2002-03 Budget - Article 7 Bill s6260: Revenue
STATE OF NEW YORK
________________________________________________________________________
S. 6260 A. 9762
SENATE - ASSEMBLY
January 28, 2002
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IN SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti-
cle seven of the Constitution -- read twice and ordered printed, and
when printed to be committed to the Committee on Finance
IN ASSEMBLY -- A BUDGET BILL, submitted by the Governor pursuant to
article seven of the Constitution -- read once and referred to the
Committee on Ways and Means
AN ACT to amend chapter 405 of the laws of 1999 amending the real prop-
erty tax law relating to improving the administration of the school
tax relief (STAR) program and other laws, in relation to the authori-
zation to operate the quick draw lottery game (Part A); to amend the
tax law, in relation to eliminating various restrictions on the opera-
tion of Quick Draw (Part B); to amend the tax law, in relation to
authorizing up to three instant games with a seventy-five percent
prize payout (Part C); to authorize and direct the comptroller to make
deposits to the dedicated highway and bridge trust fund (Part D); to
amend the tax law, in relation to making technical corrections regard-
ing the reduced rate of sales tax on the sale of transportation, tran-
smission or distribution of gas or electricity (Part E); to amend the
tax law, in relation to the residential fuel oil storage tank credit
under the personal income tax; and to repeal certain provisions of the
tax law relating thereto (Part F); to amend the state finance law and
the tax law, in relation to dedicating revenues from the tax imposed
under article 28-A of the tax law to the dedicated highway and bridge
trust fund (Part G); to amend the tax law, in relation to calculating
the amount of tax required to be prepaid for purposes of the prepay-
ment of sales tax on cigarettes (Part H); to amend the alcoholic
beverage control law, in relation to permitting the inspection of
certain stores, premises and other locations licensed to sell beer,
liquor or wine at retail for off-premises consumption and to amend
chapter 508 of the laws of 1993, amending the tax law and the criminal
procedure law relating to enhancing the enforcement of the taxes on
alcoholic beverages with respect to liquors, in relation to the effec-
tiveness thereof (Part I); to amend the alcoholic beverage control
law, in relation to the adjustment of license and permit fees (Part
J); to amend the public housing law, in relation to increasing the
dollar amount of statewide limitation on the low-income housing tax
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD12374-01-2
S. 6260 2 A. 9762
credit (Part K); to amend the tax law and the administrative code of
the city of New York, in relation to the credit and deduction for
college tuition under the personal income tax (Part L); to amend the
tax law, in relation to providing reports to the comptroller to aid in
the administration and enforcement of the abandoned property law (Part
M); to amend the tax law, in relation to the attribution of certain
receipts of OTC derivatives dealers under article 9-A thereof (Part
N); to amend the tax law, in relation to participation in the elec-
tronic funds transfer program prescribed by section 9 of such law
(Part O); to amend the tax law, in relation to sales and use tax
filing and payment procedures for certain taxpayers (Part P); to amend
the tax law, in relation to amending the definition of a new business
for purposes of the refundability of certain new business credits
under articles 9-A, 22, 32 and 33 of such law, and to make conforming
and clarifying amendments; to amend the general municipal law and the
tax law, in relation to extending the empire zone program and making
technical corrections to the empire zones program act; and to amend
the tax law, in relation to the empire zone wage tax credit under
articles 9-A and 22 of such law (Part Q); to amend the tax law, in
relation to the ordering of credits under articles 9, 9-A, 32 and 33
of such law (Part R); and to amend the tax law and the administrative
code of the city of New York, in relation to extending the tax rate
reduction under the New York state real estate transfer tax and the
New York city real property transfer tax for conveyances of real prop-
erty to existing real estate investment trusts (Part S)
The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
1 Section 1. This act enacts into law major components of legislation
2 which are necessary to implement the state fiscal plan for the 2002-2003
3 state fiscal year. Each component is wholly contained within a Part
4 identified as Parts A through S. The effective date for each particular
5 provision contained within such Part is set forth in the last section of
6 such Part. Any provision in any section contained within a Part, includ-
7 ing the effective date of the Part, which makes reference to a section
8 "of this act", when used in connection with that particular component,
9 shall be deemed to mean and refer to the corresponding section of the
10 Part in which it is found. Section three of this act sets forth the
11 general effective date of this act.
12 PART A
13 Section 1. Section 1 of part J of chapter 405 of the laws of 1999,
14 amending the real property tax law relating to improving the adminis-
15 tration of the school tax relief (STAR) program and other laws, as
16 amended by section 1 of part M of chapter 383 of the laws of 2001, is
17 amended to read as follows:
18 Section 1. Notwithstanding the provisions of article 5 of the general
19 construction law, the provisions of the tax law amended by sections
20 94-a, 94-d and 94-g of chapter 2 of the laws of 1995 are hereby revived
21 and shall continue in full force and effect as they existed on March 31,
22 1999 [through March 31, 2002, when upon such date they shall expire and
23 be repealed]. Sections 1, 2, 3, 4, and 5, and such part of section 10 of
24 chapter 336 of the laws of 1999 as relates to providing for the effec-
S. 6260 3 A. 9762
1 tiveness of such sections 1, 2, 3, 4 and 5 shall be nullified in effect
2 on the effective date of this section, except that the amendments made
3 to: paragraph (2) of subdivision a of section 1612 of the tax law by
4 such section 1; and subdivision b of section 1612 of the tax law by such
5 section 2; and the repeal of section 152 of chapter 166 of the laws of
6 1991 made by such section 5 shall continue to remain in effect.
7 § 2. This act shall take effect immediately.
8 PART B
9 Section 1. Paragraph 1 of subdivision a of section 1612 of the tax
10 law, as amended by chapter 2 of the laws of 1995, is amended to read as
11 follows:
12 (1) sixty percent of the total amount for which tickets have been sold
13 for [a lawful lottery game introduced on or after the effective date of
14 this paragraph, subject to the following provisions:
15 (A) drawings in such game shall be held during no more than thirteen
16 hours each day, no more than eight hours of which shall be consecutive;
17 (B) such game shall be available only on premises occupied by licensed
18 lottery sales agents, subject to the following provisions:
19 (i) if the licensee holds a license issued pursuant to the alcoholic
20 beverage control law to sell alcoholic beverages for consumption on the
21 premises, then not less than twenty-five percent of the gross sales must
22 result from sales of food;
23 (ii) if the licensee does not hold a license issued pursuant to the
24 alcoholic beverage control law to sell alcoholic beverages for consump-
25 tion on the premises, then the premises must have a minimum square
26 footage greater than two thousand five hundred square feet;
27 (iii) notwithstanding the foregoing provisions, television equipment
28 that automatically displays the results of such drawings may be
29 installed and used without regard to the percentage of food sales or the
30 square footage if such premises are used as:
31 (I) a commercial bowling establishment, or
32 (II) a facility authorized under the racing, pari-mutuel wagering and
33 breeding law to accept pari-mutuel wagers;
34 (C) the] a game currently called "Quick Draw". The rules for the oper-
35 ation of such game shall be as prescribed by regulations promulgated and
36 adopted by the division, provided however, that such rules shall provide
37 that no person under the age of twenty-one may participate in such games
38 on the premises of a licensee who holds a license issued pursuant to the
39 alcoholic beverage control law to sell alcoholic beverages for consump-
40 tion on the premises[; and, provided, further, that such regulations may
41 be revised on an emergency basis not later than ninety days after the
42 enactment of this paragraph in order to conform such regulations to the
43 requirements of this paragraph]; or
44 § 2. This act shall take effect immediately; provided, however, that
45 the amendment to paragraph 1 of subdivision a of section 1612 of the tax
46 law made by section one of this act shall not affect the repeal of such
47 paragraph and shall be deemed repealed therewith.
48 PART C
49 Section 1. Paragraph 2 of subdivision a of section 1612 of the tax
50 law, as amended by chapter 336 of the laws of 1999, is amended to read
51 as follows:
S. 6260 4 A. 9762
1 (2) sixty-five percent of the total amount for which tickets have been
2 sold for the "Instant Cash" game in which the participant purchases a
3 preprinted ticket on which dollar amounts or symbols are concealed on
4 the face or the back of such ticket, provided however up to three such
5 games may be offered during the fiscal year, seventy-five percent of the
6 total amount for which tickets have been sold for such three games in
7 which the participant purchases a preprinted ticket on which dollar
8 amounts or symbols are concealed on the face or the back of such ticket;
9 or
10 § 2. Subdivision b of section 1612 of the tax law, as amended by chap-
11 ter 336 of the laws of 1999, is amended to read as follows:
12 b. Notwithstanding section one hundred twenty-one of the state finance
13 law, on or before the twentieth day of each month, the division shall
14 pay into the state treasury, to the credit of the state lottery fund
15 created by section ninety-two-c of the state finance law, not less than
16 forty-five percent of the total amount for which tickets have been sold
17 for games defined in paragraph four of subdivision a of this section
18 during the preceding month, not less than thirty-five percent of the
19 total amount for which tickets have been sold for games defined in para-
20 graph three of subdivision a of this section during the preceding month,
21 not less than twenty percent of the total amount for which tickets have
22 been sold for games defined in paragraph two of subdivision a of this
23 section during the preceding month, provided however that for games with
24 a prize payout of seventy-five percent of the total amount for which
25 tickets have been sold, the division shall pay not less than ten percent
26 of sales into the state treasury and not less than twenty-five percent
27 of the total amount for which tickets have been sold for games defined
28 in paragraph one of subdivision a of this section during the preceding
29 month. Within twenty days after any award of lottery prizes, the divi-
30 sion shall pay into the state treasury, to the credit of the state
31 lottery fund, the balance of all moneys received from the sale of all
32 tickets for the lottery in which such prizes were awarded remaining
33 after provision for the payment of prizes as herein provided. Any reven-
34 ues derived from the sale of advertising on lottery tickets shall be
35 deposited in the state lottery fund.
36 § 3. This act shall take effect immediately.
37 PART D
38 Section 1. Notwithstanding any other law, rule or regulation to the
39 contrary, the comptroller is hereby authorized and directed to deposit
40 in equal monthly installments the amounts listed below to the credit of
41 the dedicated highway and bridge trust fund from taxes now deposited
42 into the general fund pursuant to the provisions of the vehicle and
43 traffic law: one hundred seventy-one million six hundred thousand
44 dollars from April 1, 2002 through March 31, 2003; and one hundred
45 fifty-two million seven hundred thousand dollars from April 1, 2003
46 through March 31, 2004.
47 § 2. This act shall take effect April 1, 2002; provided, however, if
48 this act shall become a law after such date it shall take effect imme-
49 diately and shall be deemed to have been in full force and effect on and
50 after April 1, 2002.
51 PART E
S. 6260 5 A. 9762
1 Section 1. Section 1105-C of the tax law is amended by adding a new
2 subdivision (d) to read as follows:
3 (d) For the purpose of the reduced rate of tax provided by subdivision
4 (a) of this section, the following shall apply to a sale, other than a
5 sale for resale, of the transportation, transmission or distribution of
6 gas or electricity by a vendor not subject to the supervision of the
7 public service commission where such transportation, transmission or
8 distribution service being sold is wholly within a service area of the
9 state wherein the public service commission shall have approved by
10 formal order a single retailer model for the regulated utility which has
11 the responsibility to serve that area. Where such a vendor makes a sale,
12 other than a sale for resale, of gas or electricity to be delivered to a
13 customer within such service area and, for the purpose of transporting,
14 transmitting or distributing such gas or electricity, also makes a sale
15 of transportation, transmission or distribution service to such custom-
16 er, the charge for the transportation, transmission or distribution of
17 gas or electricity wholly within such service area made by such vendor,
18 notwithstanding paragraph three of subdivision (b) of section eleven
19 hundred one of this article, shall not be included in the receipt for
20 such gas or electricity, and, therefore, shall qualify for such reduced
21 rate.
