S T A T E O F N E W Y O R K
________________________________________________________________________
7608
2011-2012 Regular Sessions
I N A S S E M B L Y
May 11, 2011
___________
Introduced by M. of A. BING, COOK -- Multi-Sponsored by -- M. of A.
P. RIVERA, SCHIMMINGER -- read once and referred to the Committee on
Ways and Means
AN ACT to amend the tax law, in relation to an investment tax credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (i) of paragraph (b) of subdivision 12 of
section 210 of the tax law, as amended by chapter 637 of the laws of
2008, is amended to read as follows:
(i) A credit shall be allowed under this subdivision with respect to
tangible personal property and other tangible property, including build-
ings and structural components of buildings, which are: depreciable
pursuant to section one hundred sixty-seven of the [internal revenue
code] INTERNAL REVENUE CODE, have a useful life of four years or more,
are acquired by purchase as defined in section one hundred seventy-nine
(d) of the [internal revenue code] INTERNAL REVENUE CODE, have a situs
in this state and are (A) principally used by the taxpayer in the
production of goods by manufacturing, processing, assembling, refining,
mining, extracting, farming, agriculture, horticulture, floriculture,
viticulture or commercial fishing, (B) industrial waste treatment facil-
ities or air pollution control facilities, used in the taxpayer's trade
or business, (C) research and development property, (D) principally used
in the ordinary course of the taxpayer's trade or business as a broker
or dealer in connection with the purchase or sale (which shall include
but not be limited to the issuance, entering into, assumption, offset,
assignment, termination, or transfer) of stocks, bonds or other securi-
ties as defined in section four hundred seventy-five (c)(2) of the
Internal Revenue Code, or of commodities as defined in section four
hundred seventy-five (e) of the Internal Revenue Code, (E) principally
used in the ordinary course of the taxpayer's trade or business of
providing investment advisory services for a regulated investment compa-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10881-01-1
A. 7608 2
ny as defined in section eight hundred fifty-one of the Internal Revenue
Code, or lending, loan arrangement or loan origination services to
customers in connection with the purchase or sale (which shall include
but not be limited to the issuance, entering into, assumption, offset,
assignment, termination, or transfer) of securities as defined in
section four hundred seventy-five (c)(2) of the Internal Revenue Code,
(E-1) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR
BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES, OR THE SERVICE OF
MANAGING INVESTMENT PORTFOLIOS TO ACHIEVE SPECIFIC INVESTMENT OBJECTIVES
FOR ACCOUNTS OVER ONE MILLION DOLLARS OF ACCREDITED INVESTORS (AS THAT
TERM IS DEFINED IN RULE FIVE HUNDRED ONE OF REGULATION D OF THE SECURI-
TIES ACT OF 1933), IF THE TAXPAYER SATISFIES THE FOLLOWING CRITERIA: (I)
THE TAXPAYER IS A REGULATED BROKER OR DEALER OR AN AFFILIATE OF A REGU-
LATED BROKER OR DEALER, (II) THE TAXPAYER IS REGISTERED AS AN INVESTMENT
ADVISER UNDER SECTION TWO HUNDRED THREE OF THE INVESTMENT ADVISER ACT OF
1940, AS AMENDED, AND (III) AT LEAST ONE CLIENT OF THE TAXPAYER IS A
REGULATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-
ONE OF THE INTERNAL REVENUE CODE THAT HAS ASSETS IN EXCESS OF ONE
HUNDRED MILLION DOLLARS, (F) principally used in the ordinary course of
the taxpayer's business as an exchange registered as a national securi-
ties exchange within the meaning of sections 3(a)(1) and 6(a) of the
Securities Exchange Act of 1934 or a board of trade as defined in
section 1410(a)(1) of the New York Not-for-Profit Corporation Law or as
an entity that is wholly owned by one or more such national securities
exchanges or boards of trade and that provides automation or technical
services thereto, or (G) principally used as a qualified film production
facility including qualified film production facilities having a situs
in an empire zone designated as such pursuant to article eighteen-B of
the general municipal law, where the taxpayer is providing three or more
services to any qualified film production company using the facility,
including such services as a studio lighting grid, lighting and grip
