What's happening
This bill clarifies that certain payments in lieu of taxes by qualified empire zone enterprises are eligible for property tax credits.
Why it matters
Clarifies eligibility for tax credits. The bill specifically confirms that payments made by lessees who are qualified empire zone enterprises (QEZEs) as "payments in lieu of taxes" (PILOTs) at a specified property are eligible for the state's real property tax credit, reducing legal ambiguity for businesses and local governments.
Expands potential tax benefits. By treating these PILOTs as if they were regular property taxes paid directly by the QEZE, the bill allows more businesses leasing property (rather than owning it) to benefit from property tax incentives, incentivizing economic development in empire zones.
Prevents double-dipping. The bill ensures that only one party (either the landlord or the lessee) can claim the property tax credit for a particular payment, aiming to prevent duplicate claims and maintain fairness in credit allocation.
Applies retroactively. The bill is set to take effect at the same time as the original 2017 law, which could impact past and pending tax filings, potentially providing relief or obligations for affected businesses for previous tax years.
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Who cares
Headline styles
Tax Credit for Islandia Property
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Substituted by A9989
- Ordered to third reading cal.1696
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tax Credit for Islandia Property
Signed by Governor · Sponsor Michael J. Fitzpatrick
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8951
IN SENATE
June 7, 2018
Introduced by Sen. FLANAGAN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend chapter 296 of the laws of 2017 relating to a certain agreement for a payment in lieu of taxes, in relation to payment in lieu of taxes
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1 of chapter 296 of the laws of 2017, relating to a certain agreement for a payment in lieu of taxes, is amended to read as follows:
Section 1. Notwithstanding the provisions of subdivision (e) of section 15 of the tax law, with respect to any payment in lieu of taxes imposed on real property with respect to property located at 1800 Motor Parkway, Islandia, New York, with respect to a lessee that is a qualified empire zone enterprise, such payment in lieu of taxes shall be deemed to be eligible real property taxes with respect to such lessee and (1) such payment in lieu of taxes shall be deemed to have been paid by the lessee pursuant to explicit requirements in a written lease, (2) shall be deemed to become a lien on the real property during a taxable year in which the lessee of the real property is both certified pursuant to article 18-B of the general municipal law and a qualified empire zone enterprise, and (3) the lessee shall be deemed to have made direct payment of such payment in lieu of taxes to the taxing authority and to have received a receipt for such payment in lieu of taxes from the taxing authority. Such qualified empire zone enterprise shall be eligible to claim the real property tax credit provided by section 15 of the tax law provided that for each of such periods, the landlord has not filed a claim for the real property tax credit for such payments.
§ 2. This act shall take effect on the same date and in the same manner as chapter 296 of the laws of 2017, takes effect.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13846-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend chapter 296 of the laws of 2017 relating to a certain agreement for a payment in lieu of taxes, in relation to payment in lieu of taxes
Purpose or general idea of bill
This bill corrects a technical issue with legislation Chaptered in 2017, wherein the holding company was determined to be making "payments in lieu of taxes" as opposed to making "payment of taxes".
Summary of specific provisions
Section 1. Amends references to payment of taxes, to refer instead to payments in lieu of taxes.
Section 2. This act shall take effect on the same date and in the same manner as the 2017 Chapter.
Justification
Qualified Empire Zone Enterprises (QEZE) are vital businesses which encourage job growth and foster economic development. During the rele- vant years, the Qualified Company paid rent to a limited liability company, formed for the sole purpose of acquiring and holding this prop- erty, through a qualified exchange, which is an affiliate of the Quali- fied Company by common ownership and control. Due to a technicality involving these commonly owned and controlled companies, the Department of Taxation and Finance would not honor the QEZE tax credit. As a result, the Qualified Company, which had been approved for a tax credit and had been audited by the state during the relevant time period, was later denied the credit. Furthermore, Tax and Finance has attempted to claw back the credit from prior years.
In 2017, the Legislature enacted Chapter 296 of the Laws of 2017, which attempted to remedy the injustice that resulted from the unfavorable determination. However, because this legislation referred to payments made as "payment of taxes", instead of "payments in lieu of taxes", the Department has opined that a technical correct is necessary. This legis- lation will carry out the original intent of the legislature.
The business has complied with the law and has relied on this tax credit for operating expenses. This bill would allow the property owner to receive their tax credit for the years 2012, 2013, 2014 and 2015, as was intended by the 2017 legislation.
In 2014, two similar pieces of legislation were signed into law. In 2016, another similar piece of legislation was signed into law
Prior legislative history
New Bill
Effective date
This act shall take effect on the same date and in the same manner as Chapter 296 of the Laws of 2017.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.