This bill has been amended

Bill S2762-2013

Establishes a credit against income tax for the rehabilitation of distressed commercial properties

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 dilapidated vacancies; provides that the property shall be substantially rehabilitated which is where the qualified rehabilitation expenditures in relation to such building total ten thousand dollars.

Details

Actions

  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • May 21, 2013: REPORTED AND COMMITTED TO FINANCE
  • Jan 23, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Meetings

Votes

VOTE: COMMITTEE VOTE: - Investigations and Government Operations - May 21, 2013
Ayes (8): Marcellino, Carlucci, Golden, Nozzolio, O'Mara, Zeldin, Hoylman, Diaz
Ayes W/R (1): Squadron

Memo

BILL NUMBER:S2762

TITLE OF BILL: An act to amend the tax law, in relation to establishing a credit against income tax for the rehabilitation of distressed commercial properties

SUMMARY OF PROVISIONS: This bill would create a new tax credit program to encourage the rehabilitation of distressed commercial property.

Section 1 - amends section 606 of the Tax Law by adding a new subsection (vv) which creates a tax credit for the rehabilitation of distressed commercial property.

(1) For taxable years beginning after January 1, 2013, taxpayers shall be allowed a credit equal to thirty percent of the qualified expenditures made by the taxpayer with respect to a qualified distressed commercial property.

(2) The credit shall not exceed $100,000. Credits are allowed in the taxable year in which the property is deemed a certified rehabilitation.

(3) Credits may be carried forward, but not more than $25,000 in any year.

(4) Defines qualified rehabilitation expenditure. Expenditures must be made after January 1, 2013 and before December 31, 2018.

(5) Defines certified rehabilitation.

(6) Defines qualified distressed commercial property.

(7) Provides for recapture of tax credits in the event the rehabilitated distressed commercial property is disposed of within five years after receiving the credit.

Section 2 - amends subparagraph (B) of paragraph 1 of subsection (i) of section 606 by adding a new clause (xxxv) enumerating the new credit for rehabilitation of distressed commercial property.

Section 3 - amends section 210 of the Tax law to add a new subdivision 46

(1) For taxable years beginning after January 1, 2013, taxpayers shall be allowed a credit equal to thirty percent of the qualified expenditures made by the taxpayer with respect to a qualified distressed commercial property.

(2) The credit shall not exceed $100,000. Credits are allowed in the taxable year in which the property is deemed a certified rehabilitation.

(3) Credits may be carried forward, but not more than $25,000 in any Year.

(4) Defines qualified rehabilitation expenditure. Expenditures must be made after January 1, 2013 and before December 31, 2018.

(5) Defines certified rehabilitation.

(6) Defines qualified distressed commercial property.

(7) Provides for recapture of tax credits in the event the rehabilitated distressed commercial property is disposed of within five years after receiving the credit.

Section 4 - provides that this act shall take effect immediately and shall apply to taxable years on or after January 1, 2013.

PURPOSE AND JUSTIFICATION: In many communities across New York State, whether towns, villages, suburbs or cities, there are areas of tired and outdated commercial buildings. On older commercial streets, these areas may include long stretches of outdated commercial buildings that may have been built from the 1930's through the 1980's. These commercial buildings have not received any significant updating for years, and they are now vacant or under performing properties that give their whole neighborhoods a rundown appearance. Rehabilitating these properties will benefit communities, make these areas economically attractive for new and existing businesses and help to revive the economy of our state. Under this legislation, it will be up to local communities to identify, by local law, areas that are dilapidated and in need of rehabilitation, and to confirm that rehabilitation work is completed to the satisfaction of their building departments and certificates of occupancy were issued for the work done. We will all be rewarded with rejuvenated neighborhoods.

EXISTING LAW: Various tax credits are offered to encourage activities that will benefit the state.

