapter and the interest on
    49  such amount which is certified to the comptroller by the commissioner as
    50  the amount to be credited against the amount of defaults in repayment of
    51  guaranteed  student  loans and state university loans or city university
    52  loans pursuant to subdivision five of section one hundred  seventy-one-d
    53  and  subdivision six of section one hundred seventy-one-e of this [chap-
    54  ter] article, (iii) and except further that,  notwithstanding  any  law,
    55  the  comptroller shall credit to the revenue arrearage account, pursuant
    56  to section ninety-one-a of the state finance law, that amount  of  over-

        S. 6359--D                         137                        A. 8559--D
 
     1  payment  of  tax  imposed  by  article nine, nine-A, twenty-two, thirty,
     2  thirty-A, thirty-B[, thirty-two] or thirty-three of  this  chapter,  and
     3  any  interest  thereon,  which  is  certified  to the comptroller by the
     4  commissioner  as  the  amount  to be credited against a past-due legally
     5  enforceable debt owed to a state agency pursuant  to  paragraph  (a)  of
     6  subdivision  six  of  section one hundred seventy-one-f of this article,
     7  provided, however, he shall  credit  to  the  special  offset  fiduciary
     8  account,  pursuant to section ninety-one-c of the state finance law, any
     9  such amount creditable as a liability as set forth in paragraph  (b)  of
    10  subdivision  six  of  section one hundred seventy-one-f of this article,
    11  (iv) and except further that the comptroller shall pay to  the  city  of
    12  New  York  that  amount  of  overpayment of tax imposed by article nine,
    13  nine-A, twenty-two, thirty, thirty-A, thirty-B[, thirty-two,]  or  thir-
    14  ty-three  of  this chapter and any interest thereon that is certified to
    15  the comptroller by the commissioner as the amount to be credited against
    16  city of New York tax warrant  judgment  debt  pursuant  to  section  one
    17  hundred  seventy-one-l  of this article, (v) and except further that the
    18  comptroller shall pay to a non-obligated spouse that amount of  overpay-
    19  ment of tax imposed by article twenty-two of this chapter and the inter-
    20  est  on  such  amount  which  has  been credited pursuant to section one
    21  hundred seventy-one-c, one hundred seventy-one-d, one  hundred  seventy-
    22  one-e,  one  hundred  seventy-one-f or one hundred seventy-one-l of this
    23  article and which is certified to the comptroller by the commissioner as
    24  the amount due such non-obligated spouse pursuant to  paragraph  six  of
    25  subsection  (b)  of  section  six hundred fifty-one of this chapter; and
    26  (vi) the comptroller shall deduct a like amount  which  the  comptroller
    27  shall  pay  into  the  treasury  to  the credit of the general fund from
    28  amounts subsequently payable to the department of social  services,  the
    29  state  university  of  New York, the city university of New York, or the
    30  higher education services corporation, or the revenue arrearage  account
    31  or  special offset fiduciary account pursuant to section ninety-one-a or
    32  ninety-one-c of the state finance law, as the case may be, whichever had
    33  been credited the amount originally withheld from such overpayment,  and
    34  (vii)  with respect to amounts originally withheld from such overpayment
    35  pursuant to section one hundred seventy-one-l of this article  and  paid
    36  to  the  city  of  New York, the comptroller shall collect a like amount
    37  from the city of New York.
    38    § 55. Subdivision 2 of section 171-a of the tax  law,  as  amended  by
    39  chapter 57 of the laws of 1993, is amended to read as follows:
    40    2.  Notwithstanding  subdivision  one  of  this  section  or any other
    41  provision of law to the contrary, the taxes imposed pursuant to sections
    42  one hundred eighty-three-a,  one  hundred  eighty-four-a,  [one  hundred
    43  eighty-six-b,]  one  hundred  eighty-six-c, [one hundred eighty-nine-a,]
    44  two hundred nine-B[, fourteen hundred fifty-five-b] and fifteen  hundred
    45  five-a  of  this chapter, reduced by an amount for administrative costs,
    46  shall be deposited to the credit of the metropolitan mass transportation
    47  operating  assistance  account  in  the  mass  transportation  operating
    48  assistance fund, created pursuant to section eighty-eight-a of the state
    49  finance  law,  as such taxes are received. The amount for administrative
    50  costs shall be determined by the commissioner  to  represent  reasonable
    51  costs  of  the  department  of  taxation  and  finance in administering,
    52  collecting, determining and distributing such taxes. Of the total reven-
    53  ue collected or received under such sections of this chapter, the  comp-
    54  troller  shall  retain  in his hands such amount as the commissioner may
    55  determine to be necessary  for  refunds  or  reimbursements  under  such
    56  sections  of  this chapter out of which amount the comptroller shall pay

        S. 6359--D                         138                        A. 8559--D
 
     1  any refunds or reimbursements to which taxpayers shall be entitled under
     2  provisions of such sections. The tax commissioner  and  the  comptroller
     3  shall  maintain  a  system  of  accounts  showing  the amount of revenue
     4  collected or received from each of the taxes imposed by such sections.
     5    §  56. Paragraphs (b) and (c) of subdivision 1 of section 171-f of the
     6  tax law, as amended by chapter 81 of the laws of 1995,  are  amended  to
     7  read as follows:
     8    (b)  "taxpayer"  shall mean a corporation, association, company, part-
     9  nership, estate, trust, liquidator, fiduciary or other entity  or  indi-
    10  vidual who or which is liable for any tax or other imposition imposed by
    11  or pursuant to article nine, nine-A, twenty-two, thirty, thirty-A, thir-
    12  ty-B[,  thirty-two,] or thirty-three of this chapter or article two-E of
    13  the general city law, which tax or other imposition is  administered  by
    14  the  commissioner  of  taxation  and finance, or who or which is under a
    15  duty to perform an act under or pursuant  to  such  tax  or  imposition,
    16  excluding  a  state agency, a municipal corporation or a district corpo-
    17  ration; and (c) "overpayment" shall mean an overpayment which  has  been
    18  requested  or determined to be refunded, a refund or a reimbursement, of
    19  a tax or other imposition  imposed  by  or  pursuant  to  article  nine,
    20  nine-A,  twenty-two,  thirty, thirty-A, thirty-B[, thirty-two,] or thir-
    21  ty-three of this chapter or article two-E of the general city law, which
    22  is administered by the commissioner of taxation and finance.
    23    § 57. Subdivision 2 of section 171-f of the tax law, as added by chap-
    24  ter 55 of the laws of 1992, is amended to read as follows:
    25    (2) The commissioner of taxation and finance, upon agreement with  the
    26  state  comptroller  and  acting  as  an agent for the state comptroller,
    27  shall set forth the  procedures  for  crediting  any  overpayment  by  a
    28  taxpayer  of  any tax or other imposition imposed by or authorized to be
    29  imposed pursuant to article nine, nine-A, twenty-two, thirty,  thirty-A,
    30  thirty-B[, thirty-two,] or thirty-three of this chapter or article two-E
    31  of  the  general  city law, which is administered by the commissioner of
    32  taxation and finance, and the interest on any such overpayments, against
    33  the amount of a past-due legally enforceable debt owed by such  taxpayer
    34  to  a  state  agency.  An  implementation plan shall be developed by the
    35  division of the budget and the department of taxation and finance  which
    36  shall  provide,  but not be limited to, guidance with respect to coordi-
    37  nation of debt collection pursuant to this section and subdivision twen-
    38  ty-seventh of section one hundred  seventy-one  of  this  article.  This
    39  section  shall  not be deemed to abrogate or limit in any way the powers
    40  and authority of the state comptroller to set off debts owed  the  state
    41  against  payments from the state, under the constitution of the state or
    42  any other law.
    43    § 58. Paragraphs (a) and (b) of subdivision 1 of section 171-l of  the
    44  tax  law,  as  added by section 6 of part R of chapter 60 of the laws of
    45  2004, are amended to read as follows:
    46    (a) "taxpayer" shall mean a corporation, association,  company,  part-
    47  nership,  estate,  trust, liquidator, fiduciary or other entity or indi-
    48  vidual who or which is liable for any tax or other imposition imposed by
    49  or pursuant to article nine, nine-A, twenty-two, thirty, thirty-A, thir-
    50  ty-B[, thirty-two,] or thirty-three of this chapter, which tax or  other
    51  imposition  is administered by the commissioner of taxation and finance,
    52  or who or which is under a duty to perform an act under or  pursuant  to
    53  such  tax  or  imposition,  excluding a state agency, a municipal corpo-
    54  ration or a district corporation;
    55    (b) "overpayment" shall mean an overpayment which has  been  requested
    56  or  determined  to be refunded, a refund or a reimbursement, of a tax or

        S. 6359--D                         139                        A. 8559--D

     1  other imposition imposed by or pursuant to article nine,  nine-A,  twen-
     2  ty-two,  thirty,  thirty-A,  thirty-B[,  thirty-two,] or thirty-three of
     3  this chapter, which is administered by the commissioner of taxation  and
     4  finance; and
     5    § 59. Paragraph (b) of subdivision 1 of section 183 of the tax law, as
     6  amended  by  section  1  of part Y of chapter 63 of the laws of 2000, is
     7  amended to read as follows:
     8    (b) For the privilege of exercising its  corporate  franchise,  or  of
     9  doing business, or of employing capital, or of owning or leasing proper-
    10  ty in this state in a corporate or organized capacity, or of maintaining
    11  an office in this state, every domestic corporation, joint-stock company
    12  or  association  formed  for  or  principally  engaged in the conduct of
    13  canal, steamboat, ferry (except a ferry company operating between any of
    14  the boroughs of the city of New York under a lease granted by the city),
    15  express, navigation, pipe  line,  transfer,  baggage  express,  omnibus,
    16  taxicab,  telegraph, or telephone business, or formed for or principally
    17  engaged in the conduct of two or more  of  such  businesses,  and  every
    18  domestic  corporation,  joint-stock company or association formed for or
    19  principally engaged in the conduct of a railroad, palace  car,  sleeping
    20  car  or  trucking  business  or formed for or principally engaged in the
    21  conduct of two or more of such businesses and which has made an election
    22  pursuant to subdivision ten of this section, and  every  other  domestic
    23  corporation,  joint-stock  company or association principally engaged in
    24  the conduct of a  transportation  or  transmission  business,  except  a
    25  corporation, joint-stock company or association formed for or principal-
    26  ly  engaged  in  the  conduct of a railroad, palace car, sleeping car or
    27  trucking business or formed for or principally engaged in the conduct of
    28  two or more of such businesses and  which  has  not  made  the  election
    29  provided  for  in  subdivision  ten of this section, and except a corpo-
    30  ration, joint-stock company or association principally  engaged  in  the
    31  conduct  of aviation (including air freight forwarders acting as princi-
    32  pal and like indirect air carriers) and except a corporation principally
    33  engaged in providing telecommunication  services  between  aircraft  and
    34  dispatcher,  aircraft  and  air  traffic  control  or ground station and
    35  ground station (or any combination of the foregoing),  at  least  ninety
    36  percent  of  the voting stock of which corporation is owned, directly or
    37  indirectly, by air carriers and which corporation's  principal  function
    38  is  to  fulfill  the  requirements  of (i) the federal aviation adminis-
    39  tration (or the successor  thereto)  or  (ii)  the  international  civil
    40  aviation organization (or the successor thereto), relating to the exist-
    41  ence of a communication system between aircraft and dispatcher, aircraft
    42  and  air  traffic  control  or ground station and ground station (or any
    43  combination of the foregoing) for the purposes of air safety and naviga-
    44  tion [and except  a  corporation,  joint-stock  company  or  association
    45  subject  to  taxation  under  article thirty-two of this chapter,] shall
    46  pay, in advance, an annual tax to be computed  upon  the  basis  of  the
    47  amount of its capital stock within this state during the preceding year,
    48  and  upon  each dollar of such amount. Provided, however, a corporation,
    49  joint-stock company or association formed for or principally engaged  in
    50  the  transportation, transmission or distribution of gas, electricity or
    51  steam shall not be subject to tax under  this  section  or  section  one
    52  hundred eighty-four of this article.
    53    §  60. Subdivision 10 of section 183 of the tax law, as added by chap-
    54  ter 309 of the laws of 1996, is amended to read as follows:
    55    10. Election. [With respect to taxable years beginning after  nineteen
    56  hundred  ninety-seven,  every] Every corporation, joint-stock company or

        S. 6359--D                         140                        A. 8559--D
 
     1  association formed for or principally engaged in the conduct of a  rail-
     2  road  (including  surface  railroad,  whether  or not operated by steam,
     3  subway railroad or elevated  railroad),  palace  car,  sleeping  car  or
     4  trucking business or formed for or principally engaged in the conduct of
     5  two or more of such businesses, which would be subject to article nine-A
     6  [or  thirty-two] of this chapter if the election provided for under this
     7  subdivision were not made, may elect to be subject to the provisions  of
     8  this section and, as applicable, section one hundred eighty-four of this
     9  article,  rather  than the provisions of such article nine-A [or thirty-
    10  two]. [In the case of such a corporation, joint-stock company or associ-
    11  ation subject to the tax imposed under this section and, as  applicable,
    12  section  one  hundred  eighty-four of this article, for the taxable year
    13  ending December thirty-first, nineteen hundred ninety-seven, such corpo-
    14  ration, joint-stock company or association must make such election on or
    15  before March fifteenth, nineteen hundred ninety-eight, and such election
    16  shall apply to the taxable year ending on December  thirty-first,  nine-
    17  teen  hundred  ninety-eight  and  to  succeeding  taxable  years,  until
    18  revoked. In the case of such a corporation, joint-stock company or asso-
    19  ciation which is not subject to the tax imposed under this section  and,
    20  as  applicable,  section one hundred eighty-four of this article for the
    21  taxable year ending December thirty-first, nineteen hundred  ninety-sev-
    22  en,  but  thereafter would be subject to article nine-A or thirty-two of
    23  this chapter if the election provided for under  this  subdivision  were
    24  not  made,  such]  Such  corporation, joint-stock company or association
    25  must make such election by the first  day  on  which  such  corporation,
    26  joint-stock company or association would be required to file a return or
    27  report  (without regard to extensions) under this section or section one
    28  hundred eighty-four of this article,  or  section  one  hundred  eighty-
    29  three-a  or  one  hundred[-]eighty-four-a  of  this  article, or article
    30  nine-A [or thirty-two] of this chapter. An  election  made  pursuant  to
    31  this  subdivision  shall  continue  to be in effect until revoked by the
    32  taxpayer. A revocation of the election to be  subject  to  this  section
    33  and,  as  applicable,  section  one hundred eighty-four of this article,
    34  shall be irrevocable. Such election, and a revocation thereof, shall  be
    35  made in the manner prescribed by the commissioner, whether by regulation
    36  or otherwise. Such revocation shall apply as of the first day of January
    37  next  following  the  end  of  a  taxable year with respect to which the
    38  taxpayer had been subject to this section and,  as  applicable,  section
    39  one  hundred  eighty-four of this article, by reason of an election made
    40  pursuant to this subdivision.
    41    § 61. The section heading and subdivisions 1 and 5 of section 183-a of
    42  the tax law, the section heading as added by chapter 931 of the laws  of
    43  1982,  subdivision  1 as amended by section 1 of part A of chapter 59 of
    44  the laws of 2013 and subdivision 5 as amended by chapter 945 of the laws
    45  of 1990, are amended to read as follows:
    46    [Temporary  metropolitan]  Metropolitan  transportation  business  tax
    47  surcharge  on  transportation  and transmission corporations and associ-
    48  ations.  1. The term "corporation" as used in this section shall include
    49  an association, within the meaning of paragraph three of subsection  (a)
    50  of  section  seventy-seven  hundred  one  of  the  internal revenue code
    51  (including a limited liability company), a publicly  traded  partnership
    52  treated  as  a  corporation  for  purposes  of the internal revenue code
    53  pursuant to section seventy-seven hundred four thereof and any  business
    54  conducted  by  a  trustee  or  trustees wherein interest or ownership is
    55  evidenced by certificates or other  written  instruments.  Every  corpo-
    56  ration,  joint-stock  company  or  association formed for or principally

        S. 6359--D                         141                        A. 8559--D

     1  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
     2  ny operating between any of the boroughs of the city of New York under a
     3  lease granted by the city), express, navigation,  pipe  line,  transfer,
     4  baggage  express, omnibus, taxicab, telegraph, or telephone business, or
     5  formed for or principally engaged in the conduct of  two  or  more  such
     6  businesses,  and  every  corporation, joint-stock company or association
     7  formed for or principally engaged in the conduct of a  railroad,  palace
     8  car,  sleeping  car  or  trucking  business or formed for or principally
     9  engaged in the conduct of two or more of such businesses and  which  has
    10  made  an  election  pursuant  to  subdivision ten of section one hundred
    11  eighty-three of this article, and every other  corporation,  joint-stock
    12  company or association principally engaged in the conduct of a transpor-
    13  tation  or  transmission  business,  except  a  corporation, joint-stock
    14  company or association formed for or principally engaged in the  conduct
    15  of  a  railroad, palace car, sleeping car or trucking business or formed
    16  for or principally engaged in the conduct of two or more of  such  busi-
    17  nesses  and  which has not made the election provided for in subdivision
    18  ten of section one hundred eighty-three of this article,  and  except  a
    19  corporation,  joint-stock  company or association principally engaged in
    20  the conduct of aviation (including  air  freight  forwarders  acting  as
    21  principal and like indirect air carriers) and except a corporation prin-
    22  cipally engaged in providing telecommunication services between aircraft
    23  and  dispatcher,  aircraft and air traffic control or ground station and
    24  ground station (or any combination of the foregoing),  at  least  ninety
    25  percent  of  the voting stock of which corporation is owned, directly or
    26  indirectly, by air carriers and which corporation's  principal  function
    27  is  to  fulfill  the  requirements  of (i) the federal aviation adminis-
    28  tration (or the successor  thereto)  or  (ii)  the  international  civil
    29  aviation organization (or the successor thereto), relating to the exist-
    30  ence of a communication system between aircraft and dispatcher, aircraft
    31  and  air  traffic  control  or ground station and ground station (or any
    32  combination of the foregoing) for the purposes of air safety and naviga-
    33  tion [and except a corporation, joint-stock company or association which
    34  is liable to taxation under article thirty-two of this  chapter],  shall
    35  pay for the privilege of exercising its corporate franchise, or of doing
    36  business,  or  of employing capital, or of owning or leasing property in
    37  the metropolitan commuter transportation district in such  corporate  or
    38  organized  capacity, or of maintaining an office in such district, a tax
    39  surcharge [for all or any part of its years commencing on or after Janu-
    40  ary first, nineteen hundred eighty-two but ending before December  thir-
    41  ty-first,  two  thousand  eighteen], which tax surcharge, in addition to
    42  the tax imposed by section one hundred  eighty-three  of  this  article,
    43  shall  be  computed  at the rate of [eighteen percent of the tax imposed
    44  under such section one hundred eighty-three for such years or  any  part
    45  of  such  years  ending  before  December thirty-first, nineteen hundred
    46  eighty-three after the deduction  of  any  credits  otherwise  allowable
    47  under  this  article,  and  at the rate of] seventeen percent of the tax
    48  imposed under such section for such years or  any  part  of  such  years
    49  [ending  on  or  after  December  thirty-first, nineteen hundred eighty-
    50  three] after the deduction of any credits otherwise allowable under this
    51  article; provided, however, that such rates of tax  surcharge  shall  be
    52  applied  only  to  that  portion  of  the  tax imposed under section one
    53  hundred eighty-three of this article after the deduction of any  credits
    54  otherwise  allowable  under  this  article  which is attributable to the
    55  taxpayer's business activity carried on within the metropolitan commuter
    56  transportation district as so determined in the manner prescribed by the

        S. 6359--D                         142                        A. 8559--D

     1  rules and regulations promulgated by the  commissioner[;  and  provided,
     2  further,  that  the  tax  surcharge imposed by this section shall not be
     3  imposed upon any taxpayer for more than four hundred thirty-two months].
     4    5.  [The  report  covering  the tax surcharge which must be calculated
     5  pursuant to this section based upon the tax reportable on the report due
     6  by March  fifteenth,  nineteen  hundred  eighty-two  under  section  one
     7  hundred  eighty-three  of this article shall be filed on or before March
     8  fifteenth, nineteen hundred eighty-three. The report  covering  the  tax
     9  surcharge  which  must be calculated pursuant to this section based upon
    10  the tax reportable on  the  report  due  by  March  fifteenth,  nineteen
    11  hundred  eighty-three  under  section  one  hundred eighty-three of this
    12  article shall be filed on or before March  fifteenth,  nineteen  hundred
    13  eighty-four.  The report covering the tax surcharge which must be calcu-
    14  lated pursuant to this section based upon  the  tax  reportable  on  the
    15  report  due  by  March  fifteenth,  nineteen  hundred  eighty-four under
    16  section one hundred eighty-three of this article shall be  filed  on  or
    17  before  March fifteenth, nineteen hundred eighty-five. The report cover-
    18  ing the tax surcharge which must be calculated pursuant to this  section
    19  based  upon  the  tax  reportable  on the report due by March fifteenth,
    20  nineteen hundred eighty-five under section one hundred  eighty-three  of
    21  this  article  shall  be  filed  on  or before March fifteenth, nineteen
    22  hundred eighty-six. The report covering the tax surcharge which must  be
    23  calculated pursuant to this section based upon the tax reportable on the
    24  report due by March fifteenth, nineteen hundred eighty-six under section
    25  one  hundred  eighty-three  of  this article shall be filed on or before
    26  March fifteenth, nineteen hundred eighty-seven. The report covering  the
    27  tax  surcharge  which  must be calculated pursuant to this section based
    28  upon the tax reportable on the report due by March  fifteenth,  nineteen
    29  hundred  eighty-seven  under  section  one  hundred eighty-three of this
    30  article shall be filed on or before March  fifteenth,  nineteen  hundred
    31  eighty-eight. The report covering the tax surcharge which must be calcu-
    32  lated  pursuant  to  this  section  based upon the tax reportable on the
    33  report due by  March  fifteenth,  nineteen  hundred  eighty-eight  under
    34  section  one  hundred  eighty-three of this article shall be filed on or
    35  before March fifteenth, nineteen hundred eighty-nine. The report  cover-
    36  ing  the tax surcharge which must be calculated pursuant to this section
    37  based upon the tax reportable on the  report  due  by  March  fifteenth,
    38  nineteen  hundred  eighty-nine under section one hundred eighty-three of
    39  this article shall be filed  on  or  before  March  fifteenth,  nineteen
    40  hundred  ninety.]  The  report  covering the tax surcharge which must be
    41  calculated pursuant to this section based upon the tax reportable on the
    42  report due by March  fifteenth  of  any  year  [subsequent  to  nineteen
    43  hundred  eighty-nine]  under  section  one  hundred eighty-three of this
    44  article shall be filed on or before March fifteenth  of  the  year  next
    45  succeeding such year. An extension pursuant to section one hundred nine-
    46  ty-three  of this article shall be allowed only if a taxpayer files with
    47  the commissioner an application for  extension  in  such  form  as  said
    48  commissioner  may prescribe by regulation and pays on or before the date
    49  of such filing in addition to any  other  amounts  required  under  this
    50  article,  either  ninety percent of the entire tax surcharge required to
    51  be paid under this section for the applicable period, or not  less  than
    52  the tax surcharge shown on the taxpayer's report for the preceding year,
    53  if  such  preceding  year  consisted of twelve months. The tax surcharge
    54  imposed by this section shall be payable to the commissioner in full  at
    55  the  time  the report is required to be filed, and such tax surcharge or
    56  the balance thereof, imposed on any taxpayer which  ceases  to  exercise

        S. 6359--D                         143                        A. 8559--D
 
     1  its franchise or be subject to the tax surcharge imposed by this section
     2  shall  be payable to the commissioner at the time the report is required
     3  to be filed, provided such tax surcharge of a domestic corporation which
     4  continues to possess its franchise shall be subject to adjustment as the
     5  circumstances  may require; all other tax surcharges of any such taxpay-
     6  er, which pursuant to the foregoing provisions  of  this  section  would
     7  otherwise  be  payable subsequent to the time such report is required to
     8  be filed, shall nevertheless  be  payable  at  such  time.  All  of  the
     9  provisions  of  this article presently applicable to section one hundred
    10  eighty-three of this article are applicable to the tax surcharge imposed
    11  by this section except for section one hundred ninety-two of this  arti-
    12  cle.
    13    §  62.  Subdivision  1  of  section  184 of the tax law, as amended by
    14  section 2 of part Y of chapter 63 of the laws of  2000,  is  amended  to
    15  read as follows:
    16    1.  The  term  "corporation"  as used in this section shall include an
    17  association, within the meaning of paragraph three of subsection (a)  of
    18  section  seventy-seven hundred one of the internal revenue code (includ-
    19  ing a limited liability company), a publicly traded partnership  treated
    20  as  a  corporation for purposes of the internal revenue code pursuant to
    21  section seventy-seven hundred four thereof.
    22    Every corporation, joint-stock company or association  formed  for  or
    23  principally  engaged in the conduct of canal, steamboat, ferry (except a
    24  ferry company operating between any of the boroughs of the city  of  New
    25  York under a lease granted by the city), express, navigation, pipe line,
    26  transfer,  baggage  express,  omnibus, taxicab, telegraph or local tele-
    27  phone business, or formed for or principally engaged in the  conduct  of
    28  two  or  more  of  such  businesses,  and every corporation, joint-stock
    29  company or association formed for or principally engaged in the  conduct
    30  of  surface railroad, whether or not operated by steam, subway railroad,
    31  elevated railroad, palace car, sleeping  car  or  trucking  business  or
    32  formed  for  or  principally  engaged in the conduct of two or more such
    33  businesses and which has made an election pursuant to subdivision ten of
    34  section one hundred eighty-three of this article, and every other corpo-
    35  ration, joint-stock company or association  formed  for  or  principally
    36  engaged  in  the  conduct  of  a transportation or transmission business
    37  (other than a telephone business),  except  a  corporation,  joint-stock
    38  company  or association formed for or principally engaged in the conduct
    39  of a surface railroad, whether or not operated by  steam,  subway  rail-
    40  road,  elevated  railroad, palace car, sleeping car or trucking business
    41  or formed for or principally engaged in the conduct of two  or  more  of
    42  such  businesses  and  which  has  not made the election provided for in
    43  subdivision ten of section one hundred  eighty-three  of  this  article,
    44  and, except a corporation, joint-stock company or association principal-
    45  ly  engaged in the conduct of aviation (including air freight forwarders
    46  acting as principal and like indirect air carriers) and except a  corpo-
    47  ration  principally  engaged  in  providing  telecommunication  services
    48  between aircraft and dispatcher, aircraft and  air  traffic  control  or
    49  ground station and ground station (or any combination of the foregoing),
    50  at  least  ninety  percent  of  the voting stock of which corporation is
    51  owned, directly or indirectly, by air carriers and  which  corporation's
    52  principal  function  is  to  fulfill the requirements of (i) the federal
    53  aviation administration (or the successor thereto) or (ii) the  interna-
    54  tional  civil aviation organization (or the successor thereto), relating
    55  to  the  existence  of  a  communication  system  between  aircraft  and
    56  dispatcher,  aircraft  and  air  traffic  control  or ground station and

        S. 6359--D                         144                        A. 8559--D
 
     1  ground station (or any combination of the foregoing) for the purposes of
     2  air safety and navigation and [except a corporation, joint-stock company
     3  or association which is liable to taxation under article  thirty-two  of
     4  this  chapter,] for the privilege of exercising its corporate franchise,
     5  or of doing business, or of employing capital, or of owning  or  leasing
     6  property  in  this  state in a corporate or organized capacity, or main-
     7  taining an office in this state, shall pay a franchise tax  which  shall
     8  be  equal to [(i) three-quarters of one percent for taxable years ending
     9  before two thousand one, provided that for a taxable year ending in  two
    10  thousand  the  rate  shall  be  reduced  to three-eighths of one percent
    11  effective July first, two thousand with the result that for purposes  of
    12  implementation  of  such  change  in rate the applicable rate for such a
    13  year shall be nine-sixteenths of one percent, and (ii)] three-eighths of
    14  one percent for taxable years commencing after two  thousand,  upon  its
    15  gross  earnings  from  all  sources within this state; except that, [for
    16  taxable years commencing on or after  January  first,  nineteen  hundred
    17  eighty-five  and  ending  on  or  before December thirty-first, nineteen
    18  hundred eighty-nine, every corporation, joint-stock company  or  associ-
    19  ation  formed  for or principally engaged in the conduct of telephone or
    20  telegraph business shall pay a franchise tax which  shall  be  equal  to
    21  three-tenths  of one per centum upon its gross earnings from all sources
    22  within this state and,] for taxable years commencing on or after January
    23  first, nineteen hundred ninety, every corporation,  joint-stock  company
    24  or association formed for or principally engaged in the conduct of local
    25  telephone  business,  or  telegraph  business  shall pay a franchise tax
    26  which shall be equal to [(i) three-quarters of one percent  for  taxable
    27  years  ending  before two thousand one, provided that for a taxable year
    28  ending in two thousand the rate shall be reduced to three-eighths of one
    29  percent effective July first, two thousand  with  the  result  that  for
    30  purposes  of  implementation  of such change in rate the applicable rate
    31  for such a year shall be  nine-sixteenths  of  one  percent,  and  (ii)]
    32  three-eighths  of  one  percent  for  taxable years commencing after two
    33  thousand, upon its gross earnings from all sources  within  this  state,
    34  except that a corporation, joint-stock company or association formed for
    35  or  principally  engaged  in  the  conduct of a local telephone business
    36  shall exclude the following earnings (but  not  in  any  event  earnings
    37  derived  by such taxpayer from the provision of carrier access services)
    38  derived by such taxpayer from sales for ultimate consumption of telecom-
    39  munications service to its customers (i) thirty  percent  of  separately
    40  charged  intra-LATA  toll  service (which shall also include interregion
    41  regional calling plan service) and (ii) one hundred percent of separate-
    42  ly charged inter-LATA, interstate  or  international  telecommunications
    43  service; and except that [corporations, joint-stock companies or associ-
    44  ations formed for or principally engaged in the conduct of surface rail-
    45  road,  whether or not operated by steam, subway railroad, elevated rail-
    46  road, palace car or sleeping car,  business  or  any  other  corporation
    47  formed for or principally engaged in the conduct of a railroad business,
    48  for  taxable  years  prior to nineteen hundred ninety-seven, and] corpo-
    49  rations, joint-stock companies or associations formed for or principally
    50  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
    51  ny operating between any of the boroughs of the city of New York under a
    52  lease granted by the city), navigation or any corporation formed for  or
    53  principally  engaged  in the operation of vessels, shall pay a franchise
    54  tax which shall be equal to three-quarters of one per  centum  upon  its
    55  gross  earnings  from  all sources within this state, excluding earnings
    56  derived from business of an interstate or foreign character; except that

        S. 6359--D                         145                        A. 8559--D
 
     1  for taxable years beginning in nineteen hundred ninety-seven  or  there-
     2  after,  in the case of a corporation, joint-stock company or association
     3  which, with respect to taxable years beginning  after  nineteen  hundred
     4  ninety-seven,  has  made  an  election  pursuant  to  subdivision ten of
     5  section one hundred eighty-three of this article and which is formed for
     6  or principally engaged in the conduct of surface  railroad,  whether  or
     7  not  operated  by steam, subway railroad, elevated railroad, palace car,
     8  sleeping car or trucking business or formed for or  principally  engaged
     9  in  the  conduct  of  two  or more of such businesses, such corporation,
    10  joint-stock company or association shall pay a franchise tax which shall
    11  be equal to [(i) six-tenths of one  percent  for  taxable  years  ending
    12  before  two thousand one, provided that for a taxable year ending in two
    13  thousand the rate shall be  reduced  to  three-eighths  of  one  percent
    14  effective  July first, two thousand with the result that for purposes of
    15  implementation of such change in rate the applicable  rate  for  such  a
    16  year  shall  be  thirty-nine eightieths of one percent, and (ii)] three-
    17  eighths of one percent for taxable years commencing after two  thousand,
    18  upon  its  gross  earnings  from all sources within this state, provided
    19  that in the case of a corporation, joint-stock  company  or  association
    20  formed  for  or  principally engaged in the conduct of surface railroad,
    21  whether or not operated by steam, subway  railroad,  elevated  railroad,
    22  palace  car  or  sleeping  car  business,  or  formed for or principally
    23  engaged in the conduct of two or more of  such  businesses,  such  gross
    24  earnings  shall  not include earnings derived from business of an inter-
    25  state or foreign character.
    26    Provided, however, with respect to railroad, elevated railroad, palace
    27  car or sleeping car business or any  other  corporation  formed  for  or
    28  principally  engaged  in  the  conduct of a railroad business and canal,
    29  steamboat, ferry (except a ferry company operating between  any  of  the
    30  boroughs  of  the  city  of New York under a lease granted by the city),
    31  navigation or any corporation formed for or principally engaged  in  the
    32  operation  of  vessels where the gross earnings from such transportation
    33  business both originating and terminating within this state and travers-
    34  ing both this state and another state or  states  or  country  shall  be
    35  subject  to the franchise tax imposed by this section (except where such
    36  corporation, joint-stock company or association is formed for or princi-
    37  pally engaged in the conduct of a railroad (including surface  railroad,
    38  whether or not operated by steam, subway railroad or elevated railroad),
    39  palace car or sleeping car business or formed for or principally engaged
    40  in  the  conduct of two or more of such businesses, and has not made the
    41  election provided for under  subdivision  ten  of  section  one  hundred
    42  eighty-three  of  this  article) and such earnings shall be allocated to
    43  this state in the same ratio that the mileage within the state bears  to
    44  the  total  mileage  of such business. Provided, further, a corporation,
    45  joint-stock company or association formed for or principally engaged  in
    46  the  transportation, transmission or distribution of gas, electricity or
    47  steam shall not be subject to tax under  this  section  or  section  one
    48  hundred eighty-three of this article.
    49    The  term "local telephone business" means the provision or furnishing
    50  of telecommunication services for hire wherein the service furnished  by
    51  the  provider  thereof consists of carrier access service or the service
    52  originates and terminates within the same  local  access  and  transport
    53  area  ("LATA"),  a local access and transport area being that geographic
    54  area as established and approved, and as so set and in existence on July
    55  first, nineteen hundred ninety-four, pursuant  to  the  modification  of
    56  final  judgment  in  United  States  v.  Western Electric Company (civil

