This bill has been amended

Bill S2221-2013

Relates to tax credits for certain rehabilitation projects

Relates to tax credits for certain rehabilitation projects.

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  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 14, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S2221

TITLE OF BILL: An act to amend the tax law, in relation to credits for certain rehabilitation projects; and providing for the repeal of such provisions upon expiration thereof

PURPOSE: To strengthen the existing historic rehabilitation tax credit by allowing for a partnership/LLC to allocate the state tax credit separately from the federal tax credit.

SUMMARY OF PROVISIONS:

Section 1 states the tax credit in section 606 (Personal Income Tax) shall be allowed to a partnership, LLC, subchapter S corp., or other business entity and shall be passed through to the partners, members or share-holders respectively. Credits allowed to these entities shall be allocated among all partners without regard to their sharing of other tax or economic attributes of the entity.

Section 2 states the tax credit in section 210 (Franchise Tax on Business Corporations) shall be allowed to a partnership, LLC, subchapter S corp., or other business entity and shall be passed through to the partners, members or share-holders respectively. Credits allowed to these entities shall be allocated among all partners without regard to their sharing of other tax or economic attributes of the entity.

Section 3 states the tax credit in section 1456 (Franchise Tax on Banking Corporations )shall be allowed to a partnership, LLC, subchapter S corp., or other business entity and shall be passed through to the partners, members or share-holders respectively. Credits allowed to these entities shall be allocated among all partners without regard to their sharing of other tax or economic attributes of the entity.

Section 4 states the tax credit in section 1511(Franchise Taxes on Insurance Corporations) shall be allowed to a partnership, LLC, subchapter S corp., or other business entity and shall be passed through to the partners, members or share-holders respectively. Credits allowed to these entities shall be allocated among all partners without regard to their sharing of other tax or economic attributes of the entity.

Section 5 gives the effective date of the act.

EXISTING LAW: State historic tax credits cannot be allocated separately from the federal tax credit.

JUSTIFICATION: In 2006, New York State became the 28th state in the nation to enact a tax incentive (Chapter 547 of the laws of 2006) to encourage the rehabilitation of historic commercial and residential properties. While the Legislature's establishment of this program was welcomed, enhancements were required to assure the program matched the notable economic stimulus impacts and community redevelopment successes achieved by effective programs in other states. However, there remains an inability for a partnership/LLC to allocate the state

tax credit separately from the federal tax credit. As out of state investors are unable to realize the benefits of the state tax credit, coupling the state and federal tax credits leaves little incentive for out of state investors to participate in economic development projects. By allowing members of a partnership/LLC to allocate these tax credits as they see fit, additional out of state investors will be attracted to invest in historic rehabilitation projects here in New York.

LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS: No direct fiscal impact. Any increase in projects undertaken because of the larger pool of potential investors would be offset through new project development in aging historic properties statewide and the associated job creation and spin off sales tax and other revenues associated with these projects.

LOCAL FISCAL IMPLICATIONS: None

EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2014; this act shall expire and be deemed repealed December 31, 2019; provided, however, that the credit shall be applied to any rehabilitation project commenced on or before December 31, 2019