22 § 2. This act shall take effect immediately and shall be deemed to
23 have been in full force and effect on and after September 1, 2000, and
24 shall apply to sales made, services rendered and uses occurring on and
25 after such date although made, rendered or occurring under a prior
26 contract.
27 PART F
28 Section 1. Subsection (p-1) of section 606 of the tax law, as added by
29 section 1 of part N of chapter 63 of the laws of 2000, is amended to
30 read as follows:
31 (p-1) Residential fuel oil storage tank credit. (1) Allowance of cred-
32 it. A taxpayer shall be allowed a credit, to be computed as hereinafter
33 provided, against the tax imposed by this article for the removal[,] or
34 permanent closure [or] and installation of a below-ground or above-
35 ground residential fuel oil storage tank used to provide heating fuel
36 for single to four-family residences located in this state.
37 (2) Amount of credit. The amount of the credit shall be equal to [the
38 sum of:
39 (A)] the costs of removal [during the taxable year] or permanent
40 closure of an existing unprotected below-ground or above-ground residen-
41 tial fuel oil tank[, not to exceed two hundred fifty dollars;
42 (B) the costs of permanently closing during the taxable year an exist-
43 ing unprotected below-ground or above-ground residential fuel oil tank,
44 not to exceed two hundred fifty dollars; and
45 (C)] and the purchase and installation costs of a new below-ground or
46 above-ground residential fuel oil storage tank which is installed during
47 the taxable year [and], where such new tank is used in place of [a] such
48 formerly used unprotected below-ground or above-ground residential fuel
49 oil tank [and provided that such unprotected tank] which was removed or
50 permanently closed during the taxable year or the immediately preceding
51 taxable year, not to exceed [two] five hundred [fifty] dollars.
52 (3) Limitation. [The costs described in subparagraphs (A), (B) and (C)
53 of paragraph two of this subsection with respect to a particular resi-
54 dence may be used only once in computing a] A credit allowed under this
S. 6260 6 A. 9762
1 subsection may be allowed only once with respect to a particular resi-
2 dence.
3 (4) Carryover. If the amount of the credit allowable under this
4 subsection exceeds the taxpayer's tax for any taxable year, the excess
5 may be carried over to the following year or years and may be deducted
6 from the taxpayer's tax for such year or years.
7 § 2. Subsection (p-1) of section 606 of the tax law is REPEALED.
8 § 3. This act shall take effect April 1, 2002; except that section two
9 of this act shall take effect January 1, 2004; and provided that the
10 amendments to subsection (p-1) of section 606 of the tax law, made by
11 section one of this act, shall apply to taxable years beginning in 2002
12 and 2003 and only for any existing residential fuel oil tanks removed or
13 closed after March 31, 2002.
14 PART G
15 Section 1. Paragraph (a) of subdivision 3 of section 89-b of the state
16 finance law, as amended by section 12 of part EE of chapter 63 of the
17 laws of 2000, is amended to read as follows:
18 (a) The special obligation reserve and payment account shall consist
19 (i) of all moneys required to be deposited in the dedicated highway and
20 bridge trust fund pursuant to the provisions of sections two hundred
21 eighty-nine-e, three hundred one-j [and], five hundred fifteen and elev-
22 en hundred sixty-seven of the tax law, section four hundred one of the
23 vehicle and traffic law, and section thirty-one of [this] chapter [which
24 amends this sentence] fifty-six of the laws of nineteen hundred ninety-
25 three, (ii) all fees, fines or penalties collected by the commissioner
26 of transportation pursuant to section fifty-two and subdivisions five,
27 eight and twelve of section eighty-eight of the highway law, subdivision
28 fifteen of section three hundred eighty-five of the vehicle and traffic
29 law, section fifteen of this chapter, excepting moneys deposited with
30 the state on account of betterments performed pursuant to subdivision
31 twenty-seven or subdivision thirty-five of section ten of the highway
32 law, and (iii) any other moneys collected therefor or credited or trans-
33 ferred thereto from any other fund, account or source.
34 § 2. Section 1165 of the tax law, as added by chapter 190 of the laws
35 of 1990, is amended to read as follows:
36 § 1165. Administrative provisions. The tax imposed by section eleven
37 hundred sixty of this article shall be administered and collected in a
38 like manner as and jointly with the taxes imposed by sections eleven
39 hundred five and eleven hundred ten of article twenty-eight of this
40 chapter. All of the provisions of such article twenty-eight (except
41 sections eleven hundred seven, eleven hundred eight [and], eleven
42 hundred nine and eleven hundred forty-eight) relating to or applicable
43 to the administration, collection[,] and review [and disposition] of the
44 taxes imposed by such sections eleven hundred five and eleven hundred
45 ten, including, but not limited to, the provisions relating to defi-
46 nitions, exemptions, returns, personal liability for the tax, collection
47 of tax from the customer, collection of tax at the time of registration
48 of a motor vehicle and payment of tax by a person required to file a
49 return, shall apply to the tax imposed by this article so far as such
50 provisions can be made applicable to the tax imposed by this article
51 with such limitations as set forth in this article and such modifica-
52 tions as may be necessary in order to adapt such language to the tax so
53 imposed. Such provisions shall apply with the same force and effect as
54 if the language of those provisions had been set forth in full in this
S. 6260 7 A. 9762
1 article except to the extent that any provision is either inconsistent
2 with a provision of this article or is not relevant to the tax imposed
3 by this article. For purposes of this article, any reference in article
4 twenty-eight to the tax or taxes imposed by such article shall be deemed
5 to refer to the tax imposed by this article also unless a different
6 meaning is clearly required. Provided, further, however, that the
7 provisions of subdivision seven of section eleven hundred eighteen of
8 this chapter shall apply to the tax on uses within this state imposed by
9 section eleven hundred sixty of this article only in the event that the
10 rate of the retail sales or use tax paid, under the conditions described
11 in such subdivision seven, to any other state or jurisdiction within any
12 other state exceeds the aggregate rate of the compensating use tax
13 imposed under section eleven hundred ten of this chapter and any compen-
14 sating use tax imposed pursuant to the authority of article twenty-nine
15 of this chapter, and in such event only with respect to the difference
16 between the rate paid to such other state or jurisdiction thereof and
17 such aggregate rate. Provided, further, that for purposes of this arti-
18 cle and for articles twenty-eight and twenty-nine of this chapter, the
19 provisions of section eleven hundred seventeen of this chapter shall not
20 apply to the rental, as such term is defined in this article, of motor
21 vehicles and that the provisions contained in section eleven hundred
22 thirty-six of this chapter with respect to filing a part-quarterly
23 return monthly and section eleven hundred thirty-seven-A of this chapter
24 relating to returns and payments of estimated tax shall not apply to the
25 tax imposed under this article.
26 § 3. The tax law is amended by adding a new section 1167 to read as
27 follows:
28 § 1167. Deposit and disposition of revenue. All taxes, interest and
29 penalties collected or received by the commissioner under this article
30 shall be deposited and disposed of pursuant to the provisions of section
31 one hundred seventy-one-a of this chapter, except as otherwise provided
32 in section eighty-nine-b of the state finance law.
33 § 4. This act shall take effect immediately and shall apply to taxes,
34 penalties and interest collected or received by the commissioner of
35 taxation and finance under article 28-A of the tax law on or after April
36 1, 2002.
37 PART H
38 Section 1. Subdivision (j) of section 1111 of the tax law, as added by
39 chapter 2 of the laws of 1995, is amended to read as follows:
40 (j) (1) The tax required to be prepaid pursuant to section eleven
41 hundred three of this article shall be computed by multiplying the base
42 retail price by a tax rate of seven percent and rounding the result
43 thereof to the nearest whole cent per package.
44 (2) For purposes of this subdivision, the base retail price shall mean
45 for the period September first, nineteen hundred ninety-five, through
46 August thirty-first, nineteen hundred ninety-six, one dollar for each
47 package of cigarettes containing ten cigarettes or fraction thereof, and
48 two dollars for each package of cigarettes containing twenty cigarettes
49 or fraction thereof in excess of ten and, if a package contains more
50 than twenty cigarettes, the base retail price shall be increased by
51 fifty cents for each five cigarettes or fraction thereof in excess of
52 twenty. [Provided, however, if the United States of America enacts a law
53 by July first, nineteen hundred ninety-five, imposing on manufacturers,
54 distributors, wholesalers, retailers, agents or other persons, other
S. 6260 8 A. 9762
1 than retail consumers, a new or additional excise tax on cigarettes or
2 repealing or reducing the rate of such a tax, and such imposition,
3 repeal or reduction becomes effective no later than September first,
4 nineteen hundred ninety-five, then the base retail price set forth in
5 the preceding sentence shall be increased by the amount of the new or
6 additional federal excise tax or reduced by the amount of such repeal or
7 reduction, as effective on or before September first, nineteen hundred
8 ninety-five, applicable to such quantities of cigarettes. Commencing]
9 Effective for the twelve-month period commencing on the first day of
10 September[, nineteen hundred ninety-six, and on the first day of Septem-
11 ber] of each year [thereafter], the base retail price [then in effect on
12 the immediately preceding August thirty-first] for any such package
13 shall be adjusted as follows: [Such] As soon as practicable after June
14 first of each year, the base retail price in effect for the twelve-month
15 period commencing on the immediately preceding September first shall be
16 multiplied by a fraction, the numerator of which is the [sum] total of
17 the sums of the [monthly consumer price indices for all urban consumers
18 for the northeast urban region (unadjusted) published by the bureau of
19 labor statistics of the United States department of labor for the cate-
20 gory of commodities designated tobacco and smoking products] manufactur-
21 ers' list price for a carton of standard brand cigarettes containing ten
22 packages of twenty cigarettes and the amount of cigarette tax imposed by
23 subdivision one of section four hundred seventy-one of this chapter on
24 such a carton of cigarettes, in effect on the first day of each month,
25 for each of the twelve consecutive months ending with [the immediately
26 preceding] such month of [May] June, and the denominator of which is the
27 [sum] total of the sums of the [monthly consumer price indices for all
28 urban consumers for the northeast urban region (unadjusted) published by
29 such bureau of labor statistics for such category of products] manufac-
30 turers' list price for such a carton of cigarettes and the amount of
31 cigarette tax imposed by subdivision one of section four hundred seven-
32 ty-one of this chapter on such a carton of cigarettes, in effect on the
33 first day of each month, for each of the twelve consecutive months
34 ending with the month of [May in] June of the immediately preceding
35 year. Provided, however, for purposes of the adjustment to any such base
36 retail price required for the period commencing September first, two
37 thousand two, the denominator shall be such total with respect to the
38 twelve consecutive months ending with the month of June, nineteen
39 hundred ninety-seven. The manufacturers' list price for a carton of
40 standard brand cigarettes containing ten packages of twenty cigarettes
41 in effect on the first day of a month shall be determined by calculating
42 a weighted average of each of the major manufacturer's list prices for
43 such a carton of cigarettes in effect on the first day of such month, as
44 such list prices are reported to the department by such manufacturers,
45 in the department's determination of the cost of cigarettes under arti-
46 cle twenty-A of this chapter, and using the most recently published
47 annual national market shares of such major manufacturers. The commis-
48 sioner shall cause to be published in the section for miscellaneous
49 notices in the state register, and give other appropriate general notice
50 of, the base retail price adjustment calculation and the resulting base
51 retail price fixed by this section for the period commencing September
52 first of each year beginning September first, nineteen hundred ninety-
53 six, no later than the immediately preceding first day of August. The
54 calculation and publication of the base retail price so fixed by
55 provisions of this section shall not be included within the definition
56 of "rule" as defined in paragraph (a) of subdivision two of section one
S. 6260 9 A. 9762
1 hundred two of the state administrative procedure act. The base retail
2 prices determined pursuant to this paragraph shall be rounded to the
3 nearest one-tenth of one cent for each package containing ten cigarettes
4 or fraction thereof, for each package containing twenty cigarettes and,
5 if packages are sold in excess of twenty cigarettes and stamps have been
6 issued therefor, for each such package.