        S. 6359--D                         146                        A. 8559--D
 
     1  action no. 82-0192) in the United States district court for the District
     2  of Columbia or within the LATA-like Rochester non-associated independent
     3  area.
     4    The  term "telecommunication services" shall have the meaning ascribed
     5  to such term in section one hundred eighty-six-e of this article.
     6    § 63. The section heading and the opening paragraph of  subdivision  1
     7  of section 184-a of the tax law, the section heading as added by chapter
     8  931  of  the  laws of 1982 and the opening paragraph of subdivision 1 as
     9  amended by section 2 of part A of chapter 59 of the laws  of  2013,  are
    10  amended to read as follows:
    11    Additional   [temporary]   metropolitan  transportation  business  tax
    12  surcharge on transportation and transmission  corporations  and  associ-
    13  ations services.
    14    The  term "corporation" as used in this section shall include an asso-
    15  ciation, within the meaning of paragraph  three  of  subsection  (a)  of
    16  section  seventy-seven hundred one of the internal revenue code (includ-
    17  ing a limited liability company),  and  a  publicly  traded  partnership
    18  treated  as  a  corporation  for  purposes  of the internal revenue code
    19  pursuant to section seventy-seven hundred four thereof.    Every  corpo-
    20  ration,  joint-stock  company  or  association formed for or principally
    21  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
    22  ny operating between any of the boroughs of the city of New York under a
    23  lease granted by the city), express, navigation,  pipe  line,  transfer,
    24  baggage  express,  omnibus,  taxicab, telegraph or local telephone busi-
    25  ness, or formed for or principally engaged in the conduct of two or more
    26  such businesses, and every corporation, joint-stock company  or  associ-
    27  ation  formed  for  or  principally  engaged in the conduct of a surface
    28  railroad, whether or not operated by steam,  subway  railroad,  elevated
    29  railroad,  palace  car, sleeping car or trucking business or principally
    30  engaged in the conduct of two or more such businesses and which has made
    31  an election pursuant to subdivision ten of section one  hundred  eighty-
    32  three  of this article, and every other corporation, joint-stock company
    33  or association formed for or principally engaged in  the  conduct  of  a
    34  transportation  or  transmission  business (other than a telephone busi-
    35  ness) except a corporation, joint-stock company  or  association  formed
    36  for or principally engaged in the conduct of a surface railroad, whether
    37  or  not  operated  by  steam, subway railroad, elevated railroad, palace
    38  car, sleeping car or trucking business or  principally  engaged  in  the
    39  conduct  of  two  or  more  such  businesses  and which has not made the
    40  election provided for in subdivision ten of section one hundred  eighty-
    41  three  of this article, and except a corporation, joint-stock company or
    42  association principally engaged in the conduct  of  aviation  (including
    43  air  freight forwarders acting as principal and like indirect air carri-
    44  ers) and except a corporation principally engaged in providing  telecom-
    45  munication  services  between  aircraft and dispatcher, aircraft and air
    46  traffic control or ground station and ground station (or any combination
    47  of the foregoing), at least ninety percent of the voting stock of  which
    48  corporation  is owned, directly or indirectly, by air carriers and which
    49  corporation's principal function is to fulfill the requirements  of  (i)
    50  the  federal  aviation administration (or the successor thereto) or (ii)
    51  the international civil aviation organization (or the  successor  there-
    52  to),  relating  to  the  existence  of  a  communication  system between
    53  aircraft and dispatcher, aircraft and  air  traffic  control  or  ground
    54  station and ground station (or any combination of the foregoing) for the
    55  purposes  of air safety and navigation [and except a corporation, joint-
    56  stock company or association which is liable to taxation  under  article

        S. 6359--D                         147                        A. 8559--D

     1  thirty-two  of  this chapter], shall pay for the privilege of exercising
     2  its corporate franchise, or of doing business, or of employing  capital,
     3  or  of owning or leasing property in the metropolitan commuter transpor-
     4  tation district in such corporate or organized capacity, or of maintain-
     5  ing  an office in such district, a tax surcharge [for all or any part of
     6  its taxable years commencing on or after January first, nineteen hundred
     7  eighty-two, but ending before December thirty-first, two thousand  eigh-
     8  teen],  which  tax  surcharge, in addition to the tax imposed by section
     9  one hundred eighty-four of this article, shall be computed at  the  rate
    10  of  [eighteen  percent of the tax imposed under such section one hundred
    11  eighty-four for such taxable years or any part  of  such  taxable  years
    12  ending before December thirty-first, nineteen hundred eighty-three after
    13  the deduction of any credits otherwise allowable under this article, and
    14  at  the rate of] seventeen percent of the tax imposed under such section
    15  for such taxable years or any part of such taxable years [ending  on  or
    16  after  December  thirty-first,  nineteen hundred eighty-three] after the
    17  deduction  of  any  credits  otherwise  allowable  under  this  article;
    18  provided,  however,  that  such  rates of tax surcharge shall be applied
    19  only to that portion of the tax imposed under section one hundred eight-
    20  y-four of this article after the  deduction  of  any  credits  otherwise
    21  allowable  under  this  article  which is attributable to the taxpayer's
    22  business activity carried on within the metropolitan commuter  transpor-
    23  tation  district[; and provided, further, that the tax surcharge imposed
    24  by this section on corporations, joint-stock companies and  associations
    25  formed  for  or principally engaged in the conduct of telephone or tele-
    26  graph business shall be computed in accordance with this subdivision and
    27  paragraph (c) of subdivision two of this section as if  the  three-quar-
    28  ters  of  one  percent  rate  of  tax provided for in subdivision one of
    29  section one hundred eighty-four of this article were applicable to  such
    30  telephone  and  telegraph  businesses for taxable years commencing on or
    31  after January first, nineteen  hundred  eighty-five  and  ending  on  or
    32  before   December   thirty-first,   nineteen  hundred  eighty-nine;  and
    33  provided, further, that the tax surcharge imposed by this section  shall
    34  not  be  imposed upon any taxpayer for more than four hundred thirty-two
    35  months].  Provided, however, that for taxable  years  beginning  in  two
    36  thousand  and  thereafter,  for  purposes  of  this  subdivision the tax
    37  imposed under section one hundred eighty-four of this article  shall  be
    38  deemed  to  have  been  imposed  at  the  rate  of three-quarters of one
    39  percent, except that in the case of a corporation,  joint-stock  company
    40  or association which has made an election pursuant to subdivision ten of
    41  section  one  hundred eighty-three of this article, for purposes of this
    42  subdivision the tax imposed under section  one  hundred  eighty-four  of
    43  this  article  shall  be deemed to have been imposed at the rate of six-
    44  tenths of one percent.
    45    § 64. Subdivision 8 of section 186-a of the tax law is REPEALED.
    46    § 65.  The section heading and subdivision 1 of section 186-c  of  the
    47  tax  law,  the  section  heading  as amended by chapter 2 of the laws of
    48  1995, subdivision 1 as amended by section 3 of part II-1 of  chapter  57
    49  of the laws of 2008, subparagraph 1 of paragraph (a) of subdivision 1 as
    50  amended  by  section  3 of part A of chapter 59 of the laws of 2013, are
    51  amended to read as follows:
    52    [Temporary  metropolitan]  Metropolitan  transportation  business  tax
    53  surcharge  on  utility  services  and excise tax on sale of telecommuni-
    54  cation services.  1. (a) (1) Every utility doing business in the  metro-
    55  politan  commuter  transportation district shall pay a tax surcharge, in
    56  addition to the tax imposed by section one hundred eighty-six-a of  this

        S. 6359--D                         148                        A. 8559--D
 
     1  article[,  for  all  or  any parts of its taxable years commencing on or
     2  after January first,  nineteen  hundred  eighty-two  but  ending  before
     3  December  thirty-first,  two  thousand eighteen], to be computed [at the
     4  rate  of  eighteen  percent of the tax imposed under section one hundred
     5  eighty-six-a of this article for such taxable years or any part of  such
     6  taxable  years  ending  before  December  thirty-first, nineteen hundred
     7  eighty-three after the deduction  of  any  credits  otherwise  allowable
     8  under  this  article,  and]  at the rate of seventeen percent of the tax
     9  imposed under such section [for such taxable years or any part  of  such
    10  taxable years ending on or after December thirty-first, nineteen hundred
    11  eighty-three]  after  the deduction of credits otherwise allowable under
    12  this article except any utility credit provided  for  by  article  thir-
    13  teen-A  of  this  chapter;  provided,  however,  that  such rates of tax
    14  surcharge shall be applied only to that portion of the tax imposed under
    15  section one hundred eighty-six-a of this article after the deduction  of
    16  credits otherwise allowable under this article, except any utility cred-
    17  it  provided for by article thirteen-A of this chapter, which is attrib-
    18  utable to the taxpayer's gross income or  gross  operating  income  from
    19  business  activity carried on within the metropolitan commuter transpor-
    20  tation district[; and provided, further, that the tax surcharge  imposed
    21  by  this  section  shall  not be imposed upon any taxpayer for more than
    22  four hundred thirty-two months].
    23    (2) Provided however, that [commencing January first,  two  thousand,]
    24  in the case of the tax imposed under paragraph (a) of subdivision one of
    25  section  one hundred eighty-six-a of this article (relating to providers
    26  of telecommunications services) such tax surcharge shall  be  calculated
    27  as  if  the  tax  imposed under section one hundred eighty-six-a of this
    28  article were imposed at a rate of three and one-half percent.
    29    (b) In addition to the surcharge imposed  by  paragraph  (a)  of  this
    30  subdivision,  there  is hereby imposed a surcharge on the gross receipts
    31  from telecommunication services relating to  the  metropolitan  commuter
    32  transportation  district  at  the rate of seventeen percent of the state
    33  tax rate under section one hundred eighty-six-e of this article [for all
    34  or part of taxable years commencing on and after January first, nineteen
    35  hundred ninety-five but ending before December thirty-first,  two  thou-
    36  sand  thirteen]. All the definitions and other provisions of section one
    37  hundred eighty-six-e of this article shall apply to the tax  imposed  by
    38  this paragraph with such modification and limitation as may be necessary
    39  (including  substituting the words "metropolitan commuter transportation
    40  district" for "state" where appropriate) in order to adapt the  language
    41  of  such  section  one  hundred  eighty-six-e  of  this  article  to the
    42  surcharge imposed by this paragraph within  such  metropolitan  commuter
    43  transportation district so as to include (1) any intra-district telecom-
    44  munication  services,  except  any  telecommunication services the gross
    45  receipts from which are subject to tax under subparagraph four  of  this
    46  paragraph, (2) any inter-district telecommunication services which orig-
    47  inate or terminate in such district and are charged to a service address
    48  therein  regardless  of  where the amounts charged for such services are
    49  billed or ultimately paid, except any  telecommunications  services  the
    50  gross  receipts from which are subject to tax under subparagraph four of
    51  this paragraph, (3) as apportioned to such district, private  telecommu-
    52  nication  services,  except  any  telecommunication  services  the gross
    53  receipts from which are subject to tax under subparagraph four  of  this
    54  paragraph,  and (4) mobile telecommunications service provided by a home
    55  service provider where the place of primary use is within such metropol-
    56  itan commuter transportation  district.  Provided  however,  [commencing

        S. 6359--D                         149                        A. 8559--D

     1  October  first,  nineteen hundred ninety-eight] such tax surcharge shall
     2  be calculated as if the tax imposed under section  one  hundred  eighty-
     3  six-e  of  this  article  were  imposed  at a rate of three and one-half
     4  percent.
     5    §  66.  Clause  (iii) of subparagraph (D) of paragraph 3 of subsection
     6  (b) of section 605 of the tax law, as added by chapter 658 of  the  laws
     7  of 2003, is amended to read as follows:
     8    (iii)  Provided  further,  that for the purposes of item (I) of clause
     9  (i) of this subparagraph, a trustee which is a  banking  corporation  as
    10  defined  in subsection (a) of section fourteen hundred fifty-two of this
    11  chapter, as such section was in effect  on  December  thirty-first,  two
    12  thousand  fourteen, and which is domiciled outside the state of New York
    13  at the time it becomes a trustee of the trust shall be deemed to contin-
    14  ue to be a trustee domiciled outside the state of New York notwithstand-
    15  ing that it thereafter otherwise becomes  a  trustee  domiciled  in  the
    16  state  of New York by virtue of being acquired by, or becoming an office
    17  or branch of, a corporate trustee domiciled  within  the  state  of  New
    18  York.
    19    §  67.  Subparagraph  (A) of paragraph 10 of subsection (a) of section
    20  606 of the tax law, as amended by section 3 of part CC of chapter 85  of
    21  the laws of 2002, is amended to read as follows:
    22    (A)  the business of which the individual is an owner is substantially
    23  similar in operation and in ownership to a business entity  taxable,  or
    24  previously  taxable, under section one hundred eighty-three, one hundred
    25  eighty-four[,] or one hundred eighty-five [or one hundred eighty-six] of
    26  article nine; article nine-A[, thirty-two] or thirty-three of this chap-
    27  ter; article twenty-three of this  chapter  or  which  would  have  been
    28  subject  to  tax under such article twenty-three (as such article was in
    29  effect on January first, nineteen hundred eighty), article thirty-two of
    30  this chapter or which would have been subject to tax under such  article
    31  thirty-two  (as such article was in effect on December thirty-first, two
    32  thousand fourteen) or the income  (or  losses)  of  which  is  (or  was)
    33  includable  under  article twenty-two of this chapter whereby the intent
    34  and purpose of this paragraph and paragraph five of this subsection with
    35  respect to refunding of credit to new business would be evaded; or
    36    § 68. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
    37  of the tax law, as amended by section 7 of part C-1 of chapter 57 of the
    38  laws of 2009, clause (ix) as amended by section 4 of part G  of  chapter
    39  59  of  the laws of 2013, clause (xxxi) as added by section 5 of part MM
    40  of chapter 59 of the laws of 2010, clause (xxxi) as added by section  14
    41  of  part Q of chapter 57 of the laws of 2010, clause (xxxii) as added by
    42  section 6 of part V of chapter 61 of the laws of 2011,  clause  (xxxiii)
    43  as  added  by  section  4  of  part D of chapter 56 of the laws of 2011,
    44  clause (xxxiii) as added by section 5 of part E of  chapter  56  of  the
    45  laws  of  2011,  clause  (xxxiii) as added by chapter 604 of the laws of
    46  2011, clause (xxxiv) as added by chapter 109 of the laws of 2012, clause
    47  (xxxv) as added by section 2 of part AA of chapter 59  of  the  laws  of
    48  2013,  clause  (xxxv)  as added by section 4 of part EE of chapter 59 of
    49  the laws of 2013, and clause (xxxvi) as added by section 8 of part A  of
    50  chapter 68 of the laws of 2013, is amended to read as follows:
    51    (B)  shall  be  treated as the owner of a new business with respect to
    52  such share if the corporation qualifies as a new  business  pursuant  to
    53  paragraph  [(j)]  (f) of subdivision [twelve] one of section two hundred
    54  [ten] ten-B of this chapter.
 
    55  With respect to the following        The corporation's credit base under

        S. 6359--D                         150                        A. 8559--D
 
     1  credit under this section:           section two hundred [ten or section
     2                                       fourteen hundred fifty-six] ten-B
     3                                       of this chapter is:
 
     4  (i) Investment tax credit under      Investment credit base or qualified
     5  subsection (a)                       rehabilitation expenditures under
     6                                       subdivision [twelve] one of section
     7                                       two hundred [ten] ten-B
 
     8  (ii) Empire zone investment          Cost or other basis under
     9  tax credit under subsection (j)      subdivision [twelve-B] three
    10                                       of section two hundred [ten] ten-B
 
    11  [(iii) Empire zone wage tax credit   Eligible wages under subdivision
    12  under subsection (k)                 nineteen of section two hundred
    13                                       ten or subsection (e) of section
    14                                       fourteen hundred fifty-six

    15  (iv) Empire zone capital tax         Qualified investments and
    16  credit under subsection (l)          contributions under subdivision
    17                                       twenty of section two hundred ten
    18                                       or subsection (d) of section
    19                                       fourteen hundred fifty-six]
 
    20  (v) Agricultural property tax        Allowable school district property
    21  credit under subsection (n)          taxes under subdivision
    22                                       [twenty-two] eleven of
    23                                       section two hundred [ten]
    24                                       ten-B
 
    25  (vi) Credit for employment of        Qualified first-year wages or
    26  persons with disabilities            qualified second-year wages under
    27  under subsection (o)                 subdivision [twenty-three] twelve
    28                                       of section two hundred [ten or
    29                                       subsection (f) of section
    30                                       fourteen hundred fifty-six] ten-B
 
    31  (vii) Employment incentive credit    Applicable investment credit base
    32  under subsection (a-1)               under subdivision [twelve-D] two
    33                                       of section two hundred [ten]
    34                                       ten-B
 
    35  (viii) Empire zone employment        Applicable investment credit
    36  incentive credit under subsection    under subdivision [twelve-C]
    37  (j-1)                                four of section
    38                                       two hundred [ten] ten-B
 
    39  (ix) Alternative fuels               Amount of credit under subdivision
    40  and electric vehicle                 [twenty-four] thirty of section
    41  recharging property                  two hundred [ten] ten-B
    42  credit under subsection (p)
 
    43  (x) Qualified emerging technology    Applicable credit base under
    44  company employment credit under      subdivision [twelve-E] seven
    45  subsection (q)                       of section two hundred [ten] ten-B

        S. 6359--D                         151                        A. 8559--D
 
     1  (xi) Qualified emerging technology   Qualified investments under
     2  company capital tax credit under     subdivision [twelve-F] eight
     3  subsection (r)                       of section two hundred [ten] ten-B
 
     4  (xii) Credit for purchase of an      Cost of an automated external
     5  automated external defibrillator     defibrillator under subdivision
     6  under subsection (s)                 [twenty-five] thirteen of section
     7                                       two hundred [ten or subsection
     8                                       (j) of section fourteen hundred
     9                                       fifty-six] ten-B
 
    10  (xiii) Low-income housing credit     Credit amount under subdivision
    11  under subsection (x)                 [thirty] fifteen of section
    12                                       two hundred [ten or subsection
    13                                       (l) of section fourteen
    14                                       hundred fifty-six] ten-B
 
    15  [(xiv) Credit for transportation     For taxable years beginning
    16  improvement contributions under      before January first, two thousand
    17  subsection (z)                       nine, amount of credit under
    18                                       subdivision thirty-two of
    19                                       section two hundred ten
    20                                       or subsection (n) of section
    21                                       fourteen hundred fifty-six]
 
    22  (xv) QEZE credit for real property   Amount of credit under subdivision
    23  taxes under subsection (bb)          [twenty-seven] five of
    24                                       section two hundred [ten
    25                                       or subsection (o) of section
    26                                       fourteen hundred fifty-six]
    27                                       ten-B
 
    28  (xvi) QEZE tax reduction credit      Amount of benefit period factor,
    29  under subsection (cc)                employment increase factor and zone
    30                                       allocation factor (without regard
    31                                       to pro ration) under subdivision
    32                                       [twenty-eight] six of
    33                                       section two hundred [ten
    34                                       or subsection (p) of section
    35                                       fourteen hundred fifty-six]
    36                                       ten-B and amount
    37                                       of tax factor as determined under
    38                                       subdivision (f) of section sixteen

    39  (xvii) Green building credit under   Amount of green building credit
    40  subsection (y)                       under subdivision [thirty-one]
    41                                       sixteen of section two
    42                                       hundred [ten or subsection (m)
    43                                       of section fourteen hundred
    44                                       fifty-six] ten-B
 
    45  (xviii) Credit for long-term care    Qualified costs under subdivision
    46  insurance premiums under subsection  [twenty-five-a] fourteen
    47  (aa)                                 of section two hundred [ten
    48                                       or subsection (k) of
    49                                       section fourteen hundred fifty-six]

        S. 6359--D                         152                        A. 8559--D
 
     1                                       ten-B
 
     2  (xix) Brownfield redevelopment       Amount of credit under subdivision
     3  credit under subsection (dd)         [thirty-three] seventeen
     4                                       of section two hundred
     5                                       [ten or subsection (q) of section
     6                                       fourteen hundred fifty-six]
     7                                       ten-B
 
     8  (xx) Remediated brownfield credit    Amount of credit under subdivision
     9  for real property taxes for          [thirty-four] eighteen
    10  qualified sites under subsection     of section two hundred
    11  (ee)                                 [ten of subsection (r) of section
    12                                       fourteen hundred fifty-six]
    13                                       ten-B
 
    14  (xxi) Environmental remediation      Amount of credit under subdivision
    15  insurance credit under subsection    [thirty-five] nineteen
    16  (ff)                                 of section two hundred
    17                                       [ten or subsection (s) of section
    18                                       fourteen hundred fifty-six]
    19                                       ten-B
 
    20  (xxii) Empire state film             Amount of credit for qualified
    21  production credit under              production costs in production of a
    22  subsection (gg)                      qualified film under subdivision
    23                                       [thirty-six] twenty of
    24                                       section two hundred [ten] ten-B
 
    25  [(xxiii) Qualified emerging          Qualifying expenditures and
    26  technology company facilities,       development activities under
    27  operations and training credit       subdivision twelve-G of section two
    28  under subsection (nn)                hundred ten]
 
    29  (xxiv) Security training tax credit  Amount of credit under subdivision
    30  under subsection (ii)                [thirty-seven] twenty-one
    31                                       of section two hundred
    32                                       [ten or under subsection (t) of
    33                                       section fourteen hundred fifty-six]
    34                                       ten-B

    35  [(xxv) Credit for qualified fuel     For taxable years beginning before
    36  cell electric generating             January first, two thousand nine,
    37  equipment expenditures               amount of credit under subdivision
    38  under subsection (g-2)               thirty-seven of section two hundred
    39                                       ten or subsection (t) of section
    40                                       fourteen hundred fifty-six]
 
    41  (xxvi) Empire state commercial       Amount of credit for qualified
    42  production credit under subsection   production costs in production of
    43  (jj)                                 a qualified commercial under
    44                                       subdivision [thirty-eight]
    45                                       twenty-three of
    46                                       section two hundred [ten]
    47                                       ten-B

        S. 6359--D                         153                        A. 8559--D
 
     1  (xxvii) Biofuel production tax       Amount of credit under subdivision
     2  credit under subsection (jj)         [thirty-eight] twenty-four
     3                                       of section two hundred [ten]
     4                                       ten-B
 
     5  (xxviii) Clean heating fuel credit   Amount of credit under subdivision
     6  under subsection (mm)                [thirty-nine] twenty-five of
     7                                       section two hundred [ten]
     8                                       ten-B

     9  (xxix) Credit for rehabilitation     Amount of credit under subdivision
    10  of historic properties under         [forty] twenty-six of
    11  subsection (oo)                      section two hundred [ten]
    12                                       ten-B
 
    13   (xxxi) Excelsior jobs program tax   Amount of credit under subdivision
    14  credit under subsection (qq)         [forty-one] thirty-one of
    15                                       section two hundred [ten
    16                                       or under subdivision (u) of
    17                                       section fourteen hundred fifty-six]
    18                                       ten-B
 
    19  (xxxi) Empire state film             Amount of credit for
    20  post production credit under         qualified post production
    21  subsection (qq)                      costs of a qualified film
    22                                       under subdivision [forty-one]
    23                                       thirty-two of section
    24                                       two hundred [ten] ten-B
 
    25   (xxxii) Economic transformation     Amount of credit under subdivision
    26  and facility redevelopment credit    [forty-three] thirty-five
    27                                       of section [210 or under
    28                                       subsection (x) of section fourteen
    29                                       hundred fifty-six] two hundred
    30                                       ten-B
 
    31   (xxxiii) New York youth works       Amount of credit under
    32  tax credit                           subdivision [forty-four] thirty-six
    33                                       of section two hundred [ten]
    34                                       ten-B
 
    35   (xxxiii) Empire state jobs          Amount of credit under
    36  retention program credit             subdivision [forty-four]
    37                                       thirty-seven of section
    38                                       two hundred [ten or under
    39                                       subsection (y) of section
    40                                       fourteen hundred fifty-six]
    41                                       ten-B
 
    42  (xxxiii) Credit for companies who    Amount of credit under
    43  provide transportation to            subdivision [forty-four]
    44  individuals with disabilities        thirty-eight of section
    45  under subsection (tt)                two hundred [ten] ten-B
 
    46  (xxxiv) Beer production credit       Amount of credit under
    47  under subsection (uu)                [subdivision] subdivision

        S. 6359--D                         154                        A. 8559--D
 
     1                                       [forty-five] thirty-nine of
     2                                       section two hundred [ten]
     3                                       ten-B
 
     4  (xxxv) Hire a vet credit             Amount of credit under subdivision
     5  under subsection (a-2)               [twenty-three-a] twenty-nine
     6                                       of section two hundred [ten
     7                                       or subsection (e-1) of
     8                                       of section fourteen hundred
     9                                       fifty-six] ten-B
 
    10  (xxxv) Minimum wage reimbursement    Amount of credit under subdivision
    11  credit under subsection (aaa)        [forty-six] forty
    12                                       of section two hundred
    13                                       [ten or subsection (z) of
    14                                       section fourteen hundred
    15                                       fifty-six] ten-B
 
    16  (xxxvi) Tax-free NY area tax         Amount of credit under
    17  elimination credit                   subdivision [forty-seven] forty-one
    18                                       of section two hundred [ten]
    19                                       ten-B
 
    20  (xxxvii) Real property tax           Amount of credit under
    21  credit for manufacturers             subdivision
    22  under subsection (xx)                forty-three of section
    23                                       two hundred ten-B
 
    24  (xxxviii) Tax-free NY area           Amount of credit under
    25  excise tax on                        subdivision
    26  telecommunications services          forty-four of section
    27  credit under subsection (yy)         two hundred ten-B
 
    28    §  69.  Subparagraphs  (A) and (B) of paragraph 3 of subsection (i) of
    29  section 606 of the tax law, as added by chapter 170 of the laws of 1994,
    30  are amended to read as follows:
    31    (A) Credit carryover. Any excess  credit  under  subparagraph  (A)  of
    32  paragraph  one of this subsection, as it was in effect for taxable years
    33  beginning before nineteen hundred ninety-four, may be  carried  over  to
    34  the  shareholder's following year or years and may be deducted from such
    35  shareholder's tax for such year or years, except that any excess  credit
    36  attributable  to  subdivision  [twelve] one of section two hundred [ten]
    37  ten-B of this chapter shall in no event be carried over beyond  the  ten
    38  taxable years next following the taxable year of origin.
    39    (B)  Credit  recapture. Any redetermination of credit required by this
    40  subsection as it was in effect for taxable years beginning before  nine-
    41  teen hundred ninety-four, upon disposition or cessation of qualified use
    42  of property pursuant to paragraph [(g)] (e) of subdivision [twelve] one,
    43  or  paragraph  (f) of subdivision [twelve-B or paragraph (f) of subdivi-
    44  sion eighteen] three of section two hundred [ten] ten-B of this  chapter
    45  shall  be  attributed  in  pro  rata shares to the shareholders who were
    46  allowed credit under this subsection with respect to such property,  and
    47  the  reduction  of a shareholder's proportionate stock interest shall be
    48  treated as a disposition of property  for  which  a  redetermination  of
    49  credit under such paragraphs is required with respect to such sharehold-
    50  er.

        S. 6359--D                         155                        A. 8559--D
 
     1    §  70.  Subparagraph (B) of paragraph 3 and paragraph 21 of subsection
     2  (b) and paragraph 21 of subsection (c) of section 612 of  the  tax  law,
     3  subparagraph  (B) of paragraph 3 of subsection (b) as amended by section
     4  57, paragraph 21 of subsection (b) as amended by section  59  and  para-
     5  graph 21 of subsection (c) as amended by section 60 of part A of chapter
     6  389 of the laws of 1997, are amended to read as follows:
     7    (B) Shareholders of S corporations. In the case of a shareholder of an
     8  S  corporation,  with  respect  to  taxes imposed upon or payable by the
     9  corporation, the term "income taxes" in subparagraph (A) of  this  para-
    10  graph  shall  also  include  the  taxes imposed under [articles] article
    11  nine-A [and thirty-two] of this chapter, regardless of  the  measure  of
    12  such  tax,  but shall not otherwise include taxes imposed by this or any
    13  other state of the United States, or any political subdivision  of  this
    14  or any other state, or the District of Columbia.
    15    (21)  In  relation  to  the  disposition of stock or indebtedness of a
    16  corporation which elected under subchapter  s  of  chapter  one  of  the
    17  internal  revenue  code  for any taxable year of such corporation begin-
    18  ning, in the case of a corporation taxable under article nine-A of  this
    19  chapter,  after  December thirty-first, nineteen hundred eighty, [and in
    20  the case of a corporation taxable under article thirty-two of this chap-
    21  ter, after December  thirty-first,  nineteen  hundred  ninety-six,]  the
    22  amount required to be added to federal adjusted gross income pursuant to
    23  subsection (n) of this section.
    24    (21)  In  relation  to  the  disposition of stock or indebtedness of a
    25  corporation which elected under subchapter  s  of  chapter  one  of  the
    26  internal  revenue  code  for any taxable year of such corporation begin-
    27  ning, in the case of a corporation taxable under article nine-A of  this
    28  chapter,  after  December thirty-first, nineteen hundred eighty, [and in
    29  the case of a corporation taxable under article thirty-two of this chap-
    30  ter, after December  thirty-first,  nineteen  hundred  ninety-six,]  the
    31  amounts  required  to  be  subtracted from federal adjusted gross income
    32  pursuant to subsection (n) of this section.
    33    § 71. Paragraph 2 of subsection (a) of section 632 of the tax law,  as
    34  amended  by  section  2  of part C of chapter 57 of the laws of 2010, is
    35  amended to read as follows:
    36    (2) In determining New York source income of a nonresident shareholder
    37  of an S corporation where the election provided for in subsection (a) of
    38  section six hundred sixty of this article is in effect, there  shall  be
    39  included only the portion derived from or connected with New York sourc-
    40  es  of  such  shareholder's  pro  rata  share  of items of S corporation
    41  income, loss and deduction entering  into  his  federal  adjusted  gross
    42  income,  increased  by  reductions for taxes described in paragraphs two
    43  and three of subsection (f) of section thirteen hundred sixty-six of the
    44  internal revenue code, as such portion shall be determined  under  regu-
    45  lations  of  the commissioner consistent with the applicable methods and
    46  rules for allocation under article nine-A [or thirty-two] of this  chap-
    47  ter,  regardless of whether or not such item or reduction is included in
    48  entire net income under article nine-A [or thirty-two] for the tax year.
    49  If a nonresident is a shareholder in an S corporation where the election
    50  provided for in subsection (a) of section  six  hundred  sixty  of  this
    51  article  is in effect, and the S corporation has distributed an install-
    52  ment obligation under section 453(h)(1)(A) of the Internal Revenue Code,
    53  then any gain recognized on the receipt of payments from the installment
    54  obligation for federal income tax purposes will be treated as  New  York
    55  source income allocated in a manner consistent with the applicable meth-
    56  ods  and  rules  for  allocation under article nine-A [or thirty-two] of

        S. 6359--D                         156                        A. 8559--D
 
     1  this chapter in the year that the assets were sold. In addition, if  the
     2  shareholders  of  the  S corporation have made an election under section
     3  338(h)(10) of the Internal Revenue Code, then any gain recognized on the
     4  deemed asset sale for federal income tax purposes will be treated as New
     5  York  source income allocated in a manner consistent with the applicable
     6  methods and rules for allocation under article nine-A [or thirty-two] of
     7  this  chapter  in  the  year  that  the  shareholder  made  the  section
     8  338(h)(10) election. For purposes of a section 338(h)(10) election, when
     9  a  nonresident  shareholder  exchanges his or her S corporation stock as
    10  part of the deemed liquidation, any gain or  loss  recognized  shall  be
    11  treated  as the disposition of an intangible asset and will not increase
    12  or offset any gain recognized on the deemed assets sale as a  result  of
    13  the section 338(h)(10) election.
    14    § 72. Subparagraph (A) of paragraph 4 of subsection (c) of section 658
    15  of the tax law, as amended by section 1 of part DD of chapter 686 of the
    16  laws of 2003, is amended to read as follows:
    17    (A) General. Every entity which is a partnership, other than a public-
    18  ly traded partnership as defined in section 7704 of the federal Internal
    19  Revenue Code, subchapter K limited liability company or an S corporation
    20  for  which  the  election  provided for in subsection (a) of section six
    21  hundred sixty of this [article] part is in effect, which  has  partners,
    22  members  or  shareholders  who  are  nonresident individuals, as defined
    23  under subsection (b) of section six hundred five of this article,  or  C
    24  corporations,  and  which  has any income derived from New York sources,
    25  determined in accordance  with  the  applicable  rules  of  section  six
    26  hundred thirty-one of this article as in the case of a nonresident indi-
    27  vidual,  shall  pay estimated tax on such income on behalf of such part-
    28  ners, members or shareholders in the manner and at the times  prescribed
    29  by  subsection  (c)  of section six hundred eighty-five of this article.
    30  For purposes of this paragraph, the term "estimated tax"  shall  mean  a
    31  partner's,  member's  or  shareholder's  distributive  share or pro rata
    32  share of the entity income derived from New York sources, multiplied  by
    33  the  highest  rate  of tax prescribed by section six hundred one of this
    34  article for the taxable year of any partner, member or  shareholder  who
    35  is  an  individual  taxpayer,  or  paragraph  (a)  of subdivision one of
    36  section two hundred ten of this chapter for  the  taxable  year  of  any
    37  partner,  member or shareholder which is a C corporation, whether or not
    38  such C corporation is subject to tax under article nine, nine-A[,  thir-
    39  ty-two,]  or  thirty-three of this chapter, and reduced by the distribu-
    40  tive share or pro rata share of any credits determined under section one
    41  hundred eighty-seven, one  hundred  eighty-seven-a,  six  hundred  six[,
    42  fourteen  hundred  fifty-six] or fifteen hundred eleven of this chapter,
    43  whichever is applicable, derived from the entity.
    44    § 73. Subsections  (a)  and  (h)  of  section  660  of  the  tax  law,
    45  subsection (a) as amended by section 50 and subsection (h) as amended by
    46  section  66 of part A of chapter 389 of the laws of 1997, are amended to
    47  read as follows:
    48    (a) Election. If a corporation  is  an  eligible  S  corporation,  the
    49  shareholders  of  the  corporation  may elect in the manner set forth in
    50  subsection (b) of this section to  take  into  account,  to  the  extent
    51  provided for in this article (or in article thirteen of this chapter, in
    52  the case of a shareholder which is a taxpayer under such article), the S
    53  corporation  items  of  income, loss, deduction and reductions for taxes
    54  described in paragraphs two and three of subsection (f) of section thir-
    55  teen hundred sixty-six of the internal revenue code which are taken into
    56  account for federal  income  tax  purposes  for  the  taxable  year.  No

