Bill S7556-2009

Clarifies the application of the tax credit for rehabilitation of historic properties and historic homes and makes permanent certain provisions of the tax law regarding the credit

Clarifies the application of the tax credit for rehabilitation of historic properties and historic homes and makes permanent certain provisions of the tax law regarding the credit.

Details

Actions

  • Aug 30, 2010: SIGNED CHAP.472
  • Aug 18, 2010: DELIVERED TO GOVERNOR
  • Jun 16, 2010: returned to senate
  • Jun 16, 2010: passed assembly
  • Jun 16, 2010: ordered to third reading cal.848
  • Jun 16, 2010: substituted for a10839
  • Jun 16, 2010: referred to ways and means
  • Jun 16, 2010: DELIVERED TO ASSEMBLY
  • Jun 16, 2010: PASSED SENATE
  • Jun 16, 2010: ORDERED TO THIRD READING CAL.985
  • Jun 15, 2010: REPORTED AND COMMITTED TO RULES
  • May 18, 2010: REPORTED AND COMMITTED TO FINANCE
  • Apr 21, 2010: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Votes

VOTE: COMMITTEE VOTE: - Rules - Jun 16, 2010
Ayes (21): Smith, Espada, Stachowski, Montgomery, Duane, Hassell-Thompson, Krueger, Parker, Serrano, Stewart-Cousins, Dilan, Klein, Valesky, Skelos, Johnson O, Padavan, Volker, Farley, LaValle, Seward, Larkin
Ayes W/R (2): Hannon, Saland

Memo

BILL NUMBER:S7556

TITLE OF BILL:

An act to amend the tax law, in relation to clarifying the application of the credit for the rehabilitation of historic properties and historic homes; and to amend chapter 239 of the laws of 2009 amending the tax law and other laws relating to providing a tax credit for the rehabilitation of historic properties, in relation to making permanent the provisions thereof

PURPOSE:

The purpose of this bill is to amend the Tax Law to make tax credits for the rehabilitation of properties (the "tax credit") available to banks and insurance companies, and to clarify certain current Tax Law provisions relating to historic preservation tax credits.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Tax Law (TL) § 606(oo) to clarify that the tax credit is allowed only to taxpayers subject to tax under the personal income tax provisions. Corporations, certain limited liability companies and other business entities are not subject to tax under the personal income tax provisions. Thus, the reference to these entities is being deleted as superfluous and confusing. Also, this section would change the reference to the federal rehabilitation credit to Internal Revenue Code (IRC) § 47(a)(2), to more accurately reflect that the New York credit is a percentage of the federal rehabilitation credit allowed, and is not a percentage of qualified rehabilitation expenses as that term is defined in IRC § 47(c)(2). In addition, under this bill, the sunset for the increased credit percentage and credit cap enacted by Chapter 239 of the Laws of 2009 would be set forth in the text of the Tax Law rather than the effective date of Chapter 239. This section therefore adds the credit language into the body of Tax Law § 606 (00) applicable to taxable years beginning on or after January 1, 2015. At that time, the credit would revert back to 30 percent of the federal rehabilitation credit, and the cap could not exceed $100,000. Finally, this section makes clear that if a taxpayer is a partner in a partnership or shareholder of a New York S corporation, the credit cap is applied at the entity level and not at the partner or shareholder level.

Section 2 of the bill would amend TL § 606(pp)(2)(A) and (B) to add the provisions applicable to taxable years beginning on or after January 1, 2015, in the same manner as in section 1 of the bill. This section would also amend subparagraph (A) to make a technical correction to provide that, if a taxpayer has more than one residence in the same year, the amount of credit shall not exceed $50,000 for taxable years beginning on or after January 1, 2010 and before January 1, 2015.

Section 3 of the bill would amend paragraphs 1, 3 and 4 of TL § 210(40) to make the same changes that are contained in section 1 of the bill to the credit provisions in the Article 9-A General Business Corporation Tax. This section also contains an amendment that provides that the credit cannot reduce the franchise tax due to less than the alternative minimum taxable income base or fixed dollar minimum. Under the corporate franchise tax, corporations subject to tax must pay a minimum tax for the privilege of exercising its corporate franchise in the state. This amendment would treat the historic preservation credit similarly to the other tax credits under Article 9-A, and is necessary to maintain Article 9-A's status as a franchise tax.

