Part H of Chapter 60 of the Laws of 2016 amends the low-income housing credit, which is administered by the Division of Housing and Community Renewal (DHCR). Part H increases the statewide limitations for the aggregate dollar amount of credit the Commissioner of DHCR may allocate to eligible low-income buildings.
The limitation is immediately increased from $64 million to $72 million. The limitation is subsequently increased as follows:
• $80 million for credit allocations effective April 1, 2017
• $88 million for credit allocations effective April 1, 2018
• $96 million for credit allocations effective April 1, 2019
• $104 million for credit allocations effective April 1, 2020
(Section 22.4 of the Public Housing Law)
Part I of Chapter 60 of the Laws of 2016 extends the expiration date of the hire a veteran credit from January 1, 2017 to January 1, 2019. The period of eligible employment for qualified veterans is also extended from January 1, 2016 to January 1, 2018.
The veteran must be employed in New York State by the taxpayer claiming the credit for one year or more and for not less than 35 hours each week. The taxpayer may claim the credit in the tax year in which the qualified veteran completes one year of employment with the taxpayer. The credit is equal to 10% of the total amount of wages paid to the qualified veteran during the veteran’s first full year of employment. The amount is increased to 15% of the total wages paid if the qualified veteran is disabled. The credit is capped at $5,000 per veteran or $15,000 per disabled veteran. The taxpayer may carry forward any unused credit to the following three years.
(Sections 210-B.29(a), 210-B.29(b), 606(a-2)(1), 606(a-2)(2), 1511(g-1)(1), and 1511(g-1)(2) of the Tax Law)
Part J of Chapter 60 of the Laws of 2016 extends the expiration date of the commercial production credit from January 1, 2017 to January 1, 2019.
Taxpayers meeting a threshold level of commercial production activity in New York may apply for credit from the Governor’s Office of Motion Picture and Television Development. The maximum amount of the credit is $7 million annually.
(Sections 28, 210-B.23(c ), and 606(jj)(1) of the Tax Law)
Part K of Chapter 60 of the Laws of 2016 extends the expiration date of the credit for companies who provide transportation to people with disabilities from December 31, 2016 to December 31, 2022.
Taxpayers providing taxicab or livery service may claim a credit equal to the incremental cost associated with upgrading a vehicle so that it is accessible to individuals with disabilities. In addition, these taxpayers may also claim the credit for the purchase of a new vehicle that is initially manufactured to be accessible to persons with disabilities, and for which there is no comparable make or model that does not include the equipment necessary to provide accessibility to persons with disabilities. The amount of the credit is limited to $10,000 per vehicle.
(Section 210-B.38(c) of the Tax Law)
Part N of Chapter 60 of the Laws of 2016 modifies and extends the clean heating fuel credit. The clean heating fuel credit is a refundable tax credit available for the purchase of bioheat, when used for space heating or hot water production for residential purposes within New York State. The credit is equal to one cent for each percent of biodiesel per gallon of bioheat, up to 20 cents per gallon.
The Tax Law is amended to modify the minimum biodiesel fuel thresholds for bioheat for the corporate and personal income tax credits to at least six percent biodiesel per gallon of bioheat. Any bioheat purchased on or after January 1, 2017, that is graded below B6 (meaning less than six percent biodiesel per gallon of bioheat) will no longer qualify for the credit beginning in 2017; this includes products such as B2 or B5. The expiration date of the credit is extended three years to January 1, 2020.
(Sections 210-B.25(a) and 606(mm)(1) of the Tax Law)
Part O of Chapter 60 of the Laws of 2016 amends the excelsior jobs program to address awarding:
• unused allocations,
• benefit periods, and
• overall credit allocation totals.
Empire State Development (ESD) may award 100% of any unallocated tax credits remaining at the end of 2024, which was formerly the end date of the program, in taxable years 2025 and 2026. This is to ensure that companies entering the program in 2016 and 2017 can realize the full ten-year benefit period. However, under no circumstances may the aggregate statutory cap for all years be exceeded, and no tax credits are allowed for taxable years beginning on or after January 1, 2027.
Also, the annual credit allocations are reduced beginning in 2016. As initially enacted, ESD could issue up to $50 million in new credit annually, with a fully effective annual total program cost of $250 million in 2015. The following table shows the reductions in the credit caps per taxable year:
|Credit components in aggregate shall not exceed:|
|Previous Amount||New Amount||Taxable Year|
|$50 million||$50 million||2011|
|$100 million||$100 million||2012|
|$150 million||$150 million||2013|
|$200 million||$200 million||2014|
|$250 million||$250 million||2015|
|$200 million||$183 million||2016|
|$200 million||$183 million||2017|
|$200 million||$183 million||2018|
|$200 million||$183 million||2019|
|$200 million||$183 million||2020|
|$200 million||$183 million||2021|
|$150 million||$133 million||2022|
|$100 million||$83 million||2023|
|$50 million||$36 million||2024|
(Sections 354 and 359 of the Economic Development Law; Section 31 of the Tax Law)
Part V of Chapter 60 of the Laws of 2016 expands the beer production credit available under the corporate franchise tax and the personal income tax to include wine, liquor and cider. Specifically, the credit will be available to taxpayers registered as a distributor in New York State that produce:
• 60 million gallons or less of beer or cider,
• 20 million gallons or less of wine, or
• 800,000 gallons or less of liquor in New York State.
The amended credit is renamed the alcohol beverage production credit.
The alcohol beverage production credit is equal to:
• 14 cents per gallon for the first 500,000 gallons of alcohol produced in New York State during the tax year, plus
• 4.5 cents per gallon for each additional gallon over 500,000 and up to 15,500,000 produced in New York State in the same tax year.
The expansion of the beer production credit to include wine, liquor and cider applies to taxable years beginning on or after January 1, 2016.
