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Business Council Tax Committee Members Kenneth J. Pokalsky 2012 State Legislative Session Final Tax Legislation 7/31/12



The 2012 New York state regular legislation session was an uneventful one from a tax policy perspective. Outside the context of the state budget process, which saw limited changes (summarized here), the state legislature gave final approval to more than 70 separate tax law changes, including several of general interest to Business Council members. However, most of these bills were fairly limited in applicability and/or impact, with nearly half of all two-house tax bills being taxpayer- or parcel-specific legislation, and more than a dozen others were extensions of existing local tax provisions. Among two-house bills, The Business Council supported legislation creating a new solar installation tax credit (in part, as an alternative to proposed solar power mandates on public utilities) and a nine-month extension of the states brownfield tax credits. However, many issues of broad Council interest were left undone. The Administration never introduced its major Article 9A/Article 32 integration/reform bill, despite several years of drafting and stakeholder meetings. Nor has the Administration named the members of the Tax Reform and Fairness Commission announced in conjunction with the December 2011 personal income tax legislation. Among other issues left unresolved, neither house passed legislation to restore the qualified emerging technology company credit despite both houses passing permanent extension legislation in 2011, which was vetoed by Governor Cuomo citing technical deficiencies. The Senate pushed a number of pro-business tax bills. In May, the Senate passed a nearly $1 billion tax reform package, which included: a 5.2% corporate franchise tax rate for small business; a 10 % PIT reduction for shareholders in subchapter S corporations; early repeal of the Article 18-A energy assessment; expansion of the states tax increment financing program; and $5,000 job creation credit (up to $10,000 under certain circumstances); and a requirement for a two-thirds super majority vote on tax increase legislation. The Senate also passed legislation: phasing out CFT tax liability for manufacturers; addressing unintended limitations on QEZE real property tax credits; modifying sales tax enforcement

actions; modifying the definition of resident for PIT purposes; reinstating the middle class STAR real property tax rebate; and others. The Assembly had a very limited tax reform agenda. It passed legislation that would consolidate the assessment function of certain utility transmission property (e.g., wires, conduit and poles) at the state-level, but little else of benefit to the business community. The following provides an overview of tax legislation receiving two house approval during the regular 2012 legislative session (other than budget legislation), and indicates those that have already been approved by Governor Cuomo. Bill text is available on line from either the Senate or Assembly public web sites. Please feel free to contact me with any questions or comments regarding this update. Ken Pokalsky Vice President of Government Affairs The Business Council of New York State, Inc. 152 Washington Avenue Albany, NY 12210 T 518.465.7511 x. 205 C 518.339.5894

GENERAL Repeals the prohibition against tax return preparers or facilitators operating on the same premises as licensed check cashers, contained in Section 32 of the New York Tax Law (S.7002).

TAX CREDITS Exempts the sale and installation of commercial solar energy systems equipment from sales and compensating use taxes; grants municipalities the option to grant such exemption from local sales and use taxes. Currently, only residential solar customers are exempt from sales tax (S.3203-B). Modifies the Empire State Film Production credit program by increasing the post production credit from 10 to 30% within the MTA region and to 35% outside the MTA region, by moving provisions capping and allocating total available credits from unconsolidated law to the Tax Law (S.7244-A). Chapter 268. Establishes a beer production tax credit for beer produced within the state by a taxpayer that is registered as a distributor, replacing a prior excise tax exemption for small instate brewers that was overturned in court (S.7728). Chapter 109. Extends the sunset of the states brownfield site preparation, development and environmental insurance tax credits from March 31, 2015 to December 31, 2015


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(credits apply to sites receiving a DEC certificate of completion prior to such date) (A.10593). Extends authority for New York Citys biotechnology tax credit for another three years from January 1, 2013 through December 31, 2015 (S.7462). Extends the PIT credit for solar energy system equipment purchases to homeowners that lease solar equipment or purchase solar power under a written agreement with a third party (A.34-A). Authorizes municipalities to provide up to 10 year property tax exemptions for property improvements meeting specified green building standards (S.1462-D). Chapter 188. Increases the cap on the 20% historic [property] preservation tax credit from $5 million to $12 million per project (S.6134). Extends the PIT credit (of up to $.20/gallon) for purchase of clean heating fuel purchased for residential purposes until 1/1/17 (S.6039). Chapter 193.