        S. 6359--D                         157                        A. 8559--D
 
     1  election  under this subsection shall be effective unless all sharehold-
     2  ers of the corporation have so elected. An eligible S corporation is (i)
     3  an S corporation which is subject to tax under article nine-A [or  thir-
     4  ty-two] of this chapter, or (ii) an S corporation which is the parent of
     5  a qualified subchapter S subsidiary subject to tax under article nine-A,
     6  where  the  shareholders of such parent corporation are entitled to make
     7  the election under this subsection by reason of  subparagraph  three  of
     8  paragraph  (k)  of subdivision nine of section two hundred eight of this
     9  chapter[; or (iii) an S corporation which is the parent of  a  qualified
    10  subchapter  S corporation subject to tax under article thirty-two, where
    11  the shareholders of such parent are entitled to make the election  under
    12  this  subsection  by  reason  of  paragraph  three  of subsection (o) of
    13  section fourteen hundred fifty-three of this chapter].
    14    (h) Cross reference. For definitions relating to S  corporations,  see
    15  subdivision  one-A of section two hundred eight [and subsections (f) and
    16  (g) of section fourteen hundred fifty] of this chapter.
    17    § 74. Paragraph 1 of subsection (i) of section 660 of the tax law,  as
    18  added  by  section  1  of  part  L of chapter 60 of the laws of 2007, is
    19  amended to read as follows:
    20    (1) Notwithstanding the provisions in subsection (a) of this  section,
    21  in  the  case  of an eligible S corporation for which the election under
    22  subsection (a) of this section is not in effect for the current  taxable
    23  year,  the  shareholders of an eligible S corporation are deemed to have
    24  made that election effective for the  eligible  S  corporation's  entire
    25  current  taxable year, if the eligible S corporation's investment income
    26  for the current taxable year is more than fifty percent of  its  federal
    27  gross  income  for  such  year  [provided that this subsection shall not
    28  apply to an eligible S corporation that is subject to tax under  article
    29  thirty-two  of this chapter]. In determining an eligible S corporation's
    30  investment income, the investment income of  a  qualified  subchapter  S
    31  subsidiary  owned  directly  or indirectly by the eligible S corporation
    32  shall be included.
    33    § 75. Paragraph 3 of subsection (c) of section 1085 of the tax law, as
    34  amended by section 15 of part Y of chapter 63 of the laws  of  2000,  is
    35  amended to read as follows:
    36    (3)  The  provisions of this subsection and subsections (d) and (e) of
    37  this section shall apply to the failure of a taxpayer to file a declara-
    38  tion of estimated tax surcharge or the failure to pay all or any part of
    39  an amount which is applied as an installment against such estimated  tax
    40  surcharge  pursuant  to sections one hundred ninety-seven-a, one hundred
    41  ninety-seven-b, two hundred thirteen-a, two hundred  thirteen-b,  [four-
    42  teen  hundred  sixty, fourteen hundred sixty-one,] fifteen hundred thir-
    43  teen and fifteen hundred fourteen  of  this  chapter.  For  purposes  of
    44  applying this section and subsections (d) and (e) of this section to the
    45  estimated  tax surcharge, where appropriate the term "tax" shall be read
    46  to mean "tax surcharge," and the terms "amount  required  to  be  paid,"
    47  "amount  which  would  be  required to be paid," and "amount which would
    48  have been required to be paid" shall be computed as the product  of  (1)
    49  such  amount computed without regard to the tax surcharges imposed under
    50  sections  one  hundred  eighty-four-a,  one  hundred  eighty-six-c,  one
    51  hundred  eighty-eight, two hundred nine-A, two hundred nine-B, [fourteen
    52  hundred fifty-five-A, fourteen hundred  fifty-five-B,]  fifteen  hundred
    53  five-a,  and  fifteen  hundred  twenty  of this chapter, and (2) the MTA
    54  percentage. The term "MTA percentage" shall mean the product of (A)  the
    55  tax rate applicable under such sections imposing such surcharges and (B)
    56  the  percentage  utilized  in  determining the portion of the taxpayer's

        S. 6359--D                         158                        A. 8559--D
 
     1  business activity carried on within the metropolitan commuter  transpor-
     2  tation district under such sections.
     3    §  76.  The  opening  paragraph  of subparagraph (A) of paragraph 3 of
     4  subsection (d) of section 1085 of the tax law, as amended by chapter 170
     5  of the laws of 1994, is amended to read as follows:
     6    An amount equal to ninety-one percent of the tax for the taxable  year
     7  computed  on all items entering into the computation of the tax or taxes
     8  of the taxpayer for the taxable year under article nine, nine-A[,  thir-
     9  ty-two]  or  thirty-three of this chapter. For purposes of computing the
    10  tax, all items of receipts, income and expenses shall be  placed  on  an
    11  annualized basis--
    12    §  77. Clause (i) of subparagraph (A) of paragraph 4 of subsection (d)
    13  of section 1085 of the tax law, as amended by chapter 57 of the laws  of
    14  1993, is amended to read as follows:
    15    (i)  take  the items entering into the computation of the tax or taxes
    16  of the taxpayer for the taxable year under article nine, nine-A[,  thir-
    17  ty-two] or thirty-three of this chapter, for all months during the taxa-
    18  ble year preceding the filing month,
    19    § 78. Paragraph 5 of subsection (d) of section 1085 of the tax law, as
    20  added by chapter 61 of the laws of 1989, is amended to read as follows:
    21    (5)  In the case of any declaration installment, any reduction in such
    22  installment resulting from the application of paragraph three or four of
    23  this subsection shall be recaptured by increasing the amount of the next
    24  installment determined under paragraph one or two of this subsection  or
    25  paragraph  one  of  subsection (c) of this section by the amount of such
    26  reduction (and by increasing subsequent installments to the extent  that
    27  the  reduction has not previously been recaptured under this paragraph).
    28  For purposes of the preceding sentence, a declaration installment  means
    29  any installment of estimated tax other than the mandatory first install-
    30  ment  required  under  paragraph  (a)  of subdivision one of section one
    31  hundred ninety-seven-b, subdivision (a) of  section  two  hundred  thir-
    32  teen-b[, subsection (a) of section fourteen hundred sixty-one] or subdi-
    33  vision (a) of section fifteen hundred fourteen of this chapter.
    34    § 79. Paragraph 1 of subsection (e) of section 1085 of the tax law, as
    35  amended  by  section 28-p of part H-3 of chapter 62 of the laws of 2003,
    36  is amended to read as follows:
    37    (1) Paragraphs (1) and (2) of subsection (d) of this section shall not
    38  apply in the case of any corporation (or  any  predecessor  corporation)
    39  which had [entire net] business income, or the portion thereof allocated
    40  within  the  state,  of one million dollars or more for any taxable year
    41  during the three taxable years immediately preceding  the  taxable  year
    42  involved;  provided,  however, that in the case of a corporation subject
    43  to tax under section fifteen hundred two-a of this  chapter,  paragraphs
    44  (1)  and  (2)  of subsection (d) of this section shall not apply if such
    45  corporation had entire net income,  or  the  portion  thereof  allocated
    46  within  the  state,  of one million dollars or more for any of the three
    47  taxable years immediately preceding the taxable year involved, or if the
    48  direct premiums subject to tax under section fifteen  hundred  two-a  of
    49  this  chapter of the corporation for any of such three preceding taxable
    50  years beginning on or after January first, two thousand three equals  or
    51  exceeds three million seven hundred fifty thousand dollars.
    52    §  80.  Subsections  (m)  and  (o)  of section 1085 of the tax law are
    53  REPEALED.
    54    § 81. Clause (ii) of subparagraph (B) of  paragraph  2  of  subsection
    55  (q),  paragraph  3  of subsection (s) and the closing paragraph of para-
    56  graph 1 of subsection (t) of section 1085 of the tax law,  as  added  by

        S. 6359--D                         159                        A. 8559--D
 
     1  section  10  of part N of chapter 61 of the laws of 2005, are amended to
     2  read as follows:
     3    (ii)  fifty percent of the gross income that the organizer or material
     4  advisor derived with respect to activities that were the basis  for  the
     5  requirement to file, disclose or provide information pursuant to section
     6  six  thousand  eleven  of  the internal revenue code, to the extent such
     7  gross income is attributable to the avoidance of any tax  imposed  under
     8  article nine, nine-A[, thirty-two,] or thirty-three of this chapter.
     9    (3)  For  purposes  of  this  subsection,  the term "understatement of
    10  liability" means any understatement  of  the  net  amount  payable  with
    11  respect  to any tax imposed under article nine, nine-A[, thirty-two,] or
    12  thirty-three of this chapter or any  overstatement  of  the  net  amount
    13  creditable or refundable with respect to any such tax.
    14  shall  pay,  with respect to each activity described in subparagraph (A)
    15  of this paragraph, a penalty equal to one thousand dollars  or,  if  the
    16  person  establishes  that it is lesser, one hundred percent of the gross
    17  income derived (or to be derived) by such person from such  activity  to
    18  the  extent  such gross income is attributed to the avoidance of any tax
    19  imposed under articles nine, nine-A[,  thirty-two]  or  thirty-three  of
    20  this  chapter;  provided,  however,  that if an activity with respect to
    21  which a penalty imposed  under  this  subsection  involves  a  statement
    22  described  in  clause  (i)  of subparagraph (B) of paragraph one of this
    23  subsection, the penalty shall be equal to fifty  percent  of  the  gross
    24  income derived (or to be derived) from that activity within the state by
    25  the  person on which the penalty is imposed. For purposes of the preced-
    26  ing sentence, activities described in clause (i) of subparagraph (A)  of
    27  this  paragraph  with  respect  to  each  entity or arrangement shall be
    28  treated as a separate activity and participation in each sale  described
    29  in  clause (ii) of subparagraph (A) of this paragraph shall be so treat-
    30  ed.
    31    § 82. The opening paragraph of subsection (c) of section 1087  of  the
    32  tax  law,  as  separately amended by chapters 760 and 770 of the laws of
    33  1992, is amended to read as follows:
    34    If a taxpayer is required by subdivision three of section two  hundred
    35  eleven[,  subsection (e) of section fourteen hundred sixty-two] or para-
    36  graph one of subdivision (e) of section fifteen hundred fifteen of  this
    37  chapter, to file a report or amended return in respect of (i) a decrease
    38  or  increase  in  federal  taxable income or federal alternative minimum
    39  taxable income or federal tax, or (ii) a federal change or correction or
    40  renegotiation, or computation or recomputation of tax, which is  treated
    41  in  the  same manner as if it were an overpayment for federal income tax
    42  purposes, claim for credit or refund of any resulting overpayment of tax
    43  shall be filed by the taxpayer within  two  years  from  the  time  such
    44  report  or amended return was required to be filed with the commissioner
    45  [of taxation and finance]. If the report or amended return  required  by
    46  any  such provision of law is not filed within the period therein speci-
    47  fied, no interest shall be payable on any claim for credit or refund  of
    48  the  overpayment  attributable  to the federal change or correction. The
    49  amount of such credit or refund--
    50    § 83. Subsection (g) of section 1088 of the tax  law,  as  amended  by
    51  chapter  61 of the laws of 1989 and relettered by chapter 55 of the laws
    52  of 1992, is amended to read as follows:
    53    (g) Cross-reference.--For provision with  respect  to  interest  after
    54  failure  to  file  a report or amended return under subdivision three of
    55  section two hundred eleven[, subsection (e) of section fourteen  hundred
    56  sixty-two]  or  paragraph  one  of  subdivision  (e)  of section fifteen

        S. 6359--D                         160                        A. 8559--D
 
     1  hundred fifteen, see subsection (c) of section one thousand  eighty-sev-
     2  en.
     3    § 84. Paragraph 2 of subsection (b) of section 1096 of the tax law, as
     4  amended  by  chapter  411  of  the  laws  of 1986, is amended to read as
     5  follows:
     6    (2) The [tax commission] commissioner may take any action under  para-
     7  graph  one  of  this  subdivision  to  inquire into the commission of an
     8  offense connected with the administration or enforcement of this article
     9  or article nine, [nine-a] nine-A,  thirteen,  [thirteen-a,  thirty-two,]
    10  thirteen-A  or  thirty-three  of  this  chapter, provided, however, that
    11  notwithstanding the provisions of section one  hundred  seventy-four  of
    12  this  chapter  no  such  action  shall  be  taken when a referral by the
    13  department or the [tax commission] commissioner to the attorney general,
    14  a district attorney or any other  prosecutorial  agency  is  in  effect.
    15  Provided,  however,  the [tax commission] commissioner shall have power,
    16  during the period when such referral is in  effect,  to  examine  or  to
    17  cause  to have examined, by any agent or representative designated by it
    18  for that purpose, any books, papers, records or memoranda  bearing  upon
    19  the  matters  required  to  be included in the return, where such books,
    20  papers, records or memoranda are in its possession, or where such books,
    21  papers, records or memoranda are  in  the  possession  of  the  attorney
    22  general,  district  attorney or other prosecutorial agency to which such
    23  referral is made.
    24    § 85. Paragraph 1 of subsection (e) of section 1096 of the tax law, as
    25  amended by section 8 of subpart D of part V1 of chapter 57 of  the  laws
    26  of 2009, is amended to read as follows:
    27    (1)  Authority to set interest rates.---The commissioner shall set the
    28  overpayment and underpayment rates of interest to be  paid  pursuant  to
    29  sections  two  hundred  thirteen,  two  hundred  thirteen-b, two hundred
    30  fifty-eight, two hundred sixty-three, two hundred ninety-four, one thou-
    31  sand eighty-four, one thousand eighty-five[,] and one  thousand  eighty-
    32  eight[,  fourteen hundred sixty-one and fourteen hundred sixty-three] of
    33  this chapter, but if no such rate or rates of  interest  are  set,  such
    34  overpayment  rate shall be deemed to be set at six percent per annum and
    35  such underpayment rate shall be deemed to be set at seven  and  one-half
    36  percent  per annum. Such overpayment and underpayment rates shall be the
    37  rates prescribed in paragraph two of this subsection, but the  underpay-
    38  ment  rate  shall not be less than seven and one-half percent per annum.
    39  Any such rates set by the commissioner shall  apply  to  taxes,  or  any
    40  portion  thereof, which remain or become due or overpaid on or after the
    41  date on which such rates become effective  and  shall  apply  only  with
    42  respect  to  interest  computed or computable for periods or portions of
    43  periods occurring in the period during which such rates are in effect.
    44    § 86. Subdivision (b) of section 1201-a of the tax law, as amended  by
    45  section  5  of  part  Y of chapter 62 of the laws of 2006, is amended to
    46  read as follows:
    47    (b) Empire state film production credit. Any city in this state having
    48  a population of one million or more, acting through its  local  legisla-
    49  tive body, is hereby authorized to adopt and amend local laws to allow a
    50  credit  against the general corporation tax and the unincorporated busi-
    51  ness tax imposed pursuant to the  authority  of  chapter  seven  hundred
    52  seventy-two  of  the  laws  of nineteen hundred sixty-six which shall be
    53  substantially identical to the credit allowed under section  twenty-four
    54  of  this chapter, except that (A) the percentage of qualified production
    55  costs used to calculate such credit shall be five percent, (B)  whenever
    56  such  section twenty-four references the state, such words shall be read

        S. 6359--D                         161                        A. 8559--D
 
     1  as referencing the city, (C) such credit shall  be  allowed  only  to  a
     2  taxpayer  which  is  a  qualified  film  production company, and (D) the
     3  effective date of such credit shall be July  first,  two  thousand  six.
     4  Such  credit  shall  be  applied  in a manner consistent with the credit
     5  allowed under subdivision [thirty-six] twenty  of  section  two  hundred
     6  [ten]  ten-B  of  this  chapter  except as may be necessary to take into
     7  account differences between the general corporation tax and the unincor-
     8  porated business tax.
     9    § 87. Subdivision (c) of section 1201-a of the tax law, as amended  by
    10  chapter 300 of the laws of 2007, is amended to read as follows:
    11    (c)  Empire state commercial production credit. Any city in this state
    12  having a population of one million or more,  acting  through  its  local
    13  legislative  body, is hereby authorized to adopt and amend local laws to
    14  allow a credit against the general corporation tax and the unincorporat-
    15  ed business tax imposed pursuant  to  the  authority  of  chapter  seven
    16  hundred  seventy-two  of  the  laws  of nineteen hundred sixty-six which
    17  shall be  substantially  identical  to  the  credit  allowed  under  the
    18  provisions  of section twenty-eight of this chapter, except that (A) the
    19  percentage of qualified production costs used to calculate  such  credit
    20  shall be five percent, (B) whenever such section twenty-eight references
    21  the  state,  such  words shall be read as referencing the city, (C) such
    22  credit shall be allowed only to a taxpayer that is a  qualified  commer-
    23  cial production company, and (D) the effective date of such credit shall
    24  be  as  provided in local laws. Such credit shall be applied in a manner
    25  consistent with the  credit  allowed  under  subdivision  [thirty-eight]
    26  twenty-three  of  section two hundred [ten] ten-B of this chapter except
    27  as may be necessary to take into account differences between the general
    28  corporation tax and unincorporated business tax.
    29    § 88. The section heading and paragraphs 1 and 3 of subdivision (a) of
    30  section 1505-a of the tax law, the section heading as added  by  chapter
    31  11  of  the  laws  of  1983 and paragraphs 1 and 3 of subdivision (a) as
    32  amended by section 6 of part A of chapter 59 of the laws  of  2013,  are
    33  amended to read as follows:
    34    [Temporary  metropolitan]  Metropolitan  transportation  business  tax
    35  surcharge on insurance corporations.
    36    (1) Every domestic insurance corporation and every  foreign  or  alien
    37  insurance corporation, and every life insurance corporation described in
    38  subdivision  (b) of section fifteen hundred one of this article, for the
    39  privilege of exercising its corporate franchise, or of  doing  business,
    40  or  of employing capital, or of owning or leasing property in the metro-
    41  politan commuter transportation district in  a  corporate  or  organized
    42  capacity,  or  of  maintaining  an  office  in the metropolitan commuter
    43  transportation district, [for all or  any  part  of  its  taxable  years
    44  commencing  on  or after January first, nineteen hundred eighty-two, but
    45  ending before December  thirty-first,  two  thousand  eighteen,]  except
    46  corporations  specified  in  subdivision  (c) of section fifteen hundred
    47  twelve of this article, shall annually pay, in  addition  to  the  taxes
    48  otherwise  imposed by this article, a tax surcharge on the taxes imposed
    49  under this article after the deduction of any credits  otherwise  allow-
    50  able  under this article as allocated to such district. Such taxes shall
    51  be allocated to  such  district  for  purposes  of  computing  such  tax
    52  surcharge upon taxpayers subject to tax under subdivision (b) of section
    53  fifteen  hundred ten of this article by applying the methodology, proce-
    54  dures and computations set forth in subdivisions (a) and (b) of  section
    55  fifteen  hundred  four  of this article, except that references to terms
    56  denoting New York premiums, and total wages, salaries, personal  service

        S. 6359--D                         162                        A. 8559--D
 
     1  compensation  and  commissions within New York shall be read as denoting
     2  within the  metropolitan  commuter  transportation  district  and  terms
     3  denoting  total  premiums  and  total  wages, salaries, personal service
     4  compensation and commissions shall be read as denoting within the state.
     5  If it shall appear to the commissioner that the application of the meth-
     6  odology,  procedures and computations set forth in such subdivisions (a)
     7  and (b) does not properly reflect the activity, business or income of  a
     8  taxpayer  within the metropolitan commuter transportation district, then
     9  the commissioner shall be authorized, in the commissioner's  discretion,
    10  to  adjust such methodology, procedures and computations for the purpose
    11  of allocating such taxes by:
    12    (A) excluding one or more factors therein;
    13    (B) including one or more other factors  therein,  such  as  expenses,
    14  purchases,  receipts  other  than  premiums,  real  property or tangible
    15  personal property; or
    16    (C) any other similar or different method which allocates  such  taxes
    17  by  attributing a fair and proper portion of such taxes to the metropol-
    18  itan commuter transportation district. The  commissioner  from  time  to
    19  time  shall  publish all rulings of general public interest with respect
    20  to any application of the provisions  of  the  preceding  sentence.  The
    21  commissioner  may  promulgate rules and regulations to further implement
    22  the provisions of this section.
    23    (3) Such tax surcharge shall be computed  at  the  rate  of  [eighteen
    24  percent  of  the  taxes  imposed  under sections fifteen hundred one and
    25  fifteen hundred ten of  this  article  as  limited  by  section  fifteen
    26  hundred  five  of  this article, as allocated to such district, for such
    27  taxable years or any part of such taxable years ending  before  December
    28  thirty-first,  nineteen  hundred eighty-three after the deduction of any
    29  credits otherwise allowable under this article, at the rate of seventeen
    30  percent of the taxes imposed under such sections as limited  by  section
    31  fifteen hundred five of this article, as allocated to such district, for
    32  such  taxable years or any part of such taxable years ending on or after
    33  December thirty-first, nineteen hundred eighty-three and before  January
    34  first,  two  thousand three after the deduction of any credits otherwise
    35  allowable under this article, and at the rate of] seventeen  percent  of
    36  the  taxes  imposed  under sections fifteen hundred one, fifteen hundred
    37  two-a, and fifteen hundred ten of this article, as limited or  otherwise
    38  determined  by subdivision (a) or (b) of section fifteen hundred five of
    39  this article, as allocated to such district, [for such taxable years  or
    40  any  part  of such taxable years ending after December thirty-first, two
    41  thousand two] after the deduction of  any  credits  otherwise  allowable
    42  under  this  article[; provided, however, that the tax surcharge imposed
    43  by this section shall not be imposed upon any  taxpayer  for  more  than
    44  four  hundred  thirty-two  months].  Provided  however, that for taxable
    45  years commencing on or after July first, two thousand, and in  the  case
    46  of  taxpayers subject to tax under section fifteen hundred two-a of this
    47  article, for taxable years of such taxpayers beginning on or after  July
    48  first,  two  thousand and before January first, two thousand three, such
    49  surcharge shall be calculated as if (i) the rate  of  the  tax  computed
    50  under paragraph one of subdivision (a) of section fifteen hundred two of
    51  this article was nine percent and (ii) the rate of the limitation on tax
    52  set  forth in section fifteen hundred five of this article for domestic,
    53  foreign and alien insurance corporations except  life  insurance  corpo-
    54  rations was two and six-tenths percent.
    55    §  89.  Section 1825 of the tax law, as amended by section 2 of part E
    56  of chapter 25 of the laws of 2009, is amended to read as follows:

        S. 6359--D                         163                        A. 8559--D
 
     1    § 1825. Violation of secrecy provisions of the  tax  law.--Any  person
     2  who  violates  the  provisions of subdivision (b) of section twenty-one,
     3  subdivision one of section two hundred two, subdivision eight of section
     4  two hundred eleven, subdivision (a) of section three  hundred  fourteen,
     5  subdivision  one  or  two  of section four hundred thirty-seven, section
     6  four hundred eighty-seven,  subdivision  one  or  two  of  section  five
     7  hundred  fourteen,  subsection  (e) of section six hundred ninety-seven,
     8  subsection (a) of section nine hundred ninety-four, subdivision  (a)  of
     9  section  eleven  hundred forty-six, section twelve hundred eighty-seven,
    10  subdivision (a) of section fourteen hundred eighteen, [subsection (a) of
    11  section  fourteen  hundred  sixty-seven,]  subdivision  (a)  of  section
    12  fifteen  hundred  eighteen,  subdivision  (a) of section fifteen hundred
    13  fifty-five of this chapter, and subdivision (e) of  section  11-1797  of
    14  the  administrative  code  of  the city of New York shall be guilty of a
    15  misdemeanor.
    16    § 90. Subdivisions (s) and (t) of section 957 of the general municipal
    17  law, as amended by section 1 of part S1 of chapter 57  of  the  laws  of
    18  2009, are amended to read as follows:
    19    (s)  "Qualified  investment  project" shall mean a project (i) located
    20  within an empire zone, (ii) at which five hundred or more jobs  will  be
    21  created,  provided such jobs are new to the state and are in addition to
    22  any other jobs previously created by the owner of such  project  in  the
    23  state,  and  (iii)  which will consist of tangible personal property and
    24  other tangible property, including buildings and  structural  components
    25  of  buildings,  described  in  subparagraphs  (i), (ii), (iii), (iv) and
    26  clause (A) or (C) of subparagraph (v) of paragraph  (b)  of  subdivision
    27  [twelve-B]  three of section two hundred [ten] ten-B of the tax law, the
    28  basis of which for federal income tax  purposes  will  equal  or  exceed
    29  seven hundred fifty million dollars. Provided however, the owner of such
    30  project  does  not  employ more than two hundred persons in the state at
    31  the time such project is commenced.
    32    (t) "Significant capital investment project" shall mean a project  (i)
    33  located  within  an  empire  zone,  (ii)  which  will  be either a newly
    34  constructed facility or a newly constructed addition to or expansion  of
    35  a qualified investment project, consisting of tangible personal property
    36  and  other  tangible property, including buildings and structural compo-
    37  nents of buildings, described in subparagraphs (i),  (ii),  (iii),  (iv)
    38  and  clause  (A) or (C) of subparagraph (v) of paragraph (b) of subdivi-
    39  sion [twelve-B] three of section two hundred [ten] ten-B of the tax law,
    40  the basis of which for federal income tax purposes will equal or  exceed
    41  seven  hundred  fifty  million dollars, (iii) which is constructed after
    42  the basis for federal income tax purposes  of  the  property  comprising
    43  such  qualified investment project equals or exceeds seven hundred fifty
    44  million dollars, and (iv) at which five hundred or  more  jobs  will  be
    45  created,  provided such jobs are new to the state and are in addition to
    46  any other jobs previously created by the owner of such  project  in  the
    47  state.
    48    § 91. Intentionally omitted.
    49    § 92. Intentionally omitted.
    50    § 93. Intentionally omitted.
    51    § 94. Intentionally omitted.
    52    § 95. Intentionally omitted.
    53    § 96. Intentionally omitted.
    54    § 97. Intentionally omitted.
    55    § 98. Intentionally omitted.

        S. 6359--D                         164                        A. 8559--D
 
     1    §  99.  Notwithstanding  any  provisions  of  law  to the contrary and
     2  notwithstanding the repeal of article 32 of the tax law by  section  one
     3  of  this act, the repeal of section 180 of the tax law by section two of
     4  this act and the repeal of section 181 of the tax law by  section  three
     5  of  this  act,  all  provisions  of  such  article and such sections, in
     6  respect to the imposition, exemption, assessment, payment, payment over,
     7  determination, collection, and credit or refund  of  tax,  interest  and
     8  penalty imposed thereunder, the filing of forms and returns, the preser-
     9  vation  of records for the purposes of such tax, the secrecy of returns,
    10  the disposition of revenues, and the civil and criminal penalties appli-
    11  cable to the violation of the provisions of such  article  32  and  such
    12  sections  180  and  181,  shall  continue  in full force and effect with
    13  respect to all such tax accrued for taxable years beginning before Janu-
    14  ary 1, 2015;  and  all  actions  and  proceedings,  civil  or  criminal,
    15  commenced  or  authorized  to  be  commenced  under  or by virtue of any
    16  provision of such article 32 or by  virtue  of  any  provision  of  such
    17  section  180  or  181  so  repealed, and pending or able to be commenced
    18  immediately prior to the taking effect of such repeal, may be commenced,
    19  prosecuted and defended to final effect in the same manner as they might
    20  if such provisions were not so repealed.
    21    § 100. Subdivision 1 of section 187 of the  tax  law,  as  amended  by
    22  chapter 2 of the laws of 1995, is amended to read as follows:
    23    1.  A  taxpayer  shall be allowed a credit, to be credited against the
    24  taxes imposed by this article, other than the taxes and fees imposed  by
    25  sections  [one  hundred  eighty,  one  hundred  eighty-one,] one hundred
    26  eighty-six-a and one hundred eighty-six-e of this chapter. The amount of
    27  the credit shall be  the  amount  of  the  special  additional  mortgage
    28  recording  tax paid by the taxpayer pursuant to the provisions of subdi-
    29  vision one-a of section two hundred fifty-three of this chapter on mort-
    30  gages recorded on and after January  first,  nineteen  hundred  seventy-
    31  nine.  Provided,  however,  that  the  amount  of  such credit allowable
    32  against the tax imposed by section one hundred eighty-four of this chap-
    33  ter shall be the excess of the amount of such special  additional  mort-
    34  gage  recording  tax  paid over the amount of any credit allowed by this
    35  section against the tax imposed by section one hundred  eighty-three  of
    36  this chapter. Provided further, however, no credit shall be allowed with
    37  respect  to  a  mortgage  of real property principally improved or to be
    38  improved by one or more structures containing in the aggregate not  more
    39  than  six  residential dwelling units, each dwelling unit having its own
    40  separate cooking facilities, where the real property is located  in  one
    41  or more of the counties comprising the metropolitan commuter transporta-
    42  tion  district and where the mortgage is recorded on or after May first,
    43  nineteen hundred eighty-seven.  Provided  further,  however,  no  credit
    44  shall be allowed with respect to a mortgage of real property principally
    45  improved  or  to be improved by one or more structures containing in the
    46  aggregate not more than six residential dwelling  units,  each  dwelling
    47  unit having its own separate cooking facilities, where the real property
    48  is  located  in the county of Erie and where the mortgage is recorded on
    49  or after May first, nineteen hundred eighty-seven.
    50    § 101. Subdivision 1 of section 187-a of the  tax  law,  as  added  by
    51  chapter 142 of the laws of 1997, is amended to read as follows:
    52    1.    Allowance of credit. A taxpayer shall be allowed a credit, to be
    53  computed as hereinafter provided, against  the  taxes  imposed  by  this
    54  article,  other  than the taxes imposed by sections [one hundred eighty,
    55  one hundred eighty-one,] one hundred eighty-six-a, one  hundred  eighty-
    56  six-e  and one hundred eighty-nine of this article, for employing within

        S. 6359--D                         165                        A. 8559--D
 
     1  the state a qualified employee. Provided, however, the amount of  credit
     2  allowed  by  this section against the tax imposed by section one hundred
     3  eighty-four of this article shall be the excess of the  credit  computed
     4  under  this  section  over  the amount of credit allowed by this section
     5  against the tax imposed by section  one  hundred  eighty-three  of  this
     6  article.
     7    §  102.  Subdivision  1  of  section 190 of the tax law, as amended by
     8  section 17 of part B of chapter 58 of the laws of 2004,  is  amended  to
     9  read as follows:
    10    1.  General.  A  taxpayer  shall  be  allowed a credit against the tax
    11  imposed by this article[, other than  the  taxes  and  fees  imposed  by
    12  sections one hundred eighty and one hundred eighty-one of this article,]
    13  equal  to twenty percent of the premium paid during the taxable year for
    14  long-term care insurance. In order  to  qualify  for  such  credit,  the
    15  taxpayer's premium payment must be for the purchase of or for continuing
    16  coverage under a long-term care insurance policy that qualifies for such
    17  credit  pursuant  to  section  one thousand one hundred seventeen of the
    18  insurance law.
    19    § 103. Subdivision 5 of section 192 of the tax law is REPEALED.
    20    § 104. Clauses 1 and 2 of subparagraph (A)  and  subparagraph  (B)  of
    21  paragraph (iii) of subdivision 9 of section 16-v of section 1 of chapter
    22  174  of  the laws of 1968 constituting the urban development corporation
    23  act, as added by section 1 of part C of chapter 59 of the laws of  2013,
    24  is amended to read as follows:
    25    (1)  over fifty percent of the number of shares of stock entitling the
    26  holders thereof to vote for the election of  directors  or  trustees  is
    27  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
    28  subject to tax under the following provisions of the  tax  law:  article
    29  nine-A; section one hundred eighty-three, or one hundred eighty-four [or
    30  one  hundred eighty-five] of article nine; [article thirty-two] or arti-
    31  cle thirty-three; or
    32    (2) is substantially similar in operation and in ownership to a  busi-
    33  ness  entity  (or  entities)  taxable  or  previously  taxable under the
    34  following provisions of the tax law: article nine-A; section one hundred
    35  eighty-three, one hundred eighty-four, former section one hundred eight-
    36  y-five or former section one hundred eighty-six of article nine;  former
    37  article thirty-two; article thirty-three; article twenty-three, or would
    38  have  been subject to tax under such article twenty-three (as such arti-
    39  cle was in effect on January first,  nineteen  hundred  eighty)  or  the
    40  income  (or  losses) of which is (or was) includable under article twen-
    41  ty-two; or
    42    (B) a sole proprietorship, partnership, limited  partnership,  limited
    43  liability  company,  or  New  York  subchapter S corporation that is not
    44  substantially similar in operation and in ownership to a business entity
    45  (or entities) taxable, or previously taxable, under  article  nine-A  of
    46  the  tax law, section one hundred eighty-three, one hundred eighty-four,
    47  former section one hundred eighty-five or  former  section  one  hundred
    48  eighty-six  of article nine of the tax law, former article thirty-two or
    49  article thirty-three of the tax law, article twenty-three of the tax law
    50  or which would have been subject to tax under such article  twenty-three
    51  (as  such  article  was  in  effect  on  January first, nineteen hundred
    52  eighty) or the income (or losses) of which is (or was) includable  under
    53  article twenty-two of the tax law; and
    54    §  105. Section 206 of the tax law, as added by chapter 69 of the laws
    55  of 1978, is amended to read as follows:

        S. 6359--D                         166                        A. 8559--D
 
     1    § 206.   Deposit and disposition of  revenue.    The  [license  fees,]
     2  taxes,  percentage,  interest  and other charges imposed by this article
     3  shall be collected and deposited and receipts  therefor  issued  by  the
     4  [tax  commission,  except  that  such  license  fees, taxes, percentage,
     5  interest and other charges imposed by section one hundred eighty of this
     6  chapter shall be collected and deposited and receipts therefor issued by
     7  the  proper  state officer in accordance with the provisions of subdivi-
     8  sion two of section one hundred eighty of  this  chapter,]  commissioner
     9  and  all  revenues  so  collected  or  received  shall  be deposited and
    10  disposed of pursuant to the provisions of section one  hundred  seventy-
    11  one-a of this chapter.
    12    §  106.  Subsection  (a)  of  section 1080 of the tax law, as added by
    13  chapter 188 of the laws of 1964, is amended to read as follows:
    14    (a) General.--- The provisions of this  article  shall  apply  to  the
    15  administration  of  and the procedures with respect to the taxes imposed
    16  by articles nine [(except section one  hundred  eighty)],  and  nine-a[,
    17  nine-b  and  nine-c] of this chapter for taxable years or periods ending
    18  on or after December thirty-first, nineteen hundred sixty-four.
    19    § 107. Subdivisions (a) and (c) of section 1809 of  the  tax  law,  as
    20  added  by  section 1 of subpart A of part S of chapter 57 of the laws of
    21  2010, are amended to read as follows:
    22    (a) Any person who, with intent to evade payment of  any  tax  imposed
    23  under  article nine [(other than under section one hundred eighty or one
    24  hundred eighty-one)], nine-A, thirteen,  [thirty-two,]  thirty-three  or
    25  thirty-three-A  of  this  chapter,  fails to file a return or report for
    26  three consecutive taxable years shall be guilty of  a  class  E  felony,
    27  provided  that such person had an unpaid tax liability, in excess of the
    28  threshold amount with respect to each of the three  consecutive  taxable
    29  years.  The threshold amount in the case of a taxable year under article
    30  nine-A of this chapter ending after  June  thirtieth,  nineteen  hundred
    31  eighty-nine  is  the  applicable  fixed  dollar minimum prescribed under
    32  paragraph (d) of subdivision one of section  two  hundred  ten  of  this
    33  chapter. In the event such fixed dollar minimum is less than two hundred
    34  fifty  dollars, the threshold amount in the case of such taxable year is
    35  two hundred fifty dollars. In all other cases the  threshold  amount  is
    36  two hundred fifty dollars.
    37    (c)  As  used  in  this section, the terms "return" and "report" shall
    38  mean a return or report required under section one  hundred  ninety-two,
    39  two  hundred  eleven,  two hundred ninety-four, [fourteen hundred sixty-
    40  two,] fifteen hundred fifteen or  fifteen  hundred  fifty-four  of  this
    41  chapter.    It  shall  not  include  any return or report referred to in
    42  section one hundred ninety-seven-a, two  hundred  thirteen-a,  [fourteen
    43  hundred sixty] or fifteen hundred thirteen of this chapter.
    44    §  108.  Paragraphs (d), (e), (g), (h) and (q) of section 104-A of the
    45  business corporation law, subdivisions (d), (e) and (q)  as  amended  by
    46  chapter 166 of the laws of 1991, subdivision (g) as added by chapter 591
    47  of  the  laws  of 1982, and subdivision (h) as amended by chapter 117 of
    48  the laws of 1986, are amended to read as follows:
    49    (d) For filing a certificate of incorporation pursuant to section four
    50  hundred two of this chapter, one hundred twenty-five dollars  [plus  the
    51  tax on shares prescribed by section one hundred eighty of the tax law].
    52    (e)  For  filing  a certificate of amendment pursuant to section eight
    53  hundred five of this chapter, sixty dollars  [plus  the  tax  on  shares
    54  prescribed  by section one hundred eighty of the tax law if such certif-
    55  icate shows a change of shares].