7 § 2. This act shall take effect immediately and shall apply to adjust-
8 ments and determinations regarding the base retail price required to be
9 made for periods beginning on and after September 1, 2002.
10 PART I
11 Section 1. Section 105 of the alcoholic beverage control law is
12 amended by adding a new subdivision 23 to read as follows:
13 23. All premises licensed under sections fifty-four, fifty-four-a,
14 sixty-three and seventy-nine of this chapter shall be subject to
15 inspection by any peace officer acting pursuant to his special duties,
16 or police officer or any duly authorized representative of the state
17 liquor authority, during the hours when the said premises are open for
18 the transaction of business.
19 § 2. Section 16 of chapter 508 of the laws of 1993, amending the tax
20 law and the criminal procedure law relating to enhancing the enforcement
21 of the taxes on alcoholic beverages with respect to liquors, as amended
22 by section 103 of part A of chapter 389 of the laws of 1997, is amended
23 to read as follows:
24 § 16. This act shall take effect on the first day of the first month
25 beginning more than 90 days after this act shall become a law; provided,
26 however, that any rules or regulations necessary to implement the
27 provisions of this act may be promulgated and any procedures, forms, or
28 instructions necessary for such implementation may be adopted and issued
29 on or after the date this act shall have become a law [provided, howev-
30 er, that all the provisions contained in this act shall remain in full
31 force and effect until October 31, 2002 at which time such sections of
32 the tax law shall revert to the language of such sections such as it
33 existed on the date immediately preceding the effective date of this
34 act].
35 § 3. This act shall take effect immediately.
36 PART J
37 Section 1. The alcoholic beverage control law is amended by adding a
38 new section 131 to read as follows:
39 § 131. Adjustment of license and permit fees. 1. The payment of an
40 adjusted fee shall be required for every license and permit provided for
41 in this chapter.
42 2. Except as provided in subdivision four of this section, for license
43 or permit periods commencing on or after the effective date of this
44 section, the adjusted fee of a license provided for in subdivision four,
45 nine or ten of section fifty-six of this chapter or in subdivision one
46 of section seventy-nine-a of this chapter shall be the sum of the stated
47 fee plus one-third of the remainder of a subtraction in which the
48 subtrahend is the stated fee and the minuend is the product of the stat-
49 ed fee multiplied by a fraction the numerator of which is the sum of the
50 monthly producer price index (unadjusted) published by the bureau of
51 labor statistics of the United States department of labor for the cate-
52 gory of commodities designated "alcoholic beverages" for the twelve
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1 consecutive months ending with the month of December two thousand one
2 and the denominator of which is the sum of the monthly producer price
3 index (unadjusted) published by the bureau of labor statistics of the
4 United States department of labor for the category of commodities desig-
5 nated "alcoholic beverages" for the twelve consecutive months ending
6 with the month of December nineteen hundred ninety-two.
7 3. Except as provided in subdivision five of this section, for license
8 or permit periods commencing on or after the effective date of this
9 section, the adjusted fee for any license or permit not specified in
10 subdivision two of this section shall be the sum of the stated fee plus
11 one-third of the remainder of a subtraction in which the subtrahend is
12 the stated fee and the minuend is the product of the stated fee multi-
13 plied by a fraction the numerator of which is the sum of the monthly
14 producer price index (unadjusted) published by the bureau of labor
15 statistics of the United States department of labor for the category of
16 commodities designated "alcoholic beverages" for the twelve consecutive
17 months ending with the month of December two thousand one and the denom-
18 inator of which is the sum of the monthly producer price index (unad-
19 justed) published by the bureau of labor statistics of the United States
20 department of labor for the category of commodities designated "alcohol-
21 ic beverages" for the twelve consecutive months ending with the month of
22 December nineteen hundred seventy-six.
23 4. Except as provided in subdivision six of this section, for license
24 or permit periods commencing on or after the first day of April two
25 thousand three the adjusted fee of a license provided in subdivision
26 four, nine or ten of section fifty-six of this chapter or in subdivision
27 one of section seventy-nine-a of this chapter shall be the sum of the
28 stated fee plus two-thirds of the remainder of a subtraction in which
29 the subtrahend is the stated fee and the minuend is the product of the
30 stated fee multiplied by a fraction the numerator of which is the sum of
31 the monthly producer price index (unadjusted) published by the bureau of
32 labor statistics of the United States department of labor for the cate-
33 gory of commodities designated "alcoholic beverages" for the twelve
34 consecutive months ending with the month of December two thousand one
35 and the denominator of which is the sum of the monthly producer price
36 index (unadjusted) published by the bureau of labor statistics of the
37 United States department of labor for the category of commodities desig-
38 nated "alcoholic beverages" for the twelve consecutive months ending
39 with the month of December nineteen hundred ninety-two.
40 5. Except as provided in subdivision seven of this section, for
41 license or permit periods commencing on or after the first day of April
42 two thousand three, the adjusted fee for any license or permit not spec-
43 ified in subdivision four of this section shall be the sum of the stated
44 fee plus two-thirds of the remainder of a subtraction in which the
45 subtrahend is the stated fee and the minuend is the product of the stat-
46 ed fee multiplied by a fraction the numerator of which is the sum of the
47 monthly producer price index (unadjusted) published by the bureau of
48 labor statistics of the United States department of labor for the cate-
49 gory of commodities designated "alcoholic beverages" for the twelve
50 consecutive months ending with the month of December two thousand one
51 and the denominator of which is the sum of the monthly producer price
52 index (unadjusted) published by the bureau of labor statistics of the
53 United States department of labor for the category of commodities desig-
54 nated "alcoholic beverages" for the twelve consecutive months ending
55 with the month of December nineteen hundred seventy-six.
S. 6260 11 A. 9762
1 6. For license or permit periods commencing on or after the first day
2 of April two thousand four, the adjusted fee of a license provided for
3 in subdivision four, nine or ten of section fifty-six of this chapter or
4 in subdivision one of section seventy-nine-a of this chapter shall be
5 the product of the stated fee multiplied by a fraction the numerator of
6 which is the sum of the monthly producer price index (unadjusted)
7 published by the bureau of labor statistics of the United States depart-
8 ment of labor for the category of commodities designated "alcoholic
9 beverages" for the twelve consecutive months ending with the month of
10 December two thousand one and the denominator of which is the sum of the
11 monthly price index (unadjusted) published by the bureau of labor
12 statistics of the United States department of labor for the twelve
13 consecutive months ending with the month of December nineteen hundred
14 ninety-two.
15 7. For license or permit periods commencing on or after the first of
16 April two thousand four, the adjusted fee for any license or permit not
17 specified in subdivision six of this section shall be the product of the
18 stated fee multiplied by a fraction the numerator of which is the sum of
19 the monthly producer price index (unadjusted) published by the bureau of
20 labor statistics of the United States department of labor for the cate-
21 gory of commodities designated "alcoholic beverages" for the twelve
22 consecutive months ending with the month of December two thousand one
23 and the denominator of which is the sum of the monthly price index
24 (unadjusted) published by the bureau of labor statistics of the United
25 States department of labor for the twelve consecutive months ending with
26 the month of December nineteen hundred seventy-six.
27 8. The adjusted fees computed in this section shall be rounded to the
28 nearest dollar.
29 9. Where the chairman of the liquor authority decides that with
30 respect of a certain alcoholic beverage business any of the methods
31 prescribed in this section do not fairly and equitably reflect alcoholic
32 beverage control license and permit fees in the state, the chairman
33 shall prescribe methods of attribution which fairly and equitably
34 reflect alcoholic beverage control license and permit fees in the state.
35 § 2. This act shall take effect on the first day of a month starting
36 not less than 60 days after this act becomes a law.
37 PART K
38 Section 1. Subdivision 4 of section 22 of the public housing law, as
39 added by section 1 of part CC of chapter 63 of the laws of 2000, is
40 amended to read as follows:
41 4. Statewide limitation. The aggregate dollar amount of credit which
42 the commissioner may allocate to eligible low-income buildings under
43 this article shall be [two] four million dollars. The limitation
44 provided by this subdivision applies only to allocation of the aggregate
45 dollar amount of credit by the commissioner, and does not apply to
46 allowance to a taxpayer of the credit with respect to an eligible low-
47 income building for each year of the credit period.
48 § 2. This act shall take effect immediately.
49 PART L
50 Section 1. Paragraphs 1 and 2 of subsection (t) of section 606 of the
51 tax law, as added by section 1 of part DD of chapter 63 of the laws of
52 2000, are amended to read as follows:
S. 6260 12 A. 9762
1 (1) General. A resident taxpayer shall be allowed the option of claim-
2 ing a credit, to be computed as provided in paragraph four of this
3 subsection, against the tax imposed by this article, or an itemized
4 deduction, to be computed as provided in paragraph four of [subdivision]
5 subsection (d) of section six hundred fifteen of this article, for
6 allowable college tuition expenses.
7 (2) Allowable and qualified college tuition expenses. For the purposes
8 of this credit and the itemized deduction provided by paragraph four of
9 [subdivision] subsection (d) of section six hundred fifteen of this
10 article[,]:
11 (A) [the] The term "allowable college tuition expenses" shall mean the
12 amount of qualified college tuition expenses of eligible students paid
13 by the taxpayer during the taxable year, limited to ten thousand
14 dollars[, and] for each such student;
15 (B) [the] The term "eligible student" shall mean the taxpayer, the
16 taxpayer's spouse, and any dependent of the taxpayer with respect to
17 whom the taxpayer is allowed an exemption under section six hundred
18 sixteen of this article for the taxable year;
19 (C) The term "qualified college tuition expenses" shall mean the
20 tuition required for the enrollment or attendance of [the taxpayer, the
21 taxpayer's spouse, or a dependent of the taxpayer with respect to whom
22 the taxpayer is allowed an exemption under section six hundred sixteen
23 of this article,] an eligible student at an institution of higher educa-
24 tion. Provided, however, tuition payments made pursuant to the receipt
25 of any scholarships or financial aid, or tuition required for enrollment
26 or attendance in a course of study leading to the granting of a post
27 baccalaureate or other graduate degree, shall be excluded from the defi-
28 nition of "qualified college tuition expenses".
29 (D) Expenses paid by dependent. If an exemption under section six
30 hundred sixteen of this article with respect to an individual is allowed
31 to another taxpayer for a taxable year beginning in the calendar year in
32 which such individual's taxable year begins,
33 (i) no credit under this subsection or deduction under paragraph four
34 of subsection (d) of section six hundred fifteen of this article shall
35 be allowed to such individual for such individual's taxable year, and
36 (ii) for purposes of such credit or deduction, qualified college
37 tuition expenses paid by such individual during such individual's taxa-
38 ble year shall be treated as paid by such other taxpayer.
39 § 2. Subdivision (d) of section 11-1715 of the administrative code of
40 the city of New York is amended by adding a new paragraph 4 to read as
41 follows:
42 (4) allowable college tuition expenses, as defined in paragraph two of
43 subsection (t) of section six hundred six of the state tax law, multi-
44 plied by the applicable percentage. Such applicable percentage shall be
45 twenty-five percent for taxable years beginning in two thousand one,
46 fifty percent for taxable years beginning in two thousand two, seventy-
47 five percent for taxable years beginning in two thousand three and one
48 hundred percent for taxable years beginning after two thousand three.
49 Provided, however, no deduction shall be allowed under this paragraph to
50 a taxpayer who claims the credit provided under subsection (t) of
51 section six hundred six of the state tax law.
