Relates to eligibility under the excelsior investment tax credit program

Title of bill

An act to amend the tax law and the economic development law, in relation to the excelsior investment tax credit

Purpose

To allow a company eligible for BCP credits to also be eligible for the Excelsior investment tax credit only to the extent that Excelsior credits provide incentives to activities excluded under the BCP, and to declare that a BCP applicant is not precluded from claiming all other credits under the Excelsior program.

Summary of provisions

Section 1: Amends section 31 of the tax law to clarify that a taxpayer can claim the BCP tangible property credit and the Excelsior investment tax credit only to the extent that the Excelsior credit provides incentives not eligible under the BCP tangible property credit.

Section 2: Provides corresponding amendments to section 355 of the Economic Development Law.

Section 3: Effective date.

Justification

Redevelopment of contaminated real estate is extremely risky and expensive. As a result, manufacturers that have chosen to redevelop brownfields in New York face substantial costs over and above developing greenfields even accounting for all eligible BCP credits as the law existed prior to the 2015 enacted Budget.

In addition, amendments to the BCP program in 2015 have greatly restricted the types of tangible property than qualify for the tangible property credit. For example, prior to the 2015 amendments, advanced manufacturing equipment could receive up to a twenty-four percent refundable credit through the BCP. After these amendments, only costs relating to building structures and permanent fixtures can qualify for the BCP credit.

These unfortunate amendments have greatly reduced the attraction of the BCP to high technology and advanced manufacturing products firms looking to invest in New York State.

However, these types of costs for vital equipment and facilities do qualify for the Excelsior investment tax credit pursuant to section 355 of the Economic Development Law. Although the Excelsior Credit only provides a two percent refundable credit for these types of property, compared to the minimum of twelve percent under the pre-amended BCP, at least in the Excelsior program the State still recognizes the worth of attracting manufacturers and high technology companies and the corresponding extremely high costs of machinery and labs for these facilities.

Finally, the bill clarifies that eligibility for the BCP in no ways restricts eligible claims for all the other credits available under the Excelsior program.

This bill recognizes the twin goals of sustainable and environmentally beneficial development and the creation of high value investments and employment in the State.

Legislative history

This is a new bill.

Fiscal implications

Based on types of projects currently in the BCP program, less than $1 million a year.

Effective date

Immediately and applies to taxable years beginning on or after January 1, 2015.