        S. 6359--D                         167                        A. 8559--D
 
     1    (g) For filing a restated certificate  of  incorporation  pursuant  to
     2  section eight hundred seven of this chapter, sixty dollars [plus the tax
     3  on  shares  prescribed  by  section one hundred eighty of the tax law if
     4  such certificate shows a change of shares].
     5    (h)  For  filing  a certificate of merger or consolidation pursuant to
     6  section nine hundred four of this chapter, or a certificate of  exchange
     7  pursuant  to  section nine hundred thirteen (other than paragraph (g) of
     8  section nine hundred thirteen) of this chapter, sixty dollars [plus  the
     9  tax on shares prescribed by section one hundred eighty of the tax law if
    10  such certificate shows a change of shares].
    11    (q)  For  filing  a  certificate  of  incorporation  by a professional
    12  service corporation pursuant to section fifteen hundred  three  of  this
    13  chapter,  one  hundred  twenty-five  dollars  [plus  the  tax  on shares
    14  prescribed by section one hundred eighty of the tax law].
    15    § 109. Subdivision 8 of section 7-a of the general  associations  law,
    16  as  added  by  chapter  575  of  the laws of 1964, is amended to read as
    17  follows:
    18    8. The provisions of section ninety-six of the executive law prescrib-
    19  ing the fee to be collected by the department  of  state  for  filing  a
    20  certificate  of  incorporation  under the business corporation law shall
    21  apply to the certificate of incorporation to be filed pursuant  to  this
    22  section[,  and  the  organization  tax payable under section one hundred
    23  eighty of the tax law in respect of a corporation formed under the busi-
    24  ness corporation law shall be paid before the department of state  shall
    25  file such certificate of incorporation].
    26    §  110. Paragraphs 1 and 2 of subdivision (l) of section 11-640 of the
    27  administrative code of the city of New York, as amended by section 3  of
    28  part R of chapter 59 of the laws of 2012, is amended to read as follows:
    29    (1) Notwithstanding anything to the contrary contained in this section
    30  other  than  subdivision  (m) of this section, a corporation that was in
    31  existence before January first, two thousand [twelve] fourteen  and  was
    32  subject to tax under subchapter two of this chapter for its last taxable
    33  year  beginning  before  January  first, two thousand [twelve] fourteen,
    34  shall continue to be taxable under such subchapter for all taxable years
    35  beginning on or after January first, two thousand [twelve] fourteen  and
    36  before  January  first, two thousand [fifteen] seventeen.  The preceding
    37  sentence shall not apply to any taxable year during  which  such  corpo-
    38  ration  is  a  banking  corporation  described in paragraphs one through
    39  eight of subdivision (a) of this section.   Notwithstanding anything  to
    40  the  contrary  contained  in  this section other than subdivision (m) of
    41  this section, a banking corporation or corporation that was in existence
    42  before January first, two thousand [twelve] fourteen and was subject  to
    43  tax  under  this  subchapter  for its last taxable year beginning before
    44  January first, two thousand [twelve]  fourteen,  shall  continue  to  be
    45  taxable  under  this  subchapter  for  all taxable years beginning on or
    46  after January first, two thousand [twelve] fourteen and  before  January
    47  first,  two  thousand  [fifteen]  seventeen only if the corporation is a
    48  banking corporation as defined in subdivision (a) of this section or the
    49  corporation satisfies the requirements for a corporation to elect to  be
    50  taxable  under  this  subchapter. Provided further, that nothing in this
    51  subdivision shall prohibit a corporation that elected pursuant to subdi-
    52  vision (d) of this section to be taxable under subchapter  two  of  this
    53  chapter  from  revoking that election in accordance with subdivision (d)
    54  of this section. For purposes of this paragraph, a corporation shall  be
    55  considered to be subject to tax under subchapter two of this chapter for
    56  a  taxable  year if such corporation was not a taxpayer but was properly

        S. 6359--D                         168                        A. 8559--D
 
     1  included in a combined report filed  pursuant  to  subdivision  four  of
     2  section  11-605  of this chapter for such taxable year and a corporation
     3  shall be considered to be subject to tax under  this  subchapter  for  a
     4  taxable  year  if  such  corporation was not a taxpayer but was properly
     5  included in a combined report filed pursuant to subdivision (f)  or  (g)
     6  of section 11-646 of this part for such taxable year. A corporation that
     7  was  in  existence  before January first, two thousand [twelve] fourteen
     8  but first becomes a taxpayer in a taxable year  beginning  on  or  after
     9  January  first, two thousand [twelve] fourteen and before January first,
    10  two thousand [fifteen] seventeen, shall be considered  for  purposes  of
    11  this  paragraph to have been subject to tax under subchapter two of this
    12  chapter for its last taxable year beginning before  January  first,  two
    13  thousand  [twelve]  fourteen if such corporation would have been subject
    14  to tax under such subchapter for such taxable year  if  it  had  been  a
    15  taxpayer  during  such taxable year. A corporation that was in existence
    16  before January first, two thousand [twelve] fourteen but first becomes a
    17  taxpayer in a taxable year beginning on  or  after  January  first,  two
    18  thousand  [twelve]  fourteen  and  before  January  first,  two thousand
    19  [fifteen] seventeen, shall be considered for purposes of this  paragraph
    20  to  have  been subject to tax under this subchapter for its last taxable
    21  year beginning before January first, two thousand [twelve]  fourteen  if
    22  such  corporation  would  have been subject to tax under this subchapter
    23  for such taxable year if it had been  a  taxpayer  during  such  taxable
    24  year.
    25    (2) Notwithstanding anything to the contrary contained in this section
    26  other  than  subdivision (m) of this section, a corporation formed on or
    27  after January first, two thousand [twelve] fourteen and  before  January
    28  first,  two  thousand [fifteen] seventeen may elect to be subject to tax
    29  under this subchapter or under subchapter two of this  chapter  for  its
    30  first  taxable  year  beginning  on or after January first, two thousand
    31  [twelve] fourteen and  before  January  first,  two  thousand  [fifteen]
    32  seventeen  in  which either (i) sixty-five percent or more of its voting
    33  stock is owned or controlled, directly  or  indirectly  by  a  financial
    34  holding company, provided the corporation whose voting stock is so owned
    35  or controlled is principally engaged in activities that are described in
    36  section  4(k)(4)  or  4(k)(5) of the federal bank holding company act of
    37  nineteen hundred fifty-six, as amended and the  regulations  promulgated
    38  pursuant  to  the  authority  of  such section or (ii) it is a financial
    39  subsidiary. An election under this paragraph may not be made by a corpo-
    40  ration described in paragraphs one through eight of subdivision  (a)  of
    41  this  section  or  in  subdivision  (e) of this section. In addition, an
    42  election under this paragraph may not be made by a corporation that is a
    43  party to a reorganization, as defined in subsection (a) of  section  368
    44  of  the  internal  revenue  code  of  1986, as amended, of a corporation
    45  described in paragraph one of this subdivision if both corporations were
    46  sixty-five percent or more owned or controlled, directly  or  indirectly
    47  by the same interests at the time of the reorganization.
    48    An  election  under  this paragraph must be made by the taxpayer on or
    49  before the due date for filing its return  (determined  with  regard  to
    50  extensions  of  time  for  filing)  for the applicable taxable year. The
    51  election to be taxed under subchapter two of this chapter shall be  made
    52  by  the  taxpayer  by filing the return required pursuant to subdivision
    53  one of section 11-605 of this chapter and the election to be taxed under
    54  this subchapter shall be made by  the  taxpayer  by  filing  the  return
    55  required pursuant to subdivision (a) of section 11-646 of this part. Any
    56  election  made pursuant to this paragraph shall be irrevocable and shall

        S. 6359--D                         169                        A. 8559--D
 
     1  apply to each subsequent taxable year  beginning  on  or  after  January
     2  first,  two  thousand  [twelve]  fourteen  and before January first, two
     3  thousand [fifteen] seventeen, provided  that  the  stock  ownership  and
     4  activities  requirements described in subparagraph (i) of this paragraph
     5  are met or such corporation described in subparagraph (ii) of this para-
     6  graph continues as a financial subsidiary.
     7    § 111. Subparagraph (iv) of paragraph 2 of subdivision (f) of  section
     8  11-646 of the administrative code of the city of New York, as amended by
     9  section  4  of  part  R of chapter 59 of the laws of 2012, is amended to
    10  read as follows:
    11    (iv) (A) Notwithstanding any provision of  this  paragraph,  any  bank
    12  holding  company exercising its corporate franchise or doing business in
    13  the city may make a return on  a  combined  basis  without  seeking  the
    14  permission  of  the commissioner with any banking corporation exercising
    15  its corporate franchise or doing business in the city in a corporate  or
    16  organized  capacity  sixty-five percent or more of whose voting stock is
    17  owned or controlled, directly or indirectly, by such bank holding compa-
    18  ny, for the first taxable year beginning on or after January first,  two
    19  thousand  and  before  January  first,  two thousand [fifteen] seventeen
    20  during which such bank holding company  registers  for  the  first  time
    21  under  the federal bank holding company act, as amended, and also elects
    22  to be a financial holding company.  In  addition,  for  each  subsequent
    23  taxable  year  beginning  after  January  first, two thousand and before
    24  January first, two thousand [fifteen] seventeen, any such  bank  holding
    25  company  may  file on a combined basis without seeking the permission of
    26  the commissioner with any banking corporation  that  is  exercising  its
    27  corporate franchise or doing business in the city and sixty-five percent
    28  or  more of whose voting stock is owned or controlled, directly or indi-
    29  rectly, by such bank holding company if either such banking  corporation
    30  is exercising its corporate franchise or doing business in the city in a
    31  corporate  or  organized  capacity for the first time during such subse-
    32  quent taxable year, or sixty-five percent or more of the voting stock of
    33  such banking corporation is owned or controlled, directly or indirectly,
    34  by such bank holding company for the first time during  such  subsequent
    35  taxable year.  Provided however, for each subsequent taxable year begin-
    36  ning  after  January  first,  two thousand and before January first, two
    37  thousand [fifteen] seventeen, a banking corporation described in  either
    38  of  the two preceding sentences which filed on a combined basis with any
    39  such bank holding company in a previous taxable year, must  continue  to
    40  file  on a combined basis with such bank holding company if such banking
    41  corporation, during such subsequent taxable year, continues to  exercise
    42  its  corporate  franchise  or  do business in the city in a corporate or
    43  organized capacity and sixty-five percent or more of such banking corpo-
    44  ration's voting stock continues to be owned or controlled,  directly  or
    45  indirectly,  by  such bank holding company, unless the permission of the
    46  commissioner has been obtained to file on  a  separate  basis  for  such
    47  subsequent  taxable year. Provided further, however, for each subsequent
    48  taxable year beginning after January  first,  two  thousand  and  before
    49  January  first,  two thousand [fifteen] seventeen, a banking corporation
    50  described in either of the first two sentences of this clause which  did
    51  not  file  on  a  combined basis with any such bank holding company in a
    52  previous taxable year, may not file on a combined basis with  such  bank
    53  holding  company  during  any  such  subsequent  taxable year unless the
    54  permission of the commissioner has been obtained to file on  a  combined
    55  basis for such subsequent taxable year.

        S. 6359--D                         170                        A. 8559--D
 
     1    (B)  Notwithstanding any provision of this paragraph other than clause
     2  (A) of this subparagraph, the commissioner may not require a bank  hold-
     3  ing  company  which, during a taxable year beginning on or after January
     4  first, two thousand and before January  first,  two  thousand  [fifteen]
     5  seventeen,  registers  for the first time during such taxable year under
     6  the federal bank holding company act, as amended, and also elects to  be
     7  a  financial  holding  company, to make a return on a combined basis for
     8  any taxable year beginning on or after January first, two  thousand  and
     9  before  January  first,  two thousand [fifteen] seventeen with a banking
    10  corporation sixty-five percent or more of whose voting stock is owned or
    11  controlled, directly or indirectly, by such bank holding company.
    12    § 112. Severability. If any provision of this act shall for any reason
    13  be finally adjudged by any court of competent jurisdiction to be  inval-
    14  id,  such judgment shall not affect, impair, or invalidate the remainder
    15  of this act, but shall be confined in its  operation  to  the  provision
    16  directly  involved  in the controversy in which such judgment shall have
    17  been rendered. It is hereby declared to be in the intent of the legisla-
    18  ture that this  act  would  have  been  enacted  even  if  such  invalid
    19  provision  had  not  been  included  in this act. Provided further, if a
    20  court of final, competent jurisdiction adjudges the tax rates imposed on
    21  qualified New York manufacturers  to  be  invalid,  qualified  New  York
    22  manufacturers  shall  be  subject  to  the  same  tax rates as all other
    23  taxpayers subject to tax under article 9-A  of  the  tax  law.  Provided
    24  further,  if  a  court of final, competent jurisdiction adjudges the tax
    25  rate of the metropolitan transportation business tax  surcharge  imposed
    26  under  section  209-B  of  the  tax  law to be invalid, the rate of such
    27  surcharge shall be twenty-seven and one tenth percent. Provided further,
    28  if a court of final, competent jurisdiction adjudges that any of the tax
    29  credits provided by this act to be invalid, such credit or credits shall
    30  be deemed repealed and shall be of no force and effect as to any taxpay-
    31  ers.
    32    § 113. This act shall take effect January 1, 2015 and shall  apply  to
    33  taxable years commencing on or after such date; provided that the amend-
    34  ments  to  section 25 of the tax law made by section forty-three of this
    35  act shall not affect the repeal of such  section  and  shall  be  deemed
    36  repealed  therewith; provided, further, that the amendments to the open-
    37  ing paragraph of subdivision (a), subparagraph (C)  of  paragraph  2  of
    38  subdivision (e) and subdivision (f) of section 35 of the tax law made by
    39  section fifty of this act shall not affect the repeal of such provisions
    40  and  shall  be  deemed  repealed  therewith; provided, further, that the
    41  amendments to clause (xxxii) of  subparagraph  (B)  of  paragraph  1  of
    42  subsection (i) of section 606 of the tax law made by section sixty-eight
    43  of  this  act  shall  not  affect the repeal of such clause and shall be
    44  deemed repealed therewith; provided, further,  that  the  amendments  to
    45  clause  (xxxiii) of subparagraph (B) of paragraph 1 of subsection (i) of
    46  section 606 of the tax law made by section sixty-eight of this act shall
    47  not affect the repeal of such clause and shall be deemed repealed there-
    48  with; and provided, further, that  the  amendments  to  clause  (ii)  of
    49  subparagraph  (B)  of  paragraph  2  of  subsection  (q), paragraph 3 of
    50  subsection (s) and the closing paragraph of paragraph  1  of  subsection
    51  (t)  of  section  1085 of the tax law made by section eighty-one of this
    52  act shall not affect the repeal of such provisions and shall  be  deemed
    53  repealed therewith.
 
    54                                   PART B

        S. 6359--D                         171                        A. 8559--D
 
     1    Section  1.  Subparagraph  (iii) of paragraph (a) of subdivision 14 of
     2  section 425 of the real property tax law, as added by section 1 of  part
     3  J of chapter 57 of the laws of 2013, is amended to read as follows:
     4    (iii)  An  owner who fails to register by the registration deadline so
     5  established shall be permitted to file a petition with the  commissioner
     6  requesting  that  the commissioner excuse such failure and accept a late
     7  registration, provided that such petition shall explain why such failure
     8  occurred and shall be filed no later than one year after such  deadline,
     9  and  provided  further that if the commissioner accepts a late registra-
    10  tion after having directed the removal of the Basic STAR exemption  from
    11  the property to which the registration pertains, then in lieu of direct-
    12  ing  the exemption to be restored, the commissioner is authorized in his
    13  or her discretion to remit directly to the property owner or owners  the
    14  tax  savings  that  the  exemption  would  have  yielded had it not been
    15  removed, and to further direct the assessor to restore the exemption  on
    16  a  prospective  basis  without a new application unless the assessor has
    17  reason to believe that the property owner  is  no  longer  eligible  for
    18  reasons other than a failure to register;
    19    §  2.  This  act  shall take effect immediately and shall be deemed to
    20  have been in full force and effect on and after April 1, 2014.
 
    21                                   PART C
 
    22    Section 1. Section 2 of chapter 540 of the laws of 1992, amending  the
    23  real  property  tax  law  relating to oil and gas charges, as amended by
    24  section 1 of part A of chapter 59 of the laws of  2012,  is  amended  to
    25  read as follows:
    26    §  2.  This  act  shall take effect immediately and shall be deemed to
    27  have been in full force and effect on and after April 1, 1992; provided,
    28  however that any charges imposed by section 593 of the real property tax
    29  law as added by section one of this act shall first be  due  for  values
    30  for assessment rolls with tentative completion dates after July 1, 1992,
    31  and  provided  further,  that  this  act  shall remain in full force and
    32  effect until March 31, [2015] 2018, at which time  section  593  of  the
    33  real  property  tax  law  as  added  by section one of this act shall be
    34  repealed.
    35    § 2. This act shall take effect immediately.
 
    36                                   PART D
 
    37                            Intentionally Omitted
 
    38                                   PART E
 
    39    Section 1. Subsection (a) of section 653 of the tax law, as amended by
    40  chapter 65 of the laws of 1985, is amended to read as follows:
    41    (a) General. (1) Any return, statement or other document  required  to
    42  be  made  pursuant  to  this  article shall be signed in accordance with
    43  regulations or instructions prescribed by the [tax  commission]  commis-
    44  sioner.    The  fact  that  an  individual's name is signed to a return,
    45  statement, or other document, shall be  prima  facie  evidence  for  all
    46  purposes  that  the  return,  statement  or  other document was actually
    47  signed by him or her.
    48    (2) In the case  of  an  electronically  filed  individual's  personal
    49  income  tax  return prepared by a tax preparer, an authorization to file

        S. 6359--D                         172                        A. 8559--D
 
     1  any return, statement or other document required to be made pursuant  to
     2  this  article  signed by the taxpayer in accordance with the regulations
     3  or instructions prescribed by the commissioner  and  received  electron-
     4  ically  by  the  tax  preparer  shall satisfy the signature requirements
     5  under this article.
     6    § 2. This act shall take effect immediately and shall apply to returns
     7  filed for taxable years beginning on or after January 1, 2014.
 
     8                                   PART F
 
     9                            Intentionally Omitted
 
    10                                   PART G
 
    11    Section 1. Section 2 of part I of chapter 58  of  the  laws  of  2006,
    12  relating  to  providing an enhanced earned income tax credit, as amended
    13  by section 1 of part L of chapter 59 of the laws of 2012, is amended  to
    14  read as follows:
    15    § 2. This act shall take effect immediately and shall apply to taxable
    16  years beginning on or after January 1, 2006 and before January 1, [2015]
    17  2017.
    18    § 2. This act shall take effect immediately.
 
    19                                   PART H
 
    20                            Intentionally Omitted
 
    21                                   PART I
 
    22    Section  1. Subsection (b) of section 612 of the tax law is amended by
    23  adding a new paragraph 40 to read as follows:
    24    (40) in the case of a beneficiary of a trust that,  in  any  tax  year
    25  after  its creation including its first tax year, was not subject to tax
    26  pursuant to subparagraph (D) of paragraph three  of  subsection  (b)  of
    27  section  six hundred five of this article (except for an incomplete gift
    28  non-grantor  trust,  as  defined  by   paragraph   forty-one   of   this
    29  subsection),  the  amount described in the first sentence of section six
    30  hundred sixty-seven of the internal revenue code for the tax year to the
    31  extent not already included in federal gross income for  the  tax  year,
    32  except  that,  in computing the amount to be added under this paragraph,
    33  such beneficiary shall disregard  (i)  subsection  (c)  of  section  six
    34  hundred  sixty-five of the internal revenue code; (ii) the income earned
    35  by such trust in any tax year in which the  trust  was  subject  to  tax
    36  under this article; and (iii) the income earned by such trust in a taxa-
    37  ble  year  prior  to when the beneficiary first became a resident of the
    38  state or in any taxable year starting before January first, two thousand
    39  fourteen.  Except as otherwise provided in this paragraph,  all  of  the
    40  provisions  of  the internal revenue code that are relevant to computing
    41  the amount described in the first sentence of subsection (a) of  section
    42  six  hundred sixty-seven of the internal revenue code shall apply to the
    43  provisions of this paragraph with the same force and effect  as  if  the
    44  language of those internal revenue code provisions had been incorporated
    45  in  full  into  this  paragraph,  except  to  the  extent  that any such
    46  provision is either inconsistent with or not relevant to this paragraph.

        S. 6359--D                         173                        A. 8559--D
 
     1    § 2. Subsection (b) of section 612 of the tax law is amended by adding
     2  a new paragraph 41 to read as follows:
     3    (41)  In  the case of a taxpayer who transferred property to an incom-
     4  plete gift  non-grantor  trust,  the  income  of  the  trust,  less  any
     5  deductions  of  the  trust,  to the extent such income and deductions of
     6  such trust would be taken  into  account  in  computing  the  taxpayer's
     7  federal  taxable  income if such trust in its entirety were treated as a
     8  grantor trust for federal tax purposes. For purposes of this  paragraph,
     9  an "incomplete gift non-grantor trust" means a resident trust that meets
    10  the  following  conditions:  (i) the trust does not qualify as a grantor
    11  trust under section six hundred seventy-one through six  hundred  seven-
    12  ty-nine  of the internal revenue code, and (2) the grantor's transfer of
    13  assets to the trust is treated as an incomplete gift under section twen-
    14  ty-five hundred eleven of the internal revenue code, and the regulations
    15  thereunder.
    16    § 3. Section 621 of the tax law, as added by chapter 272 of  the  laws
    17  of  1963  and  subsection  (a)  as amended by chapter 267 of the laws of
    18  1987, is amended to read as follows:
    19    § 621. [Credit] Credits to trust  beneficiary  receiving  accumulation
    20  distribution.   (a) General. A resident beneficiary of a trust whose New
    21  York adjusted gross income includes  all  or  part  of  an  accumulation
    22  distribution by such trust, as defined in section six hundred sixty-five
    23  of the internal revenue code, including a beneficiary who is required to
    24  make  the  modification required by paragraph forty of subsection (b) of
    25  section six hundred twelve of this part, shall be allowed (1)  a  credit
    26  against  the  tax  otherwise due under this article for all or a propor-
    27  tionate part of any tax paid by the trust under this  article  or  under
    28  former article sixteen of this chapter (as such article was in effect on
    29  or before December thirtieth, nineteen hundred sixty), for any preceding
    30  taxable  year which would not have been payable if the trust had in fact
    31  made distributions to its beneficiaries at the times and in the  amounts
    32  specified in section six hundred sixty-six of the internal revenue code;
    33  and (2) a credit against the taxes imposed by this article for the taxa-
    34  ble year for any income tax imposed on the trust for the taxable year or
    35  any  prior  taxable  year by another state of the United States, a poli-
    36  tical subdivision thereof, or the District of Columbia, upon income both
    37  derived therefrom and subject to tax under this article,  provided  that
    38  the  amount  of  the  credit  shall not exceed the percentage of the tax
    39  otherwise due under this article determined by dividing the  portion  of
    40  the  income that is both taxable to the trust in such other jurisdiction
    41  and taxable to the beneficiary under this article by the total amount of
    42  the beneficiary's New York income.
    43    (b) Limitation. The [credit] credits  under  this  section  shall  not
    44  reduce  the tax otherwise due from the beneficiary under this article to
    45  an amount less than would have been due if the accumulation distribution
    46  or his part thereof were excluded  from  his  New  York  adjusted  gross
    47  income.
    48    §  4. Section 658 of the tax law is amended by adding a new subsection
    49  (f) to read as follows:
    50     (f) (1) Every trust described by subparagraph (D) of paragraph  three
    51  of subsection (b) of section six hundred five of this article shall make
    52  a return for any taxable year in which it makes an accumulation distrib-
    53  ution  within  the  meaning  of  subdivision  (b) of section six hundred
    54  sixty-five of the internal revenue code to a beneficiary who is a  resi-
    55  dent,  which return shall include (i) information identifying such resi-
    56  dent, (ii) the amount of such accumulation distribution, and (iii)  such

        S. 6359--D                         174                        A. 8559--D
 
     1  other  information  as  the  commissioner  may require.   In determining
     2  whether there has been an accumulation distribution for purposes of this
     3  paragraph, such trust shall exclude distributions from income earned  by
     4  the trust prior to the beneficiary's birth or attaining the age of twen-
     5  ty-one.
     6    (2)  Every  resident  trust  that does not file the return required by
     7  section six hundred fifty-one of this part on the ground that it is  not
     8  subject  to  tax  pursuant  to  subparagraph  (D)  of paragraph three of
     9  subsection (b) of section six hundred five of this article for the taxa-
    10  ble year shall make a return for such taxable  year  substantiating  its
    11  entitlement  to  that  exemption and providing such other information as
    12  the commissioner may require.
    13    (3) The returns required by this  subsection  shall  be  filed  on  or
    14  before the fifteenth day of the fourth month following the close of each
    15  taxable  year.  For  purposes  of this paragraph, "taxable year" means a
    16  year or a period which would be a taxable year of the trust if  it  were
    17  subject to tax under this article.
    18    §  5.  Paragraph 2 of subsection (h) of section 685 of the tax law, as
    19  amended by chapter 190 of the laws  of  1990,  is  amended  to  read  as
    20  follows:
    21    (2)  If any partnership [or], S corporation, or trust required to file
    22  a return or report under subsection (c) or subsection (f) of section six
    23  hundred fifty-eight or under section  six  hundred  fifty-nine  of  this
    24  article  for any taxable year fails to file such return or report at the
    25  time prescribed therefor (determined with regard  to  any  extension  of
    26  time  for  filing),  or files a return or report which fails to show the
    27  information required under such subsection (c) or  section  six  hundred
    28  fifty-nine  of this article, unless it is shown that such failure is due
    29  to reasonable cause and not due to willful neglect,  there  shall,  upon
    30  notice  and demand by the commissioner and in the same manner as tax, be
    31  paid by the partnership or S corporation a penalty for  each  month  (or
    32  fraction thereof) during which such failure continues (but not to exceed
    33  five months). The amount of such penalty for any month is the product of
    34  fifty  dollars,  multiplied by the number of partners in the partnership
    35  or shareholders in the S corporation during any part of the taxable year
    36  who were subject to tax under this article during any part of such taxa-
    37  ble year, except that, in the case of a  trust,  the  penalty  shall  be
    38  equal  to  one  hundred fifty dollars a month up to a maximum of fifteen
    39  hundred dollars per taxable year.
    40    § 6. Subdivision (b) of section 11-1712 of the administrative code  of
    41  the  city of New York is amended by adding a new paragraph 36 to read as
    42  follows:
    43    (36) in the case of a beneficiary of a trust that,  in  any  tax  year
    44  after  its creation including its first tax year, was not subject to tax
    45  pursuant to subparagraph (D) of paragraph three  of  subsection  (b)  of
    46  section 11-1705 of this chapter (except for an incomplete gift non-gran-
    47  tor  trust,  as  defined by paragraph thirty-seven of this subdivision),
    48  the amount described in  the  first  sentence  of  section  six  hundred
    49  sixty-seven  of the internal revenue code for the tax year to the extent
    50  not already included in federal gross income for the  tax  year,  except
    51  that,  in  computing  the  amount to be added under this paragraph, such
    52  beneficiary shall disregard (i) subsection (c) of  section  six  hundred
    53  sixty-five  of the internal revenue code; (ii) the income earned by such
    54  trust in any tax year in which the trust was subject to tax  under  this
    55  article;  and  (iii)  the  income earned by such trust in a taxable year
    56  prior to when the beneficiary first became a resident of the city or  in

        S. 6359--D                         175                        A. 8559--D

     1  any  taxable  year starting before January first, two thousand fourteen.
     2  Except as otherwise provided in this paragraph, all of the provisions of
     3  the internal revenue code that are  relevant  to  computing  the  amount
     4  described in the first sentence of subsection (a) of section six hundred
     5  sixty-seven  of  the internal revenue code shall apply to the provisions
     6  of this paragraph with the same force and effect as if the  language  of
     7  those  internal  revenue  code  provisions had been incorporated in full
     8  into this paragraph, except to the extent that  any  such  provision  is
     9  either inconsistent with or not relevant to this paragraph.
    10    §  7. Subdivision (b) of section 11-1712 of the administrative code of
    11  the city of New York is amended by adding a new paragraph 37 to read  as
    12  follows:
    13    (37)  In  the case of a taxpayer who transferred property to an incom-
    14  plete gift  non-grantor  trust,  the  income  of  the  trust,  less  any
    15  deductions  of  such  trust, to the extent such income and deductions of
    16  such trust would be taken  into  account  in  computing  the  taxpayer's
    17  federal  taxable  income if such trust in its entirety were treated as a
    18  grantor trust for federal tax purposes. For purposes of this  paragraph,
    19  an "incomplete gift non-grantor trust" means a resident trust that meets
    20  the  following  conditions:  (i) the trust does not qualify as a grantor
    21  trust under section six hundred seventy-one through six  hundred  seven-
    22  ty-nine  of the internal revenue code, and (2) the grantor's transfer of
    23  assets to the trust is treated as an incomplete gift under section twen-
    24  ty five hundred eleven of the internal revenue code, and the regulations
    25  thereunder.
    26    § 8. Section 11-1721 of the administrative code of  the  city  of  New
    27  York, subdivisions (a) and (b) as amended by section 72 and such section
    28  as  renumbered  by  section  43  of  chapter 639 of the laws of 1986, is
    29  amended to read as follows:
    30    § 11-1721 [Credit] Credits to trust beneficiary receiving accumulation
    31  distribution. (a) General. A city resident beneficiary of a trust  whose
    32  city  adjusted  gross  income  includes  all  or part of an accumulation
    33  distribution by such trust, as defined in section six hundred sixty-five
    34  of the internal revenue code, including a beneficiary who is required to
    35  make the modification required by paragraph  thirty-six  of  subdivision
    36  (b) of section 11-1712 of this subchapter, shall be allowed (1) a credit
    37  against  the  tax  otherwise due under this chapter for all or a propor-
    38  tionate part of any tax paid by the trust under this  chapter  or  under
    39  former  title  T  of chapter forty-six of this code, as it was in effect
    40  prior to September first, nineteen hundred eighty-six, for any preceding
    41  taxable year which would not have been payable if the trust had in  fact
    42  made  distributions to its beneficiaries at the times and in the amounts
    43  specified in section six hundred sixty-six of the internal revenue code;
    44  and (2) a credit against the taxes imposed by this chapter for the taxa-
    45  ble year for any income tax imposed for the taxable year  or  any  prior
    46  taxable year by another state of the United States, a political subdivi-
    47  sion  thereof,  or  the  District  of Columbia, upon income both derived
    48  therefrom and subject to tax  under  this  chapter,  provided  that  the
    49  amount  of  the credit shall not exceed the percentage of the tax other-
    50  wise due under this chapter determined by dividing the  portion  of  the
    51  income  that is both taxable to the trust in such other jurisdiction and
    52  taxable to the beneficiary under this chapter by the total amount of the
    53  beneficiary's New York city income.
    54    (b) Limitation. The [credit] credits  under  this  section  shall  not
    55  reduce  the tax otherwise due from the beneficiary under this chapter to
    56  an amount less than would have been due if the accumulation distribution

        S. 6359--D                         176                        A. 8559--D
 
     1  or his or her part thereof were excluded from his or her  city  adjusted
     2  gross income.
     3    § 9. This act shall take effect immediately and shall apply to taxable
     4  years  beginning on or after January 1, 2014, provided that sections one
     5  and six of this act shall not apply to income of a nonresident trust  or
     6  an  exempt resident trust paid to a beneficiary before June 1, 2014, and
     7  sections two and seven of this act shall not  apply  to  income  from  a
     8  trust that is liquidated before June 1, 2014.
 
