Government Affairs Albany Update
April 28, 2010
Proposed Tax Credit Deferral Legislation
Yesterday, Governor Paterson proposed cutting business tax credits by one-half for 2010, 2011 and 2012 (see press announcement here). The Governor’s proposed legislation is available here and provides specifics on this proposal.
Its key provisions:
- Applies to taxable years beginning on or after 1/1/2010 and before 1/1/2013.
- Specifies tax credits “that otherwise would be used or refunded” during those tax years are deferred to and can be used in tax years beginning after 1/1/2013 and before 1/1/2016.
- The Department of Tax and Finance is authorized to develop implementing regulations, including rules on the extent to which deferred credits can be used in each future tax year.
- Estimates tax payments and first installment payments would be made based on tax liability calculations as if this deferral was in place on the first day of the tax year.
- The bill applies to twenty-nine specified Article 9-A tax credits, and their counterpart credits in Articles 9, 22, 32 and 33, and to four additional credits that are specific to the corporation, personal income and insurance law. It includes the ITC, Empire Zone credits, brownfield credits, energy credits and others. The only major business credit excluded from this deferral legislation is the film production credit (under the Executive Budget, the cap on available film production tax credits would increase from $350 million to $420 million for the next five years.)
I would appreciate any feedback you have on this proposal as we respond to this legislation.