PRIOR LEGISLATIVE HISTORY: 2012: S.6516/A.9543 INVESTIGATIONS/ways & means

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 2762 2013-2014 Regular Sessions IN SENATE January 23, 2013 ___________
Introduced by Sens. RANZENHOFER, LANZA, LARKIN -- read twice and ordered printed, and when printed to be committed to the Committee on Investi- gations and Government Operations 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: Section 1. Section 606 of the tax law is amended by adding a new subsection (vv) to read as follows: (VV) CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES. (1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY- ER WITH RESPECT TO A QUALIFIED DISTRESSED COMMERCIAL PROPERTY. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL- ITATION. (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT EXCEED TWENTY-FIVE THOUSAND DOLLARS. (4) (A) THE TERM "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR PURPOSES OF THIS SUBSECTION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPITAL ACCOUNT: (I) IN CONNECTION WITH THE CERTIFIED REHABILITATION OF A QUALIFIED DISTRESSED COMMERCIAL PROPERTY, AND
(II) FOR PROPERTY FOR WHICH DEPRECIATION WOULD BE ALLOWABLE UNDER SECTION 168 OF THE INTERNAL REVENUE CODE. (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO THE ENLARGE- MENT OF AN EXISTING BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND EIGHTEEN. (5) THE TERM "CERTIFIED REHABILITATION" MEANS, FOR PURPOSES OF THIS SUBSECTION, ANY REHABILITATION OF A CERTIFIED DISTRESSED COMMERCIAL PROPERTY WHICH HAS BEEN APPROVED AND CERTIFIED BY A LOCAL GOVERNMENT AS BEING COMPLETED, WITH A CERTIFICATE OF OCCUPANCY ISSUED, AND THAT THE COSTS ARE CONSISTENT WITH THE WORK COMPLETED. SUCH CERTIFICATION SHALL BE ACCEPTABLE AS PROOF THAT THE EXPENDITURES RELATED TO SUCH REHABILI- TATION QUALIFY AS QUALIFIED REHABILITATION EXPENDITURES FOR PURPOSES OF THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBSECTION. (6) (A) THE TERM "QUALIFIED DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR PURPOSES OF THIS SUBSECTION, A DISTRESSED COMMERCIAL PROPERTY LOCATED WITHIN NEW YORK STATE: (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED, (II) WHICH IS OWNED BY THE TAXPAYER, AND (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI- FIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT IS DEEMED AN AREA IN NEED OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES. (B) IF THE DISTRESSED COMMERCIAL PROPERTY IS RENTAL PROPERTY, SUCH PROPERTY SHALL HAVE BEEN MORE THAN THIRTY PERCENT VACANT FOR TWELVE MONTHS WHILE ACTIVELY MARKETED FOR LEASE. (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL- ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE. (7) (A) IF THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE QUALIFIED DISTRESSED COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE USED AS A COMMERCIAL PROPERTY OF THE TAXPAYER WITHIN FIVE YEARS OF RECEIVING THE CREDIT UNDER THIS SUBSECTION, THE TAXPAYER'S TAX IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA- TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT TO SUCH REHABILITATION. (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE PORTION SHALL BE THE PRODUCT OF THE AMOUNT OF CREDIT CLAIMED BY THE TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY LESS THE NUMBER OF MONTHS THE BUILDING IS OWNED OR USED AS COMMERCIAL PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY. S 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xxxv) to read as follows: (XXXV) CREDIT FOR REHABILITATION AMOUNT OF CREDIT UNDER OF DISTRESSED COMMERCIAL PROPERTIES SUBDIVISION FORTY-SIX UNDER SUBSECTION (VV) OF SECTION TWO HUNDRED TEN S 3. Section 210 of the tax law is amended by adding a new subdivision 46 to read as follows: 46. CREDIT FOR REHABILITATION OF DISTRESSED COMMERCIAL PROPERTIES. (1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY PERCENT OF THE QUALIFIED REHABILITATION EXPENDITURES MADE BY THE TAXPAY-