     9                                   PART J
 
    10    Section 1. Section 602 of the tax law is REPEALED.
    11    §  2.  Paragraph 4 of subsection (c) and paragraph 4 of subsection (d)
    12  of section 606 of the tax law, paragraph 4 of subsection (c) as added by
    13  chapter 309 of the laws of 1996 and paragraph 4  of  subsection  (d)  as
    14  amended  by  chapter  2  of  the  laws  of  1995, are amended to read as
    15  follows:
    16    (4) Part-year residents. In the case of a part-year resident taxpayer,
    17  the credit under this subsection shall be allowed against the tax deter-
    18  mined under subsections (a) through  (d)  of  section  six  hundred  one
    19  reduced  by  the  credit permitted under subsection (b) of this section,
    20  and any excess credit after such application shall  be  allowed  against
    21  the  [taxes]  tax  imposed by [sections six hundred two and] section six
    22  hundred three. Any remaining excess, after such  application,  shall  be
    23  refunded  as  provided  in paragraph two hereof, provided, however, that
    24  any overpayment under such paragraph shall be limited to the  amount  of
    25  the remaining excess multiplied by a fraction, the numerator of which is
    26  federal  adjusted  gross income for the period of residence, computed as
    27  if the taxable year for federal income tax purposes were limited to  the
    28  period  of  residence,  and the denominator of which is federal adjusted
    29  gross income for the taxable year.
    30    (4) Part-year residents. In the case of a part-year resident taxpayer,
    31  the credit under this subsection shall be allowed against the tax deter-
    32  mined under subsections (a) through  (d)  of  section  six  hundred  one
    33  reduced  by  the credits permitted under subsections (b), (c) and (m) of
    34  this section, and any excess credit  after  such  application  shall  be
    35  allowed  against  the  [taxes]  tax imposed by [sections six hundred two
    36  and] section six hundred three. Any remaining excess, after such  appli-
    37  cation, shall be refunded as provided in paragraph two hereof, provided,
    38  however,  that  any overpayment under such paragraph shall be limited to
    39  the amount of the remaining excess multiplied by a fraction, the numera-
    40  tor of which is federal adjusted gross income for the  period  of  resi-
    41  dence,  computed  as if the taxable year for federal income tax purposes
    42  were limited to the period of residence, and the denominator of which is
    43  federal adjusted gross income for the taxable year.
    44    § 3. Section 622 of the tax law is REPEALED.
    45    § 4. Section 636 of the tax law is REPEALED.
    46    § 5. Subsections (a), (b) and (c) of section 639 of the  tax  law,  as
    47  added  by  chapter  170  of  the  laws  of  1994, are amended to read as
    48  follows:
    49    (a) If an individual changes status from resident  to  nonresident  he
    50  shall,  regardless  of his method of accounting, accrue to the period of
    51  residence any items of income, gain,  loss,  deduction,  [items  of  tax
    52  preference] or ordinary income portion of a lump sum distribution accru-
    53  ing prior to the change of status, with the applicable modifications and
    54  adjustments  to federal adjusted gross income[,] and itemized deductions

        S. 6359--D                         177                        A. 8559--D
 
     1  [and items of tax preference] under sections six hundred  twelve[,]  and
     2  six hundred fifteen [and six hundred twenty-two], if not otherwise prop-
     3  erly  includible  or allowable for New York income tax purposes for such
     4  period or a prior taxable year under his method of accounting.
     5    (b)  If  an  individual changes status from nonresident to resident he
     6  shall, regardless of his method of accounting, accrue to the  period  of
     7  nonresidence any items of income, gain, loss or deduction, [items of tax
     8  preference] or ordinary income portion of a lump sum distribution accru-
     9  ing prior to the change of status, with the applicable modifications and
    10  adjustments  to federal adjusted gross income[,] and itemized deductions
    11  [and items of tax preference] under sections six hundred  twelve[,]  and
    12  six  hundred  fifteen  [and  six  hundred  twenty-two], other than items
    13  derived from or connected with New York sources, if not otherwise  prop-
    14  erly  includible  or allowable for New York income tax purposes for such
    15  period or for a prior taxable year under his method of accounting.
    16    (c) No item of income, gain, loss, deduction,  [item  of  tax  prefer-
    17  ence,]  ordinary  income portion of a lump sum distribution or modifica-
    18  tion or adjustment which is accrued under this section  shall  be  taken
    19  into  account  in  determining the tax under this article for any subse-
    20  quent taxable year.
    21    § 6. Paragraphs 1, 2, 3 and 4 of subsection (a) of section 651 of  the
    22  tax  law,  paragraph  1  as  amended by chapter 333 of the laws of 1987,
    23  paragraph 2 as amended by chapter 28 of the laws of 1987, and paragraphs
    24  3 and 4 as amended by chapter 170 of the laws of 1994,  are  amended  to
    25  read as follows:
    26    (1)  every  resident  individual (A) required to file a federal income
    27  tax return for the taxable year, or (B) having  federal  adjusted  gross
    28  income  for  the  taxable  year,  increased  by  the modifications under
    29  subsection (b) of section six hundred twelve, in excess of four thousand
    30  dollars, or in excess of his New York standard deduction, if  lower,  or
    31  (C)  [subject  to  tax  under  section  six  hundred two, or (D)] having
    32  received during the taxable year a lump sum distribution any portion  of
    33  which is subject to tax under section six hundred three;
    34    (2)  every  resident estate or trust required to file a federal income
    35  tax return for the taxable year, or having any New York  taxable  income
    36  for the taxable year, determined under section six hundred eighteen, [or
    37  subject to tax under section six hundred two,] or having received during
    38  the taxable year a lump sum distribution any portion of which is subject
    39  to tax under section six hundred three;
    40    (3) every nonresident or part-year resident individual having New York
    41  source  income  for  the taxable year, determined under part III of this
    42  article, and having New York adjusted gross income for the taxable year,
    43  determined under part II of this article, in excess  of  the  taxpayer's
    44  New  York  standard  deduction,  [or  subject  to  tax under section six
    45  hundred two,] or having received during the  taxable  year  a  lump  sum
    46  distribution  any  portion  of which is subject to tax under section six
    47  hundred three; and
    48    (4) every nonresident estate or  trust  or  part-year  resident  trust
    49  having  New  York  source  income for the taxable year, determined under
    50  part III of this article, and having New York adjusted gross income  for
    51  the  taxable  year, determined under paragraph four of subsection (e) of
    52  section six hundred one, [or subject to tax under  section  six  hundred
    53  two,] or having received during the taxable year a lump sum distribution
    54  any portion of which is subject to tax under section six hundred three.

        S. 6359--D                         178                        A. 8559--D
 
     1    §  7.  Paragraph 6 of subsection (b) of section 654 of the tax law, as
     2  added by section 5 of part Q of chapter 407 of  the  laws  of  1999,  is
     3  amended to read as follows:
     4    (6) In subparagraph (B) of paragraph two of subsection (d), the phrase
     5  "section  1  or  55"  shall  be read as "section six hundred one [or six
     6  hundred two] of this article".
     7    § 8. Section 659 of the tax law, as amended by chapter 577 of the laws
     8  of 1997, is amended to read as follows:
     9    § 659.  Report of federal changes, corrections or disallowances.    If
    10  the amount of a taxpayer's federal taxable income, [federal items of tax
    11  preference,]  total  taxable amount or ordinary income portion of a lump
    12  sum distribution or includible gain of a trust reported on  his  federal
    13  income  tax  return  for any taxable year, or the amount of a taxpayer's
    14  earned income credit or credit for employment-related expenses set forth
    15  on such return, or the amount of any federal foreign tax credit  affect-
    16  ing  the  calculation  of the credit for Canadian provincial taxes under
    17  section six hundred twenty or six hundred twenty-A of this  article,  or
    18  the  amount of any claim of right adjustment, is changed or corrected by
    19  the United States internal revenue service or other competent  authority
    20  or  as  the  result of a renegotiation of a contract or subcontract with
    21  the United States, or the amount an employer is required to  deduct  and
    22  withhold  from  wages  for  federal  income  tax withholding purposes is
    23  changed or corrected by such service or authority  or  if  a  taxpayer's
    24  claim  for credit or refund of federal income tax is disallowed in whole
    25  or in part, the  taxpayer  or  employer  shall  report  such  change  or
    26  correction  or  disallowance within ninety days after the final determi-
    27  nation of such change, correction, renegotiation or disallowance, or  as
    28  otherwise  required  by the commissioner, and shall concede the accuracy
    29  of such determination or state wherein it is erroneous.   The  allowance
    30  of  a  tentative  carryback  adjustment  based upon a net operating loss
    31  carryback pursuant to section sixty-four hundred eleven of the  internal
    32  revenue  code  shall be treated as a final determination for purposes of
    33  this section.  Any taxpayer filing an amended federal income tax  return
    34  and any employer filing an amended federal return of income tax withheld
    35  shall  also  file  within ninety days thereafter an amended return under
    36  this article, and shall give such information as  the  commissioner  may
    37  require.    The commissioner may by regulation prescribe such exceptions
    38  to the requirements of this section as he or she deems appropriate.  For
    39  purposes of this section, (i) the term "taxpayer" shall include a  part-
    40  nership  having a resident partner or having any income derived from New
    41  York sources, and a corporation with respect to which the  taxable  year
    42  of  such  change,  correction,  disallowance or amendment is a year with
    43  respect to which the election provided for in subsection (a) of  section
    44  six  hundred  sixty  of  this  article  is  in effect, and (ii) the term
    45  "federal income tax return" shall include the returns of income required
    46  under sections six thousand thirty-one and six thousand thirty-seven  of
    47  the  internal  revenue  code.    In the case of such a corporation, such
    48  report shall  also  include  any  change  or  correction  of  the  taxes
    49  described in paragraphs two and three of subsection (f) of section thir-
    50  teen hundred sixty-six of the internal revenue code.  Reports made under
    51  this  section by a partnership or corporation shall indicate the portion
    52  of the change in each item of income, gain, loss or deduction  (and,  in
    53  the case of a corporation, of each change in, or disallowance of a claim
    54  for  credit  or  refund of, a tax referred to in the preceding sentence)
    55  allocable to each partner or shareholder and shall set forth such  iden-

        S. 6359--D                         179                        A. 8559--D
 
     1  tifying  information  with respect to such partner or shareholder as may
     2  be prescribed by the commissioner.
     3    § 9. Subsection (d) of section 683 of the tax law, as amended by chap-
     4  ter 170 of the laws of 1994, is amended to read as follows:
     5    (d) Omission of income, [item of tax preference,] total taxable amount
     6  or  ordinary  income  portion of a lump sum distribution on return.--The
     7  tax may be assessed at any time within six years after  the  return  was
     8  filed if--
     9    (1)  an individual omits from his New York adjusted gross income, [the
    10  sum of his items of tax preference,] or  the  total  taxable  amount  or
    11  ordinary  income  portion  of a lump sum distribution an amount properly
    12  includible therein which is in excess  of  twenty-five  percent  of  the
    13  amount  of  New York adjusted gross income, [the sum of the items of tax
    14  preference,] or the total taxable amount or ordinary income portion of a
    15  lump sum distribution stated in the return, or
    16    (2) an estate or trust omits from its New York adjusted gross  income,
    17  [the sum of its items of tax preference,] or the total taxable amount or
    18  ordinary  income  portion  of a lump sum distribution an amount properly
    19  includible therein which is in excess  of  twenty-five  percent  of  the
    20  amount stated in the return of New York adjusted gross income determined
    21  in  accordance  with  paragraph  four  of  subsection (e) of section six
    22  hundred one, [or the sum of the items of tax preference,] or  the  total
    23  taxable  amount  or  ordinary income portion of a lump sum distribution,
    24  respectively. For purposes of this subsection there shall not  be  taken
    25  into account any amount which is omitted in the return if such amount is
    26  disclosed  in the return, or in a statement attached to the return, in a
    27  manner adequate to apprise the commissioner of the nature and amount  of
    28  the  item  of income, [tax preference,] total taxable amount or ordinary
    29  income portion of a lump sum distribution.
    30    § 10. Subparagraph (B) of paragraph 4 of subsection (c) of section 685
    31  of the tax law, as amended by chapter 28 of the laws of 1987, is amended
    32  to read as follows:
    33    (B) Determination of annualized income installment.--In  the  case  of
    34  any  required  installment,  the  annualized  income  installment is the
    35  excess, if any, of an amount equal to the applicable percentage  of  the
    36  tax  for the taxable year computed by placing on an annualized basis the
    37  taxable income [and minimum taxable income] for months  in  the  taxable
    38  year  ending before the due date for the installment, over the aggregate
    39  amount of any prior required installments  for  the  taxable  year.  The
    40  applicable  percentage  of  the  tax  shall  be  twenty-two and one-half
    41  percent in the case of the first installment, forty-five percent in  the
    42  case  of the second installment, sixty-seven and one-half percent in the
    43  case of the third installment and ninety percent  in  the  case  of  the
    44  fourth installment, and shall be computed without regard to any increase
    45  in  the  rates  applicable  to the taxable year unless such increase was
    46  enacted at least thirty days prior to the due date of the installment.
    47    § 11. Paragraphs 2 and 3 of subsection (a) of section 1301 of the  tax
    48  law,  as amended by chapter 209 of the laws of 2011, are amended to read
    49  as follows:
    50    (2) [for taxable years beginning before two thousand fifteen,  a  city
    51  minimum income tax on such residents, and
    52    (3)] for taxable years beginning after nineteen hundred seventy-six, a
    53  separate tax on the ordinary income portion of lump sum distributions of
    54  such  residents,  at  the  rates  provided  for herein, such taxes to be
    55  administered, collected and distributed by the commissioner as  provided
    56  for in this article.

        S. 6359--D                         180                        A. 8559--D
 
     1    § 12. Section 1301-A of the tax law is REPEALED.
     2    §  13.  Subsection  (a)  of section 1302 of the tax law, as amended by
     3  chapter 333 of the laws of 1987, is amended to read as follows:
     4    (a) Imposition of tax. The city personal income tax  (other  than  the
     5  [city  minimum  income  tax  and  the] city separate tax on the ordinary
     6  income portion of  lump  sum  distributions)  imposed  pursuant  to  the
     7  authority  of this article shall be imposed for each taxable year on the
     8  city taxable income of every city resident individual, estate and trust.
     9  A taxpayer's taxable year for purposes of a tax imposed pursuant to  the
    10  authority  of  this  article shall be the same as his taxable year under
    11  article twenty-two of this chapter.
    12    § 14. The opening paragraph of subsection (a) of section 1304  of  the
    13  tax  law, as amended by section 134 of part A of chapter 389 of the laws
    14  of 1997, is amended to read as follows:
    15    A tax (other than the [city minimum income tax, the] city separate tax
    16  relating to qualified higher education funds and the city  separate  tax
    17  on the ordinary income portion of lump sum distributions) imposed pursu-
    18  ant  to  the  authority  of section thirteen hundred one of this article
    19  shall be determined as follows:
    20    § 15. Subsection (c) of section 1307 of the tax  law,  as  amended  by
    21  chapter 712 of the laws of 2004, is amended to read as follows:
    22    (c)  When  an individual changes his status from city resident to city
    23  nonresident, or from  city  nonresident  to  city  resident,  he  shall,
    24  regardless  of  his  method  of  accounting, accrue any items of income,
    25  gain, loss, deduction[, items of  tax  preference]  or  ordinary  income
    26  portion  of  a  lump  sum  distribution  accruing prior to the change of
    27  status, with the applicable modifications  and  adjustments  to  federal
    28  adjusted gross income[,] and itemized deductions [and items of tax pref-
    29  erence]  under  sections  six  hundred twelve[,] and six hundred fifteen
    30  [and six hundred twenty-two], if not otherwise  properly  includible  or
    31  allowable  for  New  York income tax purposes for such period or a prior
    32  taxable year under his method of accounting. Such accruals shall be made
    33  as provided in section six hundred thirty-nine of this chapter.
    34    § 16. Subsection (a) of section 1306 of the tax  law,  as  amended  by
    35  chapter 333 of the laws of 1987, is amended to read as follows:
    36    (a)  General.  On  or  before  the  fifteenth  day of the fourth month
    37  following the close of a taxable year, an income tax return under a city
    38  tax imposed pursuant to the authority of this article shall be made  and
    39  filed by or for every city resident individual, estate or trust required
    40  to  file  a  New  York  state  personal income tax (including [a minimum
    41  income tax and] a city separate tax on the ordinary  income  portion  of
    42  lump sum distributions) return for the taxable year.
    43    §  17.  Section  11-1702 of the administrative code of the city of New
    44  York is REPEALED.
    45    § 18. Subdivision (a) of section 11-1704 of the administrative code of
    46  the city of New York, as amended by chapter 17 of the laws of  1997,  is
    47  amended to read as follows:
    48    (a)  In  addition  to the taxes imposed by sections 11-1701[, 11-1702]
    49  and 11-1703, there is hereby imposed for  each  taxable  year  beginning
    50  after  nineteen  hundred eighty-nine but before nineteen hundred ninety-
    51  nine, a tax surcharge on the city taxable income of every city  resident
    52  individual, estate and trust.
    53    § 19. Subdivision (c) of section 11-1704 of the administrative code of
    54  the  city of New York, as amended by chapter 271 of the laws of 1991, is
    55  amended to read as follows:

        S. 6359--D                         181                        A. 8559--D
 
     1    (c) The tax surcharge imposed pursuant to this section shall be admin-
     2  istered, collected and distributed by the commissioner of  taxation  and
     3  finance  in  the  same  manner as the taxes imposed pursuant to sections
     4  11-1701[, 11-1702] and 11-1703, and all of the provisions of this  chap-
     5  ter, including sections 11-1706, 11-1721 and 11-1773, shall apply to the
     6  tax surcharge imposed by this section.
     7    §  20.  Section  11-1722 of the administrative code of the city of New
     8  York is REPEALED.
     9    § 21. Subdivision (a) of section 11-1751 of the administrative code of
    10  the city of New York, as amended by chapter 333 of the laws of 1987,  is
    11  amended to read as follows:
    12    (a)  General.  On  or  before  the  fifteenth  day of the fourth month
    13  following the close of a taxable year, an income tax return  under  this
    14  chapter  shall  be made and filed by or for every city resident individ-
    15  ual, estate or trust required to file a New York state  personal  income
    16  tax  (including  a [minimum income tax and] separate tax on the ordinary
    17  income portion of lump sum distributions) return for the taxable year.
    18    § 22. Subdivision (b) of section 11-1754 of the administrative code of
    19  the city of New York, as amended by chapter 712 of the laws of 2004,  is
    20  amended to read as follows:
    21    (b)  City  taxable  income  [and  city minimum taxable income] as city
    22  resident. The city taxable income [and city minimum taxable income]  for
    23  the  portion of the year during which he or she is a city resident shall
    24  be determined, except as provided in subdivision (c), as if his  or  her
    25  taxable  year for federal income tax purposes were limited to the period
    26  of his or her city resident status.
    27    § 23. Paragraph 6 of subdivision (b) of section 11-1755 of the  admin-
    28  istrative code of the city of New York, as added by section 17 of part Q
    29  of chapter 407 of the laws of 1999, is amended to read as follows:
    30    (6) In subparagraph (B) of paragraph two of subsection (d), the phrase
    31  "section 1 or 55" shall be read as "section 11-1701 [or 11-1702] of this
    32  chapter".
    33    §  24.  Section  11-1759 of the administrative code of the city of New
    34  York, as amended by chapter 577 of the laws of 1997, is amended to  read
    35  as follows:
    36    §  11-1759 Report of federal changes, corrections or disallowances. If
    37  the amount of a taxpayer's federal taxable income, [federal items of tax
    38  preference,] total taxable amount or ordinary income portion of  a  lump
    39  sum  distribution  or includible gain of a trust reported on his federal
    40  income tax return for any taxable year, or the amount of  any  claim  of
    41  right  adjustment, is changed or corrected by the United States internal
    42  revenue service or other competent authority, or  as  the  result  of  a
    43  renegotiation of a contract or subcontract with the United States or the
    44  amount  an  employer  is  required to deduct and withhold from wages for
    45  federal income tax withholding purposes is changed or corrected by  such
    46  service  or  authority  or if a taxpayer's claim for credit or refund of
    47  federal income tax is disallowed in whole or in part,  the  taxpayer  or
    48  employer  shall  report such change or correction or disallowance within
    49  ninety days after the final determination of  such  change,  correction,
    50  renegotiation,  or disallowance, or as otherwise required by the commis-
    51  sioner, and shall concede the accuracy of such  determination  or  state
    52  wherein  it is erroneous. The allowance of a tentative carryback adjust-
    53  ment based upon a net  operating  loss  carryback  pursuant  to  section
    54  sixty-four  hundred eleven of the internal revenue code shall be treated
    55  as a final determination for purposes  of  this  section.  Any  taxpayer
    56  filing  an  amended federal income tax return and any employer filing an

        S. 6359--D                         182                        A. 8559--D

     1  amended federal return of income tax withheld  shall  also  file  within
     2  ninety  days  thereafter an amended return under this chapter, and shall
     3  give such information as the commissioner may require. The  commissioner
     4  may  by regulation prescribe such exceptions to the requirements of this
     5  section as he or she deems appropriate. For purposes  of  this  section,
     6  (i)  the  term  "taxpayer" shall include a partnership having a resident
     7  partner or having any income derived from New York sources, and a corpo-
     8  ration  with  respect  to  which  the  taxable  year  of  such   change,
     9  correction,  disallowance  or  amendment is a year with respect to which
    10  the election provided for in subsection (a) of section six hundred sixty
    11  of the tax law is in effect, and  (ii)  the  term  "federal  income  tax
    12  return"  shall include the returns of income required under sections six
    13  thousand thirty-one and six thousand thirty-seven of the internal reven-
    14  ue code. In the case of such  a  corporation,  such  report  shall  also
    15  include  any  change  or correction of the taxes described in paragraphs
    16  two and three of subsection (f) of section thirteen hundred sixty-six of
    17  the internal revenue code. Reports made under this section by a partner-
    18  ship or corporation shall indicate the portion of  the  change  in  each
    19  item  of  income,  gain, loss or deduction (and, in the case of a corpo-
    20  ration, of each change in, or disallowance of  a  claim  for  credit  or
    21  refund  of,  a  tax  referred to in the preceding sentence) allocable to
    22  each partner or shareholder and shall set forth such identifying  infor-
    23  mation  with respect to such partner or shareholder as may be prescribed
    24  by the commissioner.
    25    § 25. Subdivision (d) of section 11-1783 of the administrative code of
    26  the city of New York, as amended by chapter 170 of the laws of 1994,  is
    27  amended to read as follows:
    28    (d) Omission of income, [item of tax preference,] total taxable amount
    29  or ordinary income portion of a lump sum distribution on return. The tax
    30  may  be assessed at any time within six years after the return was filed
    31  if:
    32    (1) an individual omits from his city adjusted gross income[, the  sum
    33  of his items of tax preference, or] the total taxable amount or ordinary
    34  income  portion of a lump sum distribution an amount properly includible
    35  therein which is in excess of twenty-five percent of the amount of  city
    36  adjusted  gross  income[, the sum of the items of tax preference] or the
    37  total taxable amount or ordinary income portion of a lump  sum  distrib-
    38  ution stated in the return, or
    39    (2) an estate or trust omits from its city adjusted gross income, [the
    40  sum  of  its  items  of  tax preference,] or the total taxable amount or
    41  ordinary income portion of a lump sum distribution  an  amount  properly
    42  includible  therein  which  is  in  excess of twenty-five percent of the
    43  amount stated in the return of city adjusted gross income, [or  the  sum
    44  of the items of tax preference,] or the total taxable amount or ordinary
    45  income portion of a lump sum distribution, respectively. For purposes of
    46  this paragraph, city adjusted gross income means New York adjusted gross
    47  income  as  determined under paragraph four of subsection (e) of section
    48  six hundred one of the tax law.
    49    For purposes of this subdivision there shall not be taken into account
    50  any amount which is omitted in the return if such amount is disclosed in
    51  the return, or in a statement  attached  to  the  return,  in  a  manner
    52  adequate  to  apprise  the  commissioner of the nature and amount of the
    53  item of income, [tax preference,] the total taxable amount  or  ordinary
    54  income portion of a lump sum distribution.

        S. 6359--D                         183                        A. 8559--D
 
     1    §  26.  Subparagraph  (B) of paragraph 4 of subdivision (c) of section
     2  11-1785 of the administrative code of the city of New York,  as  amended
     3  by chapter 333 of the laws of 1987, is amended to read as follows:
     4    (B) Determination of annualized income installment. In the case of any
     5  required  installment,  the annualized income installment is the excess,
     6  if any, of an amount equal to the applicable percentage of the  tax  for
     7  the  taxable year computed by placing on an annualized basis the taxable
     8  income [and minimum taxable income]  for  months  in  the  taxable  year
     9  ending  before  the  due  date  for  the installment, over the aggregate
    10  amount of any prior required installments  for  the  taxable  year.  The
    11  applicable  percentage  of  the  tax  shall  be  twenty-two and one-half
    12  percent in the case of the first installment, forty-five percent in  the
    13  case  of the second installment, sixty-seven and one-half percent in the
    14  case of the third installment and ninety percent  in  the  case  of  the
    15  fourth installment, and shall be computed without regard to any increase
    16  in  the  rates  applicable  to the taxable year unless such increase was
    17  enacted at least thirty days prior to the due date of the installment.
    18    § 27. This act shall take effect  immediately  and  apply  to  taxable
    19  years beginning on or after January 1, 2014.
 
    20                                   PART K
 
    21    Section  1.  Subsection  (e-1) of section 606 of the tax law is relet-
    22  tered subsection (e-2).
    23    § 2. Section 606 of the tax law is amended by adding a new  subsection
    24  (e-1) to read as follows:
    25    (e-1)  Enhanced  real  property  tax  circuit  breaker credit. (1) For
    26  purposes of this subsection:
    27    (A) "Qualified taxpayer" means a resident individual of the state, who
    28  (i) is a resident of a city with a population over one million, (ii) has
    29  occupied the same residence for six months or more of the taxable  year,
    30  and (iii) is required or chooses to file a return under this article.
    31    (B)  "Household"  or  "members  of  the  household"  means a qualified
    32  taxpayer and all other persons, not necessarily related,  who  have  the
    33  same residence and share its furnishings, facilities and accommodations.
    34  Such  terms shall not include a tenant, subtenant, roomer or boarder who
    35  is not related to the qualified taxpayer  in  any  degree  specified  in
    36  paragraphs  one  through  eight of subsection (a) of section one hundred
    37  fifty-two of the internal revenue code.   Provided, however,  no  person
    38  may be a member of more than one household at one time.
    39    (C) "Household gross income" means the aggregate adjusted gross income
    40  of  all  members  of  the household for the taxable year as reported for
    41  federal income tax purposes, or which  would  be  reported  as  adjusted
    42  gross  income  if a federal income tax return were required to be filed,
    43  with the modifications in subsection (b) of section six  hundred  twelve
    44  of  this article but without the modifications in subsection (c) of such
    45  section, plus any portion of the gain from the sale or exchange of prop-
    46  erty otherwise excluded from such amount;  earned  income  from  sources
    47  without  the  United  States  excludable  from  federal  gross income by
    48  section nine hundred eleven of the internal revenue code; support  money
    49  not  included  in  adjusted  gross  income;  nontaxable strike benefits;
    50  supplemental security income payments; the gross amount of  any  pension
    51  or  annuity  benefits  to the extent not included in such adjusted gross
    52  income (including, but not limited to, railroad retirement benefits  and
    53  all  payments  received under the federal social security act and veter-
    54  ans' disability pensions); nontaxable interest received from  the  state

        S. 6359--D                         184                        A. 8559--D
 
     1  of  New  York,  its agencies, instrumentalities, public corporations, or
     2  political subdivisions (including a public corporation created  pursuant
     3  to  agreement or compact with another state or Canada); workers' compen-
     4  sation;  the gross amount of "loss-of-time" insurance; and the amount of
     5  cash public assistance and relief, other than medical assistance for the
     6  needy, paid to or for the benefit of the qualified taxpayer  or  members
     7  of  his  or  her  household.  Household  gross  income shall not include
     8  surplus foods or other relief in kind or payments  made  to  individuals
     9  because  of  their  status  as victims of Nazi persecution as defined in
    10  P.L. 103-286. Provided,  further,  household  gross  income  shall  only
    11  include  all  such income received by all members of the household while
    12  members of such household. In computing household gross income, the  net
    13  amount  of  loss  reported  on  Federal Schedule C, D, E, or F shall not
    14  exceed three thousand dollars per schedule. In addition, the net  amount
    15  of  any  other separate category of loss shall not exceed three thousand
    16  dollars. The aggregate amount of all losses included in computing house-
    17  hold gross income shall not exceed fifteen thousand dollars.
    18    (D) "Residence" means a dwelling in this state owned or rented by  the
    19  taxpayer,  and  so much of the land abutting it, not exceeding one acre,
    20  as is reasonably necessary for use of the dwelling as a  home,  and  may
    21  consist  of a part of a multi-dwelling or multi-purpose building includ-
    22  ing a cooperative or condominium,  and  rental  units  within  a  single
    23  dwelling.  Residence includes a trailer or mobile home, used exclusively
    24  for  residential purposes and defined as real property pursuant to para-
    25  graph (g) of subdivision twelve of section one hundred two of  the  real
    26  property tax law.
    27    (E)  "Qualifying  real  property taxes" means all real property taxes,
    28  special ad valorem levies and special assessments, exclusive  of  penal-
    29  ties  and  interest, levied on the residence of a qualified taxpayer and
    30  paid during the taxable year. A qualified taxpayer may elect to  include
    31  any  additional  amount that would have been levied in the absence of an
    32  exemption from real property taxation pursuant to section  four  hundred
    33  sixty-seven  of  the  real property tax law. If tenant-stockholders in a
    34  cooperative housing corporation have met the requirements of section two
    35  hundred sixteen of the internal revenue code by which they are allowed a
    36  deduction for real estate taxes, the amount of taxes  so  allowable,  or
    37  which  would  be  allowable  if the taxpayer had filed returns on a cash
    38  basis, shall be qualifying real property taxes. If a residence is  owned
    39  by  two  or  more individuals as joint tenants or tenants in common, and
    40  one or more than one individual is not a member of the household, quali-
    41  fying real property taxes is that part of such taxes  on  the  residence
    42  which  reflects  the  ownership percentage of the qualified taxpayer and
    43  members of his or her household. If a residence is an integral part of a
    44  larger unit, qualifying real property taxes shall  be  limited  to  that
    45  amount of such taxes paid as may be reasonably apportioned to such resi-
    46  dence.  If  a  household owns and occupies two or more residences during
    47  different periods in the same taxable  year,  qualifying  real  property
    48  taxes  shall  be  the sum of the prorated qualifying real property taxes
    49  attributable to the household during the periods such household occupies
    50  each of such residences. If the household owns and occupies a  residence
    51  for  part of the taxable year and rents a residence for part of the same
    52  taxable year, it may include the proration of qualifying  real  property
    53  taxes  on  the residence owned.   Provided, however, for purposes of the
    54  credit allowed under this subsection, qualifying real property taxes may
    55  be included by a qualified taxpayer only to the extent that such taxpay-
    56  er or the spouse of such taxpayer,  occupying  such  residence  for  one

        S. 6359--D                         185                        A. 8559--D

     1  hundred eighty-three days or more of the taxable year, owns or has owned
     2  the residence and paid such taxes.
     3    (F)  "Real  property  tax equivalent" means fifteen and three-quarters
     4  percent of the adjusted rent actually paid in  the  taxable  year  by  a
     5  household  solely  for  the right of occupancy of its New York residence
     6  for the taxable year. If (i) a residence is rented to two or more  indi-
     7  viduals  as  cotenants,  or  such  individuals share in the payment of a
     8  single rent for the right of occupancy of such residence, and (ii)  each
     9  of such individuals is a member of a different household, one or more of
    10  which individuals shares such residence, real property tax equivalent is
    11  that  portion of fifteen and three-quarters percent of the adjusted rent
    12  paid in the taxable year which reflects that portion of the rent attrib-
    13  utable to the qualified taxpayer and the members of his  or  her  house-
    14  hold.
    15    (G)  "Adjusted rent" means rental paid for the right of occupancy of a
    16  residence, excluding charges for heat, gas, electricity, furnishings and
    17  board.  Where charges for heat, gas, electricity, furnishings  or  board
    18  are included in rental but where such charges and the amount thereof are
    19  not  separately set forth in a written rental agreement, for purposes of
    20  determining adjusted rent the qualified  taxpayer  shall  reduce  rental
    21  paid as follows:
    22    (i) For heat, or heat and gas, deduct six percent of rental paid.
    23    (ii)  For  heat,  gas  and electricity, deduct eight percent of rental
    24  paid.
    25    (iii) For heat, gas, electricity and furnishings, deduct  ten  percent
    26  of rental paid.
    27    (iv)  For heat, gas, electricity, furnishings and board, deduct twenty
    28  percent of rental paid.
    29    If the commissioner determines that the adjusted  rent  shown  on  the
    30  return is excessive, the commissioner may reduce such rent, for purposes
    31  of  the computation of the credit, to an amount substantially equivalent
    32  to rent for a comparable accommodation.
    33    (2) A qualified taxpayer shall be allowed  a  credit  as  provided  in
    34  paragraph  three  of  this  subsection against the taxes imposed by this
    35  article reduced by the credits permitted by this article. If the  credit
    36  exceeds  the  tax  as  so  reduced for such year under this article, the
    37  excess shall be treated as an overpayment, to be credited  or  refunded,
    38  without  interest.  If  a  qualified  taxpayer is not required to file a
    39  return pursuant to section six hundred  fifty-one  of  this  article,  a
    40  qualified taxpayer may nevertheless receive the full amount of the cred-
    41  it to be credited or repaid as an overpayment, without interest.
    42    (3)  Determination  of  credit.   For taxable years after two thousand
    43  thirteen and prior to two thousand sixteen, the  amount  of  the  credit
    44  allowable under this subsection shall be determined as follows:
    45  If household gross income    Excess real property    The credit amount is
    46  for the taxable year is:     taxes are the excess    the following
    47                               of real property tax    percentage of excess
    48                               equivalent or the       property taxes:
    49                               excess of qualifying
    50                               real property taxes
    51                               over the following
    52                               percentage of
    53                               household gross
    54                               income:
    55  Less than $100,000                   4                    4.5
    56  $100,000 to less than                5                    3.0

