Section 187-K. Empire zone investment tax credit for agricultural cooperatives

1. A taxpayer subject to the tax imposed  by  section  one  hundred  eighty-five  of  this  article shall be allowed a credit, to be
  computed as herein provided, against the tax imposed by this article  if
  the  taxpayer  has  been certified pursuant to article eighteen-B of the
  general municipal law. The amount of the credit shall be ten percent  of
  the  cost  or  other  basis  for federal income tax purposes of tangible
  personal property and other tangible property, including  buildings  and
  structural components of buildings, described in subdivision two of this
  section,  which  is  located  within  an  empire zone designated as such
  pursuant to article eighteen-B of such law, but only if the acquisition,
  construction, reconstruction or erection of such  property  occurred  or
  was  commenced on or after the date of such designation and prior to the
  expiration  thereof.  Provided,  however,  that  in  the  case   of   an
  acquisition,   construction,   reconstruction   or  erection  which  was
  commenced during such period and continued  or  completed  subsequently,
  such  credit  shall  be  ten percent of the portion of the cost or other
  basis for federal income tax purposes attributable to such period, which
  portion shall be ascertained by multiplying such  cost  or  basis  by  a
  fraction  the  numerator  of  which  shall  be  the expenditures paid or
  incurred during such period for such purposes  and  the  denominator  of
  which  shall  be the total of all expenditures paid or incurred for such
  acquisition, construction, reconstruction or erection.
    2. A credit shall be  allowed  under  this  section  with  respect  to
  tangible  personal  property  and  other  tangible  property,  including
  buildings  and  structural  components  of  buildings,  which  (i)   are
  depreciable  pursuant to section one hundred sixty-seven of the internal
  revenue code or recovery property with respect to which a  deduction  is
  allowable  under section one hundred sixty-eight of the internal revenue
  code, (ii) have a useful life of four years or more, (iii) are  acquired
  by  purchase  as  defined in section one hundred seventy-nine (d) of the
  internal revenue code, (iv) have a situs in an empire zone designated as
  such pursuant to article eighteen-B of the general  municipal  law,  and
  (v)  are  principally used by the taxpayer in the production of goods by
  processing, assembling, refining,  farming,  agriculture,  horticulture,
  floriculture  or  viticulture.  Property used in the production of goods
  shall include machinery, equipment or other tangible property  which  is
  principally used in the repair and service of other machinery, equipment
  or  other  tangible property used principally in the production of goods
  and shall include all  facilities  used  in  the  production  operation,
  including  storage  of  material  to  be  used  in production and of the
  products that are produced. For  purposes  of  this  section,  the  term
  "goods" shall not include electricity.
    3.  A  taxpayer  shall not be allowed a credit under this section with
  respect to any tangible personal property and other  tangible  property,
  including  buildings  and  structural  components of buildings, which it
  leases to any other person or corporation. For purposes of the preceding
  sentence, any contract or agreement to lease or rent or for a license to
  use such property shall be considered a  lease.  Provided,  however,  in
  determining  whether  a  taxpayer  shall  be allowed a credit under this
  section with respect to such property, any election made with respect to
  such  property  pursuant  to  the  provisions  of  paragraph  eight   of
  subsection  (f)  of  section  one  hundred  sixty-eight  of the internal
  revenue code, as such paragraph was in  effect  for  agreements  entered
  into  prior  to  January  first,  nineteen hundred eighty-four, shall be
  disregarded.
    4. (i) The credit allowed under this  section  for  any  taxable  year
  shall  not reduce the tax due for such year to less than the minimum tax

  prescribed in subdivision two of section one hundred eighty-five of this
  article. Provided, however, that if the amount of credit allowable under
  this section for any taxable year reduces the tax to such  minimum  tax,
  any  amount of credit not deductible in such taxable year may be carried
  over to the following year  or  years  and  may  be  deducted  from  the
  taxpayer's  tax  for  such year or years. In lieu of such carryover, any
  such taxpayer which qualifies as a new business under paragraph (ii)  of
  this  subdivision  may  elect,  on  its report for its taxable year with
  respect to which such credit is allowed, to treat fifty percent  of  the
  amount  of  such  carryover  as  an overpayment of tax to be credited or
  refunded in accordance with  the  provisions  of  section  one  thousand
  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
  notwithstanding, no interest shall be paid thereon.
