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

5 Co-sponsors

• Owen H. Johnson
• Andrew J. Lanza
• William J. Larkin Jr.
• David Storobin
• Lee M. Zeldin

BILL NUMBER:S6516

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 prop- erties

Summary of provisions

This bill would create a new tax credit program to encourage the reha- bilitation of distressed commercial property.

Section 1 - amends section 606 of the Tax Law by adding a new subsection (uu) which creates a tax credit for the rehabilitation of distressed commercial property. (1) For taxable years beginning after January 1, 2012, taxpayers shall be allowed a credit equal to thirty percent of the qualified expendi- tures 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, 2012 and before December 31, 2017. (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 (xxxiv) enumerating the new credit for rehabilitation of distressed commercial property.

Section 3 - amends section 210 of the Tax law to add a new subdivision 45. (1) For taxable years beginning after January 1, 2012, taxpayers shall be allowed a credit equal to thirty percent of the qualified expendi- tures 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, 2012 and before December 31, 2017. (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, 2012.

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 commu- nities, 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 bene- fit the state.

Prior legislative history

New bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.