ER WITH RESPECT TO A QUALIFIED DISTRESSED COMMERCIAL PROPERTY. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE ALLOWED IN THE TAXABLE YEAR IN WHICH THE PROPERTY IS DEEMED A CERTIFIED REHABIL- ITATION. (3) IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE APPLIED AGAINST THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS, BUT SHALL NOT EXCEED TWENTY-FIVE THOUSAND DOLLARS. (4) (A) THE TERM "QUALIFIED REHABILITATION EXPENDITURE" MEANS, FOR PURPOSES OF THIS SUBDIVISION, ANY AMOUNT PROPERLY CHARGEABLE TO A CAPI- TAL ACCOUNT: (I) IN CONNECTION WITH THE CERTIFIED REHABILITATION OF A QUALIFIED COMMERCIAL PROPERTY, AND (II) FOR PROPERTY FOR WHICH DEPRECIATION WOULD BE ALLOWABLE UNDER SECTION 168 OF THE INTERNAL REVENUE CODE. (B) SUCH TERM SHALL NOT INCLUDE (I) THE COST OF ACQUIRING ANY BUILDING OR INTEREST THEREIN, (II) ANY EXPENDITURE ATTRIBUTABLE TO THE ENLARGE- MENT OF AN EXISTING BUILDING, OR (III) ANY EXPENDITURE MADE PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN OR AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND EIGHTEEN. (5) THE TERM "CERTIFIED REHABILITATION" MEANS, FOR PURPOSES OF THIS SUBDIVISION, ANY REHABILITATION OF A CERTIFIED DISTRESSED COMMERCIAL PROPERTY WHICH HAS BEEN APPROVED AND CERTIFIED BY A LOCAL GOVERNMENT AS BEING COMPLETED, WITH A CERTIFICATE OF OCCUPANCY ISSUED, AND THAT THE COSTS ARE CONSISTENT WITH THE WORK COMPLETED. SUCH CERTIFICATION SHALL BE ACCEPTABLE AS PROOF THAT THE EXPENDITURES RELATED TO SUCH REHABILI- TATION QUALIFY AS QUALIFIED REHABILITATION EXPENDITURES FOR PURPOSES OF THE CREDIT ALLOWED UNDER PARAGRAPH ONE OF THIS SUBDIVISION. (6) (A) THE TERM "QUALIFIED DISTRESSED COMMERCIAL PROPERTY" MEANS, FOR PURPOSES OF THIS SUBDIVISION, A DISTRESSED COMMERCIAL PROPERTY LOCATED WITHIN NEW YORK STATE: (I) WHICH HAS BEEN SUBSTANTIALLY REHABILITATED, (II) WHICH IS OWNED BY THE TAXPAYER, AND (III) WHICH IS LOCATED WITHIN A DISTRESSED COMMERCIAL AREA, AS IDENTI- FIED BY EACH LOCALITY THROUGH LOCAL LAW, THAT IS DEEMED AN AREA IN NEED OF COMMUNITY RENEWAL DUE TO DILAPIDATION AND VACANCIES. (B) IF THE DISTRESSED COMMERCIAL PROPERTY IS RENTAL PROPERTY, SUCH PROPERTY SHALL HAVE BEEN MORE THAN THIRTY PERCENT VACANT FOR TWELVE MONTHS WHILE ACTIVELY MARKETED FOR LEASE. (C) A BUILDING SHALL BE TREATED AS HAVING BEEN "SUBSTANTIALLY REHABIL- ITATED" IF THE QUALIFIED REHABILITATION EXPENDITURES IN RELATION TO SUCH BUILDING TOTAL TEN THOUSAND DOLLARS OR MORE. (7) (A) IF THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN THE QUALIFIED DISTRESSED COMMERCIAL PROPERTY, OR SUCH PROPERTY CEASES TO BE USED AS A COMMERCIAL PROPERTY OF THE TAXPAYER WITHIN FIVE YEARS OF RECEIVING THE CREDIT UNDER THIS SUBDIVISION, THE TAXPAYER'S TAX IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSA- TION OCCURS SHALL BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS WITH RESPECT TO SUCH REHABILITATION. (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE RECAPTURE PORTION SHALL BE THE PRODUCT OF THE AMOUNT OF CREDIT CLAIMED BY THE TAXPAYER MULTIPLIED BY A RATIO, THE NUMERATOR OF WHICH IS EQUAL TO SIXTY
LESS THE NUMBER OF MONTHS THE BUILDING IS OWNED OR USED AS COMMERCIAL PROPERTY BY THE TAXPAYER AND THE DENOMINATOR OF WHICH IS SIXTY. S 4. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2013.

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