SALES TAX Exempts military service flags, POW flags and blue star banners from the sales/use tax, effective 12/1/12 (S.1007-A). Exempts food and beverage sold from vending machines for $1.50 or less from the sales/use tax (S3445-B). Clarifies the sales tax exemption for solid waste transported from a transfer station prior to a disposal site prior to 2005 legislation explicitly exempting such transfers (in effect, overrules the Department of Tax and Finances determination in TSBA97(32)S) (A.7144-B). Exclude persons operating pursuant to a farm winery license or a farm distillery license issued by the State Liquor from the obligation to file annual information returns otherwise applicable to liquor wholesalers (A.9523). Chapter 107.

LOCAL TAXES Makes villages eligible for the Department of Taxation & Finance commissioner advisory appraisals of highly complex and/or public utility property as part of a revaluation or assessment update program (S.6307-A). Chapter 62. Expands New York Citys financial institution data match system (for tax collection purposes, first adopted in 2009 as part of NYCs tax conformity bill), to apply to any bank doing business in New York State, not just those doing business in New York City (A.7764). Extends New York Citys property tax credit for solar generating equipment for calendar 2013 and 2014, but reduces the basic credit from 5 percent to 2.5 percent of qualifying expenditures (A.10620). Allows special assessing units other than cities to limit the change in any class of propertys proportion of total assessed value in their 2012 assessment rolls to 1 percent (A.9773). Chapter 73. Allows special assessing units which are a city to limit increases in the adjusted base proportion of property taxes for any class by more than 1.5% (S.7640-A). Chapter 90.


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Extends by one year, to include the 2012-2013 assessment roll, the 1% cap on property tax shift between classes of properties in the Town of Islips (Suffolk county) (S7131). Chapter 85. Hotel/Motel Occupancy Taxes were extended thru 12/31/14 for the city of Albany (S.6177) and thru 9/1/15 for the cities of New Rochelle (A.8555-A), Rye (A.8556-C) and White Plains (S.7510). Extends Oneida Indian Nation real property tax depository fund thru 6/30/14 (A.9242). Chapter 71. Extends thru 12/31/15 the ability of villages to hold to hold annual tax lien sales as a means of enforcing collection of delinquent taxes (A.9816). Chapter 154. Mortgage recording taxes were extended thru 12/1/14 for Albany (S.6176), Greene (S.6313, Chapter 206), Wyoming (S.6788-A, Chapter 230), Herkimer (S.6873, Chapter 234) counties; and thru 12/1/15 for Hamilton (S.6501, Chapter 216) and Essex counties (S.6771, Chapter 229). Authorizes the Town of Evans in Erie County to implement a property tax abatement program for the improvement one to three family residential buildings (A.8173-B). Chapter 122. Authorizes the City of Auburn to implement a property tax abatement program for the improvement of any residential structure (A.9103-C). Chapter 129. Authorizes Steuben County to implement property tax abatement for improvements to residential and commercial property located in designated redevelopment areas (A.10107). Requires municipalities that have the senior citizen rent increase exemption (SCRIE) and disabled rent increase exemption (DRIE) program to notify individuals receiving the DRIE benefits of their eligibility under SCRIE) (A.9223-A). Modifies the definition of viable agricultural land" to mean land highly suitable for a farm operation for purposes of the Agricultural District property assessment program (A.9960). Chapter 160. Allows local governments to adopt extended real property tax exemptions for projects developed by private housing redevelopment companies, for a period of up to fifty years provided they continue to provide affordable housing (S.6480). In addition, the legislature passed nearly three dozen bills pertaining to specific parcels of real property, most to allow for retroactive application of various RPT credits.


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