Establishes a credit against income tax for the rehabilitation of distressed commercial properties; allows for 30% of the qualified rehabilitation expenditures up to $100,000; requires that to be eligible, the commercial property is located within a distressed commercial area, as identified by each locality through local law, that is deemed an area in need of community renewal due to dilapidation and vacancies; provides that the property which has been substantially rehabilitated is where the qualified rehabilitation expenditures in relation to such building total ten thousand dollars or more.
STATE OF NEW YORK
________________________________________________________________________
1295--A
2015-2016 Regular Sessions
IN SENATE
January 9, 2015
___________
Introduced by Sens. RANZENHOFER, FELDER, FUNKE, LARKIN, PANEPINTO --
read twice and ordered printed, and when printed to be committed to
the Committee on Investigations and Government Operations -- recommit-
ted to the Committee on Investigations and Government Operations in
accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the tax law, in relation to establishing a credit
against income tax for the rehabilitation of distressed commercial
properties
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 606 of the tax law is amended by adding a new
2 subsection (ccc) to read as follows:
3 (ccc) Credit for rehabilitation of distressed commercial properties.
4 (1) For taxable years beginning on or after January first, two thousand
5 sixteen, a taxpayer shall be allowed a credit as hereinafter provided,
6 against the tax imposed by this article, in an amount equal to thirty
7 percent of the qualified rehabilitation expenditures made by the taxpay-
8 er with respect to a qualified distressed commercial property. Provided,
9 however, the credit shall not exceed one hundred thousand dollars.
10 (2) Tax credits allowed pursuant to this subsection shall be allowed
11 in the taxable year in which the property is deemed a certified rehabil-
12 itation.
13 (3) If the amount of the credit allowable under this subsection for
14 any taxable year shall exceed the taxpayer's tax for such year, the
15 excess may be carried over to the following year or years, and may be
16 applied against the taxpayer's tax for such year or years, but shall not
17 exceed twenty-five thousand dollars.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02088-02-6
S. 1295--A 2
1 (4) (A) The term "qualified rehabilitation expenditure" means, for
2 purposes of this subsection, any amount properly chargeable to a capital
3 account:
4 (i) in connection with the certified rehabilitation of a qualified
5 distressed commercial property, and
6 (ii) for property for which depreciation would be allowable under
7 section 168 of the internal revenue code.
8 (B) Such term shall not include (i) the cost of acquiring any building
9 or interest therein, (ii) any expenditure attributable to the enlarge-
10 ment of an existing building, or (iii) any expenditure made prior to
11 January first, two thousand sixteen or after December thirty-first, two
12 thousand twenty-one.
13 (5) The term "certified rehabilitation" means, for purposes of this
14 subsection, any rehabilitation of a certified distressed commercial
15 property which has been approved and certified by a local government as
16 being completed, with a certificate of occupancy issued, and that the
17 costs are consistent with the work completed. Such certification shall
18 be acceptable as proof that the expenditures related to such rehabili-
19 tation qualify as qualified rehabilitation expenditures for purposes of
20 the credit allowed under paragraph one of this subsection.
21 (6) (A) The term "qualified distressed commercial property" means, for
22 purposes of this subsection, a distressed commercial property located
23 within New York state:
24 (i) which has been substantially rehabilitated,
25 (ii) which is owned by the taxpayer, and
26 (iii) which is located within a distressed commercial area, as identi-
27 fied by each locality through local law, that is deemed an area in need
28 of community renewal due to dilapidation and vacancies.
29 (B) If the distressed commercial property is rental property, such
30 property shall have been more than thirty percent vacant for twelve
31 months while actively marketed for lease.
32 (C) A building shall be treated as having been "substantially rehabil-
33 itated" if the qualified rehabilitation expenditures in relation to such
34 building total ten thousand dollars or more.
35 (7) (A) If the taxpayer disposes of such taxpayer's interest in the
36 qualified distressed commercial property, or such property ceases to be
37 used as a commercial property of the taxpayer within five years of
38 receiving the credit under this subsection, the taxpayer's tax imposed
39 by this article for the taxable year in which such disposition or cessa-
40 tion occurs shall be increased by the recapture portion of the credit
41 allowed under this subsection for all prior taxable years with respect
42 to such rehabilitation.
43 (B) For purposes of subparagraph (A) of this paragraph, the recapture
44 portion shall be the product of the amount of credit claimed by the
45 taxpayer multiplied by a ratio, the numerator of which is equal to sixty
46 less the number of months the building is owned or used as commercial
47 property by the taxpayer and the denominator of which is sixty.
