Relates to a certain agreement for a payment in lieu of taxes with respect to a lessee that is a qualified empire zone enterprise of certain real property

1 Co-sponsor

• Malcolm A. Smith

BILL NUMBER:S6193B

Title of bill

An act in relation to a certain agreement for a payment in lieu of taxes

Purpose

This bill relates to a certain agreement for a payment in lieu of taxes with respect to a lessee that is a qualified empire zone enterprise of certain real property.

Summary of provisions

Section 1 - Makes provisions for payment in lieu of taxes made by entity for specified property.

Section 2 - Effective date

Justification

Qualified Empire Zone Enterprises are vital businesses which encourage job growth and foster economic development. Under New York State Tax Law, these tenants, which are responsible for property taxes under a lease, are eligible for a refund for paid property taxes. Payments made by a lessee made pursuant to a PILOT agreement qualify as property taxes which are eligible for this refund.

A policy change within the NY State Department of Tax and Finance regarding these type agreements now denies credit to the lessee as a result of the business not being a party to the PILOT agreement between the landlord and tax jurisdiction. As a result, a lessee that had been approved for the tax credit and had paid taxes consistent with its' lease agreement and had been audited by the state during the relevant time period, was assessed for credits awarded in prior years.

This business has complied with the law and has relied on the tax credit as a significant component of its operating budget. Therefore, this business should not be penalized for a change in policy and should be granted these property tax credits for the years 2005 through 2013.

Legislative history

New bill

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2005 and before January 1, 2014.