52 § 3. This act shall take effect immediately and shall apply to taxable
53 years beginning on or after January 1, 2001.
54 PART M
S. 6260 13 A. 9762
1 Section 1. Section 211 of the tax law is amended by adding a new
2 subdivision 12 to read as follows:
3 12. (a) Notwithstanding the provisions of subdivision eight of this
4 section, the commissioner and the comptroller shall enter into an agree-
5 ment pursuant to which the commissioner shall, upon request, provide the
6 comptroller with a report, not more frequently than annually, with
7 respect to corporations or other entities which have filed a business
8 corporation franchise tax report under this article for any taxable year
9 within ten calendar years prior to the report to the comptroller made
10 pursuant to this subdivision, providing the following information, to
11 the extent that such information is readily available from the depart-
12 ment's system for identifying taxpayer indicative data:
13 (1) business name and legal name, if different;
14 (2) business address and mailing address;
15 (3) federal employer identification number;
16 (4) date entered into business.
17 (b) Each report to the comptroller made pursuant to this subdivision
18 shall list each corporation or other entity with respect to which such
19 report is made according to the total assets reported for the end of the
20 year on its most recent available business corporation franchise tax
21 report, in descending order. Such reports to the comptroller shall not
22 disclose the actual amount of total assets reported on such business
23 corporation franchise tax reports.
24 (c) The information provided to the comptroller pursuant to this
25 subdivision shall be used only for administration and enforcement of the
26 abandoned property law. The comptroller may redisclose the information
27 provided under this subdivision only to the extent necessary for
28 enforcement or administration of the abandoned property law.
29 (d) The reports to the comptroller required under this subdivision
30 shall be submitted by electronic means or in some other format which is
31 mutually acceptable to the comptroller and the commissioner. The written
32 agreement with the comptroller shall set forth the procedures for
33 providing the information the commissioner is allowed to disclose pursu-
34 ant to this subdivision.
35 (e) Notwithstanding article six of the public officers law or any
36 other provision of law, the reports to be furnished to the comptroller
37 pursuant to this subdivision shall not be open to the public for
38 inspection.
39 § 2. This act shall take effect immediately.
40 PART N
41 Section 1. Clause (B) of subparagraph 9 of paragraph (a) of subdivi-
42 sion 3 of section 210 of the tax law, as added by section 2 of part K of
43 chapter 63 of the laws of 2000, is amended to read as follows:
44 (B) For purposes of this subparagraph, the term "securities" shall
45 have the same meaning as in section 475(c)(2) of the internal revenue
46 code and the term "commodities" shall have the same meaning as in
47 section 475(e)(2) of the internal revenue code. The term "registered
48 securities or commodities broker or dealer" means a broker or dealer
49 registered as such by the securities and exchange commission or the
50 commodities futures trading commission, and shall include an OTC deriva-
51 tives dealer as defined under regulations of the securities and exchange
52 commission at title 17, part 240, section 3b-12 of the code of federal
53 regulations (17 CFR 240.3b-12).
S. 6260 14 A. 9762
1 § 2. This act shall take effect immediately and shall apply to taxable
2 years beginning on or after January 1, 2003.
3 PART O
4 Section 1. Subparagraphs (B) and (C) of paragraph 2 of subdivision (b)
5 of section 9 of the tax law, as added by chapter 170 of the laws of
6 1994, are amended to read as follows:
7 (B) (i) By September first, [nineteen hundred ninety-four] two thou-
8 sand two, the commissioner shall, by certified mail, notify taxpayers
9 newly required to participate in the electronic funds transfer program
10 during the July first, [nineteen hundred ninety-four through June thir-
11 tieth, nineteen hundred ninety-five] two thousand two through June thir-
12 tieth, two thousand three program period. Such notice shall contain
13 language advising the taxpayer of the enrollment procedure and of the
14 consequences of failure to enroll in such program, as well as of the
15 taxpayer's obligation to enroll in the program within forty-five calen-
16 dar days of the mailing of the notice unless such taxpayer challenges
17 such determination of required participation by requesting a hearing
18 within forty-five calendar days of the mailing of such notice. In addi-
19 tion, such notice shall specify that such a taxpayer shall make its
20 first payment of tax by electronic funds transfer by an applicable due
21 date in January, [nineteen hundred ninety-five] two thousand three.
22 [(C)] (ii) By June first, [nineteen hundred ninety-five] two thousand
23 three and by each succeeding June first, the commissioner shall, by
24 certified mail, notify taxpayers newly required to participate in the
25 electronic funds transfer program. Such notice shall contain language
26 advising the taxpayer of the enrollment procedure and of the conse-
27 quences of failure to enroll in such program, as well as of the taxpay-
28 er's right to challenge such determination of required participation
29 provided a hearing is requested within twenty calendar days of the mail-
30 ing of such notice. In addition, such notice shall specify that such a
31 taxpayer shall make its first payment of tax by electronic funds trans-
32 fer by an applicable due date occurring on or after thirty calendar days
33 following receipt by the taxpayer of the notice but no later than sixty
34 calendar days following receipt by the taxpayer of the notice.
35 (iii) If a taxpayer does not enroll within forty-five or twenty calen-
36 dar days (as the case may be) of the mailing of [such] the notice
37 provided for in clause (i) or (ii) of this subparagraph or where a
38 taxpayer's challenge to mandatory participation is not sustained and the
39 taxpayer has not enrolled within ten calendar days of notification ther-
40 eof, the commissioner shall mail another notice, in addition to making
41 other reasonable attempts, to inform the taxpayer of the civil penalty
42 that has been assessed pursuant to subdivision (h) of this section, of
43 the opportunity for abatement of such penalty, and of the future penal-
44 ties that may result from continued failure to enroll.
45 § 2. Subdivision (d) of section 9 of the tax law, as amended by chap-
46 ter 170 of the laws of 1994, is amended to read as follows:
47 (d) Exemptions. A taxpayer shall be exempt from the requirements
48 contained in subdivision (b) of this section if such taxpayer proves to
49 the satisfaction of the commissioner that aggregate tax withheld, pursu-
50 ant to the most recent reconciliation of withholding, is less than [four
51 hundred thousand] one hundred thousand dollars.
52 § 3. Subdivision (h) of section 9 of the tax law, as added by chapter
53 170 of the laws of 1994, is amended to read as follows:
S. 6260 15 A. 9762
1 (h) Civil penalty for failure to enroll. If a taxpayer required to
2 participate in the electronic funds transfer program prescribed by this
3 section fails to enroll in such program in accordance with the terms of
4 subparagraph [(C)] (B) of paragraph two of subdivision (b) of this
5 section, such taxpayer shall pay a penalty equal to five thousand
6 dollars; provided, however, that if such taxpayer enrolls in the program
7 within twenty calendar days after notification of assessment of such
8 penalty is sent by the department by certified mail for program periods
9 beginning on or after July first, [nineteen hundred ninety-five] two
10 thousand two, then such penalty shall be abated. If such taxpayer
11 continues to fail to enroll in the program after such twenty calendar
12 day period, the taxpayer shall pay an additional penalty of five hundred
13 dollars if the failure is for not more than one month with an additional
14 five hundred dollars for each additional month or fraction thereof
15 during which such failure continues. The penalty provided by this
16 section shall be paid upon notice and demand and shall be assessed,
17 collected and paid in the same manner as the withholding taxes referred
18 to in paragraph one of subdivision (b) of this section; and any refer-
19 ence in the provisions of part VI of article twenty-two of this chapter,
20 which apply to the administration of and procedures with respect to the
21 provisions of this section, shall be deemed also to refer to the penalty
22 provided by this section.
23 § 4. This act shall take effect immediately and shall apply to program
24 periods beginning on or after July 1, 2002.
25 PART P
26 Section 1. Subparagraph (A) of paragraph 1 and subparagraph (A) of
27 paragraph 4 of subdivision (b) of section 10 of the tax law, subpara-
28 graph (A) of paragraph 1 as amended by chapter 38 of the laws of 1997
29 and subparagraph (A) of paragraph 4 as amended by chapter 2 of the laws
30 of 1995, are amended to read as follows:
31 (A) more than [one million] five hundred thousand dollars of state and
32 local sales and compensating use taxes imposed by article twenty-eight
33 and pursuant to the authority of article twenty-nine of this chapter
34 where such taxes are administered by the commissioner, or
35 (A) If a taxpayer having liability described in subparagraph (A) of
36 paragraph one of this subdivision can demonstrate to the satisfaction of
37 the commissioner that (i) for the two most recent consecutive quarters,
38 the state and local sales and compensating use taxes properly payable by
39 such taxpayer are less than fifty percent of the state and local sales
40 and compensating use taxes properly payable by such taxpayer for the
41 comparable two quarters of the preceding year and (ii) the sum of such
42 taxpayer's state and local sales and compensating use tax liability for
43 such most recent consecutive quarters together with the product of the
44 state and local sales and compensating use taxes properly payable by
45 such taxpayer for the two consecutive quarters immediately preceding the
46 quarters referred to in clause (i) of this subparagraph multiplied by
47 the percentage arrived at under such clause is less than [five hundred]
48 two hundred fifty thousand dollars in amount, then such taxpayer shall
49 not be required to participate in the program prescribed by this section
50 for the remaining quarters of the sales tax year ending on the next May
51 thirty-first and for the immediately succeeding four sales tax quarters.
52 § 2. This act shall take effect immediately, provided that section one
53 of this act shall apply to program periods beginning on or after Septem-
54 ber 1, 2002; provided, however, that effective immediately, the commis-
S. 6260 16 A. 9762
1 sioner of taxation and finance shall be authorized to make the addition,
2 amendment and/or repeal of any rule or regulation necessary for the
3 implementation of this act on its effective date are authorized and
4 directed to be made and completed on or before such effective date.
5 PART Q
6 Section 1. Subparagraph 3 of paragraph (j) of subdivision 12 of
7 section 210 of the tax law, as amended by chapter 1043 of the laws of
8 1981, is amended to read as follows:
9 (3) has been subject to tax under this article for more than [four]
10 five taxable years (excluding short taxable years) [prior to the taxable
11 year during which the taxpayer first becomes eligible for the investment
12 tax credit].
13 § 2. Paragraph (e) of subdivision 19 of section 210 of the tax law, as
14 amended by chapter 708 of the laws of 1993, is amended to read as
15 follows:
16 (e) The credit and carryovers of such credit allowed under this subdi-
17 vision for any taxable year shall not, in the aggregate, reduce the tax
18 due for such year to less than the higher of the amounts prescribed in
19 paragraphs (c) and (d) of subdivision one of this section. However, if
20 the amount of credit or carryovers of such credit, or both, allowed
21 under this subdivision for any taxable year reduces the tax to such
22 amount, or if any part of the credit or carryovers of such credit may
23 not be deducted from the tax otherwise due by reason of the final
24 sentence of paragraph (d) hereof, any amount of credit or carryovers of
25 such credit thus not deductible in such taxable year may be carried over
26 to the following year or years and may be deducted from the tax for such
27 year or years. In lieu of such carryover, any such taxpayer which quali-
28 fies as a new business under paragraph (j) of subdivision twelve of this
29 section may elect, on its report for its taxable year with respect to
30 which such credit is allowed, to treat fifty percent of the amount of
31 such carryover as an overpayment of tax to be credited or refunded in
32 accordance with the provisions of section ten hundred eighty-six of this
33 chapter. Provided, however, the provisions of subsection (c) of section
34 ten hundred eighty-eight of this chapter notwithstanding, no interest
35 shall be paid thereon. [In applying such paragraph (j), the reference to
36 investment tax credit shall be deemed to be a reference to the credit
37 provided for under this subdivision, and the reference to "four taxable
38 years" shall be deemed to be a reference to the four taxable years prior
39 to each taxable year during which the taxpayer became eligible for such
40 credit.]