equipment, multi-line phone service, broadband information technology
access, industrial scale electrical capacity, food services, security
services, and heating, ventilation and air conditioning. For purposes of
clauses (D), (E), (E-1) and (F) of this subparagraph, property purchased
by a taxpayer affiliated with a regulated broker, dealer, registered
investment adviser, national securities exchange or board of trade, is
allowed a credit under this subdivision if the property is used by its
affiliated regulated broker, dealer, registered investment adviser,
national securities exchange or board of trade in accordance with this
subdivision. For purposes of determining if the property is principally
used in qualifying uses, the uses by the taxpayer described in clauses
(D) [and], (E), AND (E-1) of this subparagraph may be aggregated. In
addition, the uses by the taxpayer, its affiliated regulated broker,
dealer, and registered investment adviser under [either or both] ANY of
those clauses may be aggregated. Provided, however, a taxpayer shall
not be allowed the credit provided by clauses (D), (E), (E-1) and (F) of
this subparagraph unless (I) eighty percent or more of the employees
performing the administrative and support functions resulting from or
related to the qualifying uses of such equipment are located in this
state or (II) the average number of employees that perform the adminis-
trative and support functions resulting from or related to the qualify-
ing uses of such equipment and are located in this state during the
taxable year for which the credit is claimed is equal to or greater than
ninety-five percent of the average number of employees that perform
these functions and are located in this state during the thirty-six
A. 7608 3
months immediately preceding the year for which the credit is claimed,
or (III) the number of employees located in this state during the taxa-
ble year for which the credit is claimed is equal to or greater than
ninety percent of the number of employees located in this state on
December thirty-first, nineteen hundred ninety-eight or, if the taxpayer
was not a calendar year taxpayer in nineteen hundred ninety-eight, the
last day of its first taxable year ending after December thirty-first,
nineteen hundred ninety-eight. If the taxpayer becomes subject to tax in
this state after the taxable year beginning in nineteen hundred ninety-
eight, then the taxpayer is not required to satisfy the employment test
provided in the preceding sentence of this subparagraph for its first
taxable year. For purposes of clause (III) of this subparagraph the
employment test will be based on the number of employees located in this
state on the last day of the first taxable year the taxpayer is subject
to tax in this state. If the uses of the property must be aggregated to
determine whether the property is principally used in qualifying uses,
then either each affiliate using the property must satisfy this employ-
ment test or this employment test must be satisfied through the aggre-
gation of the employees of the taxpayer, its affiliated regulated
broker, dealer, and registered investment adviser using the property.
For purposes of this subdivision, the term "goods" shall not include
electricity.
S 2. Subparagraph (A) of paragraph (2) of subsection (a) of section
606 of the tax law, as amended by chapter 637 of the laws of 2008, is
amended to read as follows:
(A) A credit shall be allowed under this subsection with respect to
tangible personal property and other tangible property, including build-
ings and structural components of buildings, which are: depreciable
pursuant to section one hundred sixty-seven of the [internal revenue
code] INTERNAL REVENUE CODE, have a useful life of four years or more,
are acquired by purchase as defined in section one hundred seventy-nine
(d) of the [internal revenue code] INTERNAL REVENUE CODE, have a situs
in this state and are (i) principally used by the taxpayer in the
production of goods by manufacturing, processing, assembling, refining,
mining, extracting, farming, agriculture, horticulture, floriculture,
viticulture or commercial fishing, (ii) industrial waste treatment
facilities or air pollution control facilities, used in the taxpayer's
trade or business, (iii) research and development property, (iv) princi-
pally used in the ordinary course of the taxpayer's trade or business as
