N.Y. Tax Law § 16 — QEZE tax reduction credit

§ 16. QEZE tax reduction credit. (a) Allowance of credit. A taxpayer\nwhich is a qualified empire zone enterprise (QEZE), or which is a sole\nproprietor of a QEZE or a member of a partnership which is a QEZE, and\nwhich is subject to tax under article nine-A, twenty-two or thirty-three\nof this chapter, shall be allowed a credit against such tax, pursuant to\nthe provisions referenced in subdivision (g) of this section, to be\ncomputed as hereinafter provided.\n (b) Amount of credit. The amount of the credit shall be the product of\n(i) the benefit period factor, (ii) the employment increase factor,\n(iii) the zone allocation factor and (iv) the tax factor.\n (c) Benefit period factor. The benefit period factor for the taxable\nyear shall be as prescribed in subdivision (c) of section fifteen of\nthis article.\n (d) Employment increase factor. The employment increase factor for the\ntaxable year shall be as prescribed in subdivision (d) of section\nfifteen of this article.\n (e) Zone allocation factor. The zone allocation factor shall be the\npercentage representing the QEZE's economic presence in empire zones\nwith respect to which the QEZE is certified under article eighteen-B of\nthe general municipal law. This percentage shall be computed by:\n (1) ascertaining the percentage which the average value of the QEZE's\nreal and tangible personal property, whether owned or rented to it, in\nempire zones with respect to which the QEZE is certified under article\neighteen-B of the general municipal law during the period covered by the\ntaxpayer's report or return bears to the average value of the QEZE's\nreal and tangible personal property, whether owned or rented to it,\nwithin the state during such period; provided that the term "value of\nthe QEZE's real and tangible personal property" shall have the same\nmeaning as such term has in subparagraph one of paragraph (a) of\nsubdivision three of section two hundred ten of this chapter; and\n (2) ascertaining the percentage of the total wages, salaries and other\npersonal service compensation, similarly computed, during such period of\nemployees, except general executive officers, of the QEZE in empire\nzones with respect to which the QEZE is certified under article\neighteen-B of the general municipal law, to the total wages, salaries\nand other personal service compensation, similarly computed, during such\nperiod, of all the QEZE's employees within the state, except general\nexecutive officers; and\n (3) adding together the percentages so determined and dividing the\nresult by the number of percentages.\n For purposes of article twenty-two of this chapter, references in this\nsubdivision to property, wages, salaries and other personal service\ncompensation shall be deemed to be references to such items connected\nwith the conduct of a business.\n (f) Tax factor. (1) General. The tax factor shall be, in the case of\narticle nine-A of this chapter, the amount of tax determined for the\ntaxable year under paragraph (a) of subdivision one of section two\nhundred ten of such article. The tax factor shall be, in the case of\narticle twenty-two of this chapter, the tax determined for the taxable\nyear under subsections (a) through (d) of section six hundred one of\nsuch article. The tax factor shall be, in the case of article\nthirty-three of this chapter, the larger of the amounts of tax\ndetermined for the taxable year under paragraphs one and three of\nsubdivision (a) of section fifteen hundred two of such article.\n (2) Sole proprietors, partners and S corporation shareholders. (A)\nWhere the taxpayer is a sole proprietor of a qualified empire zone\nenterprise, the taxpayer's tax factor shall be that portion of the\namount determined in paragraph one of this subdivision which is\nattributable to the income of the qualified empire zone enterprise. Such\nattribution shall be made in accordance with the ratio of the taxpayer's\nincome from the qualified empire zone enterprise allocated within the\nstate, entering into New York adjusted gross income, to the taxpayer's\nNew York adjusted gross income, or in accordance with such other methods\nas the commissioner may prescribe as providing an apportionment which\nreasonably reflects the portion of the taxpayer's tax attributable to\nthe income of the qualified empire zone enterprise. In no event may the\nratio so determined exceed 1.0.\n (B)(i) Where the taxpayer is a member of a partnership which is a\nqualified empire zone enterprise, the taxpayer's tax factor shall be\nthat portion of the amount determined in paragraph one of this\nsubdivision which is attributable to the income of the partnership. Such\nattribution shall be made in accordance with the ratio of the partner's\nincome from the partnership allocated within the state to the partner's\nentire income, or in accordance with such other methods as the\ncommissioner may prescribe as providing an apportionment which\nreasonably reflects the portion of the partner's tax attributable to the\nincome of the partnership. In no event may the ratio so determined\nexceed 1.0.\n (ii) For purposes of article nine-A of this chapter, the term\n"partner's income from the partnership" means partnership items of\nincome, gain, loss and deduction, and New York modifications thereto,\nentering into business income and the term "partner's entire income"\nmeans business income allocated within the state. For purposes of\narticle thirty-three of this chapter, the term "partner's income from\nthe partnership" means partnership items of income, gain, loss and\ndeduction, and New York modifications thereto, entering into entire net\nincome or entire net income plus compensation and the term "partner's\nentire income" means entire net income, or entire net income plus\ncompensation, allocated within the state. For purposes of article\ntwenty-two of this chapter, the term "partner's income from the\npartnership" means partnership items of income, gain, loss and\ndeduction, and New York modifications thereto, entering into New York\nadjusted gross income, and the term "partner's entire income" means New\nYork adjusted gross income.\n (C) Where the taxpayer is a shareholder of a New York S corporation\nwhich is a qualified empire zone enterprise, the shareholder's tax\nfactor shall be that portion of the amount determined in paragraph one\nof this subdivision which is attributable to the income of the S\ncorporation. Such attribution shall be made in accordance with the ratio\nof the shareholder's income from the S corporation allocated within the\nstate, entering into New York adjusted gross income, to the\nshareholder's New York adjusted gross income, or in accordance with such\nother methods as the commissioner may prescribe as providing an\napportionment which reasonably reflects the portion of the shareholder's\ntax attributable to the income of the qualified empire zone enterprise.\nIn no event may the ratio so determined exceed 1.0.\n (3) Combined returns or reports. (A) Where the taxpayer is a\nqualified empire zone enterprise and is required or permitted to make a\nreturn or report on a combined basis under article nine-A or article\nthirty-three of this chapter, the taxpayer's tax factor shall be the\namount determined in paragraph one of this subdivision which is\nattributable to the income of the qualified empire zone enterprise. Such\nattribution shall be made in accordance with the ratio of the qualified\nempire zone enterprise's income allocated within the state to the\ncombined group's income, or in accordance with such other methods as the\ncommissioner may prescribe as providing an apportionment which\nreasonably reflects the portion of the combined group's tax attributable\nto the income of the qualified empire zone enterprise. In no event may\nthe ratio so determined exceed 1.0.\n (B) The term "income of the qualified empire zone enterprise" means\nentire net income, minimum taxable income, alternative entire net income\nor entire net income plus compensation calculated as if the taxpayer was\nfiling separately and the term "combined group's income" means entire\nnet income, minimum taxable income, alternative entire net income or\nentire net income plus compensation as shown on the combined return or\nreport, allocated within the state.\n (4) If the amount determined in paragraph one of this subdivision is\nless than zero, a taxpayer shall not be allowed a credit under this\nsection.\n (g) Definitions and cross-references. For definitions of terms used in\nthis section see sections fourteen and fifteen of this article. For\napplication of the credit provided for in this section, see the\nfollowing provisions of this chapter:\n (1) Article 9-A: Section 210-B: subdivision 6.\n (2) Article 22: Section 606: subsections (i) and (cc).\n (3) Article 33: Section 1511: subdivision (s).\n