Section 4 of the bill would amend TL § 210(40) by adding a new paragraph 5 to follow the personal income tax provisions and provide that, in order to claim a rehabilitation credit for historic properties, the rehabilitation project must be in whole or in part in a targeted area residence pursuant to IRC § 143(j) or located within a census tract which is defined as being at or below one hundred percent of the state median family income in the most recent federal census.

Section 5 of the bill would amend TL § 1456 by adding a new subsection (u) to provide a credit for the rehabilitation of historic properties to banks subject to tax under Article 32 of the Tax Law.

Section 6 of the bill would amend TL § 1511 by adding a new subsection (z) to provide a credit for the rehabilitation of historic properties to insurance companies subject to tax under Article 33 of the Tax Law.

Section 7 of the bill would amend the effective date of Chapter 239 of the Laws of 2009 by striking the repeal date.

Section 8 of the bill would provide that the bill takes effect immediately and applies to taxable years beginning on and after January 1, 2010.

EXISTING LAW:

The Tax Law contains two separate credits enacted in 2006 involving the rehabilitation of historic properties. A historic homeownership credit may be claimed under the personal income tax law based on the costs incurred for qualified rehabilitation expenditures with respect to a certified rehabilitation of a qualified historic home. To be eligible for the credit, the qualified historic home must be the taxpayer's residence and must be located in New York State. The amount of the credit is equal to 20% of the qualified rehabilitation expenditures made by the taxpayer with respect to a qualified home and for taxable years beginning on or after January 1, 2010, the credit cannot exceed $50,000 per taxpayer per year. However, if a taxpayer incurs qualified rehabilitation expenditures in relation to more than one residence in the same taxable year, the total amount of credit claimed by a taxpayer cannot exceed $25,000 per year.

The credit for the rehabilitation of historic properties applies to commercial buildings for which depreciation is allowable and is in both the general corporation franchise tax and the personal income tax. The law states that the credit is allowed to "persons, firms, partnerships, limited liability companies, corporations and other business entities". For tax years beginning on or after January 1, 2010, the amount of the credit is equal to 100% of the federal credit allowed under IRC 47(c)(2) for the same taxable year for the same certified historic structure located in New York State. However, the total amount of New York State credit allowed cannot exceed $5 million per structure. Under the personal income tax provisions, the rehabilitation project must also be in whole or in part a targeted area residence within the meaning of IRC § 143(j) which is a residence in an area which is either a qualified census tract or an area of chronic economic distress, or located within a census tract which is identified as being at or below 100% of the state median family income in the most recent federal census.

STATEMENT IN SUPPORT:

This bill would amend the bank and insurance franchise taxes to enable banks and insurance companies to claim a credit for the rehabilitation of historic properties. Currently, taxpayers subject to the personal income tax and general business corporation franchise tax are allowed to claim this credit. However, banks and insurance companies, which are key investors in real estate development projects, are currently not able to claim the tax credit. The bill would also amend the credit for the rehabilitation of historic homes to provide a technical fix in the existing law by increasing the credit limit allowed, from $25,000 to $50,000, for taxpayers that incur qualified rehabilitation expenditures in relation to more than one residence in the same taxable year. Currently, taxpayers are allowed to claim a historic homeownership rehabilitation credit of $50,000, but if the taxpayer rehabilitates more than one historic home in a particular taxable year the limit is $25,000. In addition, the bill would make clarifications to existing law to more accurately reflect who is entitled to claim the rehabilitation credit and the proper amount of credit allowed. Finally, the sunset provisions including the increased credit percentage and credit cap enacted by Chapter 239 of the Laws of 2009 are being set forth in the text of the Tax Law rather than in the effective date of Chapter 239.

EFFECTIVE DATE:

This bill would take effect immediately.

FISCAL IMPLICATIONS:

This bill would reduce general fund revenue by an estimated $3 million in 2010-11, $5 million in 2011-12, and $3 million annually thereafter. The All Funds impact is identical.

LEGISLATIVE HISTORY:

This is a new bill.