(Sections 37, 210-B.39, 606(i)(1)(B)(xxxiv), and 606(uu) of the Tax Law)
[Note: Part V contains other tax provisions; See Alcoholic Beverage Tastings].
Part LL of Chapter 60 of the Laws of 2016 makes the special additional mortgage recording tax credit under Article 9-A refundable for certain residential mortgages. Prior to corporate tax reform, refundability of the credit pertaining to these mortgages was limited to general business corporations in Article 9-A; the credit was not refundable for Article 32 banking corporations. When the two articles were merged in the 2014 reform legislation, refundability was eliminated.
Part LL allows Article 9-A taxpayers to claim a refund of the credit attributable to the special additional mortgage recording tax that a taxpayer pays on or after January 1, 2015 as a lender with respect to residential mortgages.
(Section 210-B.9(b) of the Tax Law)
Part MM of Chapter 60 of the Laws of 2016 provides that an Article 9-A taxpayer principally engaged in the production of goods by farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing, can claim the real property tax credit for manufacturers based on eligible real property taxes paid on property leased from a related or unrelated third party, provided:
• the taxpayer as lessee paid the taxes pursuant to explicit requirements in a written lease, and
• the taxpayer as lessee paid such taxes directly to the taxing authority and received a written receipt from the taxing authority.
Prior to this change, real property tax paid on real property leased from a related third party did not qualify for this credit under Article 9-A. This change conforms Article 9-A to the treatment of leased property for agricultural businesses under the personal income tax.
This change is effective for tax years beginning on or after January 1, 2014.
(Section 210-B.43(b) of the Tax Law)
Part QQ of Chapter 60 of the Laws of 2016 amends the Economic Development Law and the Tax Law to allow any psychiatric facility previously owned by New York State and operated pursuant to section 7.17 of the Mental Hygiene Law, and located within the Metropolitan Commuter Transportation District (excluding New York City) as a closed facility under the Economic Transformation and Facility Redevelopment Program.
The program is administered by the Empire State Development Corporation (ESDC), which determines eligibility and issues certificates of tax credit to approved business entities. Prospective participants must submit an application by September 1, 2016.
The Economic Transformation and Facility Redevelopment Program tax credit consists of four components:
• the jobs tax credit component,
• the investment tax credit component,
• the job training credit component, and
• the real property tax credit component.
Part QQ also amends the investment tax credit component of the economic transformation and facility redevelopment program tax credit to allow owners of such closed psychiatric facilities, when claiming credit, to include in its cost or other basis of the qualified investment at the closed facility, demolition costs incurred at the facility, limited to:
i) asbestos removal costs,
ii) rental of demolition equipment,
iii) personnel costs to operate the demolition equipment,
iv) costs to remove and dispose of demolition debris, and
v) the costs of any permits, licenses and insurance necessary for the demolition.
Lastly, the definition of participant in the Economic Development law is amended, with regards to such psychiatric facilities, to waive the requirement that a business entity be a new business to participate in the Economic Transformation and Facility Redevelopment Program.
(Sections 400 and 402 of the Economic Development Law; Section 35 of the Tax Law)
Part RR of Chapter 60 of the Laws of 2016 creates the farm workforce retention credit. The refundable credit is available to farm employers equal to a fixed amount per eligible farm employee.
• A farm employer is a corporation, including a New York S corporation, a sole proprietorship, a limited liability company, or a partnership whose federal gross income from farming for the taxable year is at least two-thirds of excess federal gross income.
• Excess federal gross income means the amount of federal gross income from all sources for the taxable year in excess of $30,000. For the purposes of this credit, payments from the state's farmland protection program, administered by the Department of Agriculture and Markets, are included as federal gross income from farming for otherwise eligible farmers.
• An eligible farm employee is an individual who is employed for 500 hours or more per taxable year by a farm employer in New York State. However, general executive officers of a farm employer are excluded from the credit. Also, where an individual employed by a farm employer in New York State becomes unable to work due to a documented illness or disability, the hours such individual is employed may be combined with the hours worked by a hired replacement individual when determining the 500 hour threshold. Finally, any employees counted in the computation of this credit cannot be used as the basis to claim any other credit.
The credit is phased in gradually by taxable year:
|Tax years beginning on or after||and before||Credit per eligible farm employee|
|January 1, 2017||January 1, 2018||$250|
|January 1, 2018||January 1, 2019||$300|
|January 1, 2019||January 1, 2020||$500|
|January 1, 2020||January 1, 2021||$400|
|January 1, 2021||January 1, 2022||$600|
(Sections 42, 210-B.51, and 606(i), and 606(eee) of the Tax Law)
Part VV of Chapter 60 of the Laws of 2016 expands programs four and five of the urban youth jobs tax credit program.
The amount of tax credit the Commissioner of the Department of Labor (DOL) is allowed to annually allocate is increased from $20 million to $50 million in both programs four and five. Distribution of the allocations is as follows:
• $30 million for qualified employees, and
• $20 million for individuals who meet all of the requirements for a qualified employee except for the residency requirement, so long as they reside in New York State.
A qualified employee is defined as an individual who meets the following criteria:
• is between the ages of 16 and 24;
• resides in a city with a population of 55,000 or more, or a town with a population of 480,000 or more;
• is low income or at risk, as defined by the Commissioner of DOL;
• is unemployed prior to being hired;
• will be working in a full-time or part-time position that pays wages that are equivalent to the wages paid for similar jobs, with appropriate adjustments for experience and training, and for which no other employee was terminated, or where the employer has not otherwise reduced its workforce by involuntary terminations with the intention of filling the vacancy by creating a new hire.
The expansion is effective immediately.
(Sections 25-a(a) and 25-a(b)(3) of the Labor Law)