    (ii)  For  purposes  of this subdivision, a new business shall include
  any corporation subject to tax under section one hundred eighty-five  of
  this article, except a corporation which:
    (I)  over  fifty  percent  of  the  number  of shares or amount of the
  membership capital  entitling  the  holders  thereof  to  vote  for  the
  election  of  directors  is  owned  or  controlled,  either  directly or
  indirectly, by a taxpayer subject  to  tax  under  section  one  hundred
  eighty-three, one hundred eighty-four or one hundred eighty-five of this
  article;  article  nine-A, article thirty-two or article thirty-three of
  this chapter; or
    (II) is substantially similar in  operation  and  in  ownership  to  a
  business  entity  (or  entities)  taxable,  or previously taxable, under
  section one hundred eighty-three, one hundred eighty-four,  one  hundred
  eighty-five  or  one hundred eighty-six of this article; article nine-A,
  thirty-two or thirty-three of this chapter; article twenty-three of this
  chapter  or  would  have  been  subject  to  tax  under   such   article
  twenty-three  (as  such article was in effect on January first, nineteen
  hundred eighty)  or  the  income  (or  losses)  of  which  is  (or  was)
  includable  under  article twenty-two of this chapter whereby the intent
  and purpose of this subdivision with respect to refunding  a  credit  to
  new business would be evaded; or
    (III) has been subject to tax under section one hundred eighty-five of
  this  article  for more than five taxable years (excluding short taxable
  years).
    5. (a) With respect to  property  which  is  depreciable  pursuant  to
  section  one  hundred sixty-seven of the internal revenue code and which
  is disposed of or ceases to be in qualified use prior to the end of  the
  taxable  year  in  which  the  credit  is to be taken, the amount of the
  credit shall be that portion of the credit provided for in this  section
  which represents the ratio which the months of qualified use bear to the
  months  of  useful  life.  If property on which credit has been taken is
  disposed of or ceases to be in qualified use prior to  the  end  of  its
  useful  life,  the  difference  between  the credit taken and the credit
  allowed for actual use must be added back in the  year  of  disposition.
  Provided,  however,  if  such property is disposed of or ceases to be in
  qualified use after it has been in qualified use for  more  than  twelve
  consecutive  years,  it shall not be necessary to add back the credit as
  provided in this subparagraph. The amount of credit allowed  for  actual
  use  shall be determined by multiplying the original credit by the ratio
  which the months of qualified use bear to the months of useful life. For
  purposes of this subdivision, useful life of property shall be the  same
  as  the  taxpayer  uses  for  depreciation  purposes  when computing his
  federal income tax liability.

    (b) Except with respect to that property to  which  paragraph  (d)  of
  this  subdivision  applies,  with  respect  to  three-year  property, as
  defined in paragraph two  of  subsection  (c)  of  section  one  hundred
  sixty-eight of the internal revenue code, which is disposed of or ceases
  to be in qualified use prior to the end of the taxable year in which the
  credit is to be taken, the amount of the credit shall be that portion of
  the credit provided for in this section which represents the ratio which
  the  months  of  qualified  use bear to thirty-six. If property on which
  credit has been taken is disposed of or ceases to be  in  qualified  use
  prior to the end of thirty-six months, the difference between the credit
  taken  and  the  credit allowed for actual use must be added back in the
  year of disposition. The amount of credit allowed for actual  use  shall
  be  determined by multiplying the original credit by the ratio which the
  months of qualified use bear to thirty-six.
    (c) Except with respect to that property to  which  paragraph  (d)  of
  this  subdivision  applies,  with  respect  to  five-year  property  and
  ten-year property, as defined in paragraph  two  of  subsection  (c)  of
  section   one   hundred   sixty-eight  of  the  internal  revenue  code,
  fifteen-year real property, as defined in such paragraph as  it  was  in
  effect  for  property  placed  in  service  after December thirty-first,
  nineteen hundred  eighty  in  taxable  years  ending  after  such  date,
  eighteen-year  real  property, as defined in such paragraph as it was in
  effect for property placed in service after  March  fifteenth,  nineteen
  hundred eighty-four, and nineteen-year real property, as defined in such
  paragraph,  which  is disposed of or ceases to be in qualified use prior
  to the end of the taxable year in which the credit is to be  taken,  the
  amount of the credit shall be that portion of the credit provided for in
  this  section  which  represents the ratio which the months of qualified
  use bear to sixty. If  property  on  which  credit  has  been  taken  is
  disposed  of  or ceases to be in qualified use prior to the end of sixty
  months, the difference between the credit taken and the  credit  allowed
  for actual use must be added back in the year of disposition. The amount
  of  credit allowed for actual use shall be determined by multiplying the
  original credit by the ratio which the months of qualified use  bear  to
  sixty.
