Certified marriage certificate

On May 15, 2000, Governor George E. Pataki signed the New York budget package into law. Numerous fax provisions were enacted as part of the package, including a variety of new tax credits, a utility (gross receipts) tax reduction, a personal income tax deduction for college tuition, a reduction in the marriage penalty, increases in the earned income tax credit and child care credit, and a sales tax exemption for equipment used in facilities supporting Internet websites.

Tax Credits

Credit for energy taxes: Industrial and manufacturing businesses are allowed a refundable credit against the New York personal and corporate franchise (income) taxes equal to the sum of the utility (gross receipts) tax, natural gas importer tax, and related Metropolitan Commuter Transportation District surcharges paid by the business during tax years after 1999, but only with regard to gas, electricity, steam, water, refrigeration, or gas, electric steam, water or refrigeration services, consumed by the business in New York.

Earned income credit: The applicable percentage of the earned income tax credit allowed is increased from 25% of the federal credit to 27.5% for tax years beginning in 2002, and further increased to 30% for tax years beginning in 2003 and thereafter.

Child care credit: The personal income tax child care credit, which is equal to a percentage of the federal credit allowable under IRC 21, is increased. The applicable percentage is the sum of

20% and

a multiplier multiplied by a fraction.

For tax years beginning after 1999, the numerator of such fraction is the lesser of

$15,000 or

$65,000 ($50,000 for tax years beginning in 1999) less the New York adjusted gross income for the tax year, provided that the numerator is not less than zero.

The denominator remains at $15,000 for tax years beginning after 1998.

For tax years beginning after 1999, for a person whose New York adjusted gross income is less than $40,000, the applicable percentage is 100%, plus 10% multiplied by a fraction whose numerator is the lesser of

$15,000 or

$40,000 less the New York adjusted gross income, and the denominator is $15,000.

Long-term care insurance credit: Effective January 1, 2002, taxpayers are allowed a credit against corporate franchise (income), bank franchise (income), insurance franchise (income), utility, and personal income taxes equal to 10% of the premium paid for long-term care insurance during the tax year. In order to qualify for the credit, the taxpayer's premium payment must be for the purchase of a long-term care insurance policy approved by the Superintendent of Insurance.

Empire zones program: Under the empire zones program, for tax years beginning after 2000, a credit is available against the New York corporate franchise (income) tax, bank franchise (income) tax, insurance franchise (income) tax, and personal income tax for qualified business enterprises that create jobs in designated areas. Qualified enterprises may take an additional credit against such taxes, based on the amount of real property taxes paid during the tax year.

Green buildings: In order to enhance the supply of environmentally sound buildings in New York, a green buildings tax credit is allowed against the New York corporate franchise (income) tax, utility tax, utility (gross receipts) tax, bank franchise (income) tax, insurance franchise (income) tax, and personal income tax based on the costs incurred in performing qualified construction or rehabilitation. The credit amount is spread over five years and may be carried forward. The green building credit provisions are applicable to property that is placed in service, or that has received a final certificate of occupancy, in tax years beginning after 2000.

Economic development zone employment incentive credit: For corporate franchise (income) tax purposes, the economic development zone employment incentive credit is allowed to be applied against the minimum taxable income base, effective for tax years after 2000.

Alternative fuels credit: The alternative fuels credit against corporate franchise (income) tax for electric vehicles and clean-fuel vehicle property sold or leased to a governmental unit is extended from 2001 through 2003.

Investment credit transfer: The budget legislation allows investment credits earned by certain companies to be transferred to a spin-off company if the assets on which the credit was earned are transferred to the new company in connection with a corporate reorganization, effective January 1, 2001.

Transportation access: A refundable tax credit is provided under corporate franchise (income), utility, utility (gross receipts), personal income, bank franchise (income), and insurance franchise (income) taxes, to taxpayers who make a significant contribution to New York after 1999 for the construction of certain transportation improvement projects and increase employment by more than 1,000 jobs in New York. To qualify for the credit, the taxpayer's contribution to the project must be at least $10 million. In addition, the contribution must be certified by the State Commissioner of Transportation and the Commission of Economic Development, jointly, based in part on a finding that the project would promote the development of economic opportunities in New York by creating more than 1,000 new jobs. A recapture, with interest, is allowed of all credit taken if the taxpayer does not meet the 1,000 employee goal within three full tax years. The amount of the credit is 6% of the taxpayer's excess New York payroll over the taxpayer's average base period payroll. If the amount of credit exceeds the taxpayer's tax liability, the excess will be refunded. The credit can be claimed in the year following the contribution year and each year thereafter in which the taxpayer's New York payroll exceeds the average base period payroll, until the aggregate credits claimed by the taxpayer equal the amount of the taxpayer's contribution.

Low-income housing: A credit against New York corporate franchise (income) tax, bank franchise (income) tax, insurance franchise (income) tax, and personal income tax is provided for the construction or rehabilitation of low-income housing. Generally, the credit is allowed for the construction of rent-restricted housing in New York that qualifies for the federal low-income housing credit. However, while the federal credit requires at least 20% of the residential units of a project to be occupied by tenants whose income is 50% or less of area median gross income, the New York credit is applicable to projects where tenant income is 90% or less of such income. The credit amount allocated to a project will be allowed each year for 10 years, but the project must continue to qualify as low-income housing for a 15-year period in order to avoid partial recapture of the credit.

Fuel cell electric generating equipment: For tax years beginning after 2002, a credit against the New York personal income tax is allowed equal to 20% of qualified fuel cell electric generating equipment expenditures. The credit may not exceed $1,500 for any tax year. However, credits exceeding the tax due for a given year may be carried over for five tax years.

Investment tax credit for insurance companies: A taxpayer is allowed a credit against the insurance franchise (income) tax for tangible personal property, including buildings and structural components of buildings that (a) are depreciable; (b) have a useful life of four years or more; (c) are acquired by purchase; (d) have a situs in New York; and (e) are principally used in the ordinary course of the taxpayer's trade or business as a securities or commodities broker providing investment advisory services for a regulated investment company or providing lending, loan arrangements, or Loan origination services. The percentage to be used to compute the credit is 5% for the first $350 million of the investment credit base and 4% where the investment credit base exceeds $350 million. The credit applies to property placed in service after 2000 and before October 1, 2003.