41 § 3. Paragraph 10 of subsection (a) of section 606 of the tax law, as
42 added by chapter 103 of the laws of 1981, subparagraph (B) as amended by
43 chapter 1043 of the laws of 1981, is amended to read as follows:
44 (10) For purposes of paragraph five of this subsection, an individual
45 who is either a sole proprietor or a member of a partnership shall qual-
46 ify as an owner of a new business unless:
47 (A) [the individual has previously received a refund of an investment
48 tax credit pursuant to the provisions of paragraph five of this
49 subsection;
50 (B)] the business of which the individual is an owner is substantially
51 similar in operation and in ownership to a business entity taxable, or
52 previously taxable, under section one hundred eighty-three, one hundred
53 eighty-four, one hundred eighty-five or one hundred eighty-six of arti-
54 cle nine; article [nine-a] nine-A, thirty-two or thirty-three of this
S. 6260 17 A. 9762
1 chapter; article twenty-three of this chapter or which would have been
2 subject to tax under such article twenty-three (as such article was in
3 effect on January first, nineteen hundred eighty) or the income (or
4 losses) of which is (or was) includable under article twenty-two of this
5 chapter whereby the intent and purpose of this paragraph and paragraph
6 five of this subsection with respect to refunding of credit to new busi-
7 ness would be evaded; or
8 [(C)] (B) the individual has operated such new business entity in this
9 state for more than [four] five taxable years [prior to the first day of
10 the taxable year during which such individual first becomes eligible for
11 the investment tax credit for which the refund is claimed with respect
12 to such new business entity] (excluding short years of the business).
13 § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
14 of the tax law, as separately amended by section 4 of part I, section 47
15 of part Y, section 4 of part CC, sections 4 and 15 of part GG, section 5
16 of part II and section 3 of part E of chapter 63 of the laws of 2000, is
17 amended to read as follows:
18 (B) shall be treated as the owner of a new business with respect to
19 such share if the corporation qualifies as a new business pursuant to
20 paragraph (j) of subdivision twelve of section two hundred ten of this
21 chapter[, unless the shareholder has previously received a refund by
22 reason of the application of this subparagraph, or this subsection as it
23 was in effect for taxable years beginning before nineteen hundred nine-
24 ty-four].
25 The corporation's
26 With respect to the credit base under
27 following credit section two hundred ten
28 under this section: or section fourteen
29 hundred fifty-six of this
30 chapter is:
31 Investment tax credit Investment credit base
32 under subsection (a) or qualified
33 rehabilitation
34 expenditures under
35 subdivision twelve of
36 section two hundred ten
37 Empire zone Cost or other basis
38 investment tax credit under subdivision
39 under subsection (j) twelve-B
40 of section two hundred
41 ten
42 Empire zone Eligible wages under
43 wage tax credit subdivision nineteen of
44 under subsection (k) section two hundred ten
45 or subsection (e) of
46 section fourteen hundred
47 fifty-six
48 Empire zone Qualified investments
49 capital tax credit and contributions under
50 under subsection (1) subdivision twenty of
51 section two hundred ten
S. 6260 18 A. 9762
1 or subsection (d) of
2 section fourteen hundred
3 fifty-six
4 Agricultural property tax Allowable school
5 credit under subsection (n) district property taxes under
6 subdivision twenty-two of
7 section two hundred ten
8 Credit for employment Qualified first-year wages or
9 of persons with dis- qualified second-year wages
10 abilities under under subdivision
11 subsection (o) twenty-three of section
12 two hundred ten
13 or subsection (f)
14 of section fourteen
15 hundred fifty-six
16 Employment incentive Applicable investment credit
17 credit under subsec- base under subdivision
18 tion (a-1) twelve-D of section two
19 hundred ten
20 Empire zone Applicable investment
21 employment credit under sub-
22 incentive credit under division twelve-C
23 subsection (j-1) of section two hundred ten
24 Alternative fuels credit Cost under subdivision
25 under subsection (p) twenty-four of section two
26 hundred ten
27 Qualified emerging Applicable credit base
28 technology company under subdivision twelve-E
29 employment credit of section two hundred ten
30 under subsection (q)
31 Qualified emerging Qualified investments under
32 technology company subdivision twelve-F of
33 capital tax credit section two hundred ten
34 under subsection (r)
35 Credit for purchase of an Cost of an automated
36 automated external defibrillator external defibrillator under
37 under subsection (s) subdivision twenty-five of
38 section two hundred ten
39 or subsection (j) of section
40 fourteen hundred fifty-six
41 Low-income housing Credit amount under
42 credit under subsection (x) subdivision thirty
43 of section two hundred ten or
44 subsection (1) of section
45 fourteen hundred fifty-six
S. 6260 19 A. 9762
1 Credit for transportation Amount of credit under sub-
2 improvement contributions division thirty-two of section
3 under subsection (z) two hundred ten or subsection
4 (n) of section fourteen
5 hundred fifty-six
6 IMB credit for energy Amount of credit
7 taxes under sub- under subdivision
8 section (t-1) twenty-six-a of
9 section two hundred ten
10 QEZE credit for real property Amount of credit under
11 taxes under subsection (bb) subdivision twenty-seven of
12 section two hundred ten or
13 subsection (o) of section
14 fourteen hundred fifty-six
15 QEZE tax reduction credit Amount of [credit] benefit period
16 under subsection (cc) factor, employment increase factor
17 and zone allocation
18 factor (without regard
19 to pro ration) under
20 subdivision twenty-eight of
21 section two hundred ten or
22 subsection (p) of section
23 fourteen hundred fifty-six
24 and amount of tax factor
25 as determined under
26 subdivision (f) of section sixteen
27 Green building credit Amount of green building credit
28 under subsection (y) under subdivision thirty-one
29 of section two hundred ten
30 or subsection (m) of section
31 fourteen hundred fifty-six
32 Credit for long-term Qualified costs under
33 care insurance premiums subdivision twenty-five-a of
34 under subsection (aa) section two hundred ten
35 or subsection (k) of section
36 fourteen hundred fifty-six
37 § 5. Paragraph 5 of subsection (k) of section 606 of the tax law, as
38 amended by chapter 170 of the laws of 1994, is amended to read as
39 follows:
40 (5) If the amount of the credit and carryovers of such credit allowed
41 under this subsection for any taxable year shall exceed the taxpayer's
42 tax for such year, the excess, as well as any part of the credit or
43 carryovers of such credit, or both, which may not be deducted from the
44 tax otherwise due by reason of the final sentence in paragraph four
45 hereof, may be carried over to the following year or years and may be
46 deducted from the taxpayer's tax for such year or years. In lieu of
47 carrying over any such excess, a taxpayer who qualifies as an owner of a
48 new business for purposes of paragraph ten of subsection (a) of this
49 section may, at his option, receive fifty percent of such excess as a
50 refund. Any refund paid pursuant to this paragraph shall be deemed to be
51 a refund of an overpayment of tax as provided in section six hundred
S. 6260 20 A. 9762
1 eighty-six of this article, provided, however, that no interest shall be
2 paid thereon. [In applying such paragraph ten, the reference to invest-
3 ment tax credit shall be deemed to be a reference to the credit provided
4 for under this subsection and the reference to "four years" shall be
5 deemed to be a reference to the four years prior to each taxable year
6 during which the individual became eligible for such credit.]
7 § 6. Paragraph 5 of subsection (q) of section 606 of the tax law, as
8 added by section 2 of part I of chapter 407 of the laws of 1999, is
9 amended to read as follows:
10 (5) If the amount of the credit and carryovers of such credit allowed
11 under this subsection for any taxable year shall exceed the taxpayer's
12 tax for such year, the excess, as well as any part of the credit or
13 carryovers of such credit, or both, may be carried over to the following
14 year or years and may be deducted from the taxpayer's tax for such year
15 or years. In lieu of carrying over any such excess, a taxpayer who (A)
16 qualifies as an owner of a new business (in the case of such qualified
17 emerging technology company) under paragraph ten of subsection (a) of
18 this section without regard to subparagraph [(C)] (B) of such paragraph,
19 and (B) [the taxpayer] has not operated such new business entity, in the
20 case of a sole proprietorship, or where such new business entity is a
21 partnership or a New York S corporation, such entity has not operated,
22 for more than six taxable years (excluding short taxable years) prior to
23 the taxable year with respect to which the taxpayer first becomes eligi-
24 ble for the credit herein provided for with respect to such company, or
25 for more than eight taxable years if such new business entity's primary
26 business or product requires federal regulatory approval or involves the
27 discovery and sale of substances requiring clinical trials as part of
28 the federal drug administration's required approval process for the use
29 of such substances by humans, may, at his or her option, receive such
30 excess as a refund. Any refund paid pursuant to this paragraph shall be
31 deemed to be a refund of an overpayment of tax as provided in section
32 six hundred eighty-six of this article, provided, however, that no
33 interest shall be paid thereon.
34 § 7. Subparagraph (C) of paragraph 8 of subsection (i) of section 1456
35 of the tax law, as added by section 27 of part A of chapter 56 of the
36 laws of 1998, is amended to read as follows:
37 (C) has been subject to tax under this article for more than [four]
38 five taxable years (excluding short taxable years) [prior to the taxable
39 year during which the taxpayer first becomes eligible for the investment
40 tax credit].
41 § 8. Subparagraph (C) of paragraph 7 of subdivision (q) of section
42 1511 of the tax law, as added by section 1 of part L of chapter 63 of
43 the laws of 2000, is amended to read as follows:
44 (C) has been subject to tax under this article for more than [four]
45 five taxable years (excluding short taxable years) [prior to the taxable
46 year during which the taxpayer first becomes eligible for the investment
47 tax credit].
48 § 9. Subdivision (a) of section 969 of the general municipal law, as
49 amended by chapter 537 of the laws of 1996 and as further amended pursu-
50 ant to section 15 of part GG of chapter 63 of the laws of 2000, is
51 amended to read as follows:
52 (a) Except as provided in this section, any designation of an area as
53 an empire zone shall remain in effect during the period beginning on the
54 date of designation and ending [July] December thirty-first, two thou-
55 sand [four] twenty.
S. 6260 21 A. 9762
1 § 10. Section 14 of the tax law, as added by section 2 of part GG of
2 chapter 63 of the laws of 2000 and subdivision (b) as further amended
3 pursuant to section 15 of part GG of chapter 63 of the laws of 2000, is
4 amended to read as follows:
5 § 14. Empire zones program. (a) Qualified empire zone enterprise. A
6 business enterprise which is certified under article eighteen-B of the
7 general municipal law prior to July first, two thousand five shall be a
8 "qualified empire zone enterprise":
9 (1) for purposes of articles nine-A, twenty-two, thirty-two and thir-
10 ty-three of this chapter, for each of the [fifteen] taxable years [next
11 following the test year (which fifteen year period shall constitute the
12 "benefit period")] within the "business tax benefit period," which peri-
13 od shall consist of (A) in the case of a business enterprise with a test
14 date occurring on or before December thirty-first, two thousand one, the
15 first fifteen taxable years beginning on or after January first, two
16 thousand one, and (B) in the case of a business enterprise with a test
17 date occurring on or after January first, two thousand two, the fifteen
18 taxable years next following the business enterprise's test year, but
19 only with respect to each of such fifteen years for which the employment
20 test is met, and
21 (2) for purposes of articles twenty-eight and twenty-nine of this
22 chapter, [for each day falling within each of the ten taxable years next
23 following the test year, but only with respect to each of such ten years
24 if the taxable year immediately preceding such taxable year meets the
25 employment test] during the "sales and use tax benefit period." Such
26 period shall consist of one hundred twenty months beginning on the later
27 of (A) March first, two thousand one, or (B) the first day of the month
28 next following the date of issuance of a qualified empire zone enter-
29 prise certification by the commissioner under subdivision (h) of this
30 section. Provided however, such period shall not include any month fall-
31 ing within a taxable year immediately preceded by a taxable year with
32 respect to which the business enterprise did not meet the employment
33 test.