a broker or dealer in connection with the purchase or sale (which shall
include but not be limited to the issuance, entering into, assumption,
offset, assignment, termination, or transfer) of stocks, bonds or other
securities as defined in section four hundred seventy-five (c)(2) of the
Internal Revenue Code, or of commodities as defined in section 475(e) of
the Internal Revenue Code, (v) principally used in the ordinary course
of the taxpayer's trade or business of providing investment advisory
services for a regulated investment company as defined in section eight
hundred fifty-one of the Internal Revenue Code, or lending, loan
arrangement or loan origination services to customers in connection with
the purchase or sale (which shall include but not be limited to the
issuance, entering into, assumption, offset, assignment, termination, or
transfer) of securities as defined in section four hundred seventy-five
(c)(2) of the Internal Revenue Code, [or] (vi) PRINCIPALLY USED IN THE
ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSINESS OF PROVIDING INVEST-
MENT ADVISORY SERVICES, OR THE SERVICE OF MANAGING INVESTMENT PORTFOLIOS
TO ACHIEVE SPECIFIC INVESTMENT OBJECTIVES FOR ACCOUNTS OVER ONE MILLION
A. 7608 4
DOLLARS OF ACCREDITED INVESTORS (AS THAT TERM IS DEFINED IN RULE FIVE
HUNDRED ONE OF REGULATION D OF THE SECURITIES ACT OF 1933), IF THE
TAXPAYER SATISFIES THE FOLLOWING CRITERIA: (I) THE TAXPAYER IS A REGU-
LATED BROKER OR DEALER OR AN AFFILIATE OF A REGULATED BROKER OR DEALER,
(II) THE TAXPAYER IS REGISTERED AS AN INVESTMENT ADVISOR UNDER SECTION
TWO HUNDRED THREE OF THE INVESTMENT ADVISER ACT OF 1940, AS AMENDED, AND
(III) AT LEAST ONE CLIENT OF THE TAXPAYER IS A REGULATED INVESTMENT
COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE OF THE INTERNAL
REVENUE CODE THAT HAS ASSETS IN EXCESS OF ONE HUNDRED MILLION DOLLARS,
OR (VII) principally used as a qualified film production facility
including qualified film production facilities having a situs in an
empire zone designated as such pursuant to article eighteen-B of the
general municipal law, where the taxpayer is providing three or more
services to any qualified film production company using the facility,
including such services as a studio lighting grid, lighting and grip
equipment, multi-line phone service, broadband information technology
access, industrial scale electrical capacity, food services, security
services, and heating, ventilation and air conditioning. For purposes of
clauses (iv) [and], (v) AND (VI) of this subparagraph, property
purchased by a taxpayer affiliated with a regulated broker, dealer, or
registered investment adviser is allowed a credit under this subsection
if the property is used by its affiliated regulated broker, dealer or
registered investment adviser in accordance with this subsection. For
purposes of determining if the property is principally used in qualify-
ing uses, the uses by the taxpayer described in clauses (iv) and (v) of
this subparagraph may be aggregated. In addition, the uses by the
taxpayer, its affiliated regulated broker, dealer and registered invest-
ment adviser under either or both of those clauses may be aggregated.
Provided, however, a taxpayer shall not be allowed the credit provided
by clauses (iv) [and], (v) AND (VI) of this subparagraph unless (I)
eighty percent or more of the employees performing the administrative
and support functions resulting from or related to the qualifying uses
of such equipment are located in this state, or (II) the average number
of employees that perform the administrative and support functions
resulting from or related to the qualifying uses of such equipment and
are located in this state during the taxable year for which the credit
is claimed is equal to or greater than ninety-five percent of the aver-
age number of employees that perform these functions and are located in
this state during the thirty-six months immediately preceding the year
for which the credit is claimed, or (III) the number of employees
located in this state during the taxable year for which the credit is
claimed is equal to or greater than ninety percent of the number of
employees located in this state on December thirty-first, nineteen
hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
er in nineteen hundred ninety-eight, the last day of its first taxable
year ending after December thirty-first, nineteen hundred ninety-eight.