Text

STATE OF NEW YORK ________________________________________________________________________ 7556 IN SENATE April 21, 2010 ___________
Introduced by Sen. VALESKY -- (at request of the Governor) -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to clarifying the application of the credit for the rehabilitation of historic properties and historic homes; and to amend chapter 239 of the laws of 2009 amending the tax law and other laws relating to providing a tax credit for the rehabilitation of historic properties, in relation to making permanent the provisions thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subsection (oo) of section 606 of the tax law, as amended by chapter 239 of the laws of 2009, is amended to read as follows: (1) (A) For taxable years beginning on or after January first, two thousand ten AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, [any person, firm, partnership, limited liability company, corporation or other business entity] A TAXPAYER shall be allowed a credit as herein- after provided, against the tax imposed by this article, in an amount equal to one hundred percent of the amount of credit allowed the taxpay- er [for the same taxable year] with respect to a certified historic structure under subsection [(c)] (A) (2) of section 47 of the federal internal revenue code with respect to a certified historic structure located within the state. Provided, however, the credit shall not exceed five million dollars. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, A TAXPAYER SHALL BE ALLOWED A CRED- IT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE LOCATED WITHIN THE STATE; PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. (B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER OF A NEW YORK S CORPORATION, THEN THE CREDIT CAP IMPOSED IN SUBPARAGRAPH
(A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS OR SHAREHOLDERS OF EACH SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP THAT IS APPLICABLE IN THAT TAXABLE YEAR. S 2. Subparagraphs (A) and (B) of paragraph 2 of subsection (pp) of section 606 of the tax law, as amended by chapter 239 of the laws of 2009, are amended to read as follows: (A) With respect to any particular residence of a taxpayer, the credit allowed under paragraph one of this subsection shall not exceed fifty thousand dollars FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN AND TWENTY-FIVE THOUSAND DOLLARS FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN. In the case of a husband and wife, the amount of the credit shall be divided between them equally or in such other manner as they may both elect. If a taxpayer incurs qualified rehabilitation expenditures in relation to more than one residence in the same year, the total amount of credit allowed under paragraph one of this subsection for all such expenditures shall not exceed [twenty-five] FIFTY thousand dollars FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN AND TWENTY-FIVE THOUSAND DOLLARS FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN. (B) [If] FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, IF the amount of credit allowable under this subsection shall exceed the taxpayer's tax for such year, and the taxpayer's New York adjusted gross income for such year does not exceed sixty thousand dollars, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. If the taxpayer's New York adjusted gross income for such year exceeds sixty thousand dollars, the excess credit that may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBSECTION SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. S 3. Paragraphs 1, 3 and 4 of subdivision 40 of section 210 of the tax law, as amended by chapter 239 of the laws of 2009, are amended to read as follows: (1) (A) For taxable years beginning on or after January first, two thousand ten AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, [any person, firm, partnership, limited liability company, corporation or other business entity] A TAXPAYER shall be allowed a credit as herein- after provided, against the tax imposed by this article, in an amount equal to one hundred percent of the amount of credit allowed the taxpay- er [for the same taxable year] with respect to a certified historic structure under subsection [(c)] (A) (2) of section 47 of the federal internal revenue code with respect to a certified historic structure located within the state. Provided, however, the credit shall not exceed five million dollars. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, A TAXPAYER SHALL BE ALLOWED A CRED- IT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO THIRTY PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION
