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Government Affairs Albany Update

April 26, 2002

Commissioner Novello to appear at Assembly Health Committee meeting

Antonia C. Novello, M.D., M.P.H., Commissioner of the New York State Department of Health will address the Assembly Health Committee on Tuesday, April 30th. The meeting begins at 1:00 p.m. and is being held in Room 711-A of the Legislative Office Building.

Budget Bill Clarification Good News for Business Council Members

Part R of Budget Bill S.6260A/A.9762A brings welcome news to Business Council members who have been thwarted to-date in their attempts to avail themselves of the refundable Industrial Manufacturing Business tax credit for Gross Receipt Tax and Gas Importation Privilege Tax paid at the statutory rates since January 1, 2000.

The IMB credit was established in the Fiscal Year 2001 Budget enacted in May of 2000; the IMB credit is available to industrial businesses, manufacturing firms, and research and development enterprises for GRT and GIPT paid since January 1 of that year at the newly reduced statutory rates contained in the FY 2001 Budget.

While the IMB credit is not applicable against the Minimum Taxable Income base of the Corporation Franchise Tax, the portion of the IMB that is blocked from usage by the MTI is fully refundable to Article 9-A taxpayers. Some taxpayers who filed for their refunds have received responses from the Department of Taxation & Finance that reordered the taxpayer's various tax credits from the order filed by the taxpayer. In these cases, the net result of the Department's reordering (primarily taking the IMB credit before the Investment Tax Credit) is a reduced or "wiped-out" IMB credit refund and a like increase in the amount of carry forward Investment Tax Credit.

Part R of S.6260A/A.9762A clarifies that the order of the credits is as announced by the Executive and Legislative branches of government in 2000 when the IMB credit was enacted, namely, that a taxpayer will take their Investment Tax Credit before the Industrial Manufacturing Business credit. The result --as was the intent of the 2001 Budget -- is that a taxpayer who has earned sufficient ITC to reduce their Article 9-A liability to the level of the Minimum Taxable Income basis will actually receive the benefit of the Industrial Manufacturing Business credit because of the IMB credit's refundable nature. The clarifying language is retroactively effective to January 1, 2000.