34 [(3) for business enterprises with a test date falling within the year
35 two thousand, the term "next following the test year" shall be read as
36 "next following the taxable year following the test year".]
37 (b) Employment test. (1) General. The employment test shall be met
38 with respect to a taxable year if the business enterprise's employment
39 number in [economic development] empire zones [with respect to which
40 such enterprise is certified pursuant to article eighteen-B of the
41 general municipal law] for such taxable year equals or exceeds its
42 employment number in such zones for the base period, and its employment
43 number in the state outside of such zones for such taxable year equals
44 or exceeds its employment number in the state outside of such zones for
45 the base period. If the base period is zero years and the enterprise
46 has an employment number in such zone of greater than zero with respect
47 to a taxable year, then the employment test will be met only if the
48 enterprise qualifies as a new business under subdivision (j) of this
49 section.
50 (2) Change in zone boundaries or newly designated zones. Provided,
51 however, where there has been one or more revisions of the boundaries of
52 an empire zone that resulted in the inclusion of the business enterprise
53 within such zone, the employment test shall be determined with respect
54 to a taxable year as if the boundaries of the revised zone on the last
55 day of the taxable year existed during the base period and test year and
56 as if the enterprise had been located in the revised zone during its
S. 6260 22 A. 9762
1 base period and test year. In addition, where an area has been newly
2 designated as an empire zone, the employment test shall be determined
3 with respect to a taxable year as if such newly designated zone existed
4 during the base period and test year and as if the enterprise had been
5 located in the newly designated zone during its base period and test
6 year.
7 (3) Relocation from a business incubator facility. Where a business
8 enterprise relocates to an empire zone from a business incubator facili-
9 ty operated by a municipality or by a public or private not-for-profit
10 entity which provides space or business support services or both space
11 and business support services to newly established enterprises, the
12 employment test shall be determined with respect to a taxable year as if
13 such business enterprise was located in the empire zone during the base
14 period.
15 (c) Base period. The term "base period" means the five taxable years
16 immediately preceding the test year. If the business enterprise has
17 fewer than five such years, then the term "base period" means such smal-
18 ler set of years.
19 (d) Test year. The term "test year" means the last taxable year of the
20 business enterprise ending on or before the test date. If a business
21 enterprise does not have a taxable year that ends on or before the test
22 date, such enterprise shall be deemed to have a test year which shall be
23 either the last calendar year ending on or before its test date, or if
24 the enterprise has as its taxable year a fiscal year, the last such
25 fiscal year ending on or before its test date (whether or not the enter-
26 prise in fact had a taxable year during that period).
27 (e) Test date. The term "test date" means the later of July first, two
28 thousand or the date prior to July first, two thousand five on which the
29 business enterprise was first certified under article eighteen-B of the
30 general municipal law.
31 (f) Taxable year. The term "taxable year" means the taxable year of
32 the business enterprise under section one hundred eighty-three, one
33 hundred eighty-four, one hundred eighty-five or former section one
34 hundred eighty-six of article [nine-a] nine, or under article nine-A,
35 twenty-two, thirty-two or thirty-three of this chapter. If a business
36 enterprise does not have a taxable year because it is exempt from taxa-
37 tion or otherwise not required to file a return under any of such
38 sections of article nine or under article nine-A, twenty-two, thirty-two
39 or thirty-three, then the term "taxable year" means (i) the business
40 enterprise's federal taxable year, or, (ii) if the enterprise does not
41 have a federal taxable year, the calendar year.
42 (g) Employment number. The term "employment number" shall mean the
43 average number of individuals, excluding general executive officers (in
44 the case of a corporation), employed full-time by the enterprise for at
45 least one-half of the taxable year. Such number shall be computed by
46 determining the number of such individuals employed by the taxpayer on
47 the thirty-first day of March, the thirtieth day of June, the thirtieth
48 day of September and the thirty-first day of December during the appli-
49 cable taxable year, adding together the number of such individuals
50 determined to be so employed on each of such dates and dividing the sum
51 so obtained by the number of such dates occurring within such applicable
52 taxable year. Such number shall not include individuals employed within
53 the immediately preceding sixty months by a related person to the QEZE,
54 as such term "related person" is defined in subparagraph (c) of para-
55 graph three of subsection (b) of section four hundred sixty-five of the
56 internal revenue code.
S. 6260 23 A. 9762
1 (h) Sales and use tax. (1) In addition to the other requirements of
2 this section, in order for the exemptions described in subdivision (z)
3 of section eleven hundred fifteen of this chapter or any like exemptions
4 from taxes imposed pursuant to the authority of article twenty-nine of
5 this chapter to apply with respect to a qualified empire zone enter-
6 prise, such enterprise shall apply to the commissioner of taxation and
7 finance for the issuance of a qualified empire zone enterprise
8 [exemption certificate] certification, in the manner prescribed by such
9 commissioner. If such commissioner grants such [a certificate] certif-
10 ication, [its use] such certification shall be subject to conditions
11 specified by such commissioner. An enterprise to which the commissioner
12 issues such [a certificate] certification may furnish a qualified empire
13 zone enterprise exempt purchase [certification] certificate to a person
14 required to collect sales and compensating use taxes imposed under or
15 pursuant to the authority of article twenty-eight or twenty-nine of this
16 chapter, which [certification] certificate shall be deemed to be an
17 exemption certificate under subdivision (c) of section eleven hundred
18 thirty-two of this chapter. Nothing herein or in any other law shall be
19 construed to prohibit the disclosure, in such manner as the commissioner
20 of taxation and finance deems appropriate, of the names and other appro-
21 priate identifying information of those persons holding qualified empire
22 zone enterprise [certificates] certifications pursuant to this subdivi-
23 sion, those persons whose qualified empire zone enterprise [certif-
24 icates] certifications have been revoked or those persons whose quali-
25 fied empire zone enterprise [certificates] certifications have expired.
26 (2) During the period that a business enterprise is eligible to apply,
27 or is qualified, for exemptions from sales and compensating use taxes
28 under this section, the commissioner of economic development shall, at
29 the time such commissioner certifies or decertifies a business enter-
30 prise under article eighteen-B of the general municipal law, notify the
31 commissioner of taxation and finance of such certification or decertif-
32 ication, which notification shall include the full legal name, address
33 and federal employer identification number of such enterprise. The
34 commissioner of economic development shall, at the time of any such
35 certification, also advise such enterprise of the requirements in para-
36 graph one of this subdivision.
37 (i) Cessation of status. A business enterprise shall cease to be a
38 qualified empire zone enterprise:
39 (1) for purposes of articles nine-A, twenty-two, thirty-two and thir-
40 ty-three of this chapter, on the first day of the taxable year during
41 which revocation of its certification under article eighteen-B of the
42 general municipal law occurs, and
43 (2) for purposes of articles twenty-eight and twenty-nine of this
44 chapter, on the day such revocation occurs.
45 (j) New business. (1) A new business shall include any corporation,
46 except a corporation which is substantially similar in operation and in
47 ownership to a business entity (or entities) taxable, or previously
48 taxable, under section one hundred eighty-three, one hundred eighty-
49 four, one hundred eighty-five or one hundred eighty-six of article nine;
50 article nine-A, article thirty-two or thirty-three of this chapter;
51 article twenty-three of this chapter or which would have been subject to
52 tax under such article twenty-three (as such article was in effect on
53 January first, nineteen hundred eighty) or the income (or losses) of
54 which is (or was) includable under article twenty-two of this chapter.
55 (2) For purposes of article twenty-two of this chapter, an individual
56 who is either a sole proprietor or a member of a partnership shall qual-
S. 6260 24 A. 9762
1 ify as an owner of a new business unless the business of which the indi-
2 vidual is an owner is substantially similar in operation and in owner-
3 ship to a business entity taxable, or previously taxable, under section
4 one hundred eighty-three, one hundred eighty-four, one hundred eighty-
5 five or one hundred eighty-six of article nine; article nine-A, thirty-
6 two or thirty-three of this chapter; article twenty-three of this chap-
7 ter or which would have been subject to tax under such article
8 twenty-three (as such article was in effect on January first, nineteen
9 hundred eighty) or the income (or losses) of which is (or was) includa-
10 ble under article twenty-two.
11 (3) For purposes of article twenty-two of this chapter, a shareholder
12 of a New York S corporation shall be treated as the owner of a new busi-
13 ness with respect to such share if the corporation qualifies as a new
14 business pursuant to paragraph one of this subdivision.
15 § 11. Subdivision (b) of section 15 of the tax law, as added by
16 section 2 of part GG of chapter 63 of the laws of 2000, is amended to
17 read as follows:
18 (b) Amount of credit. The amount of the credit shall be the product
19 (or pro rata share of the product, in the case of a member of a partner-
20 ship) of (i) the benefit period factor, (ii) the employment increase
21 factor and (iii) the eligible real property taxes paid or incurred by
22 the QEZE during the taxable year. However, the amount of the credit may
23 not exceed the credit limitation set forth in subdivision (f) of this
24 section.
25 § 12. Subdivisions (d) and (e) of section 15 of the tax law, as added
26 by section 2 of part GG of chapter 63 of the laws of 2000 and paragraph
27 1 of subdivision (d) and subdivision (e) as further amended pursuant to
28 section 15 of part GG of chapter 63 of the laws of 2000, are amended to
29 read as follows:
30 (d) Employment increase factor. The employment increase factor is the
31 amount, not to exceed 1.0, which is the greater of:
32 (1) the excess of the [taxpayer's] QEZE's employment number in the
33 empire zones with respect to which the [taxpayer] QEZE is certified
34 pursuant to article eighteen-B of the general municipal law for the
35 taxable year, over the [taxpayer's] QEZE's test year employment number
36 in such zones, divided by such test year employment number in such
37 zones; or
38 (2) the excess of the [taxpayer's] QEZE's employment number in such
39 zones for the taxable year over the [taxpayer's] QEZE's test year
40 employment number in such zones, divided by 100.
41 (3) For purposes of paragraph one of this subdivision, where there is
42 an excess as described in such paragraph, and where the test year
43 employment number is zero, then the employment increase factor shall be
44 1.0.
45 (e) Eligible real property taxes. The term "eligible real property
46 taxes" means taxes imposed on real property which is owned by the
47 [taxpayer] QEZE and located in an empire [zones] zone with respect to
48 which the [taxpayer] QEZE is certified pursuant to article eighteen-B of
49 the general municipal law [for the taxable year], provided such taxes
50 become a lien on the real property during a taxable year in which the
51 owner of the real property is both certified pursuant to article eigh-
52 teen-B of the general municipal law and a qualified empire zone enter-
53 prise.
54 § 13. Subdivision (f) of section 15 of the tax law is relettered
55 subdivision (h) and two new subdivisions (f) and (g) are added to read
56 as follows:
S. 6260 25 A. 9762
1 (f) The credit limitation shall be the greater of the employment
2 increase limitation or the capital investment limitation.
3 (1) The employment increase limitation shall be the product of (A) ten
4 thousand dollars and (B) the excess of the QEZE's employment number in
5 the empire zones with respect to which the QEZE is certified pursuant to
6 article eighteen-B of the general municipal law for the taxable year,
7 over the QEZE's test year employment number in such zones.