(A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. (B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER IN A NEW YORK S CORPORATION, THEN THE CREDIT CAPS IMPOSED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS OR SHAREHOLDERS OF EACH SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP THAT IS APPLICABLE IN THAT TAXABLE YEAR. (3) If the credit allowed the taxpayer pursuant to section 47 of the internal revenue code with respect to a qualified rehabilitation is recaptured pursuant to subsection (a) of section 50 of the internal revenue code, a portion of the credit allowed under this subsection must be added back in the same taxable year and in the same proportion as [such credit] THE FEDERAL RECAPTURE. (4) [If] THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF THIS SECTION. HOWEVER, 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] DEDUCTED from the taxpayer's tax for such year or years. S 4. Subdivision 40 of section 210 of the tax law, as amended by chap- ter 239 of the laws of 2009, is amended by adding a new paragraph 5 to read as follows: (5) TO BE ELIGIBLE FOR THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION, THE REHABILITATION PROJECT SHALL BE IN WHOLE OR IN PART A TARGETED AREA RESIDENCE WITHIN THE MEANING OF SECTION 143(J) OF THE INTERNAL REVENUE CODE OR LOCATED WITHIN A CENSUS TRACT WHICH IS IDENTIFIED AS BEING AT OR BELOW ONE HUNDRED PERCENT OF THE STATE MEDIAN FAMILY INCOME IN THE MOST RECENT FEDERAL CENSUS. S 5. Section 1456 of the tax law is amended by adding a new subsection (u) to read as follows: (U) CREDIT FOR REHABILITATION OF HISTORIC PROPERTIES. (1)(A) FOR TAXA- BLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTI- CLE, IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED FIVE MILLION DOLLARS. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, 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 AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTOR- IC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. (B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER OF A NEW YORK S CORPORATION, THEN THE CREDIT CAPS IMPOSED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS OR SHAREHOLDERS OF EACH
SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP THAT IS APPLICABLE IN THAT TAXABLE YEAR. (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED IN THE TAXABLE YEAR THAT THE QUALIFIED REHABILITATION IS PLACED IN SERVICE UNDER SECTION 167 OF THE FEDERAL INTERNAL REVENUE CODE. (3) IF THE CREDIT ALLOWED THE TAXPAYER PURSUANT TO SECTION 47 OF THE INTERNAL REVENUE CODE WITH RESPECT TO A QUALIFIED REHABILITATION IS RECAPTURED PURSUANT TO SUBSECTION (A) OF SECTION 50 OF THE INTERNAL REVENUE CODE, A PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION MUST BE ADDED BACK IN THE SAME TAXABLE YEAR AND IN THE SAME PROPORTION AS THE FEDERAL RECAPTURE. (4) THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINI- MUM TAX BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THE EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. (5) TO BE ELIGIBLE FOR THE CREDIT ALLOWABLE UNDER THIS SUBSECTION THE REHABILITATION PROJECT SHALL BE IN WHOLE OR IN PART A TARGETED AREA RESIDENCE WITHIN THE MEANING OF SECTION 143(J) OF THE INTERNAL REVENUE CODE OR LOCATED WITHIN A CENSUS TRACT WHICH IS IDENTIFIED AS BEING AT OR BELOW ONE HUNDRED PERCENT OF THE STATE MEDIAN FAMILY INCOME IN THE MOST RECENT FEDERAL CENSUS. S 6. Section 1511 of the tax law is amended by adding a new subsection (y) to read as follows: (Y) CREDIT FOR REHABILITATION OF HISTORIC PROPERTIES. (1)(A) FOR TAXA- BLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND BEFORE JANUARY FIRST, TWO THOUSAND FIFTEEN, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTI- CLE, IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED FIVE MILLION DOLLARS. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, 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 AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTOR- IC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. (B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP, THEN THE CAP IMPOSED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS OF SUCH PARTNERSHIP IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP THAT IS APPLICABLE IN THAT TAXABLE YEAR. (2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED IN THE TAXABLE YEAR THAT THE QUALIFIED REHABILITATION IS PLACED IN SERVICE UNDER SECTION 167 OF THE FEDERAL INTERNAL REVENUE CODE. (3) IF THE CREDIT ALLOWED THE TAXPAYER PURSUANT TO SECTION 47 OF THE INTERNAL REVENUE CODE WITH RESPECT TO A QUALIFIED REHABILITATION IS RECAPTURED PURSUANT TO SUBSECTION (A) OF SECTION 50 OF THE INTERNAL REVENUE CODE, A PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION IN
THE TAXABLE YEAR THE CREDIT WAS CLAIMED MUST BE ADDED BACK IN THE SAME TAXABLE YEAR AND IN THE SAME PROPORTION AS THE FEDERAL RECAPTURE. (4) THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM FIXED BY PARAGRAPH FOUR OF SUBDIVISION (A) OF SECTION FIFTEEN HUNDRED TWO OR SECTION FIFTEEN HUNDRED TWO-A OF THIS ARTICLE, WHICHEVER IS APPLICABLE. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THE EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. (5) TO BE ELIGIBLE FOR THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION, THE REHABILITATION PROJECT SHALL BE IN WHOLE OR IN PART A TARGETED AREA RESIDENCE WITHIN THE MEANING OF SECTION 143(J) OF THE INTERNAL REVENUE CODE OR LOCATED WITHIN A CENSUS TRACT WHICH IS IDENTIFIED AS BEING AT OR BELOW ONE HUNDRED PERCENT OF THE STATE MEDIAN FAMILY INCOME IN THE MOST RECENT FEDERAL CENSUS. S 7. Section 5 of chapter 239 of the laws of 2009 amending the tax law and other laws relating to providing a tax credit for the rehabilitation of historic properties, is amended to read as follows: S 5. This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2010 [and shall expire and be deemed repealed December 31, 2014; provided, however, that the credit shall be applied to any rehabilitation project commenced on or before the date on which that act shall be deemed repealed]. S 8. This act shall take effect immediately.

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