        S. 6359--D                         186                        A. 8559--D
 
     1  $150,000
     2  $150,000 to less than                6                    1.5
     3  $200,000
     4    Notwithstanding  the  foregoing  provisions, the maximum credit deter-
     5  mined under this subparagraph may not exceed five hundred dollars.
     6    (4) If a qualified taxpayer occupies a residence for a period of  less
     7  than twelve months during the taxable year or occupies two or more resi-
     8  dences during different periods in such taxable year, the credit allowed
     9  pursuant  to  this  subsection  shall  be computed in such manner as the
    10  commissioner may, by regulation, prescribe in order to properly  reflect
    11  the  credit  or  portion thereof attributable to such residence or resi-
    12  dences and such period or periods.
    13    (5)  The  commissioner  may  prescribe  that  the  credit  under  this
    14  subsection  shall be determined in whole or in part by the use of tables
    15  prescribed by such commissioner. Such tables shall set forth the  credit
    16  to the nearest dollar.
    17    (6)  Only one credit per household and per qualified taxpayer shall be
    18  allowed per taxable year under this subsection. When two or more members
    19  of a household are able to  meet  the  qualifications  for  a  qualified
    20  taxpayer,  the  credit  shall  be  equally divided between or among such
    21  individuals unless such individuals file with the commissioner a written
    22  agreement among such individuals setting forth a different division.
    23    (A) Provided, however, where a joint income tax return has been  filed
    24  pursuant  to  the  provisions  of  section six hundred fifty-one of this
    25  article by a qualified taxpayer and his or her  spouse  (or  where  both
    26  spouses  are  qualified taxpayers and have filed such joint return), the
    27  credit, or the portion of the credit if divided, to  which  the  spouses
    28  are  entitled  shall  be applied against the tax of both spouses and any
    29  overpayment shall be made to both spouses.
    30    (B) Where any return required to be filed pursuant to  the  provisions
    31  of  section  six  hundred fifty-one of this article is combined with any
    32  return of tax imposed pursuant to the authority of this chapter  or  any
    33  other law if such tax is administered by the commissioner, the credit or
    34  the  portion of the credit if divided, allowed to the qualified taxpayer
    35  may be applied by the commissioner toward any liability for  the  afore-
    36  mentioned taxes.
    37    (7) No credit shall be granted under this subsection:
    38    (A)  If  household gross income for the taxable year equals or exceeds
    39  two hundred thousand dollars.
    40    (B) To a property owner unless: (i) the property is used for  residen-
    41  tial  purposes,  (ii) not more than twenty percent of the rental income,
    42  if any, from the property is from rental for nonresidential purposes and
    43  (iii) the property is occupied as a residence in whole or in part by one
    44  or more of the owners of the property.
    45    (C) To an individual with respect to whom a deduction under subsection
    46  (c) of section one hundred fifty-one of the  internal  revenue  code  is
    47  allowable to another taxpayer for the taxable year.
    48    (D)  With  respect  to  a  residence that is wholly exempted from real
    49  property taxation.
    50    (E) To an individual who is not a resident individual of a city, with-
    51  in the state, with a population over one million, for the entire taxable
    52  year.
    53    (8) The right to claim a credit or the portion of a credit, where such
    54  credit has been divided under this subsection, shall be personal to  the
    55  qualified  taxpayer  and  shall  not  survive his or her death, but such

        S. 6359--D                         187                        A. 8559--D
 
     1  right may be exercised on behalf of a claimant by his or her legal guar-
     2  dian or attorney in fact during his or her lifetime.
     3    (9)  Returns. If a qualified taxpayer is not required to file a return
     4  pursuant to section six hundred fifty-one of this article, a claim for a
     5  credit may be taken on a return filed with the commissioner within three
     6  years from the time it would have been required that a return  be  filed
     7  pursuant  to  such section had the qualified taxpayer had a taxable year
     8  ending on December thirty-first.  Returns under this paragraph shall  be
     9  in  such  form  as  shall be prescribed by the commissioner, which shall
    10  make available such forms and instructions for filing such returns.
    11    (10) Proof of claim. The commissioner may require a qualified taxpayer
    12  to furnish the following information in support of his claim for  credit
    13  under  this  subsection:  household  gross  income,  real property taxes
    14  levied or that would have been levied in the  absence  of  an  exemption
    15  from  real  property tax pursuant to section four hundred sixty-seven of
    16  the real property tax law, the names of members  of  the  household  and
    17  other  qualifying taxpayers occupying the same residence and their iden-
    18  tifying numbers  including  social  security  numbers,  household  gross
    19  income,  size  and nature of property claimed as residence and all other
    20  information which may be required by the commissioner to  determine  the
    21  credit.
    22    (11)  Administration.  The  provisions  of this article, including the
    23  provisions of sections six hundred fifty-three, six hundred fifty-eight,
    24  and six hundred fifty-nine of this article and the  provisions  of  part
    25  six  of this article relating to procedure and administration, including
    26  the judicial review of the decisions of the commissioner, except so much
    27  of section six hundred eighty-seven of  this  article  which  permits  a
    28  claim  for credit or refund to be filed after the period provided for in
    29  paragraph nine of  this  subsection  and  except  sections  six  hundred
    30  fifty-seven, six hundred eighty-eight and six hundred ninety-six of this
    31  article,  shall  apply  to the provisions of this subsection in the same
    32  manner and with the same force and effect as if the  language  of  those
    33  provisions  had  been  incorporated in full into this subsection and had
    34  expressly referred to the credit allowed or  returns  filed  under  this
    35  subsection,  except  to  the  extent  that  any such provision is either
    36  inconsistent with a provision of this subsection or is not  relevant  to
    37  this  subsection.  As  used  in  such  sections  and such part, the term
    38  "taxpayer" shall include a qualified taxpayer under this subsection and,
    39  notwithstanding the provisions of subsection (e) of section six  hundred
    40  ninety-seven  of  this article, where a qualified taxpayer has protested
    41  the denial of a claim for credit under this subsection and the  time  to
    42  file  a  petition  for redetermination of a deficiency or for refund has
    43  not expired, he shall, subject to such conditions as may be set  by  the
    44  commissioner,  receive  such  information  (A) which is contained in any
    45  return filed under this article by a member of his or her household  for
    46  the  taxable  year  for  which  the credit is claimed, and (B) which the
    47  commissioner finds is relevant and material to the issue of whether such
    48  claim was properly denied.
    49    (12) Notwithstanding any other provision of this article,  the  credit
    50  allowed  under  this  subsection  shall be determined after the determi-
    51  nation  and  application  of  any  other  credits  permitted  under  the
    52  provisions of this article.
    53    (13)  The  commissioner  shall prepare a written report after December
    54  thirty-first of each calendar  year,  which  shall  contain  statistical
    55  information  regarding the credits granted on or before such dates under
    56  this subsection during such calendar year. Copies of the report shall be

        S. 6359--D                         188                        A. 8559--D
 
     1  submitted by the commissioner to the governor, the  temporary  president
     2  of  the  senate, the speaker of the assembly, the chairman of the senate
     3  finance committee and the  chairman  of  the  assembly  ways  and  means
     4  committee  within  forty-five days of December thirty-first. Such report
     5  shall contain, but need not be limited to, the number of credits and the
     6  average amount of such credits allowed; and  of  those,  the  number  of
     7  credits  and  the  average  amount  of such credits allowed to qualified
     8  taxpayers in each county; and of those, the number of  credits  and  the
     9  average  amount  of  such  credits  allowed to qualified taxpayers whose
    10  household gross income falls within each of the household  gross  income
    11  ranges set forth in paragraph three of this subsection.
    12    § 3. This act shall take effect immediately and shall apply to taxable
    13  years  beginning  on  or  after  January 1, 2014 and shall expire and be
    14  deemed repealed January 1, 2016.
 
    15                                   PART L
 
    16                            Intentionally Omitted
 
    17                                   PART M
 
    18    Section 1. Paragraphs 2, 4 and 5 of subsection (vv) of section 606  of
    19  the  tax law, as added by section 1 of part CC of chapter 59 of the laws
    20  of 2013, are amended to read as follows:
    21    2. To be eligible for the credit, the taxpayer  (or  taxpayers  filing
    22  joint  returns)  on the personal income tax return filed for the taxable
    23  year [two years prior], must  [have]  (a)  [been]  be  a  resident,  (b)
    24  [claimed] claim one or more dependent children who were under the age of
    25  seventeen  on  the last day of the taxable year, (c) [had] have New York
    26  adjusted gross income of at least forty thousand dollars but no  greater
    27  than  three hundred thousand dollars, and (d) [had] have a tax liability
    28  as determined under paragraph three of this subsection of  greater  than
    29  or equal to zero.
    30    4.  [For  each  year  this  credit  is  allowed,  on or before October
    31  fifteenth of such year, the commissioner shall determine the  taxpayer's
    32  eligibility  for  this credit utilizing the information available to the
    33  commissioner on the taxpayer's personal income tax return filed for  the
    34  taxable  year two years prior to the taxable year in which the credit is
    35  allowed. For those taxpayers whom the commissioner has determined eligi-
    36  ble for this credit, the commissioner shall advance a payment  of  three
    37  hundred  fifty  dollars. When a taxpayer files his or her return for the
    38  taxable year, such taxpayer shall properly reconcile that payment on his
    39  or her return.
    40    5.] If the amount of the credit allowed under  this  subsection  shall
    41  exceed  the  taxpayer's  tax  for  the taxable year, the excess shall be
    42  treated as an overpayment of tax to be credited or refunded  in  accord-
    43  ance with the provisions of section six hundred eighty-six of this arti-
    44  cle, provided, however, that no interest shall be paid thereon.
    45    § 2. This act shall take effect immediately and apply to taxable years
    46  beginning on or after January 1, 2015.
 
    47                                   PART N
 
    48                            Intentionally Omitted

        S. 6359--D                         189                        A. 8559--D
 
     1                                   PART O
 
     2    Section  1.  Paragraph  1  of subdivision (a) of section 28 of the tax
     3  law, as amended by section 1 of part I of chapter  59  of  the  laws  of
     4  2012, is amended to read as follows:
     5    (1)  A taxpayer which is a qualified commercial production company, or
     6  which is a sole proprietor of a qualified commercial production company,
     7  and which is subject to tax under article nine-A or twenty-two  of  this
     8  chapter,  shall  be  allowed  a credit against such tax, pursuant to the
     9  provisions referenced in subdivision (c) of this section, to be computed
    10  as provided in this section. Provided, however, to be eligible for  such
    11  credit, at least seventy-five percent of the production costs (excluding
    12  post  production  costs)  paid or incurred directly and predominantly in
    13  the actual filming or recording of  the  qualified  commercial  must  be
    14  costs  incurred  in  New  York state. The tax credit allowed pursuant to
    15  this section shall apply  to  taxable  years  beginning  before  January
    16  first, two thousand [fifteen] seventeen.
    17    §  2.  Subparagraph (iii) of paragraph 2 of subdivision (a) of section
    18  28 of the tax law, as amended by section 2 of part I of  chapter  59  of
    19  the laws of 2012, is amended to read as follows:
    20    (iii)  The  state  annually  will  disburse three million of the total
    21  seven million in tax credits to all eligible  production  companies  who
    22  film or record a qualified commercial outside of the metropolitan commu-
    23  ter  transportation district as defined in section twelve hundred sixty-
    24  two of the public authorities law; provided,  however,  that  if,  after
    25  July  thirty-first  the  state  reviews  all  applications from eligible
    26  production companies who film or record a qualified  commercial  outside
    27  of  the  metropolitan  commuter  district  for a given year, tax credits
    28  remain unallocated under  this  subparagraph,  those  credits  shall  be
    29  allotted  to the credits set forth in subparagraph (i) of this paragraph
    30  for use consistent with the purposes of such subparagraph. The amount of
    31  the credit shall be the product (or pro rata share of  the  product,  in
    32  the  case of a member of a partnership) of five percent of the qualified
    33  production costs paid or incurred  in  the  production  of  a  qualified
    34  commercial,  provided  that  the  qualified  production  costs  paid  or
    35  incurred are attributable  to  the  use  of  tangible  property  or  the
    36  performance of services within the state in the production of such qual-
    37  ified  commercial.  To  be  eligible for said credit the total qualified
    38  production costs of a qualified production company must be greater  than
    39  [two]  one hundred thousand dollars in the aggregate during the calendar
    40  year. Such credit will be applied to qualified production costs  exceed-
    41  ing [two] one hundred thousand dollars in a calendar year.
    42    §  3.   Paragraph (a) of subdivision 38 of section 210 of the tax law,
    43  as amended by section 3 of part I of chapter 59 of the laws of 2012,  is
    44  amended to read as follows:
    45    (a)  Allowance  of  credit.  A  taxpayer  that is eligible pursuant to
    46  provisions of section twenty-eight of this chapter shall  be  allowed  a
    47  credit  to  be  computed  as  provided  in  such section against the tax
    48  imposed by this article. The tax credit allowed pursuant to this section
    49  shall apply to taxable years beginning before January first,  two  thou-
    50  sand [fifteen] seventeen.
    51    §  4. Paragraph 1 of subsection (jj) of section 606 of the tax law, as
    52  amended by section 4 of part I of chapter 59 of the  laws  of  2012,  is
    53  amended to read as follows:
    54    (1)  Allowance  of credit. A taxpayer that is eligible pursuant to the
    55  provisions of section twenty-eight of this chapter shall  be  allowed  a

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     1  credit  to  be  computed  as  provided  in  such section against the tax
     2  imposed by this article. The tax credit allowed pursuant to this section
     3  shall apply to taxable years beginning before January first,  two  thou-
     4  sand [fifteen] seventeen.
     5    § 5. This act shall take effect immediately.
 
     6                                   PART P
 
     7    Section  1.  Subdivision 4 of section 22 of the public housing law, as
     8  amended by section 2 of part J of chapter 59 of the  laws  of  2012,  is
     9  amended to read as follows:
    10    4.  Statewide  limitation. The aggregate dollar amount of credit which
    11  the commissioner may allocate to  eligible  low-income  buildings  under
    12  this article shall be [forty-eight] fifty-six million dollars. The limi-
    13  tation  provided  by  this subdivision applies only to allocation of the
    14  aggregate dollar amount of credit by  the  commissioner,  and  does  not
    15  apply to allowance to a taxpayer of the credit with respect to an eligi-
    16  ble low-income building for each year of the credit period.
    17    § 2. Subdivision 4 of section 22 of the public housing law, as amended
    18  by section one of this act, is amended to read as follows:
    19    4.  Statewide  limitation. The aggregate dollar amount of credit which
    20  the commissioner may allocate to  eligible  low-income  buildings  under
    21  this  article shall be [fifty-six] sixty-four million dollars. The limi-
    22  tation provided by this subdivision applies only to  allocation  of  the
    23  aggregate  dollar  amount  of  credit  by the commissioner, and does not
    24  apply to allowance to a taxpayer of the credit with respect to an eligi-
    25  ble low-income building for each year of the credit period.
    26    § 3. This act shall take effect immediately; provided,  however,  that
    27  section two of this act shall take effect April 1, 2015.
 
    28                                   PART Q
 
    29                            Intentionally Omitted

    30                                   PART R
 
    31    Section  1.    Section  210  of the tax law is amended by adding a new
    32  subdivision 48 to read as follows:
    33    48. Real property tax credit for manufacturers. (a)  A  qualified  New
    34  York  manufacturer,  as defined in subparagraph (vi) of paragraph (a) of
    35  subdivision one of this section, will be allowed a credit equal to twen-
    36  ty percent of the real property tax it paid during the taxable year  for
    37  real  property  owned by such manufacturer in New York which was princi-
    38  pally used during the taxable year for manufacturing to the  extent  not
    39  deducted  in  determining  entire  net  income.  This credit will not be
    40  allowed if the real property taxes that are the basis  for  this  credit
    41  are included in the calculation of another credit claimed by the taxpay-
    42  er.
    43    (b)  (1)  For purposes of this subdivision, the term real property tax
    44  means a charge imposed upon real property by or on behalf of  a  county,
    45  city,  town, village or school district for municipal or school district
    46  purposes, provided that the charge is  levied  for  the  general  public
    47  welfare  by  the  proper  taxing  authorities at a like rate against all
    48  property over which such authorities  have  jurisdiction,  and  provided
    49  that  where taxes are levied pursuant to article eighteen or nineteen of

        S. 6359--D                         191                        A. 8559--D

     1  the real property tax law, the property must have been taxed at the rate
     2  determined for the class in which it is contained, as provided  by  such
     3  article  eighteen  or  nineteen,  whichever is applicable. The term real
     4  property tax does not include a charge for local benefits, including any
     5  portion of that charge that is properly allocated to the costs attribut-
     6  able  to  maintenance  or interest, when (i) the property subject to the
     7  charge is limited to the property that benefits from the charge, or (ii)
     8  the amount of the charge is determined by the benefit  to  the  property
     9  assessed,  or  (iii)  the  improvement  for which the charge is assessed
    10  tends to increase the property value.
    11    (2) In addition, the term real property tax includes taxes paid by the
    12  taxpayer upon real property principally used during the taxable year  by
    13  the  taxpayer in manufacturing where the taxpayer leases such real prop-
    14  erty from an unrelated third  party  if  the  following  conditions  are
    15  satisfied:  (i)  the tax must be paid by the taxpayer as lessee pursuant
    16  to explicit requirements in a written lease, and (ii)  the  taxpayer  as
    17  lessee  has  paid  such  taxes  directly to the taxing authority and has
    18  received a written receipt for payment of taxes from the taxing authori-
    19  ty. In the case of a combined group that  constitutes  a  qualified  New
    20  York  manufacturer,  the conditions in the preceding sentence are satis-
    21  fied if one corporation in the combined group is the lessee and  another
    22  corporation  in  the  combined  group  makes  the payments to the taxing
    23  authority.
    24    (3) The term real property tax does not include a payment made by  the
    25  taxpayer  in  connection  with  an  agreement for the payment in lieu of
    26  taxes on real property, whether such property is owned or leased by  the
    27  taxpayer.
    28    (4)  The  real property taxes must be paid by the taxpayer in the year
    29  such taxes become a lien on the real property.
    30    (c) Credit recapture. Where a qualified New York  manufacturer's  real
    31  property  taxes  which  were  the  basis for the allowance of the credit
    32  provided for under this subdivision are subsequently reduced as a result
    33  of a final order in any proceeding under article seven of the real prop-
    34  erty tax law or other provision of law, the taxpayer shall add back,  in
    35  the  taxable year in which such final order is issued, the excess of (1)
    36  the amount of credit originally allowed for a taxable year over (2)  the
    37  amount  of credit determined based upon the reduced real property taxes.
    38  If such final order reduces real property taxes for more than one  year,
    39  the  taxpayer  must determine how much of such reduction is attributable
    40  to each year covered by such final order and  calculate  the  amount  of
    41  credit  which  is required by this subdivision to be recaptured for each
    42  year based on such reduction.
    43    (d) The credit allowed under this subdivision  for  any  taxable  year
    44  shall  not  reduce  the  tax  due for such year to less than twenty-five
    45  dollars.
    46    § 2. Paragraph (b) of subdivision 9 of section 208 of the tax  law  is
    47  amended by adding a new subparagraph 21 to read as follows:
    48    (21)  The  amount  of any federal deduction for real property taxes to
    49  the extent such taxes are used as the basis of the  calculation  of  the
    50  real  property  tax  credit  for manufacturers allowed under subdivision
    51  forty-eight of section two hundred ten of this article.
    52    § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
    53  of  the  tax  law is amended by adding a new clause (xxxviii) to read as
    54  follows:

    55  (xxxviii) Real property tax           Amount of credit under

        S. 6359--D                         192                        A. 8559--D
 
     1  credit for manufacturers under        subdivision forty-eight of
     2  subsection (xx)                       section two hundred ten
 
     3    §  4.  Subsections  (yy)  and  (zz)  of section 606 of the tax law, as
     4  relettered by section 5 of part H of chapter 1 of the laws of 2003,  are
     5  relettered  subsections  (yyy)  and  (zzz)  and a new subsection (xx) is
     6  added to read as follows:
     7    (xx) Real property tax credit for manufacturers. (1) A  qualified  New
     8  York  manufacturer  will  be allowed a credit equal to twenty percent of
     9  the real property tax it paid during the taxable year for real  property
    10  owned by such manufacturer in New York which was principally used during
    11  the taxable year for manufacturing to the extent not deducted in comput-
    12  ing  federal  adjusted  gross income. This credit will not be allowed if
    13  the real property taxes that are the basis for this credit are  included
    14  in the calculation of another credit claimed by the taxpayer.
    15    (2)(A)  The  term qualified New York manufacturer has the same meaning
    16  as under subparagraph (vi)  of  paragraph  (a)  of  subdivision  one  of
    17  section two hundred ten of this chapter.
    18    (B)  (i)  The  term real property tax means a charge imposed upon real
    19  property by or on behalf of a county,  city,  town,  village  or  school
    20  district  for  municipal  or school district purposes, provided that the
    21  charge is levied for the general public welfare  by  the  proper  taxing
    22  authorities at a like rate against all property over which such authori-
    23  ties  have jurisdiction, and provided that where taxes are levied pursu-
    24  ant to article eighteen or nineteen of the real property  tax  law,  the
    25  property  must  have  been taxed at the rate determined for the class in
    26  which it is contained, as provided by such article eighteen or nineteen,
    27  whichever is applicable. The term real property tax does not  include  a
    28  charge  for local benefits, including any portion of that charge that is
    29  properly allocated to the costs attributable to maintenance or interest,
    30  when (I) the property subject to the charge is limited to  the  property
    31  that  benefits  from  the  charge,  or  (II) the amount of the charge is
    32  determined by the  benefit  to  the  property  assessed,  or  (III)  the
    33  improvement for which the charge is assessed tends to increase the prop-
    34  erty value.
    35    (ii)  In  addition,  the term real property tax includes taxes paid by
    36  the taxpayer upon real property principally used during the taxable year
    37  by the taxpayer in manufacturing where the  taxpayer  leases  such  real
    38  property  from  an unrelated third party if the following conditions are
    39  satisfied: (I) the tax must be paid by the taxpayer as  lessee  pursuant
    40  to  explicit  requirements  in a written lease, and (II) the taxpayer as
    41  lessee has paid such taxes directly to  the  taxing  authority  and  has
    42  received a written receipt for payment of taxes from the taxing authori-
    43  ty.  In  the  case  of a combined group that constitutes a qualified New
    44  York manufacturer, the conditions in the preceding sentence  are  satis-
    45  fied  if one corporation in the combined group is the lessee and another
    46  corporation in the combined group  makes  the  payments  to  the  taxing
    47  authority.
    48    (iii)  The  term  real property tax does not include a payment made by
    49  the taxpayer in connection with an agreement for the payment in lieu  of
    50  taxes  on real property, whether such property is owned or leased by the
    51  taxpayer.
    52    (iv) The real property taxes must be paid by the taxpayer in the  year
    53  such taxes become a lien on the real property.
    54    (3)  Credit  recapture. Where a qualified New York manufacturer's real
    55  property taxes which were the basis for  the  allowance  of  the  credit

        S. 6359--D                         193                        A. 8559--D
 
     1  provided for under this subdivision are subsequently reduced as a result
     2  of a final order in any proceeding under article seven of the real prop-
     3  erty  tax law or other provision of law, the taxpayer shall add back, in
     4  the  taxable year in which such final order is issued, the excess of (i)
     5  the amount of credit originally allowed for a taxable year over (ii) the
     6  amount of credit determined based upon the reduced real property  taxes.
     7  If  such final order reduces real property taxes for more than one year,
     8  the taxpayer must determine how much of such reduction  is  attributable
     9  to  each  year  covered  by such final order and calculate the amount of
    10  credit which is required by this subdivision to be recaptured  for  each
    11  year based on such reduction.
    12    (4)  If the amount of the credit allowed under this subsection for any
    13  taxable year exceeds the taxpayer's tax for such year, the  excess  will
    14  be  treated  as  an overpayment to be credited or refunded in accordance
    15  with the provisions of section six hundred eighty-six of  this  article,
    16  provided however, no interest will be paid thereon.
    17    §  4-a.  Subsection  (b)  of  section 612 of the tax law is amended by
    18  adding a new paragraph 40 to read as follows:
    19    (40) The amount of any federal deduction for real  property  taxes  to
    20  the  extent  such  taxes are used as the basis of the calculation of the
    21  real property tax credit for manufacturers allowed under subsection (xx)
    22  of section six hundred six of this article.
    23    § 5. Subparagraphs (vi) and (vii) of paragraph (a) of subdivision 1 of
    24  section 210 of the tax law, subparagraph (vi) as amended by section 1 of
    25  part C of chapter 56 of the laws of 2011 and subparagraph (vii) as added
    26  by section 1 of part Z of chapter 59 of the laws of 2013, are amended to
    27  read as follows:
    28    (vi) for taxable years beginning on or  after  January  [thirty-first]
    29  first,  two  thousand  [seven]  fourteen,  the amount prescribed by this
    30  paragraph for a taxpayer which is a  qualified  New  York  manufacturer,
    31  shall  be  computed at the rate of [six and one-half (6.5)] zero percent
    32  of the taxpayer's entire net income base. For taxable years beginning on
    33  or after January first, two thousand twelve and  before  January  first,
    34  two  thousand  fifteen,  the  amount  prescribed by this paragraph for a
    35  taxpayer which is an eligible qualified New York manufacturer  shall  be
    36  computed  at  the  rate  of  three and one-quarter (3.25) percent of the
    37  taxpayer's entire net income base.  The term "manufacturer" shall mean a
    38  taxpayer which during the taxable year is  principally  engaged  in  the
    39  production  of goods by manufacturing, processing, assembling, refining,
    40  mining, extracting, farming,  agriculture,  horticulture,  floriculture,
    41  viticulture  or commercial fishing. However, the generation and distrib-
    42  ution  of  electricity,  the  distribution  of  natural  gas,  and   the
    43  production  of steam associated with the generation of electricity shall
    44  not be qualifying activities for a manufacturer under this subparagraph.
    45  Moreover, the combined group shall be considered  a  "manufacturer"  for
    46  purposes  of  this  subparagraph  only  if the combined group during the
    47  taxable year is principally engaged in the activities set forth in  this
    48  paragraph,  or  any  combination thereof. A taxpayer or a combined group
    49  shall be "principally engaged" in activities described above if,  during
    50  the  taxable  year, more than fifty percent of the gross receipts of the
    51  taxpayer or combined group, respectively, are derived from receipts from
    52  the sale of goods produced by such activities. In computing  a  combined
    53  group's  gross  receipts, intercorporate receipts shall be eliminated. A
    54  "qualified New York manufacturer" is a manufacturer which  has  property
    55  in  New  York  which  is  described in clause (A) of subparagraph (i) of
    56  paragraph (b) of subdivision twelve of this section and either  (I)  the

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     1  adjusted  basis  of such property for federal income tax purposes at the
     2  close of the taxable year is at least one million dollars or (II) all of
     3  its real and personal property is located in New York. [In  addition,  a
     4  "qualified  New York manufacturer" means a taxpayer which is defined as]
     5  A taxpayer or, in the case of a combined report, a combined group,  that
     6  does  not  satisfy  the  principally engaged test may be a qualified New
     7  York manufacturer if the taxpayer or the combined group  employs  during
     8  the  taxable  year at least two thousand five hundred employees in manu-
     9  facturing in New York and the taxpayer or the combined group has proper-
    10  ty in the state used in manufacturing, the adjusted basis of  which  for
    11  federal income tax purposes at the close of the taxable year is at least
    12  one hundred million dollars. The amount prescribed by this paragraph for
    13  a  taxpayer  that is a qualified emerging technology company under para-
    14  graph (c) of subdivision one of section thirty-one hundred two-e of  the
    15  public  authorities  law regardless of the ten million dollar limitation
    16  expressed in subparagraph one of such paragraph (c) shall be computed at
    17  the rate of five and nine-tenths percent of the  taxpayer's  entire  net
    18  income  base.  The  commissioner shall establish guidelines and criteria
    19  that specify requirements by which a manufacturer may be  classified  as
    20  an  eligible  qualified  New York manufacturer. Criteria may include but
    21  not be limited to factors such as regional  unemployment,  the  economic
    22  impact  that  manufacturing has on the surrounding community, population
    23  decline within the region and median income within the region  in  which
    24  the manufacturer is located. In establishing these guidelines and crite-
    25  ria,  the  commissioner shall endeavor that the total annual cost of the
    26  lower rates shall not exceed twenty-five million dollars.
    27    [(vii) For a qualified New York manufacturer, as defined  in  subpara-
    28  graph  (vi)  of this paragraph, the rate at which the tax is computed in
    29  effect for taxable years beginning on or after January first, two  thou-
    30  sand thirteen and before January first, two thousand fourteen for quali-
    31  fied  New  York  manufacturers  shall  be reduced by nine and two-tenths
    32  percent for taxable years commencing on  or  after  January  first,  two
    33  thousand fourteen and before January first, two thousand fifteen, twelve
    34  and  three-tenths percent for taxable years commencing on or after Janu-
    35  ary first, two thousand fifteen and before January first,  two  thousand
    36  sixteen, fifteen and four-tenths percent for taxable years commencing on
    37  or  after  January first, two thousand sixteen and before January first,
    38  two thousand eighteen, and twenty-five percent for taxable years  begin-
    39  ning on or after January first, two thousand eighteen.]
    40    §  6.  Subparagraph 2 of paragraph (b) of subdivision 1 of section 210
    41  of the tax law, as amended by section 1 of part GG-1 of  chapter  57  of
    42  the laws of 2008, is amended to read as follows:
    43    (2)  For  purposes  of  subparagraph  one  of this paragraph, the term
    44  "manufacturer" shall mean a taxpayer which during the  taxable  year  is
    45  principally  engaged  in the production of goods by manufacturing, proc-
    46  essing, assembling, refining, mining, extracting, farming,  agriculture,
    47  horticulture, floriculture, viticulture or commercial fishing. Moreover,
    48  for  purposes  of  computing  the capital base in a combined report, the
    49  combined group shall be considered a "manufacturer" for purposes of this
    50  subparagraph only if the combined group during the taxable year is prin-
    51  cipally engaged in the activities set forth in this subparagraph, or any
    52  combination thereof. A taxpayer or a combined group shall be "principal-
    53  ly engaged" in activities described above if, during the  taxable  year,
    54  more  than  fifty  percent  of  the  gross  receipts  of the taxpayer or
    55  combined group, respectively, are derived from receipts from the sale of
    56  goods produced by such activities. In computing a combined group's gross

        S. 6359--D                         195                        A. 8559--D
 
     1  receipts, intercorporate receipts shall be eliminated. A "qualified  New
     2  York  manufacturer" is a manufacturer that has property in New York that
     3  is described in clause (A) of  subparagraph  (i)  of  paragraph  (b)  of
     4  subdivision  twelve of this section and either (i) the adjusted basis of
     5  that property for federal income tax purposes at the close of the  taxa-
     6  ble  year  is  at  least one million dollars or (ii) all of its real and
     7  personal property is located in New York. In addition, a "qualified  New
     8  York  manufacturer"  means  a  taxpayer  that  is defined as a qualified
     9  emerging technology company under paragraph (c) of  subdivision  one  of
    10  section  thirty-one  hundred two-e of the public authorities law regard-
    11  less of the ten million dollar limitation expressed in subparagraph  one
    12  of  such paragraph.   A taxpayer or, in the case of a combined report, a
    13  combined group, that does not satisfy the principally engaged  test  may
    14  be  a  qualified  New  York manufacturer if the taxpayer or the combined
    15  group employs during the taxable year at least two thousand five hundred
    16  employees in manufacturing in New York and the taxpayer or the  combined
    17  group  has  property  in  the  state used in manufacturing, the adjusted
    18  basis of which for federal income tax purposes at the close of the taxa-
    19  ble year is at least one hundred million dollars.
    20    § 7. Subparagraph (iii) of paragraph (c) of subdivision 1  of  section
    21  210 of the tax law, as added by section 3 of part Z of chapter 59 of the
    22  laws of 2013, is amended to read as follows:
    23    (iii)  For  a  qualified New York manufacturer, as defined in subpara-
    24  graph (vi) of paragraph (a) of this subdivision and a qualified emerging
    25  technology company under paragraph (c) of  subdivision  one  of  section
    26  thirty-one hundred two-e of the public authorities law regardless of the
    27  ten  million  dollar  limitation  expressed  in subparagraph one of such
    28  paragraph (c), the rate at which the tax is computed in effect for taxa-
    29  ble years beginning on or after January first, two thousand thirteen and
    30  before January first, two  thousand  fourteen  for  qualified  New  York
    31  manufacturers  shall be reduced by nine and two-tenths percent for taxa-
    32  ble years commencing on or after January first,  two  thousand  fourteen
    33  and  before January first, two thousand fifteen, twelve and three-tenths
    34  percent for taxable years commencing on  or  after  January  first,  two
    35  thousand fifteen and before January first, two thousand sixteen, fifteen
    36  and four-tenths percent for taxable years commencing on or after January
    37  first, two thousand sixteen and before January first, two thousand eigh-
    38  teen,  and  twenty-five  percent for taxable years beginning on or after
    39  January first, two thousand eighteen.
    40    § 8. Subparagraph 6 of paragraph (d) of subdivision 1 of  section  210
    41  of  the  tax  law,  as added by section 4 of part Z of chapter 59 of the
    42  laws of 2013, is amended to read as follows:
    43    (6) For a qualified New York manufacturer, as defined in  subparagraph
    44  (vi)  of  paragraph  (a)  of  this subdivision, and a qualified emerging
    45  technology company under paragraph (c) of  subdivision  one  of  section
    46  thirty-one hundred two-e of the public authorities law regardless of the
    47  ten  million  dollar  limitation  expressed  in subparagraph one of such
    48  paragraph (c), the amounts prescribed in subparagraphs one and  four  of
    49  this paragraph in effect for taxable years beginning on or after January
    50  first,  two  thousand  thirteen  and  before January first, two thousand
    51  fourteen for qualified New York manufacturers shall be reduced  by  nine
    52  and  two-tenths percent for taxable years commencing on or after January
    53  first, two thousand fourteen and  before  January  first,  two  thousand
    54  fifteen, twelve and three-tenths percent for taxable years commencing on
    55  or  after  January first, two thousand fifteen and before January first,
    56  two thousand sixteen, fifteen and four-tenths percent for taxable  years

        S. 6359--D                         196                        A. 8559--D
 
     1  commencing  on  or  after January first, two thousand sixteen and before
     2  January first, two thousand eighteen, and twenty-five percent for  taxa-
     3  ble years beginning on or after January first, two thousand eighteen.
     4    §  9.  Severability.  The  legislature  intends by this act to provide
     5  needed tax relief to New York manufacturers.  However,  if  a  court  of
     6  final,  competent  jurisdiction adjudges the tax rates imposed on quali-
     7  fied New York manufacturers to be invalid, qualified New  York  manufac-
     8  turers  shall  be  subject  to the same tax rates as all other taxpayers
     9  subject to tax under article 9-A of the tax law. Provided further, if  a
    10  court  of  final,  competent  jurisdiction adjudges that the tax credits
    11  provided by this act to qualified New York manufacturers to be  invalid,
    12  such  credits  shall  be  deemed  repealed  and shall be of no force and
    13  effect as to any taxpayers.
    14    § 10. This act shall take effect immediately and shall apply to  taxa-
    15  ble  years  beginning on or after January 1, 2014 provided that sections
    16  one, two, three, five, six, seven, eight and  nine  of  this  act  shall
    17  expire  December  31,  2014 when upon such date such provisions shall be
    18  deemed repealed.
 