Text

STATE OF NEW YORK ________________________________________________________________________ 2221 2013-2014 Regular Sessions IN SENATE January 14, 2013 ___________
Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to credits for certain rehabil- itation projects; and providing for the repeal of such provisions upon expiration thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (oo) of section 606 of the tax law is amended by adding a new paragraph 6 to read as follows: (6) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED TO A PARTNERSHIP, LIMITED LIABILITY COMPANY, "SUBCHAPTER S" CORPORATION OR OTHER BUSINESS ENTITY AND SHALL BE PASSED THROUGH TO THE PARTNERS, MEMBERS, OR SHAREHOLDERS RESPECTIVELY. CREDITS ALLOWED TO THESE ENTITIES SHALL BE ALLOCATED AMONG ALL PARTNERS, MEMBERS, OR SHAREHOLDERS RESPEC- TIVELY, EITHER IN PROPORTION TO THEIR OWNERSHIP INTEREST IN THE ENTITY, OR AS THE PARTNERS, MEMBERS, OR SHAREHOLDERS MUTUALLY AGREE AS PROVIDED IN AN EXECUTED DOCUMENT WITHOUT REGARD TO THEIR SHARING OF OTHER TAX OR ECONOMIC ATTRIBUTES OF THE ENTITY. S 2. Subdivision 40 of section 210 of the tax law is amended by adding a new paragraph 6 to read as follows: (6) TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE ALLOWED TO A PARTNERSHIP, LIMITED LIABILITY COMPANY, "SUBCHAPTER S" CORPORATION OR OTHER BUSINESS ENTITY AND SHALL BE PASSED THROUGH TO THE PARTNERS, MEMBERS, OR SHAREHOLDERS RESPECTIVELY. CREDITS ALLOWED TO THESE ENTITIES SHALL BE ALLOCATED AMONG ALL PARTNERS, MEMBERS, OR SHAREHOLDERS RESPEC- TIVELY, EITHER IN PROPORTION TO THEIR OWNERSHIP INTEREST IN THE ENTITY, OR AS THE PARTNERS, MEMBERS, OR SHAREHOLDERS MUTUALLY AGREE AS PROVIDED IN AN EXECUTED DOCUMENT WITHOUT REGARD TO THEIR SHARING OF OTHER TAX OR ECONOMIC ATTRIBUTES OF THE ENTITY.
S 3. Subsection (u) of section 1456 of the tax law, as added by chap- ter 472 of the laws of 2010, is amended by adding a new paragraph 6 to read as follows: (6) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED TO A PARTNERSHIP, LIMITED LIABILITY COMPANY, "SUBCHAPTER S" CORPORATION OR OTHER BUSINESS ENTITY SHALL BE PASSED THROUGH TO THE PARTNERS, MEMBERS, OR SHAREHOLDERS RESPECTIVELY. CREDITS ALLOWED TO THESE ENTITIES SHALL BE ALLOCATED AMONG ALL PARTNERS, MEMBERS, OR SHAREHOLDERS RESPEC- TIVELY, EITHER IN PROPORTION TO THEIR OWNERSHIP INTEREST IN THE ENTITY, OR AS THE PARTNERS, MEMBERS, OR SHAREHOLDERS MUTUALLY AGREE AS PROVIDED IN AN EXECUTED DOCUMENT WITHOUT REGARD TO THEIR SHARING OF OTHER TAX OR ECONOMIC ATTRIBUTES OF THE ENTITY. S 4. Subdivision (y) of section 1511 of the tax law, as added by chap- ter 472 of the laws of 2010, is amended by adding a new paragraph 6 to read as follows: (6) TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE ALLOWED TO A PARTNERSHIP, LIMITED LIABILITY COMPANY, "SUBCHAPTER S" CORPORATION OR OTHER BUSINESS ENTITY AND SHALL BE PASSED THROUGH TO THE PARTNERS, MEMBERS, OR SHAREHOLDERS RESPECTIVELY. CREDITS ALLOWED TO THESE ENTITIES SHALL BE ALLOCATED AMONG ALL PARTNERS, MEMBERS, OR SHAREHOLDERS RESPEC- TIVELY, EITHER IN PROPORTION TO THEIR OWNERSHIP INTEREST IN THE ENTITY, OR AS THE PARTNERS, MEMBERS, OR SHAREHOLDERS MUTUALLY AGREE AS PROVIDED IN AN EXECUTED DOCUMENT WITHOUT REGARD TO THEIR SHARING OF OTHER TAX OR ECONOMIC ATTRIBUTES OF THE ENTITY. S 5. This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2014; provided, however, this act shall expire and be deemed repealed December 31, 2019; and provided, further however, that the credit shall be applied to any rehabilitation project commenced on or before December 31, 2019.

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