    (d) With respect to any recovery property to which section one hundred
  sixty-eight of the internal revenue code applies, which is a building or
  a  structural component of a building and which is disposed of or ceases
  to be in qualified use prior to the end of the taxable year in which the
  credit is to be taken, the amount of the credit shall be that portion of
  the credit provided for in this section which represents the ratio which
  the months of qualified use bear to the  total  number  of  months  over
  which  the  taxpayer  chooses  to  deduct the property under section one
  hundred sixty-eight of the internal revenue code. If property  on  which
  credit  has  been  taken is disposed of or ceases to be in qualified use
  prior to the end of the period over which the taxpayer chooses to deduct
  the property under section  one  hundred  sixty-eight  of  the  internal
  revenue  code,  the  difference  between the credit taken and the credit
  allowed for actual use must be added back in the  year  of  disposition.
  Provided,  however,  if  such property is disposed of or ceases to be in
  qualified use after it has been in qualified use for  more  than  twelve
  consecutive  years,  it shall not be necessary to add back the credit as
  provided in this paragraph. The amount of credit allowed for actual  use
  shall  be  determined  by  multiplying  the original credit by the ratio
  which the months of qualified use bear to the  total  number  of  months
  over which the taxpayer chooses to deduct the property under section one
  hundred sixty-eight of the internal revenue code.

    (e)  For  purposes  of  this  subdivision,  disposal  or  cessation of
  qualified use shall not be deemed to have occurred solely by  reason  of
  the termination or expiration of an empire zone's designation as such.
    (f)(I)  For  purposes  of  this  subdivision, the decertification of a
  business enterprise with respect to an empire zone  shall  constitute  a
  disposal  or  cessation  of  qualified  use of the property on which the
  credit  was  taken  which  is  located  in  the  zone   to   which   the
  decertification applies, on the effective date of such decertification.
    (II)  Where  a  business  enterprise  has  been decertified based on a
  finding pursuant to clause one, two,  or  five  of  subdivision  (a)  of
  section nine hundred fifty-nine of the general municipal law, the amount
  required  to  be  added  back  by  reason  of  this subdivision shall be
  augmented by an amount equal to the product of  the  amount  of  credit,
  with  respect  to  property  which  is  disposed  of  or ceases to be in
  qualified use, which was deducted from the taxpayer's tax otherwise  due
  under this article for all prior taxable years (subject to the limit set
  forth  in  this  subparagraph)  and  the  underpayment  rate of interest
  (without regard to compounding) set by the commissioner of taxation  and
  finance  pursuant  to subdivision (e) of section one thousand ninety-six
  of this chapter, in effect on the last day  of  the  taxable  year.  The
  limit  shall  be  (i) the amount of credit, with respect to the property
  which is disposed of or  ceases  to  be  in  qualified  use,  which  was
  deducted  from  the  taxpayer's tax otherwise due under this article for
  all prior taxable years, reduced (but not below zero) by (ii) the credit
  allowed for  actual  use.    For  purposes  of  this  subparagraph,  the
  attribution  to  specific  property  of credit amounts deducted from tax
  shall be established in accordance with the date of placement in service
  of such property in the empire zone.
    (III) Notwithstanding any other provision of this section, in the case
  of a business enterprise which  has  been  decertified,  any  amount  of
  credit  allowed with respect to the property of such business enterprise
  located in the zone  to  which  the  decertification  applies  which  is
  carried  over  pursuant to subdivision four of this section shall not be
  carried over beyond the seventh taxable year next following the  taxable
  year  with  respect to which the credit provided for in this section was
  allowed.