8 (2) The capital investment limitation shall be the product of (A) ten
9 percent of the greater of (i) the cost or other basis for federal income
10 tax purposes, determined on the later of January first, two thousand one
11 or the effective date of the QEZE's certification pursuant to article
12 eighteen-B of the general municipal law, of real property, including
13 buildings and structural components of buildings, owned by the QEZE and
14 located in empire zones with respect to which the QEZE is certified
15 pursuant to such article eighteen-B of the general municipal law, or
16 (ii) the cost or other basis for federal income tax purposes of such
17 real property described in clause (i) of this subparagraph on the last
18 day of the taxable year, and (B) the percentage of such real property
19 described in clause (i) of subparagraph (A) of this paragraph which is
20 physically occupied and used by the QEZE or by a related person to the
21 QEZE, as the term "related person" is defined in subparagraph (c) of
22 paragraph three of subsection (b) of section four hundred sixty-five of
23 the internal revenue code.
24 (g) Credit recapture. Where a QEZE's eligible real property taxes
25 which were the basis for the allowance of the credit provided for under
26 this section are subsequently reduced as a result of a final order in
27 any proceeding under article seven of the real property tax law or other
28 provision of law, the taxpayer shall add back, in the taxable year in
29 which such final order is issued, the excess of (1) the amount of credit
30 originally allowed for a taxable year over (2) the amount of credit
31 determined based upon the reduced eligible real property taxes. If such
32 final order reduces real property taxes for more than one year, the
33 taxpayer must determine how much of such reduction is attributable to
34 each year covered by such final order and calculate the amount of credit
35 which is required by this subsection to be recaptured for each year
36 based on such reduction.
37 § 14. Subdivisions (b), (e) and (f) of section 16 of the tax law, as
38 added by section 2 of part GG of chapter 63 of the laws of 2000 and
39 subdivision (e) as further amended pursuant to section 15 of part GG of
40 chapter 63 of the laws of 2000, are amended to read as follows:
41 (b) Amount of credit. The amount of the credit shall be the product
42 [(or pro rata share of the product, in the case of a member of a part-
43 nership)] of (i) the benefit period factor, (ii) the employment increase
44 factor, (iii) the zone allocation factor and (iv) the tax factor.
45 (e) Zone allocation factor. The zone allocation factor shall be the
46 percentage representing the [taxpayer's] QEZE's economic presence in
47 empire zones with respect to which the [taxpayer] QEZE is certified
48 under article eighteen-B of the general municipal law. This percentage
49 shall be computed [pursuant to the method prescribed in subdivision two
50 of section two hundred nine-B of this chapter (without regard to para-
51 graph (b) of such subdivision), except that references therein to the
52 metropolitan commuter transportation district shall be deemed to be
53 references to the areas of this state constituting such empire zones.]
54 by:
55 (1) ascertaining the percentage which the average value of the QEZE's
56 real and tangible personal property, whether owned or rented to it, in
S. 6260 26 A. 9762
1 empire zones with respect to which the QEZE is certified under article
2 eighteen-B of the general municipal law during the period covered by the
3 taxpayer's report or return bears to the average value of the QEZE's
4 real and tangible personal property, whether owned or rented to it,
5 within the state during such period; provided that the term "value of
6 the QEZE's real and tangible personal property" shall have the same
7 meaning as such term has in subparagraph one of paragraph (a) of subdi-
8 vision three of section two hundred ten of this chapter; and
9 (2) ascertaining the percentage of the total wages, salaries and other
10 personal service compensation, similarly computed, during such period of
11 employees, except general executive officers, of the QEZE in empire
12 zones with respect to which the QEZE is certified under article eigh-
13 teen-B of the general municipal law, to the total wages, salaries and
14 other personal service compensation, similarly computed, during such
15 period, of all the QEZE's employees within the state, except general
16 executive officers; and
17 (3) adding together the percentages so determined and dividing the
18 result by the number of percentages.
19 For purposes of article twenty-two of this chapter, references [in
20 section two hundred nine-B of this chapter] in this subdivision to prop-
21 erty, wages, salaries and other personal service compensation shall be
22 deemed to be references to such items connected with the conduct of a
23 business.
24 (f) Tax factor. (1) General. The tax factor shall be, in the case of
25 article nine-A of this chapter, the larger of the amounts of tax deter-
26 mined for the taxable year under paragraphs (a) and (c) of subdivision
27 one of section two hundred ten of such article. The tax factor shall be,
28 in the case of article twenty-two of this chapter, the tax determined
29 for the taxable year under subsections (a) through (d) of section six
30 hundred one of such article. The tax factor shall be, in the case of
31 article thirty-two of this chapter, the larger of the amounts of tax
32 determined for the taxable year under subsection (a) and paragraph two
33 of subsection (b) of section fourteen hundred fifty-five of such arti-
34 cle. The tax factor shall be, in the case of article thirty-three of
35 this chapter, the larger of the amounts of tax determined for the taxa-
36 ble year under paragraphs one and three of subdivision (a) of section
37 fifteen hundred two of such article.
38 (2) Sole proprietors, partners and S corporation shareholders. (A)
39 Where the taxpayer is a sole proprietor of a qualified empire zone
40 enterprise, the taxpayer's tax factor shall be that portion of the
41 amount determined in paragraph one of this subdivision which is attrib-
42 utable to the income of the qualified empire zone enterprise. Such
43 attribution shall be made in accordance with the ratio of the taxpayer's
44 income from the qualified empire zone enterprise allocated within the
45 state, entering into New York adjusted gross income, to the taxpayer's
46 New York adjusted gross income, or in accordance with such other methods
47 as the commissioner may prescribe as providing an apportionment which
48 reasonably reflects the portion of the taxpayer's tax attributable to
49 the income of the qualified empire zone enterprise. In no event may the
50 ratio so determined exceed 1.0.
51 (B)(i) Where the taxpayer is a member of a partnership which is a
52 qualified empire zone enterprise, the taxpayer's tax factor shall be
53 that portion of the amount determined in paragraph one of this subdivi-
54 sion which is attributable to the income of the partnership. Such attri-
55 bution shall be made in accordance with the ratio of the partner's
56 income from the partnership allocated within the state to the partner's
S. 6260 27 A. 9762
1 entire income, or in accordance with such other methods as the commis-
2 sioner may prescribe as providing an apportionment which reasonably
3 reflects the portion of the partner's tax attributable to the income of
4 the partnership. In no event may the ratio so determined exceed 1.0.
5 (ii) For purposes of article nine-A, thirty-two or thirty-three of
6 this chapter, the term "partner's income from the partnership" means
7 partnership items of income, gain, loss and deduction, and New York
8 modifications thereto, entering into entire net income, minimum taxable
9 income, alternative entire net income or entire net income plus compen-
10 sation and the term "partner's entire income" means entire net income,
11 minimum taxable income, alternative entire net income or entire net
12 income plus compensation, allocated within the state. For purposes of
13 article twenty-two of this chapter, the term "partner's income from the
14 partnership" means partnership items of income, gain, loss and
15 deduction, and New York modifications thereto, entering into New York
16 adjusted gross income, and the term "partner's entire income" means New
17 York adjusted gross income.
18 (C) Where the taxpayer is a shareholder of a New York S corporation
19 which is a qualified empire zone enterprise, the shareholder's tax
20 factor shall be that portion of the amount determined in paragraph one
21 of this subdivision which is attributable to the income of the S corpo-
22 ration. Such attribution shall be made in accordance with the ratio of
23 the shareholder's income from the S corporation allocated within the
24 state, entering into New York adjusted gross income, to the sharehold-
25 er's New York adjusted gross income, or in accordance with such other
26 methods as the commissioner may prescribe as providing an apportionment
27 which reasonably reflects the portion of the shareholder's tax attribut-
28 able to the income of the qualified empire zone enterprise. In no event
29 may the ratio so determined exceed 1.0.
30 (3) Combined returns or reports. (A) Where the taxpayer is a qualified
31 empire zone enterprise and is required or permitted to make a return or
32 report on a combined basis under article nine-A, thirty-two or thirty-
33 three of this chapter, the taxpayer's tax factor shall be the amount
34 determined in paragraph one of this subdivision which is attributable to
35 the income of the qualified empire zone enterprise. Such attribution
36 shall be made in accordance with the ratio of the qualified empire zone
37 enterprise's income allocated within the state to the combined group's
38 income, or in accordance with such other methods as the commissioner may
39 prescribe as providing an apportionment which reasonably reflects the
40 portion of the combined group's tax attributable to the income of the
41 qualified empire zone enterprise. In no event may the ratio so deter-
42 mined exceed 1.0.
43 (B) The term "income of the qualified empire zone enterprise" means
44 entire net income, minimum taxable income, alternative entire net income
45 or entire net income plus compensation calculated as if the taxpayer was
46 filing separately and the term "combined group's income" means entire
47 net income, minimum taxable income, alternative entire net income or
48 entire net income plus compensation as shown on the combined return or
49 report, allocated within the state.
50 (4) If the amount determined in paragraph one of this subdivision is
51 less than zero, a taxpayer shall not be allowed a credit under this
52 section.
53 § 15. Paragraph (d) of subdivision 19 of section 210 of the tax law is
54 amended by adding a new subparagraph 3 to read as follows:
55 (3) For purposes of calculating the amount of the credit, individuals
56 employed within an empire zone within the immediately preceding sixty
S. 6260 28 A. 9762
1 months by a related person, as such term is defined in subparagraph (c)
2 of paragraph three of subsection (b) of section four hundred sixty-five
3 of the internal revenue code, shall not be included in the average
4 number of individuals described in subparagraph one or subparagraph two
5 of this paragraph, unless such related person was never allowed a credit
6 under this subdivision with respect to such employees.
7 § 16. Paragraph 4 of subsection (k) of section 606 of the tax law is
8 amended by adding a new subparagraph (iii) to read as follows:
9 (iii) For purposes of calculating the amount of the credit, individ-
10 uals employed within an empire zone within the immediately preceding
11 sixty months by a related person, as such term is defined in subpara-
12 graph (c) of paragraph three of subsection (b) of section four hundred
13 sixty-five of the internal revenue code, shall not be included in the
14 average number of individuals described in subparagraph (i) or subpara-
15 graph (ii) of this paragraph, unless such related person was never
16 allowed a credit under this subsection with respect to such employees.
17 § 17. Paragraph 1 of subdivision (z) of section 1115 of the tax law,
18 as added by section 9 of part GG of chapter 63 of the laws of 2000, and
19 as further amended pursuant to section 15 of part GG of chapter 63 of
20 the laws of 2000, is amended to read as follows:
21 (1) Receipts from the retail sale of tangible personal property
22 described in subdivision (a) of section eleven hundred five of this
23 article, receipts from every sale of services described in subdivisions
24 (b) and (c) of such section eleven hundred five and consideration given
25 or contracted to be given for, or for the use of, such tangible personal
26 property or services shall be exempt from the taxes imposed by this
27 article where such tangible personal property or services are sold to a
28 qualified empire zone enterprise, provided that (i) such property or
29 property upon which such a service has been performed or such service
30 (other than a service described in subdivision (b) of section eleven
31 hundred five) is directly and predominantly, or such a service described
32 in clause (A) or (D) of paragraph one of such subdivision (b) of section
33 eleven hundred five is directly and exclusively, used or consumed by
34 such enterprise in an area designated as an empire zone pursuant to
35 article eighteen-B of the general municipal law with respect to which
36 such enterprise is certified pursuant to such article eighteen-B, or
37 (ii) such a service described in clause (B) or (C) of paragraph one of
38 such subdivision (b) of section eleven hundred five is delivered and
39 billed to such enterprise at an address in such empire zone; provided,
40 further, that, in order for a motor vehicle, as defined in subdivision
41 (c) of section eleven hundred seventeen of this article, or tangible
42 personal property related to such a motor vehicle to be found to be used
43 predominantly in such a zone, at least fifty percent of [its] such motor
44 vehicle's use shall be exclusively within such zone or at least fifty
45 percent of [its] such motor vehicle's use shall be in activities origi-
46 nating or terminating in such zone, or both; and either or both such
47 usages shall be computed either on the basis of mileage or hours of use,
48 at the discretion of such enterprise. For purposes of this subdivision,
49 tangible personal property related to such a motor vehicle shall include
50 a battery, diesel motor fuel, an engine, engine components, motor fuel,
51 a muffler, tires and similar tangible personal property used in or on
52 such a motor vehicle.