    19                                   PART S
 
    20    Section 1. Sections 185, 187-j, 187-k, 187-l, 187-m, 187-q, 187-r  and
    21  187-s of the tax law are REPEALED.
    22    §  2.  Paragraph  (c)  of subdivision 9 of section 400 of the economic
    23  development law, as added by section 2 of part V of chapter  61  of  the
    24  laws of 2011, is amended to read as follows:
    25    (c) the business entity must not be substantially similar in ownership
    26  and  operation  to  another taxpayer taxable or previously taxable under
    27  section one hundred eighty-three[,] or one hundred eighty-four or former
    28  section one hundred eighty-five of  article  nine,  former  section  one
    29  hundred  eighty-six or article nine-A, twenty-two, thirty-two or thirty-
    30  three of the tax law or the income or losses of which is or was includa-
    31  ble under article twenty-two of the tax law;
    32    § 3. Paragraph (c) of subdivision 6 of section  431  of  the  economic
    33  development  law,  as  added by section 1 of part A of chapter 68 of the
    34  laws of 2013, is amended to read as follows:
    35    (c) the business is not substantially  similar  in  operation  and  in
    36  ownership  to  a  business  entity  (or entities) taxable, or previously
    37  taxable within the last five taxable years, under  section  one  hundred
    38  eighty-three[,]  or  one hundred eighty-four, former section one hundred
    39  eighty-five or former section one hundred eighty-six  of  the  tax  law,
    40  article nine-A, thirty-two or thirty-three of the tax law, article twen-
    41  ty-three  of  the  tax law or which would have been subject to tax under
    42  such article twenty-three (as such article  was  in  effect  on  January
    43  first,  nineteen  hundred eighty), or the income (or losses) of which is
    44  (or was) includable under article twenty-two of the tax law; and
    45    § 4. Paragraph 1 of subdivision (a), subdivision (f), paragraph  1  of
    46  subdivision  (i)  and  subdivisions (j) and (k) of section 14 of the tax
    47  law, paragraph 1 of subdivision (a) as amended by section 3 of  part  V1
    48  of  chapter 109 of the laws of 2006, subdivisions (f) and (j) as amended
    49  by section 10 of part CC of chapter 85 of the laws of 2002, paragraph  1
    50  of  subdivision  (i)  and  subdivision (k) as amended and paragraph 4 of
    51  subdivision (j) as added by section 5 of part A of  chapter  63  of  the
    52  laws  of  2005,  subparagraph  (B)  of paragraph 4 of subdivision (j) as
    53  amended by chapter 161 of the laws of 2005 and paragraph 5  of  subdivi-

        S. 6359--D                         197                        A. 8559--D
 
     1  sion  (j)  as amended by section 4 of part V1 of chapter 109 of the laws
     2  of 2006, are amended to read as follows:
     3    (1)  except as provided in paragraphs one-a and one-b of this subdivi-
     4  sion, for purposes of [section one hundred eighty-seven-j and]  articles
     5  nine-A,  twenty-two,  thirty-two  and  thirty-three of this chapter, for
     6  each of the taxable years within  the  "business  tax  benefit  period,"
     7  which  period  shall consist of (A) in the case of a business enterprise
     8  with a test date occurring on or before December thirty-first, two thou-
     9  sand one, the first fifteen taxable years beginning on or after  January
    10  first, two thousand one, (B) in the case of a business enterprise with a
    11  test  date  occurring  on  or after January first, two thousand two, but
    12  prior to April first, two thousand five, the fifteen taxable years  next
    13  following  the business enterprise's test year, and (C) in the case of a
    14  business enterprise which is first certified under article eighteen-B of
    15  the general municipal law on or after April first,  two  thousand  five,
    16  the  ten taxable years starting with the taxable year in which the busi-
    17  ness enterprise's first date of certification under  article  eighteen-B
    18  of  the  general  municipal law occurs, but only with respect to each of
    19  such business tax benefit period years for which the employment test  is
    20  met,
    21    (f)  Taxable  year.  The term "taxable year" means the taxable year of
    22  the business enterprise under section one hundred eighty-three[,] or one
    23  hundred eighty-four[, one hundred eighty-five]  or  former  section  one
    24  hundred eighty-six of article nine, or under article nine-A, twenty-two,
    25  thirty-two  or  thirty-three  of  this chapter. If a business enterprise
    26  does not have a taxable year because  it  is  exempt  from  taxation  or
    27  otherwise  not  required  to file a return under any of such sections of
    28  article nine or under article nine-A, twenty-two, thirty-two or  thirty-
    29  three,  then the term "taxable year" means (i) the business enterprise's
    30  federal taxable year, or, (ii) if the enterprise does not have a federal
    31  taxable year, the calendar year.
    32    (1) for purposes of [section one  hundred  eighty-seven-j  of  article
    33  nine,  and]  articles nine-A, twenty-two, thirty-two and thirty-three of
    34  this chapter, on the first day of the taxable year during which  revoca-
    35  tion of its certification under article eighteen-B of the general munic-
    36  ipal law occurs, and
    37    (j)  New  business.  (1) A new business shall include any corporation,
    38  except a corporation which is substantially similar in operation and  in
    39  ownership  to  a  business  entity  (or entities) taxable, or previously
    40  taxable, under section one hundred  eighty-three,  one  hundred  eighty-
    41  four,  former  section  one  hundred  eighty-five  or former section one
    42  hundred eighty-six of article nine; article nine-A,  article  thirty-two
    43  or thirty-three of this chapter; article twenty-three of this chapter or
    44  which would have been subject to tax under such article twenty-three (as
    45  such article was in effect on January first, nineteen hundred eighty) or
    46  the  income  (or  losses)  of which is (or was) includable under article
    47  twenty-two of this chapter.
    48    (2) For purposes of article twenty-two of this chapter, an  individual
    49  who is either a sole proprietor or a member of a partnership shall qual-
    50  ify as an owner of a new business unless the business of which the indi-
    51  vidual  is  an owner is substantially similar in operation and in owner-
    52  ship to a business entity taxable, or previously taxable, under  section
    53  one  hundred  eighty-three,  one hundred eighty-four, former section one
    54  hundred eighty-five or former section one hundred eighty-six of  article
    55  nine;  article nine-A, thirty-two or thirty-three of this chapter; arti-
    56  cle twenty-three of this chapter or which would have been subject to tax

        S. 6359--D                         198                        A. 8559--D
 
     1  under such article twenty-three (as such article was in effect on  Janu-
     2  ary  first,  nineteen hundred eighty) or the income (or losses) of which
     3  is (or was) includable under article twenty-two.
     4    (3)  For purposes of article twenty-two of this chapter, a shareholder
     5  of a New York S corporation shall be treated as the owner of a new busi-
     6  ness with respect to such share if the corporation qualifies  as  a  new
     7  business pursuant to paragraph one of this subdivision.
     8    (4) (A)(i) Notwithstanding paragraphs one and two of this subdivision,
     9  a new business shall include any corporation which is identical in oper-
    10  ation  and  ownership  to  a business entity (or entities) taxable under
    11  section one hundred eighty-three[,] or one hundred eighty-four or former
    12  section one hundred eighty-five of article nine; article nine-A, article
    13  thirty-two or thirty-three of this chapter or the income (or losses)  of
    14  which  is  includable under article twenty-two of this chapter, provided
    15  such corporation and such business entity or entities are  operating  in
    16  different counties in the state.
    17    (ii)  Notwithstanding  paragraphs  one and two of this subdivision, an
    18  individual who is either a sole proprietor or a member of a  partnership
    19  shall qualify as an owner of a new business if the business of which the
    20  individual  is  an owner is identical in operation and in ownership to a
    21  business entity (or entities) taxable under section one hundred  eighty-
    22  three[,] or one hundred eighty-four or former section one hundred eight-
    23  y-five  of  article  nine; article nine-A, article thirty-two or thirty-
    24  three of this chapter or the income (or losses) of which  is  includable
    25  under  article  twenty-two  of  this chapter, provided such business and
    26  such business entity or entities are operating in different counties  in
    27  the state.
    28    (iii)  Any  corporation qualifying as a new business or any individual
    29  qualifying as an owner of a new business as a result of  the  provisions
    30  of this subparagraph shall have the same business tax benefit period and
    31  sales  and  use tax benefit period as the business entity to which it is
    32  identical in operation and in ownership.
    33    (B) Notwithstanding any provisions of this subdivision to the contrary
    34  and notwithstanding subdivision c of section  eighteen  of  part  CC  of
    35  chapter  eighty-five  of  the laws of two thousand two, a corporation or
    36  partnership, which was first certified under article eighteen-B  of  the
    37  general  municipal law before August first, two thousand two, has a base
    38  period of zero years or zero employment for  its  base  period,  and  is
    39  similar  in  operation and in ownership to a business entity or entities
    40  taxable, or previously taxable, under sections  specified  in  paragraph
    41  one  or  two of this subdivision or which would have been subject to tax
    42  under article twenty-three of this  chapter  (as  such  article  was  in
    43  effect on January first, nineteen hundred eighty) or the income or loss-
    44  es  of which is or was includable under article twenty-two of this chap-
    45  ter shall not be deemed a new business if it was not formed for a  valid
    46  business  purpose, as such term is defined in clause (D) of subparagraph
    47  one of paragraph (o) of subdivision nine of section two hundred eight of
    48  this chapter and was formed solely to gain empire zone benefits.
    49    (5) Notwithstanding any other provision of this  section,  a  business
    50  enterprise which is approved by the commissioner of economic development
    51  as  the owner of a qualified investment project or a significant capital
    52  investment project pursuant to subdivision (w) of section  nine  hundred
    53  fifty-nine of the general municipal law, has a base period of zero years
    54  and  places in service property (or a project that includes such proper-
    55  ty) which comprises such qualified investment project  or  such  signif-
    56  icant  capital  investment project[,], shall be deemed to be a new busi-

        S. 6359--D                         199                        A. 8559--D

     1  ness under this section. Provided, however, to be deemed a new  business
     2  under  this  paragraph,  such  business  enterprise  shall have received
     3  certification under article eighteen-B of the general  business  law  by
     4  December thirty-first, two thousand seven.
     5    (k)  If  the  designation of an area as an empire zone is no longer in
     6  effect because section nine hundred sixty-nine of the general  municipal
     7  law  was not amended to extend the effective date of such designation so
     8  that the designations of all empire zones pursuant to article eighteen-B
     9  of the general municipal law have expired, a  business  enterprise  that
    10  was  certified  pursuant  to article eighteen-B of the general municipal
    11  law on the day immediately preceding the day on which  such  designation
    12  expired  shall  be deemed to continue to be certified under such article
    13  eighteen-B for purposes of this section, and sections fifteen,  sixteen,
    14  [section  one  hundred  eighty-seven-j,]  subdivisions  twenty-seven and
    15  twenty-eight of section two hundred ten, subsections (bb)  and  (cc)  of
    16  section six hundred six, subdivision [(z)] (d) of section eleven hundred
    17  [fifteen]  nineteen, subsections (o) and (p) of section fourteen hundred
    18  fifty-six, and subdivisions (r) and (s) of section fifteen hundred elev-
    19  en of this chapter. In addition, if the designation of  an  area  as  an
    20  empire  zone  is no longer in effect because section nine hundred sixty-
    21  nine of the general municipal law was not amended to extend  the  effec-
    22  tive  date  of  such  designation so that the designations of all empire
    23  zones pursuant to article eighteen-B of the general municipal  law  have
    24  expired,  all references to empire zones in the provisions of this chap-
    25  ter listed in the previous sentence  shall  be  read  as  meaning  areas
    26  designated  as  empire zones on the day immediately preceding the day on
    27  which such designation expired.
    28    § 5. Paragraph 1 of subdivision (h) of section 15 of the  tax  law  is
    29  REPEALED.
    30    § 6. The closing paragraph of subdivision (a) of section 28 of the tax
    31  law,  as added by section 2 of part V of chapter 62 of the laws of 2006,
    32  is amended to read as follows:
    33    (4) Notwithstanding any provisions of this section to the contrary,  a
    34  corporation  or  partnership,  which  otherwise qualifies as a qualified
    35  commercial production company, and is similar in operation and in owner-
    36  ship to a business entity or entities taxable,  or  previously  taxable,
    37  under  section one hundred eighty-three[,] or one hundred eighty-four or
    38  former section one hundred eighty-five of article nine; article  nine-A,
    39  article  thirty-two  or thirty-three of this chapter or which would have
    40  been subject to tax under article twenty-three of this chapter (as  such
    41  article  was in effect on January first, nineteen hundred eighty) or the
    42  income or losses of which is or was includable under article  twenty-two
    43  of  this  chapter  shall  not  be deemed a new or separate business, and
    44  therefore shall not be eligible for empire state  commercial  production
    45  benefits,  if  it  was  not formed for a valid business purpose, as such
    46  term is defined in clause (D) of subparagraph one of  paragraph  (o)  of
    47  subdivision  nine  of  section two hundred eight of this chapter and was
    48  formed solely to gain empire state commercial  production  credit  bene-
    49  fits.
    50    §  7.  Subdivision  (a)  of  section  31 of the tax law, as amended by
    51  section 7 of part G of chapter 61 of the laws of  2011,  is  amended  to
    52  read as follows:
    53    (a)  General.  A  taxpayer  subject  to tax under [section one hundred
    54  eighty-five,] article nine-A, twenty-two, thirty-two or thirty-three  of
    55  this chapter shall be allowed a credit against such tax, pursuant to the
    56  provisions  referenced in subdivision (g) of this section. The amount of

        S. 6359--D                         200                        A. 8559--D
 
     1  the credit, allowable for up to ten consecutive taxable  years,  is  the
     2  sum of the following four credit components:
     3    (1) the excelsior jobs tax credit component;
     4    (2) the excelsior investment tax credit component;
     5    (3) the excelsior research and development tax credit component; and
     6    (4) the excelsior real property tax credit component.
     7    §  8.  Paragraph  1 of subdivision (g) of section 31 of the tax law is
     8  REPEALED.
     9    § 9. The opening paragraph of  paragraph  1  of  subdivision  (a)  and
    10  subparagraph  (C) of paragraph 2 of subdivision (e) of section 35 of the
    11  tax law, as added by section 3 of part V of chapter 61 of  the  laws  of
    12  2011, are amended to read as follows:
    13    A taxpayer which is a participant or the owner of a participant in the
    14  economic transformation and facility redevelopment program under article
    15  eighteen  of  the  economic development law that is subject to tax under
    16  [section one hundred eighty-five of article nine,  or]  article  nine-A,
    17  twenty-two,  thirty-two or thirty-three of this chapter shall be allowed
    18  the sum of following  components  against  such  tax,  pursuant  to  the
    19  provisions referenced in subdivision (f) of this section.
    20    (C) the business entity must not be substantially similar in ownership
    21  and  operation  to  another taxpayer taxable or previously taxable under
    22  section one hundred eighty-three[,] or one hundred eighty-four or former
    23  section one hundred eighty-five of  article  nine,  former  section  one
    24  hundred  eighty-six of this chapter or article nine-A, twenty-two, thir-
    25  ty-two or thirty-three of this chapter or the income or losses of  which
    26  is or was includable under article twenty-two of this chapter;
    27    §  10. Paragraph 1 of subdivision (f) of section 35 of the tax law, as
    28  added by section 3 of part V of chapter 61  of  the  laws  of  2011,  is
    29  REPEALED.
    30    §  11. Paragraph 1 of subdivision (e) of section 38 of the tax law, as
    31  added by section 1 of part EE of chapter 59 of  the  laws  of  2013,  is
    32  REPEALED.
    33    § 12. Subdivision 2 of section 187 of the tax law, as added by chapter
    34  788 of the laws of 1978, is amended to read as follows:
    35    2.  In  no event shall the credit herein provided for be allowed in an
    36  amount which will reduce the tax payable to  less  than  the  applicable
    37  minimum  tax  fixed  by  section  one hundred eighty-three[, one hundred
    38  eighty-five] or former section one hundred eighty-six. If, however,  the
    39  amount  of  credit  allowable  under  this  section for any taxable year
    40  reduces the tax to such amount, any amount of credit not  deductible  in
    41  such taxable year may be carried over to the following year or years and
    42  may be deducted from the taxpayer's tax for such year or years.
    43    § 13. Subdivision 5 of section 187-a of the tax law, as added by chap-
    44  ter 142 of the laws of 1997, is amended to read as follows:
    45    5.  Carryover.  In  no  event  shall  the credit under this section be
    46  allowed in an amount which will reduce the tax payable to less than  the
    47  applicable  minimum  tax fixed by section one hundred eighty-three[, one
    48  hundred eighty-five] or former section one hundred  eighty-six  of  this
    49  article.  If, however, the amount of credit allowable under this section
    50  for any taxable year reduces the tax to such amount, any amount of cred-
    51  it  not  deductible  in  such  taxable  year  may be carried over to the
    52  following year or years and may be deducted from the taxpayer's tax  for
    53  such year or years.
    54    § 14. Subdivisions 1 and 4 of section 187-b of the tax law, as amended
    55  by section 1 of part G of chapter 59 of the laws of 2013, are amended to
    56  read as follows:

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     1    1.  General.  A  taxpayer  shall  be  allowed a credit, to be credited
     2  against the taxes imposed under sections one hundred eighty-three[,] and
     3  one hundred eighty-four[, and one hundred eighty-five] of this  article.
     4  Such  credit,  to  be computed as hereinafter provided, shall be allowed
     5  for  alternative  fuel vehicle refueling and electric vehicle recharging
     6  property placed in service during the taxable year.  Provided,  however,
     7  that  the  amount  of  such  credit allowable against the tax imposed by
     8  section one hundred eighty-four of this article shall be the  excess  of
     9  the credit allowed by this section over the amount of such credit allow-
    10  able against the tax imposed by section one hundred eighty-three of this
    11  article.
    12    4.  Carryovers.  In  no  event  shall the credit under this section be
    13  allowed in an amount which will reduce the tax payable to less than  the
    14  applicable minimum tax fixed by section one hundred eighty-three [or one
    15  hundred  eighty-five] of this article. If, however, the amount of credit
    16  allowable under this section for any taxable year  reduces  the  tax  to
    17  such  amount,  any  amount of credit not deductible in such taxable year
    18  may be carried over to the following year or years and may  be  deducted
    19  from the taxpayer's tax for such year or years.
    20    §  15. Section 187-c of the tax law, as amended by section 2 of part K
    21  of chapter 59 of the laws of 2012, is amended to read as follows:
    22    § 187-c. Biofuel production credit. A  taxpayer  shall  be  allowed  a
    23  credit  to be computed as provided in section twenty-eight of this chap-
    24  ter, as added by part X of chapter sixty-two of the laws of two thousand
    25  six, against the tax imposed by this article.  Provided,  however,  that
    26  the amount of such credit allowed against the tax imposed by section one
    27  hundred eighty-four of this article shall be the excess of the amount of
    28  such  credit  over  the  amount  of  any  credit allowed by this section
    29  against the tax imposed by section  one  hundred  eighty-three  of  this
    30  article.  In  no event shall the credit under this section be allowed in
    31  an amount which will reduce the tax payable to less than the  applicable
    32  minimum  tax  fixed  by section one hundred eighty-three [or one hundred
    33  eighty-five] of this article. If, however,  the  amount  of  the  credit
    34  allowed  under this section for any taxable year reduces the tax to such
    35  amount, the excess shall be treated as an overpayment of tax to be cred-
    36  ited or refunded in  accordance  with  the  provisions  of  section  six
    37  hundred eighty-six of this chapter. Provided, however, the provisions of
    38  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    39  notwithstanding, no interest shall  be  paid  thereon.  The  tax  credit
    40  allowed  pursuant to this section shall apply to taxable years beginning
    41  before January first, two thousand twenty.
    42    § 16. Section 187-d of the tax law, as added by section 3 of  part  II
    43  of chapter 63 of the laws of 2000, is amended to read as follows:
    44    §  187-d.  Green  building  credit. 1. Allowance of credit. A taxpayer
    45  shall be allowed a credit, to be computed as provided in  section  nine-
    46  teen  of this chapter, against the taxes imposed by sections one hundred
    47  eighty-three, one hundred eighty-four[,  one  hundred  eighty-five]  and
    48  former  section one hundred eighty-six of this article. Provided, howev-
    49  er, that the amount of such credit allowable against the tax imposed  by
    50  section  one  hundred eighty-four of this article shall be the excess of
    51  the amount of such credit over the amount of any credit allowed by  this
    52  section  against  the tax imposed by section one hundred eighty-three of
    53  this article.
    54    2. Carryovers. In no event shall the  credit  under  this  section  be
    55  allowed  in an amount which will reduce the tax payable to less than the
    56  applicable minimum tax fixed by section one hundred  eighty-three[,  one

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     1  hundred  eighty-five]  or  former section one hundred eighty-six of this
     2  article. If, however, the amount of credit allowable under this  section
     3  for any taxable year reduces the tax to such amount, any amount of cred-
     4  it  not  deductible  in  such  taxable  year  may be carried over to the
     5  following year or years and may be deducted from the taxpayer's tax  for
     6  such year or years.
     7    §  17.  Subdivisions 1 and 2 of section 187-e of the tax law, as added
     8  by section 2 of part I of chapter 63 of the laws of 2000, are amended to
     9  read as follows:
    10    1. Allowance of credit. A taxpayer shall be allowed a  credit,  to  be
    11  computed  as  provided  in  section  twenty of this chapter, against the
    12  taxes imposed by sections one hundred eighty-three, one hundred  eighty-
    13  four[,  one  hundred eighty-five] and former section one hundred eighty-
    14  six of this article. Provided, however, that the amount of  such  credit
    15  allowable  against the tax imposed by section one hundred eighty-four of
    16  this article shall be the excess of the amount of such credit  over  the
    17  amount  of any credit allowed by this section against the tax imposed by
    18  section one hundred eighty-three of this article.
    19    2. Application of credit. In no event  shall  the  credit  under  this
    20  section  be  allowed  in  an amount which will reduce the tax payable to
    21  less than the applicable minimum tax fixed by section one hundred eight-
    22  y-three[, one hundred eighty-five] or former section one hundred  eight-
    23  y-six of this article. If, however, the amount of credit allowable under
    24  this  section  for  any taxable year reduces the tax to such amount, any
    25  amount of credit not thus deductible  in  such  taxable  year  shall  be
    26  treated  as  an overpayment of tax to be credited or refunded in accord-
    27  ance with the provisions of section ten hundred eighty-six of this chap-
    28  ter. Provided, however, the provisions of subsection (c) of section  ten
    29  hundred  eighty-eight of this chapter notwithstanding, no interest shall
    30  be paid thereon.
    31    § 18. Section 187-g of the tax law, as added by section 2 of part H of
    32  chapter 1 of the laws of 2003, is amended to read as follows:
    33    § 187-g. Brownfield redevelopment tax credit. 1. Allowance of  credit.
    34  A  taxpayer  shall  be  allowed  a credit, to be computed as provided in
    35  section twenty-one  of  this  chapter,  against  the  taxes  imposed  by
    36  sections  one  hundred  eighty-three[,] and one hundred eighty-four [and
    37  one hundred eighty-five] of this article. Provided,  however,  that  the
    38  amount  of  such credit allowable against the tax imposed by section one
    39  hundred eighty-four of this article shall be the excess of the amount of
    40  such credit over the amount  of  any  credit  allowed  by  this  section
    41  against  the  tax  imposed  by  section one hundred eighty-three of this
    42  article.
    43    2. Application of credit. In no event  shall  the  credit  under  this
    44  section  be  allowed  in  an amount which will reduce the tax payable to
    45  less than the applicable minimum tax fixed by section one hundred eight-
    46  y-three [or one hundred eighty-five] of this article. If,  however,  the
    47  amount  of  credit  allowable  under  this  section for any taxable year
    48  reduces the tax to such amount, any amount of credit not  deductible  in
    49  such  taxable  year  shall  be  treated  as  an overpayment of tax to be
    50  refunded in accordance with the provisions of section ten hundred eight-
    51  y-six of this chapter. Provided, however, the provisions  of  subsection
    52  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
    53  no interest shall be paid thereon.
    54    §  19.  Section 187-h of the tax law, as added by section 13 of part H
    55  of chapter 1 of the laws of 2003, subdivision 1 as amended by section  5

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     1  of  part  H  of  chapter  577 of the laws of 2004, is amended to read as
     2  follows:
     3    §  187-h.  Remediated  brownfield  credit  for real property taxes for
     4  qualified sites. 1. Allowance of credit. A taxpayer shall be  allowed  a
     5  credit,  to  be computed as provided in subdivision (b) of section twen-
     6  ty-two of this chapter,  against  the  taxes  imposed  by  sections  one
     7  hundred  eighty-three[,]  and  one  hundred eighty-four [and one hundred
     8  eighty-five] of this article. Provided, however, that the amount of such
     9  credit allowed against the tax imposed by section  one  hundred  eighty-
    10  four  of  this  article shall be the excess of the amount of such credit
    11  over the amount of any credit allowed by this section  against  the  tax
    12  imposed by section one hundred eighty-three of this article.
    13    2.  Application  of  credit.  In  no event shall the credit under this
    14  section be allowed in an amount which will reduce  the  tax  payable  to
    15  less than the applicable minimum tax fixed by section one hundred eight-
    16  y-three  [or  one hundred eighty-five] of this article. If, however, the
    17  amount of credit allowed under this section for any taxable year reduces
    18  the tax to such amount, any amount of credit not thus deductible in such
    19  taxable year shall be treated as an overpayment of tax to be credited or
    20  refunded in accordance with the provisions of section ten hundred eight-
    21  y-six of this chapter. Provided, however, the provisions  of  subsection
    22  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
    23  no interest shall be paid thereon.
    24    §  20.  Section 187-i of the tax law, as added by section 20 of part H
    25  of chapter 1 of the laws of 2003, is amended to read as follows:
    26    § 187-i. Environmental remediation insurance credit. 1.  Allowance  of
    27  credit. A taxpayer shall be allowed a credit, to be computed as provided
    28  in  section  twenty-three  of this chapter, against the taxes imposed by
    29  sections one hundred eighty-three[,] and one  hundred  eighty-four  [and
    30  one  hundred  eighty-five]  of this article. Provided, however, that the
    31  amount of such credit allowable against the tax imposed by  section  one
    32  hundred eighty-four of this article shall be the excess of the amount of
    33  such  credit  over  the  amount  of  any  credit allowed by this section
    34  against the tax imposed by section  one  hundred  eighty-three  of  this
    35  article.
    36    2.  Application  of  credit.  In  no event shall the credit under this
    37  section be allowed in an amount which will reduce  the  tax  payable  to
    38  less  than  the  applicable  minimum  tax  fixed  by section one hundred
    39  eighty-three [or one hundred eighty-five] of this article. If,  however,
    40  the  amount  of credit allowable under this section for any taxable year
    41  reduces the tax to such amount, any amount of credit not  deductible  in
    42  such  taxable  year  shall  be  treated  as  an overpayment of tax to be
    43  refunded in accordance with  the  provisions  of  section  one  thousand
    44  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    45  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    46  notwithstanding, no interest shall be paid thereon.
    47    §  21.  Subdivision  2  of  section  187-n of the tax law, as added by
    48  chapter 537 of the laws of 2005, is amended to read as follows:
    49    2. Application of credit. In no event  shall  the  credit  under  this
    50  section  be  allowed  in  an amount which will reduce the tax payable to
    51  less than the applicable  minimum  tax  fixed  by  section  one  hundred
    52  eighty-three  [or one hundred eighty-five] of this article. If, however,
    53  the amount of credit allowable under this section for any  taxable  year
    54  reduces  the  tax to such amount, any amount of credit not deductible in
    55  such taxable year shall be treated  as  an  overpayment  of  tax  to  be
    56  refunded  in  accordance  with  the  provisions  of section one thousand

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     1  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
     2  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
     3  notwithstanding, no interest shall be paid thereon.
     4    §  22.  Subdivisions 1 and 3 of section 187-n of the tax law, subdivi-
     5  sion 1 as amended by section 1 of part C1 of chapter 57 of the  laws  of
     6  2009  and subdivision 3 as added by chapter 446 of the laws of 2005, are
     7  amended to read as follows:
     8    (1) Allowance of credit. For taxable years  beginning  before  January
     9  first, two thousand nine, a taxpayer whose business is not substantially
    10  engaged  in  the  commercial  generation, distribution, transmission, or
    11  servicing of energy or energy products shall be allowed a credit against
    12  the taxes imposed  by  sections  one  hundred  eighty-three[,]  and  one
    13  hundred eighty-four [and one hundred eighty-five] of this article, equal
    14  to  its  qualified fuel cell electric generating equipment expenditures.
    15  Provided, however, that the amount of such credit allowable against  the
    16  tax  imposed by section one hundred eighty-four of this article shall be
    17  the excess of the amount of such credit over the amount  of  any  credit
    18  allowed  by  this section against the tax imposed by section one hundred
    19  eighty-three of this article. This credit shall not exceed one  thousand
    20  five  hundred  dollars  per  generating unit with respect to any taxable
    21  year. The credit provided for herein shall be allowed  with  respect  to
    22  the taxable year in which the fuel cell electric generating equipment is
    23  placed in service.
    24    (3)  Application  of  credit.  In no event shall the credit under this
    25  section be allowed in an amount which will reduce  the  tax  payable  to
    26  less than the applicable minimum tax fixed by section one hundred eight-
    27  y-three  [or  one hundred eighty-five] of this article. If, however, the
    28  amount of credit allowable under  this  section  for  any  taxable  year
    29  reduces  the  tax to such amount, any amount of credit not deductible in
    30  such taxable year may be carried over to the following year or years and
    31  may be deducted from the taxpayer's tax for such year or years.
    32    § 23. Section 187-o of the tax law, as added by section 3 of part Y of
    33  chapter 57 of the laws of 2010, is amended to read as follows:
    34    § 187-o. Temporary deferral nonrefundable payout credit. 1.  Allowance
    35  of  credit.  A  taxpayer  shall  be  allowed a credit, to be computed as
    36  provided in subdivision one of  section  thirty-four  of  this  chapter,
    37  against either the taxes imposed by sections one hundred eighty-three[,]
    38  and  one  hundred eighty-four, [and one hundred eighty-five,] or the tax
    39  imposed by section one hundred eighty-six-a of  this  article.  However,
    40  the amount of such credit against the tax imposed by section one hundred
    41  eighty-four  of  this  article shall be the excess of the amount of that
    42  credit over the amount of any credit allowed by this section against the
    43  tax imposed by section one hundred eighty-three of this article.
    44    2. Application of credit. In no event  shall  the  credit  under  this
    45  section  be  allowed in an amount which will reduce the tax to less than
    46  the applicable minimum tax fixed by section one hundred eighty-three [or
    47  one hundred eighty-five] of this article. If,  however,  the  amount  of
    48  credit  allowed  under this section for any taxable year reduces the tax
    49  to such amount, any amount of credit not deductible in such taxable year
    50  may be carried over to the following year or years and may  be  deducted
    51  from the taxpayer's tax for such year or years.
    52    § 24. Section 187-p of the tax law, as added by section 3 of part Y of
    53  chapter 57 of the laws of 2010, is amended to read as follows:
    54    §  187-p. Temporary deferral refundable payout credit. 1. Allowance of
    55  credit. A taxpayer shall be allowed a credit, to be computed as provided
    56  in subdivision two of section thirty-four of this chapter,  against  the

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     1  taxes  imposed  by  sections one hundred eighty-three[,] and one hundred
     2  eighty-four [and one hundred eighty-five] of this article,  or  the  tax
     3  imposed  by  section  one hundred eighty-six-a of this article. However,
     4  the amount of such credit against the tax imposed by section one hundred
     5  eighty-four  of  this  article shall be the excess of the amount of that
     6  credit over the amount of any credit allowed by this section against the
     7  tax imposed by section one hundred eighty-three of this article.
     8    2. Application of credit. In no event  shall  the  credit  under  this
     9  section  be  allowed in an amount which will reduce the tax to less than
    10  the applicable minimum tax fixed by section one hundred eighty-three [or
    11  one hundred eighty-five] of this article. If,  however,  the  amount  of
    12  credit  allowed  under this section for any taxable year reduces the tax
    13  to such amount, any amount of credit not deductible in such taxable year
    14  shall be treated as an overpayment of tax to be refunded  in  accordance
    15  with  the provisions of section one thousand eighty-six of this chapter,
    16  provided however, that no interest shall be paid thereon.
    17    § 25. Subdivisions 2 and 3 of section 190 of the tax law, as added  by
    18  section  1  of  part E of chapter 63 of the laws of 2000, are amended to
    19  read as follows:
    20    2. Computation. The credit allowed by  this  section  shall  first  be
    21  deducted  from  the  taxes imposed by section one hundred eighty-three[,
    22  one hundred eighty-five] or former section  one  hundred  eighty-six  of
    23  this  article.  The  amount  of  any such credit remaining shall next be
    24  deducted from the taxes imposed by section one  hundred  eighty-four  of
    25  this article.
    26    3.  Carryover.  In  no  event shall the amount of credit allowed under
    27  this section reduce the tax payable to less than the minimum  tax  fixed
    28  by section one hundred eighty-three[, one hundred eighty-five] or former
    29  section  one hundred eighty-six of this article. If, however, the amount
    30  of credit allowable under this section for any taxable year reduces  the
    31  tax  to such amount, any amount of credit not deductible in such taxable
    32  year may be carried over to the following  year  or  years  and  may  be
    33  deducted from the taxpayer's tax for such year or years.
    34    § 26. Subdivision 1 of section 192 of the tax law, as amended by chap-
    35  ter 96 of the laws of 1976, is amended to read as follows:
    36    1.  Corporations  paying franchise tax. Every corporation, association
    37  or joint-stock company liable to pay a tax  under  section  one  hundred
    38  eighty-three  [or  one hundred eighty-five] of this chapter shall, on or
    39  before March fifteenth in each year, make a written report  to  the  tax
    40  commission  of its condition at the close of its business on the preced-
    41  ing December thirty-first, stating the amount of its authorized  capital
    42  stock, the amount of stock paid in, the date and rate per centum of each
    43  dividend  paid  by  it  during the year ending with such day, the entire
    44  amount of the capital of such corporation, and the capital  employed  by
    45  it in this state during such year.
    46    §  27.  Subdivision  4  of  section  209 of the tax law, as amended by
    47  section 2 of part FF1 of chapter 57 of the laws of 2008, is  amended  to
    48  read as follows:
    49    4.  Corporations liable to tax under sections one hundred eighty-three
    50  to one  hundred  [eighty-five]  eighty-four-a,  inclusive,  corporations
    51  taxable  under articles thirty-two and thirty-three of this chapter, any
    52  trust company organized under a law of this state all of  the  stock  of
    53  which  is  owned by not less than twenty savings banks organized under a
    54  law of this state, bank holding companies filing a  combined  return  in
    55  accordance with [subdivision] subsection (f) of section fourteen hundred
    56  sixty-two  of  this  chapter,  a  captive REIT or a captive RIC filing a

