S2221-2013 Actions

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

S2221-2013 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

S2221-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    2221

                         2013-2014 Regular Sessions

                              I N  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.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD05761-01-3

 S. 2221                             2

    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.