53 § 18. This act shall take effect immediately; provided that:
54 a. Section four shall apply to taxable years beginning on and after
55 January 1, 2002 and sections five through nine, twelve and thirteen,
56 other than the addition of subdivision (f) of section 15 of the tax law
S. 6260 29 A. 9762
1 by such section thirteen, shall apply to taxable years beginning on and
2 after January 1, 2001.
3 b. The IMB credit for energy taxes under subsection (t-1) of section
4 606 of the tax law referenced in section four of this act shall expire
5 on the same date as provided in subdivision (a) of section 49 of part Y
6 of chapter 63 of the laws of 2000.
7 c. Except as otherwise provided in this subdivision, section ten of
8 this act shall apply to taxable years beginning on and after January 1,
9 2001. Provided, however, the amendments made by section ten of this act
10 which define the term "new business" in subdivision (j) of section 14 of
11 the tax law, as added by section ten of this act, and reference to such
12 definition shall take effect July 1, 2002, but shall not apply to any
13 taxpayer which was a qualified empire zone enterprise prior to July 1,
14 2002 or to any taxpayer which has received a written letter of commit-
15 ment regarding empire zone benefits from the department of economic
16 development prior to July 1, 2002. Provided, further, however, the
17 amendments made by such section ten to the definition of the term
18 "employment number" in subdivision (g) of section 14 of the tax law, as
19 amended by such section ten, shall apply to taxable years beginning on
20 or after January 1, 2002.
21 d. Section eleven of this act, subdivision (f) of section 15 of the
22 tax law, as added by section thirteen of this act, and sections fifteen
23 and sixteen of this act shall apply to taxable years beginning on or
24 after January 1, 2002.
25 e. Section seventeen of this act shall be deemed to have been in full
26 force and effect on and after March 1, 2001 and shall apply to sales
27 made and uses occurring on and after March 1, 2001.
28 PART R
29 Section 1. The tax law is amended by adding a new section 187-f to
30 read as follows:
31 § 187-f. Order of credits. Credits allowable under this article which
32 cannot be carried over and which are not refundable shall be deducted
33 first. Credits allowable under this article which can be carried over,
34 and carryovers of such credits, shall be deducted next, and among such
35 credits, those whose carryover is of limited duration shall be deducted
36 before those whose carryover is of unlimited duration. Credits allowable
37 under this article which are refundable shall be deducted last.
38 § 2. Subdivision 26 of section 210 of the tax law, as amended by chap-
39 ter 686 of the laws of 1986 and as renumbered by section 1 of part J of
40 chapter 407 of the laws of 1999, is amended to read as follows:
41 26. [Credits allowable under this section which can be carried over,
42 and carryovers of such credits, shall be deducted after credits allow-
43 able under this section which cannot be carried over. The credit allow-
44 able under subdivision nineteen of this section, and carryovers of such
45 credit, shall be deducted prior to the other credits which can be
46 carried over and prior to carryovers of such credits.] Order of credits.
47 Credits allowable under this article which cannot be carried over and
48 which are not refundable shall be deducted first. The credit allowable
49 under subdivision nineteen of this section shall be deducted immediately
50 after the deduction of all credits allowable under this article which
51 cannot be carried over and which are not refundable, whether or not a
52 portion of such credit is refundable. Credits allowable under this arti-
53 cle which can be carried over, and carryovers of such credits, shall be
54 deducted next after the deduction of the credit allowable under subdivi-
S. 6260 30 A. 9762
1 sion nineteen of this section, and among such credits, those whose
2 carryover is of limited duration shall be deducted before those whose
3 carryover is of unlimited duration. Credits allowable under this article
4 which are refundable (other than the credit allowable under subdivision
5 nineteen of this section) shall be deducted last.
6 § 3. Subsection (g) of section 1456 of the tax law, as amended by
7 section 8 of part E of chapter 63 of the laws of 2000, is amended to
8 read as follows:
9 (g) [Credits allowable under this section which can be carried over,
10 and carryovers of such credits, shall be deducted after credits allow-
11 able under this section which cannot be carried over. The credit allowed
12 pursuant to subsection (a) of this section shall be deducted after the
13 credit allowed pursuant to subsection (d) of this section, which shall
14 be deducted after the credit allowed pursuant to subsection (b) of this
15 section. The credit and carryovers of the credit allowed pursuant to
16 subsection (c) of this section shall be deducted after the credits and
17 carryovers of the credits allowed pursuant to subsections (e), (f) and
18 (k) of this section.] Order of credits. Credits allowable under this
19 article which cannot be carried over and which are not refundable shall
20 be deducted first. Credits allowable under this article which can be
21 carried over, and carryovers of such credits, shall be deducted next,
22 and among such credits, those whose carryover is of limited duration
23 shall be deducted before those whose carryover is of unlimited duration;
24 provided, however, that the credit allowable under subsection (e) of
25 this section shall be deducted prior to all other credits described in
26 this sentence. Credits allowable under this article which are refundable
27 shall be deducted last.
28 § 4. Subdivision (m) of section 1511 of the tax law, as amended by
29 chapter 639 of the laws of 1996 and as relettered by section 5 of part J
30 of chapter 407 of the laws of 1999, is amended to read as follows:
31 (m) [The] Order of credits. Notwithstanding the succeeding sentences
32 of this subdivision, the credits provided for in subdivisions (g) and
33 (h) of this section shall be deducted before any other credits allowable
34 under this article, and the credit provided for in such subdivision (g)
35 shall be deducted after the credit provided for in such subdivision (h).
36 [The remaining credits allowable under this section which can be carried
37 over, and carryovers of such credits, shall be deducted after the
38 remaining credits allowable under this section which cannot be carried
39 over. The credits allowed pursuant to subdivisions (a), (c) and (i) of
40 this section shall be deducted after the credit allowed pursuant to
41 subdivision (d) of this section.] After application of the first
42 sentence of this subdivision, the credits allowable under this article
43 which cannot be carried over and which are not refundable shall be
44 deducted first. Credits allowable under this article which can be
45 carried over, and carryovers of such credits, shall be deducted next,
46 and among such credits, those whose carryover is of limited duration
47 shall be deducted before those whose carryover is of unlimited duration.
48 Credits allowable under this article which are refundable shall be
49 deducted last. Credits under subdivisions (g) and (h) of this section
50 may not be deducted from the limitation on tax computed pursuant to
51 section fifteen hundred five of this article.
52 § 5. Subdivision (t) of section 1511 of the tax law, as amended by
53 chapter 639 of the laws of 1996 and as relettered by section 9 of part E
54 of chapter 63 of the laws of 2000, is amended to read as follows:
55 (t) [The] Order of credits. Notwithstanding the succeeding sentences
56 of this subdivision, the credits provided for in subdivisions (g) and
S. 6260 31 A. 9762
1 (h) of this section shall be deducted before any other credits allowable
2 under this article, and the credit provided for in such subdivision (g)
3 shall be deducted after the credit provided for in such subdivision (h).
4 [The remaining credits allowable under this section which can be carried
5 over, and carryovers of such credits, shall be deducted after the
6 remaining credits allowable under this section which cannot be carried
7 over. The credits allowed pursuant to subdivisions (a), (c) and (i) of
8 this section shall be deducted after the credit allowed pursuant to
9 subdivision (d) of this section.] After application of the first
10 sentence of this subdivision, the credits allowable under this article
11 which cannot be carried over and which are not refundable shall be
12 deducted first. Credits allowable under this article which can be
13 carried over, and carryovers of such credits, shall be deducted next,
14 and among such credits, those whose carryover is of limited duration
15 shall be deducted before those whose carryover is of unlimited duration.
16 Credits allowable under this article which are refundable shall be
17 deducted last. Credits under subdivisions (g) and (h) of this section
18 may not be deducted from the limitation on tax computed pursuant to
19 section fifteen hundred five of this article.
20 § 6. This act shall take effect immediately; provided, that the amend-
21 ments made by sections one, two, three and four of this act shall apply
22 to taxable years beginning on or after January 1, 2000; and the amend-
23 ments made by section five of this act shall take effect January 1, 2002
24 and shall apply to taxable years beginning on or after January 1, 2002.
25 PART S
26 Section 1. The opening paragraph of subparagraph (B) of paragraph 2 of
27 subdivision (b) of section 1402 of the tax law, as amended by section 1
28 of part G of chapter 407 of the laws of 1999, is amended to read as
29 follows:
30 For purposes of this subdivision, the phrase "real estate investment
31 trust transfer" shall mean any conveyance of real property or an inter-
32 est therein to a REIT, or to a partnership or corporation in which a
33 REIT owns a controlling interest immediately following the conveyance,
34 which conveyance (I) occurs in connection with the initial formation of
35 the REIT, provided that the conditions set forth in clauses (i) and (ii)
36 of this subparagraph are satisfied, or (II) in the case of any real
37 estate investment trust transfer occurring on or after July thirteenth,
38 nineteen hundred ninety-six and before September first, two thousand
39 [two] five, is described in the last sentence of this subparagraph.
40 § 2. Subparagraph 2 of paragraph (xi) of subdivision (b) of section
41 1201 of the tax law, as amended by section 2 of part G of chapter 407 of
42 the laws of 1999, is amended to read as follows:
43 (2) any issuance or transfer of an interest in a REIT, or in a part-
44 nership or corporation in which a REIT owns a controlling interest imme-
45 diately following the issuance or transfer, in connection with a trans-
46 action described in subparagraph one. Notwithstanding the foregoing, a
47 transaction described in the preceding sentence shall not constitute a
48 real estate investment trust transfer unless (A) it occurs in connection
49 with the initial formation of the REIT and the conditions described in
50 subparagraphs three and four of this paragraph are satisfied, or (B) in
51 the case of any real estate investment trust transfer occurring on or
52 after July thirteenth, nineteen hundred ninety-six and before September
53 first, two thousand [two] five, the condition described in subparagraph
54 five of this paragraph is satisfied.
S. 6260 32 A. 9762
1 § 3. Subparagraph (B) of paragraph 2 of subdivision e of section
2 11-2102 of the administrative code of the city of New York, as amended
3 by section 3 of part G of chapter 407 of the laws of 1999, is amended to
4 read as follows:
5 (B) any issuance or transfer of an interest in a REIT, or in a part-
6 nership or corporation in which a REIT owns a controlling interest imme-
7 diately following the issuance or transfer in connection with a trans-
8 action described in subparagraph (A). Notwithstanding the foregoing, a
9 transaction described in the preceding sentence shall not constitute a
10 real estate investment trust transfer unless (i) it occurs in connection
11 with the initial formation of the REIT and the conditions described in
12 subparagraphs (C) and (D) of this paragraph are satisfied, or (ii) in
13 the case of any real estate investment trust transfer occurring on or
14 after July thirteenth, nineteen hundred ninety-six and before September
15 first, two thousand [two] five, the condition described in subparagraph
16 (E) of this paragraph is satisfied.
17 § 4. This act shall take effect immediately.
18 § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
19 sion, section or part of this act shall be adjudged by any court of
20 competent jurisdiction to be invalid, such judgment shall not affect,
21 impair, or invalidate the remainder thereof, but shall be confined in
22 its operation to the clause, sentence, paragraph, subdivision, section
23 or part thereof directly involved in the controversy in which such judg-
24 ment shall have been rendered. It is hereby declared to be the intent of
25 the legislature that this act would have been enacted even if such
26 invalid provisions had not been included herein.
27 § 3. This act shall take effect immediately provided, however, that
28 the applicable effective date of Parts A through S of this act shall be
29 as specifically set forth in the last section of such Parts.
Memorandum in Support