Provides a tax credit for rehabilitation of historic properties

Summary of specific provisions

Section 1 paragraph 1 of subsection (oo) of section 606 of the tax law is amended by chapter 239 of the laws of 2009, is amended and a new paragraph 6 is added to add that tax credits shall be allowed to a partnership, LLC or other business entity and shall be passed through to the partners, member or shareholders respectively.

Section 2 paragraphs 5 says the credit shall be allowed in whole or part in a targeted distressed census tract area identified as being at or below one hundred percent of the state median family income in the most recent federal census.

Section 2 paragraph 6 says the tax credit in this section shall be allowed to a partnership, LLC, subchapter S corp., 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 without regard to their sharing of other tax or economic attributes of the entity.

Section 3 subsection (u) is added to say that on or after Jan. 1, 2010 this bill will allow for a person, firm partnership or LLC shad be allowed a tax credit equal to one hundred percent of the amount of the credit allowed for the same taxable year with respect to certified historic structures provided the credit does not exceed $5 million. The tax credit is allowed in the taxable year the qualified rehabilitation is placed in service,

Section 4 amends section 1511 of the tax law to add subsection (y) that says on or after Jan. 1., 2010 any person, firm, partnership, LLC or other business entity is allowed a credit against the tax imposed by this article equal to one hundred percent of the amount of the credit allowed such taxpayer for the same taxable year with respect to certified historic structure under subsection c(2) of section 47 of the federal internal revenue code provided that the credit shall not exceed five million dollars. Credits are allowed in the taxable year the qualified rehabilitation is placed in service. If the credit allowed such taxpayer pursuant to section 47 of the federal internal revenue code with respect to the qualified rehabilitation is recaptured pursuant to subsection (a) of section 50 of the federal 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. If the allowed credit under this subsection in a taxable year exceeds the taxpayer's tax for that 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.

Section 5 gives the effective date of the act.

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. The changes were signed into law in 2009 (Chapter 239 of the laws of 2009) by Governor Paterson and were once again designed to target reinvestment in distressed census tracts. These changes created a successful tax credit program for historic residential properties in distressed census tracts throughout the state but did not provide the long term economic development stimulus effect for the commercial side of the program. This was due to the inability to apply the credit against the bank and insurance tax along with the inability to allocate the state credit within a partnership/LLC different from the federal tax credit. There are now several hundreds of millions of dollars in economic development projects statewide on hold waiting for these amendments for the commercial aspect of this tax credit program including several projects in Harmony Mills in Cohoes, The AM &A project in Buffalo, Pike Block redevelopment in Syracuse and The Mills in Downtown Rochester. Passage of this landmark legislation will allow these and other projects to move forward creating hundreds of new jobs and millions in reinvestment on major time sensitive projects that will not be completed without immediate action on these changes.

Prior legislative history

New Bill

Fiscal implications

Any fiscal impact to the state would be offset through new project development in aging historic properties statewide spurring new job creation and spin off sales tax revenue and other revenue to the local economy

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2010; provided, that the amendments to subsection (oo) of section 606 of the tax law made by section one of this act shall not affect the expiration of such subsection and chill be deemed to expire therewith; provided, further that the amendments to subdivision 40 of section 210 of the tax law made by section two of this act shall not affect the expiration of such subdivision and shall be deemed to expire therewith; and provided, further, however that Sections three and four of this act shall expire and be deemed repealed.