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     1  combined return under either [subdivision]  subsection  (f)  of  section
     2  fourteen hundred sixty-two or subdivision (f) of section fifteen hundred
     3  fifteen  of  this chapter, and housing companies organized and operating
     4  pursuant to the provisions of article two or article five of the private
     5  housing  finance  law  and  housing development fund companies organized
     6  pursuant to the provisions of article  eleven  of  the  private  housing
     7  finance law shall not be subject to tax under this article.
     8    §  28.  Section 209 of the tax law is amended by adding a new subdivi-
     9  sion 12 to read as follows:
    10    12. All farmers', fruit growers' and other  like  agricultural  corpo-
    11  rations  organized and operated on a co-operative basis for the purposes
    12  expressed in and as provided under the co-operative corporations law  of
    13  the  state  of  New  York, whether or not such corporations have capital
    14  stock, shall be exempt from taxation under the provisions of this  arti-
    15  cle.
    16    § 29. Paragraphs (b) and (c) of subdivision 1-c, clause (i) of subpar-
    17  agraph 1 of paragraph (b) of subdivision 3, and subparagraphs 1 and 2 of
    18  paragraph (j) of subdivision 12 of section 210 of the tax law, paragraph
    19  (b)  of subdivision 1-c as amended by section 12 of part Y of chapter 63
    20  of the laws of 2000, paragraph (c) of subdivision 1-c and subparagraph 2
    21  of paragraph (j) of subdivision 12 as amended by  chapter  1043  of  the
    22  laws  of 1981, clause (i) of subparagraph 1 of paragraph (b) of subdivi-
    23  sion 3 as amended by chapter 61 of the laws of 1989 and  subparagraph  1
    24  of paragraph (j) of subdivision 12 as amended by section 14 of part Y of
    25  chapter 63 of the laws of 2000, are amended to read as follows:
    26    (b) is not a corporation over fifty percent of the number of shares of
    27  stock of which entitling the holders thereof to vote for the election of
    28  directors or trustees is owned by a taxpayer which (1) is subject to tax
    29  under  this  article; section one hundred eighty-three[,] or section one
    30  hundred eighty-four or former section one hundred eighty-five of article
    31  nine; article thirty-two or thirty-three of this chapter, and  (2)  does
    32  not  qualify  as  a  small  business corporation as defined in paragraph
    33  three of subsection (c) of section  twelve  hundred  forty-four  of  the
    34  internal revenue code (without regard to the second sentence of subpara-
    35  graph  (A) thereof) as of the last day of its taxable year ending within
    36  or with the taxable year of the taxpayer,
    37    (c) is not a corporation which is substantially similar  in  operation
    38  and  in  ownership to a business entity (or entities) taxable, or previ-
    39  ously taxable, under this article; section one hundred eighty-three, one
    40  hundred eighty-four, or former section one hundred eighty-five or former
    41  section one hundred eighty-six of article nine;  article  thirty-two  or
    42  thirty-three  of  this  chapter; article twenty-three of this chapter or
    43  which would have been subject to tax under such article twenty-three (as
    44  such article was in effect on January first, nineteen hundred eighty) or
    45  the income (or losses) of which is (or  was)  includable  under  article
    46  twenty-two of this chapter, and
    47    (i)  In  the case of an issuer or obligor subject to tax under section
    48  one hundred eighty-three[, one hundred eighty-five]  or  former  section
    49  one  hundred eighty-six of this chapter or under this article or article
    50  thirty-three of this chapter (except for  savings  and  insurance  banks
    51  described  in  subdivision  (b) of section fifteen hundred of this chap-
    52  ter), the issuer's allocation percentage shall be the percentage of  the
    53  appropriate  measure  (as  defined  hereinafter) which is required to be
    54  allocated within the state on the report, if any, required of the issuer
    55  or obligor under this chapter for the preceding  year.  The  appropriate
    56  measure  referred  to in the preceding sentence shall be: in the case of

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     1  an issuer or obligor subject to section one hundred eighty-three of this
     2  chapter, issued capital stock; in the  case  of  an  issuer  or  obligor
     3  [subject  to  section  one  hundred  eighty-five]  exempt from tax under
     4  subdivision  twelve  of  section  two  hundred  nine  of  this [chapter]
     5  article, issued capital stock; in the  case  of  an  issuer  or  obligor
     6  subject  to former section one hundred eighty-six of this chapter, gross
     7  earnings; in the case of an issuer or obligor subject to  this  article,
     8  entire capital; and in the case of an issuer or obligor subject to arti-
     9  cle thirty-three of this chapter, gross direct premiums.
    10    (1)  over fifty percent of the number of shares of stock entitling the
    11  holders thereof to vote for the election of  directors  or  trustees  is
    12  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
    13  subject to tax under this article; section one hundred eighty-three, one
    14  hundred eighty-four or former section one hundred eighty-five of article
    15  nine; article thirty-two or thirty-three of this chapter; or
    16    (2) is substantially similar in operation and in ownership to a  busi-
    17  ness  entity  (or  entities)  taxable, or previously taxable, under this
    18  article; section one  hundred  eighty-three,  one  hundred  eighty-four,
    19  former  section  one  hundred  eighty-five or former section one hundred
    20  eighty-six of article nine; article thirty-two or thirty-three  of  this
    21  chapter;  article  twenty-three of this chapter or which would have been
    22  subject to tax under such article twenty-three (as such article  was  in
    23  effect  on  January  first,  nineteen  hundred eighty) or the income (or
    24  losses) of which is (or was) includable under article twenty-two of this
    25  chapter whereby the intent and purpose of this paragraph  and  paragraph
    26  (e) of this subdivision with respect to refunding of credit to new busi-
    27  ness would be evaded; or
    28    §  30.  Subparagraph  (A) of paragraph 10 of subsection (a) of section
    29  606 of the tax law, as amended by section 3 of part CC of chapter 85  of
    30  the laws of 2002, is amended to read as follows:
    31    (A)  the business of which the individual is an owner is substantially
    32  similar in operation and in ownership to a business entity  taxable,  or
    33  previously  taxable, under section one hundred eighty-three, one hundred
    34  eighty-four, former section one hundred eighty-five  or  former  section
    35  one  hundred  eighty-six  of article nine; article nine-A, thirty-two or
    36  thirty-three of this chapter; article twenty-three of  this  chapter  or
    37  which would have been subject to tax under such article twenty-three (as
    38  such article was in effect on January first, nineteen hundred eighty) or
    39  the  income  (or  losses)  of which is (or was) includable under article
    40  twenty-two of this chapter whereby the intent and purpose of this  para-
    41  graph and paragraph five of this subsection with respect to refunding of
    42  credit to new business would be evaded; or
    43    §  31.  Subparagraphs  (A) and (B) of paragraph 8 of subsection (i) of
    44  section 1456 of the tax law, as added by section 27 of part A of chapter
    45  56 of the laws of 1998, are amended to read as follows:
    46    (A) over fifty percent of the number of shares of stock entitling  the
    47  holders  thereof  to  vote  for the election of directors or trustees is
    48  owned or controlled,  either  directly  or  indirectly,  by  a  taxpayer
    49  subject to tax under this article; section one hundred eighty-three, one
    50  hundred  eighty-four,  former  section one hundred eighty-five or former
    51  section one hundred eighty-six of article nine; article nine-A or  arti-
    52  cle thirty-three of this chapter; or
    53    (B)  is substantially similar in operation and in ownership to a busi-
    54  ness entity (or entities) taxable, or  previously  taxable,  under  this
    55  article;  section  one  hundred  eighty-three,  one hundred eighty-four,
    56  former section one hundred eighty-five or  former  section  one  hundred

        S. 6359--D                         208                        A. 8559--D
 
     1  eighty-six  of  article  nine; article nine-A or article thirty-three of
     2  this chapter; article twenty-three of this chapter or which  would  have
     3  been subject to tax under such article twenty-three (as such article was
     4  in  effect  on January first, nineteen hundred eighty) or the income (or
     5  losses) of which is (or was) includable under article twenty-two of this
     6  chapter whereby the intent and purpose of this paragraph  and  paragraph
     7  five of this subsection with respect to refunding of credit to new busi-
     8  ness would be evaded; or
     9    §  32.  Subparagraph  (A) of paragraph 7 of subdivision (q) of section
    10  1511 of the tax law, as added by section 1 of part L of  chapter  63  of
    11  the laws of 2000, is amended to read as follows:
    12    (A)  over fifty percent of the number of shares of stock entitling the
    13  holders thereof to vote for the election of  directors  or  trustees  is
    14  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
    15  subject to tax under this article; section one hundred eighty-three, one
    16  hundred eighty-four, former section one hundred  eighty-five  or  former
    17  section  one hundred eighty-six of article nine; article nine-A or arti-
    18  cle thirty-two of this chapter; or
    19    § 33. Subdivision 13 of section 171  of  the  transportation  law,  as
    20  added by chapter 478 of the laws of 1991, is amended to read as follows:
    21    13.  The  transportation for compensation performed by an agricultural
    22  cooperative corporation[, which corporation  is  subject  to  tax  under
    23  section one hundred eighty-five of the tax law,] for non-members who are
    24  not  farmers  or  cooperative  corporations  when such transportation is
    25  limited to that which is  incidental  to  the  agricultural  cooperative
    26  corporation's  primary transportation operation and is necessary for its
    27  effective performance. Such transportation shall be provided only  after
    28  the  agricultural  cooperative  corporation notifies the commissioner in
    29  writing of its intent to provide the transportation  and  it  shall  not
    30  exceed twenty-five percent of the agricultural cooperative corporation's
    31  total transportation services in each calendar year measured in terms of
    32  tonnage.  The  commissioner may prescribe the records to be kept and the
    33  information to be furnished by all agricultural cooperative corporations
    34  performing transportation pursuant to this subdivision.
    35    § 34. Subclause 2 of clause (v) of subparagraph (B) of paragraph 1  of
    36  subdivision  (o)  of  section  11-1712 of the administrative code of the
    37  city of New York, such subdivision as relettered by chapter 639  of  the
    38  laws of 1986, is amended to read as follows:
    39    (2)  A  new  business  does not include: (i) any new business of which
    40  twenty-five percent or more of the number of shares of stock that  enti-
    41  tle  the  holders thereof to vote for the election of directors or trus-
    42  tees is owned, directly or indirectly, by  a  taxpayer  subject  to  tax
    43  under  section one hundred eighty-three, one hundred eighty-four, former
    44  section one hundred eighty-five or former section one hundred eighty-six
    45  of article nine of the tax law, or under article [nine-a] nine-A,  thir-
    46  ty-two  or thirty-three of the tax law or (ii) any new business substan-
    47  tially similar in operation and in ownership, directly or indirectly, to
    48  a business entity (or entities) taxable, or  previously  taxable,  under
    49  such section, such article, article twenty-three of the tax law or which
    50  would  have been subject to tax under such article twenty-three (as such
    51  article was in effect on January first, nineteen hundred eighty) or  the
    52  income  (or  losses) of which is (or was) includible under article twen-
    53  ty-two of such tax law whereby the intent and purpose  of  this  section
    54  would be evaded.
    55    § 35. Paragraph (iii) of subdivision 9 of section 16-v of section 1 of
    56  chapter  174  of the laws of 1968, constituting the New York state urban

        S. 6359--D                         209                        A. 8559--D
 
     1  development corporation act, as added by section 1 of part C of  chapter
     2  59 of the laws of 2013, is amended to read as follows:
     3    (iii) either: (A) any corporation, except a corporation which:
     4    (1)  over fifty percent of the number of shares of stock entitling the
     5  holders thereof to vote for the election of  directors  or  trustees  is
     6  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
     7  subject to tax under the following provisions of the  tax  law:  article
     8  nine-A;  section  one hundred eighty-three[,] or one hundred eighty-four
     9  or former section one hundred eighty-five of article nine; article thir-
    10  ty-two or article thirty-three; or
    11    (2) is substantially similar in operation and in ownership to a  busi-
    12  ness  entity  (or  entities)  taxable  or  previously  taxable under the
    13  following provisions of the tax law: article nine-A; section one hundred
    14  eighty-three, one hundred eighty-four, former section one hundred eight-
    15  y-five or former section one hundred eighty-six of article nine; article
    16  thirty-two; article thirty-three; article twenty-three,  or  would  have
    17  been subject to tax under such article twenty-three (as such article was
    18  in  effect  on January first, nineteen hundred eighty) or the income (or
    19  losses) of which is (or was) includable under article twenty-two; or
    20    (B) a sole proprietorship, partnership, limited  partnership,  limited
    21  liability  company,  or  New  York  subchapter S corporation that is not
    22  substantially similar in operation and in ownership to a business entity
    23  (or entities) taxable, or previously taxable, under  article  nine-A  of
    24  the  tax law, section one hundred eighty-three, one hundred eighty-four,
    25  former section one hundred eighty-five or  former  section  one  hundred
    26  eighty-six  of  article nine of the tax law, article thirty-two or thir-
    27  ty-three of the tax law, article twenty-three of the tax  law  or  which
    28  would  have been subject to tax under such article twenty-three (as such
    29  article was in effect on January first, nineteen hundred eighty) or  the
    30  income  (or  losses) of which is (or was) includable under article twen-
    31  ty-two of the tax law; and
    32    § 36. Notwithstanding the repeal of section 185  of  the  tax  law  by
    33  section  one of this act, all provisions of such section 185, in respect
    34  to the imposition, exemption, assessment, payment, payment over,  deter-
    35  mination,  collection,  and  credit or refund of tax imposed thereunder,
    36  the filing of forms and returns, the preservation  of  records  for  the
    37  purposes  of such tax, the secrecy of returns, the disposition of reven-
    38  ues, and the civil and criminal penalties applicable to the violation of
    39  the provisions of such section 185, shall continue  in  full  force  and
    40  effect with respect to all such tax accrued up to December 31, 2017; all
    41  actions  and  proceedings, civil or criminal, commenced or authorized to
    42  be commenced under or by virtue of any provision of such section 185  so
    43  repealed,  and pending or able to commence prior to the taking effect of
    44  such repeal, may be commenced, prosecuted and defended to  final  effect
    45  in  the  same  manner  as  they  might  if  such  provisions were not so
    46  repealed.
    47    § 37. This act shall take effect January 1, 2018 and  shall  apply  to
    48  taxable  years  beginning on or after January 1, 2018; provided, however
    49  that:
    50    a. the amendments to subdivision 9 of  section  400  of  the  economic
    51  development  law  made  by  section two of this act shall not affect the
    52  repeal of such section and shall be deemed repealed therewith; and
    53    b. the amendments to subdivisions (a) and (e) of section 35 of the tax
    54  law made by section nine of this act shall not affect the repeal of such
    55  section and shall be deemed repealed therewith.

        S. 6359--D                         210                        A. 8559--D
 
     1                                   PART T
 
     2    Section 1. Section 39 of the tax law is amended by adding a new subdi-
     3  vision (c-1) to read as follows:
     4    (c-1) Excise tax on telecommunication services. Such business or owner
     5  of  a business shall be eligible for a credit of the excise tax on tele-
     6  communication services imposed by section one  hundred  eighty-six-e  of
     7  this  chapter  that  is passed through to such business, pursuant to the
     8  provisions referenced in subdivision (k) of this section.
     9    § 2. Paragraph 4 of subdivision (k) of section 39 of the tax  law,  as
    10  added  by  section  2  of  part  A of chapter 68 of the laws of 2013, is
    11  amended to read as follows:
    12    (4) Article 9-A: section 210, subdivision 47 and subdivision 49.
    13    § 2-a. Paragraph 6 of subdivision (k) of section 39 of the tax law, as
    14  added by section 2 of part A of chapter 68  of  the  laws  of  2013,  is
    15  amended to read as follows:
    16    (6) Article 22: section 606, subsection (ww) and subsection (yy).
    17    § 2-b. Paragraph (b) of subdivision 9 of section 208 of the tax law is
    18  amended by adding a new subparagraph 20-a to read as follows:
    19    (20-a) The amount of any federal deduction for the excise tax on tele-
    20  communication services to the extent such taxes are used as the basis of
    21  the  calculation of the tax-free NY area excise tax on telecommunication
    22  services credit allowed under  subdivision  forty-nine  of  section  two
    23  hundred ten of this article.
    24    § 3. Section 210 of the tax law is amended by adding a new subdivision
    25  49 to read as follows:
    26    49.  The  tax-free  NY  area  excise tax on telecommunication services
    27  credit. A taxpayer that is a business or owner of  a  business  that  is
    28  located in a tax-free NY area approved pursuant to article twenty-one of
    29  the  economic  development  law  shall  be allowed a credit equal to the
    30  excise tax on telecommunication services imposed by section one  hundred
    31  eighty-six-e  of this chapter and passed through to such business during
    32  the taxable year to the  extent  not  otherwise  deducted  in  computing
    33  entire  net income. However, any amount of credit not deductible in such
    34  taxable year shall be treated as an overpayment of tax to be credited or
    35  refunded in accordance with  the  provisions  of  section  one  thousand
    36  eighty-six  of  this  chapter. This credit may be claimed only where any
    37  tax imposed by such section one hundred eighty-six-e has been separately
    38  stated on a bill from the provider  of  telecommunication  services  and
    39  paid  by  such  business with respect to such services rendered within a
    40  tax-free NY area during the taxable year.  Unless  the  taxpayer  has  a
    41  tax-free  NY  area  allocation factor of one hundred percent, the credit
    42  allowed under this subdivision for any taxable year shall not reduce the
    43  tax due for such year to less than the amount  prescribed  in  paragraph
    44  (d)   of  subdivision  one  of  this  section.  Provided,  however,  the
    45  provisions of subsection (c) of section  one  thousand  eighty-eight  of
    46  this chapter notwithstanding, no interest shall be paid thereon.
    47    §  4. Section 606 of the tax law is amended by adding a new subsection
    48  (yy) to read as follows:
    49    (yy) The tax-free NY area excise  tax  on  telecommunication  services
    50  credit.  A  taxpayer  that  is a business or owner of a business that is
    51  located in a tax-free NY area approved pursuant to article twenty-one of
    52  the economic development law shall be allowed  a  credit  equal  to  the
    53  excise  tax on telecommunication services imposed by section one hundred
    54  eighty-six-e of this chapter and passed through to such business  during
    55  the  taxable  year  to  the  extent  not otherwise deducted in computing

        S. 6359--D                         211                        A. 8559--D
 
     1  federal adjusted gross income.  This credit may be  claimed  only  where
     2  any  tax imposed by such section one hundred eighty-six-e has been sepa-
     3  rately stated on a bill from the provider of telecommunication  services
     4  and  paid by such taxpayer with respect to such services rendered within
     5  a tax-free NY area during the taxable year. If the amount of the  credit
     6  allowed  under  this subsection for any taxable year exceeds the taxpay-
     7  er's tax for such year, the excess will be treated as an overpayment  to
     8  be credited or refunded in accordance with the provisions of section six
     9  hundred  eighty-six of this article, provided, however, that no interest
    10  will be paid thereon.
    11    § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
    12  of  the  tax  law is amended by adding a new clause (xxxviii) to read as
    13  follows:
    14  (xxxviii) Tax free NY area excise       Amount of credit under
    15  tax on telecommunication services       subdivision forty-nine
    16  credit under subsection (yy)            of section two hundred ten
    17    § 5-a. Subsection (b) of section 612 of the  tax  law  is  amended  by
    18  adding a new paragraph 39-a to read as follows:
    19    (39-a) The amount of any federal deduction for the excise tax on tele-
    20  communication services to the extent such taxes are used as the basis of
    21  the  calculation  of  tax-free  NY  area excise tax on telecommunication
    22  services credit allowed under subsection (yy) of section six hundred six
    23  of this article.
    24    § 6. This act shall take effect immediately and shall apply to taxable
    25  years beginning on or after January 1, 2014; provided that sections two,
    26  two-b, three and five of this act shall expire December  31,  2014  when
    27  upon such date such provisions shall be deemed repealed.

    28                                   PART U
 
    29    Section  1.  Paragraph (a) of subdivision 44 of section 210 of the tax
    30  law, as amended by section 2 of part T of chapter  59  of  the  laws  of
    31  2012, is amended to read as follows:
    32    (a) A taxpayer that has been certified by the commissioner of labor as
    33  a  qualified employer pursuant to section twenty-five-a of the labor law
    34  shall be allowed a credit against the tax imposed by this article  equal
    35  to  (i)  five  hundred  dollars  per month for up to six months for each
    36  qualified employee the employer  employs  in  a  full-time  job  or  two
    37  hundred  fifty dollars per month for up to six months for each qualified
    38  employee the employer employs in a part-time  job  of  at  least  twenty
    39  hours  per  week  or  ten  hours per week when the qualified employee is
    40  enrolled in high school full-time, and (ii)  one  thousand  dollars  for
    41  each  qualified  employee who is employed for at least an additional six
    42  months by the qualified employer in a  full-time  job  or  five  hundred
    43  dollars  for  each  qualified  employee  who is employed for at least an
    44  additional six months by the qualified employer in a part-time job of at
    45  least twenty hours per week or ten hours per  week  when  the  qualified
    46  employee  is  enrolled in high school full-time, and (iii) an additional
    47  one thousand dollars for each qualified employee who is employed for  at
    48  least  an additional year after the first year of the employee's employ-
    49  ment by the qualified employer  in  a  full-time  job  or  five  hundred
    50  dollars  for  each  qualified  employee  who is employed for at least an
    51  additional year after the first year of the employee's employment by the
    52  qualified employer in a part-time job of at least twenty hours per  week
    53  or  ten  hours  per week when the qualified employee is enrolled in high
    54  school full-time.  For purposes of this subdivision, the term "qualified

        S. 6359--D                         212                        A. 8559--D
 
     1  employee" shall have the same meaning as set forth in subdivision (b) of
     2  section twenty-five-a of the  labor  law.  The  portion  of  the  credit
     3  described in subparagraph (i) of this paragraph shall be allowed for the
     4  taxable  year in which the wages are paid to the qualified employee, and
     5  the portion of the credit described in subparagraph (ii) of  this  para-
     6  graph  shall  be allowed in the taxable year in which the additional six
     7  month period ends.
     8    § 2. Paragraph 1 of subsection (tt) of section 606 of the tax law,  as
     9  amended  by  section  3  of part T of chapter 59 of the laws of 2012, is
    10  amended to read as follows:
    11    (1) A taxpayer that has been certified by the commissioner of labor as
    12  a qualified employer pursuant to section twenty-five-a of the labor  law
    13  shall  be allowed a credit against the tax imposed by this article equal
    14  to (A) five hundred dollars per month for up  to  six  months  for  each
    15  qualified  employee  the  employer  employs  in  a  full-time job or two
    16  hundred fifty dollars per month for up to six months for each  qualified
    17  employee  the  employer  employs  in  a part-time job of at least twenty
    18  hours per week or ten hours per week  when  the  qualified  employee  is
    19  enrolled in high school full-time, and (B) one thousand dollars for each
    20  qualified employee who is employed for at least an additional six months
    21  by the qualified employer in a full-time job or five hundred dollars for
    22  each  qualified  employee who is employed for at least an additional six
    23  months by the qualified employer in a part-time job of at  least  twenty
    24  hours  per  week  or  ten  hours per week when the qualified employee is
    25  enrolled in high school full-time, and (C) an  additional  one  thousand
    26  dollars  for  each  qualified  employee  who is employed for at least an
    27  additional year after the first year of the employee's employment by the
    28  qualified employer in a full-time job or five hundred dollars  for  each
    29  qualified employee who is employed for at least an additional year after
    30  the first year of the employee's employment by the qualified employer in
    31  a  part-time job of at least twenty hours per week or ten hours per week
    32  when the qualified employee is enrolled in high  school  full-time.    A
    33  taxpayer that is a partner in a partnership, member of a limited liabil-
    34  ity  company  or shareholder in an S corporation that has been certified
    35  by the commissioner of labor as a qualified employer pursuant to section
    36  twenty-five-a of the labor law shall be allowed its pro  rata  share  of
    37  the  credit  earned  by  the partnership, limited liability company or S
    38  corporation. For  purposes  of  this  subsection,  the  term  "qualified
    39  employee" shall have the same meaning as set forth in subdivision (b) of
    40  section  twenty-five-a  of  the  labor  law.  The  portion of the credit
    41  described in subparagraph (A) of this paragraph shall be allowed for the
    42  taxable year in which the wages are paid to the qualified employee,  and
    43  the  portion  of  the credit described in subparagraph (B) of this para-
    44  graph shall be allowed in the taxable year in which the  additional  six
    45  month period ends.
    46    §  3.  Subdivision (a) of section 25-a of the labor law, as amended by
    47  section 2 of part DD of chapter 59 of the laws of 2013,  is  amended  to
    48  read as follows:
    49    (a) The commissioner is authorized to establish and administer the New
    50  York youth works tax credit program to provide tax incentives to employ-
    51  ers  for  employing  at risk youth in part-time and full-time positions.
    52  There will be five distinct pools of tax incentives.  Program  one  will
    53  cover  tax incentives allocated for two thousand twelve and two thousand
    54  thirteen. Program two will cover tax incentives allocated in  two  thou-
    55  sand  fourteen to be used in two thousand fourteen and fifteen.  Program
    56  three will cover tax incentives allocated in two thousand fifteen to  be

        S. 6359--D                         213                        A. 8559--D
 
     1  used  in  two  thousand fifteen and sixteen. Program four will cover tax
     2  incentives allocated in two thousand sixteen to be used in two  thousand
     3  sixteen  and seventeen. Program five will cover tax incentives allocated
     4  in two thousand seventeen to be used in two thousand seventeen and eigh-
     5  teen.  The  commissioner  is  authorized  to  allocate up to twenty-five
     6  million dollars of tax credits under  program  one,  [six]  ten  million
     7  dollars  of  tax credits under program two, [six] ten million dollars of
     8  tax credits under program three, [and six] ten million  dollars  of  tax
     9  credits under program four, and [six] ten million dollars of tax credits
    10  under program five.
    11    §  4.  Subdivision (c) of section 25-a of the labor law, as amended by
    12  chapter 536 of the laws of 2013, is amended to read as follows:
    13    (c) A qualified employer shall be entitled to a tax  credit  equal  to
    14  (1)  five hundred dollars per month for up to six months for each quali-
    15  fied employee the employer employs in a full-time  job  or  two  hundred
    16  fifty dollars per month for up to six months for each qualified employee
    17  the  employer  employs  in  a part-time job of at least twenty hours per
    18  week or ten hours per week when the qualified employee  is  enrolled  in
    19  high school full-time, [and] (2) one thousand dollars for each qualified
    20  employee  who  is  employed for at least an additional six months by the
    21  qualified employer in a full-time job or five hundred dollars  for  each
    22  qualified employee who is employed for at least an additional six months
    23  by  the  qualified  employer in a part-time job of at least twenty hours
    24  per week or ten hours per week when the qualified employee  is  enrolled
    25  in high school full-time, and (3) an additional one thousand dollars for
    26  each  qualified employee who is employed for at least an additional year
    27  after the first year of  the  employee's  employment  by  the  qualified
    28  employer  in  a full-time job or five hundred dollars for each qualified
    29  employee who is employed for at least an additional year after the first
    30  year of the employee's employment by the qualified employer in  a  part-
    31  time  job  of  at least twenty hours per week or ten hours per week when
    32  the qualified employee is enrolled in high school  full  time.  The  tax
    33  credits  shall  be  claimed  by  the  qualified employer as specified in
    34  subdivision forty-four of section two hundred ten and subsection (tt) of
    35  section six hundred six of the tax law.
    36    § 5. Section 25-a of the labor law is amended by adding a new subdivi-
    37  sion (f) to read as follows:
    38    (f) The commissioner shall annually publish a report. Such report must
    39  contain the names and addresses of any employer issued a certificate  of
    40  eligibility under this section, and the maximum amount of New York youth
    41  works  tax  credit  allowed to the employer as specified on such certif-
    42  icate of eligibility.
    43    § 6. This  act  shall  take  effect  immediately;  provided,  however,
    44  sections  one and two of this act shall apply to taxable years beginning
    45  on or after January 1, 2014.
 
    46                                   PART V
 
    47    Section 1. Section 19 of Part W-1 of chapter 109 of the laws  of  2006
    48  amending  the  tax  law and other laws relating to providing exemptions,
    49  reimbursements and credits from various taxes  for  certain  alternative
    50  fuels,  as  amended  by section 1 of part D of chapter 59 of the laws of
    51  2012, is amended to read as follows:
    52    § 19. This act shall take effect immediately; provided, however,  that
    53  sections one through thirteen of this act shall take effect September 1,
    54  2006  and  shall be deemed repealed on September 1, [2014] 2016 and such

        S. 6359--D                         214                        A. 8559--D

     1  repeal shall  apply  in  accordance  with  the  applicable  transitional
     2  provisions  of sections 1106 and 1217 of the tax law, and shall apply to
     3  sales made, fuel compounded or manufactured, and uses  occurring  on  or
     4  after  such  date,  and with respect to sections seven through eleven of
     5  this act, in  accordance  with  applicable  transitional  provisions  of
     6  sections  1106  and  1217  of  the  tax law; provided, however, that the
     7  commissioner of taxation and finance shall be authorized  on  and  after
     8  the  date  this act shall have become a law to adopt and amend any rules
     9  or regulations  and  to  take  any  steps  necessary  to  implement  the
    10  provisions  of this act; provided further that sections fourteen through
    11  sixteen of this act shall take effect immediately  and  shall  apply  to
    12  taxable years beginning on or after January 1, 2006.
    13    § 2. This act shall take effect immediately.
 
    14                                   PART W
 
    15    Section  1.  Section  11 of part EE of chapter 63 of the laws of 2000,
    16  amending the tax law and other laws relating to modifying  the  distrib-
    17  ution  of  funds  from  the motor vehicle fuel excise tax, as amended by
    18  section 1 of part M of chapter 61 of the laws of  2011,  is  amended  to
    19  read as follows:
    20    § 11. Notwithstanding any other law, rule or regulation to the contra-
    21  ry,  the  comptroller  is  hereby  authorized and directed to deposit in
    22  equal monthly installments and distribute pursuant to the provisions  of
    23  subdivision  (d) of section 301-j of the tax law amounts listed below to
    24  the credit of the dedicated highway and bridge trust fund and the  dedi-
    25  cated mass transportation trust fund from all motor vehicle receipts now
    26  deposited  into  the  general fund pursuant to provisions of the vehicle
    27  and traffic law:   twenty-eight million four  hundred  thousand  dollars
    28  from  April  1,  2002  through  March 31, 2003, sixty-seven million nine
    29  hundred thousand dollars from April 1, 2003 through March 31, 2004,  one
    30  hundred  seventy million one hundred thousand dollars from April 1, 2004
    31  through March 31, 2005, and one hundred percent  of  all  motor  vehicle
    32  receipts  pursuant to provisions of the vehicle and traffic law that are
    33  not otherwise directed to be deposited in a fund other than the  general
    34  fund from April 1, 2005 through March 31, 2006, and the same amount each
    35  year  thereafter  until March 31, 2014. From April 1, 2014 through March
    36  31, 2015, and each year thereafter, the comptroller shall, on a quarter-
    37  ly basis, certify and transfer sixteen million four hundred ninety-eight
    38  thousand two hundred fifty-five dollars to  the  dedicated  highway  and
    39  bridge  trust  fund  and fifteen million six hundred sixty-five thousand
    40  two hundred forty-five dollars  to  the  dedicated  mass  transportation
    41  trust fund.
    42    §  2. Paragraph (f) of subdivision 4 of section 503 of the vehicle and
    43  traffic law, as added by section 1 of part W of chapter 59 of  the  laws
    44  of 2006, is amended to read as follows:
    45    (f)  Notwithstanding  any  other  provision  of  law  to the contrary,
    46  commencing April first, two thousand six and ending March  thirty-first,
    47  two  thousand  [seven]  fourteen,  in each year, the first forty million
    48  seven hundred thousand dollars of fees collected pursuant to this subdi-
    49  vision and section eleven hundred ninety-nine of this  chapter,  in  the
    50  aggregate, shall be paid to the state comptroller who shall deposit such
    51  money  in  the state treasury pursuant to section one hundred twenty-one
    52  of the state finance law to the credit of the  general  fund.  Any  such
    53  fees  collected  in excess of such amount shall be paid to the credit of
    54  the comptroller on account of the dedicated  highway  and  bridge  trust

        S. 6359--D                         215                        A. 8559--D
 
     1  fund  established pursuant to section eighty-nine-b of the state finance
     2  law. [Commencing April first, two thousand seven and ending March  thir-
     3  ty-first,  two thousand eight, and for each such fiscal year thereafter,
     4  the first forty million seven hundred thousand dollars of fees collected
     5  pursuant  to  this subdivision and section eleven hundred ninety-nine of
     6  this chapter, in the aggregate, shall be paid to the  state  comptroller
     7  who  shall  deposit such money in the state treasury pursuant to section
     8  one hundred twenty-one of the state finance law to  the  credit  of  the
     9  general  fund. Any such fees collected in excess of such amount for each
    10  such state fiscal year, shall be paid to the credit of  the  comptroller
    11  on  account  of  the dedicated highway and bridge trust fund established
    12  pursuant to section eighty-nine-b of the state finance law.]  Commencing
    13  April  first, two thousand fourteen and for each such fiscal year there-
    14  after, any such fees collected pursuant to this subdivision and  section
    15  eleven  hundred  ninety-nine of this chapter shall be paid to the credit
    16  of the comptroller on account of the dedicated highway and bridge  trust
    17  fund  established pursuant to section eighty-nine-b of the state finance
    18  law.
    19    § 3. This act shall take effect immediately and  shall  be  deemed  to
    20  have been in full force and effect on and after April 1, 2014.
 
    21                                   PART X
 
    22    Section 1. Section 951 of the tax law, as amended by chapter 67 of the
    23  laws  of 1978, subsection (a) as amended by section 1 of part T of chap-
    24  ter 57 of the laws of 2010, subsection (b) as amended by  section  5  of
    25  part A of chapter 389 of the laws of 1997 and subsection (c) as added by
    26  chapter 538 of the laws of 2013, is amended to read as follows:
    27    §  951.  Applicable  internal  revenue code provisions.-- (a) [Dates]
    28  General.  For purposes of this article, any reference  to  the  internal
    29  revenue code means the United States Internal Revenue Code of 1986, with
    30  all  amendments  enacted  on  or  before  [July