48 (8) Any expenditure for which a credit is claimed under this
49 subsection shall not be eligible for any other credit under this chap-
50 ter.
51 § 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
52 of the tax law is amended by adding a new clause (xli) to read as
53 follows:
54 (xli) Credit for rehabilitationAmount of credit under
55 of distressed commercial propertiessubdivision forty-nine
56 under subsection (ccc)of section two hundred ten-B
S. 1295--A 3
1 § 3. Section 210-B of the tax law is amended by adding a new subdivi-
2 sion 49 to read as follows:
3 49. Credit for rehabilitation of distressed commercial properties. (1)
4 For taxable years beginning on or after January first, two thousand
5 sixteen, a taxpayer shall be allowed a credit as hereinafter provided,
6 against the tax imposed by this article, in an amount equal to thirty
7 percent of the qualified rehabilitation expenditures made by the taxpay-
8 er with respect to a qualified distressed commercial property. Provided,
9 however, the credit shall not exceed one hundred thousand dollars.
10 (2) Tax credits allowed pursuant to this subdivision shall be allowed
11 in the taxable year in which the property is deemed a certified rehabil-
12 itation.
13 (3) If the amount of the credit allowable under this subdivision for
14 any taxable year shall exceed the taxpayer's tax for such year, the
15 excess may be carried over to the following year or years, and may be
16 applied against the taxpayer's tax for such year or years, but shall not
17 exceed twenty-five thousand dollars.
18 (4) (A) The term "qualified rehabilitation expenditure" means, for
19 purposes of this subdivision, any amount properly chargeable to a capi-
20 tal account:
21 (i) in connection with the certified rehabilitation of a qualified
22 commercial property, and
23 (ii) for property for which depreciation would be allowable under
24 section 168 of the internal revenue code.
25 (B) Such term shall not include (i) the cost of acquiring any building
26 or interest therein, (ii) any expenditure attributable to the enlarge-
27 ment of an existing building, or (iii) any expenditure made prior to
28 January first, two thousand sixteen or after December thirty-first, two
29 thousand twenty-one.
30 (5) The term "certified rehabilitation" means, for purposes of this
31 subdivision, any rehabilitation of a certified distressed commercial
32 property which has been approved and certified by a local government as
33 being completed, with a certificate of occupancy issued, and that the
34 costs are consistent with the work completed. Such certification shall
35 be acceptable as proof that the expenditures related to such rehabili-
36 tation qualify as qualified rehabilitation expenditures for purposes of
37 the credit allowed under paragraph one of this subdivision.
38 (6) (A) The term "qualified distressed commercial property" means, for
39 purposes of this subdivision, a distressed commercial property located
40 within New York state:
41 (i) which has been substantially rehabilitated,
42 (ii) which is owned by the taxpayer, and
43 (iii) which is located within a distressed commercial area, as identi-
44 fied by each locality through local law, that is deemed an area in need
45 of community renewal due to dilapidation and vacancies.
46 (B) If the distressed commercial property is rental property, such
47 property shall have been more than thirty percent vacant for twelve
48 months while actively marketed for lease.
49 (C) A building shall be treated as having been "substantially rehabil-
50 itated" if the qualified rehabilitation expenditures in relation to such
51 building total ten thousand dollars or more.
52 (7) (A) If the taxpayer disposes of such taxpayer's interest in the
53 qualified distressed commercial property, or such property ceases to be
54 used as a commercial property of the taxpayer within five years of
55 receiving the credit under this subdivision, the taxpayer's tax imposed
56 by this article for the taxable year in which such disposition or cessa-
S. 1295--A 4
1 tion occurs shall be increased by the recapture portion of the credit
2 allowed under this subdivision for all prior taxable years with respect
3 to such rehabilitation.
4 (B) For purposes of subparagraph (A) of this paragraph, the recapture
5 portion shall be the product of the amount of credit claimed by the
6 taxpayer multiplied by a ratio, the numerator of which is equal to sixty
7 less the number of months the building is owned or used as commercial
8 property by the taxpayer and the denominator of which is sixty.
9 (8) Any expenditure for which a credit is claimed under this subdivi-
10 sion shall not be eligible for any other credit under this chapter.
11 § 4. This act shall take effect immediately and shall apply to taxable
12 years beginning on or after January 1, 2016.