If the taxpayer becomes subject to tax in this state after the taxable
year beginning in nineteen hundred ninety-eight, then the taxpayer is
not required to satisfy the employment test provided in the preceding
sentence of this subparagraph for its first taxable year. For the
purposes of clause (III) of this subparagraph the employment test will
be based on the number of employees located in this state on the last
day of the first taxable year the taxpayer is subject to tax in this
state. If the uses of the property must be aggregated to determine
whether the property is principally used in qualifying uses, then either
each affiliate using the property must satisfy this employment test or
A. 7608 5
this employment test must be satisfied through the aggregation of the
employees of the taxpayer, its affiliated regulated broker, dealer, and
registered investment adviser using the property. For purposes of this
subsection, the term "goods" shall not include electricity.
S 3. Paragraph (2) of subsection (i) of section 1456 of the tax law,
as amended by chapter 637 of the laws of 2008, is amended to read as
follows:
(2) A credit shall be allowed under this subsection with respect to
tangible personal property and other tangible property, including build-
ings and structural components of buildings, which are: depreciable
pursuant to section one hundred sixty-seven of the Internal Revenue
Code, have a useful life of four years or more, are acquired by purchase
as defined in section one hundred seventy-nine (d) of the Internal
Revenue Code, have a situs in this state and are (A) principally used in
the ordinary course of the taxpayer's trade or business as a broker or
dealer in connection with the purchase or sale (which shall include but
not be limited to the issuance, entering into, assumption, offset,
assignment, termination, or transfer) of stocks, bonds or other securi-
ties as defined in section four hundred seventy-five (c) (2) of the
Internal Revenue Code, or of commodities as defined in section four
hundred seventy-five (e) of the Internal Revenue Code, [or] (B) princi-
pally used in the ordinary course of the taxpayer's trade or business of
providing investment advisory services for a regulated investment compa-
ny as defined in section eight hundred fifty-one of the Internal Revenue
Code, or lending, loan arrangement or loan origination services to
customers in connection with the purchase or sale (which shall include
but not be limited to the issuance, entering into, assumption, offset,
assignment, termination, or transfer) of securities as defined in
section four hundred seventy-five (c) (2) of the Internal Revenue Code
OR (C) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE
OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES, OR THE SERVICE OF
MANAGING INVESTMENT PORTFOLIOS TO ACHIEVE SPECIFIC INVESTMENT OBJECTIVES
FOR ACCOUNTS OVER ONE MILLION DOLLARS OF ACCREDITED INVESTORS (AS THAT
TERM IS DEFINED IN RULE FIVE HUNDRED ONE OF REGULATION D OF THE SECURI-
TIES ACT OF OF 1933), IF THE TAXPAYER SATISFIES THE FOLLOWING CRITERIA:
(I) THE TAXPAYER IS A REGULATED BROKER OR DEALER OR AN AFFILIATE OF A
REGULATED BROKER OR DEALER, (II) THE TAXPAYER IS REGISTERED AS AN
INVESTMENT ADVISER UNDER SECTION TWO HUNDRED THREE OF THE INVESTMENT
ADVISER ACT OF 1940, AS AMENDED, AND (III) AT LEAST ONE CLIENT OF THE
TAXPAYER IS A REGULATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT
HUNDRED FIFTY-ONE OF THE INTERNAL REVENUE CODE THAT HAS ASSETS IN EXCESS
OF ONE HUNDRED MILLION DOLLARS. For purposes of subparagraphs (A) [and],
(B) AND (C) of this paragraph, property purchased by a taxpayer affil-
iated with a regulated broker, dealer, or registered investment adviser
is allowed a credit under this subsection if the property is used by its
affiliated regulated broker, dealer, or registered investment adviser in
accordance with this subsection. For purposes of determining if the
property is principally used in qualifying uses, the uses by the taxpay-
er described in subparagraphs (A) [and], (B) AND (C) of this paragraph
may be aggregated. In addition, the uses by the taxpayer, its affiliated
regulated broker, dealer and registered investment adviser under either
or both of such subparagraphs may be aggregated.
S 4. This act shall take effect immediately.