New York Advisory Opinion TSB-A-12(5)C: Can a company claim the accessible-vehicle tax credit for the incremental cost it paid to buy a used van that a previous owner had already converted for wheelchair accessibility?

Plain-English summary

In October 2010 the petitioner, a corporation, bought a used 2008 van from a finance company that had repossessed it. The previous owner had already converted the van into an accessible 'ambulette' for people with disabilities. The petitioner paid more for the converted van than a comparable non-converted van of the same make and model would cost, but it incurred no additional conversion costs itself. It asked whether it could claim the accessible-vehicle tax credit for that incremental cost.

The Department said yes in principle, but with conditions and one open question. A taxpayer that provides a taxicab or livery service may claim a credit against its franchise tax for the incremental cost of upgrading a vehicle to be accessible (Tax Law § 210.40; 20 NYCRR § 5-5.2). 'Incremental cost' is the excess of the accessible vehicle's purchase price over a same-make-and-model vehicle without the accessibility equipment. The credit is capped at $10,000 per vehicle and may be claimed only once per vehicle (20 NYCRR § 5-5.4(a)). Two conditions remain: the petitioner did not provide facts showing the van qualifies as a taxicab or livery service vehicle, so the Department could not confirm that piece; and the credit is unavailable if it was already claimed on this vehicle (for example, by the prior owner). If the van qualifies and no credit was previously claimed, the petitioner may claim the credit for its incremental cost up to $10,000.

What this means for you

Taxicab and livery operators buying accessible vehicles

You can get the accessibility credit even on a used vehicle someone else converted -- the credit follows the incremental cost you paid, not who did the conversion. But the credit is a one-time-per-vehicle benefit: if a prior owner already claimed it on that van, you can't claim it again. And you must actually be running a taxicab or livery service.

Accountants and tax professionals

Document the taxicab/livery use (the opinion couldn't confirm it) and verify no prior credit was claimed on the specific vehicle. Measure the incremental cost as the price spread over a comparable non-accessible same-make/model van, capped at $10,000. Note the footnote: Chapter 604 of the Laws of 2011 added newer credits (Tax Law §§ 210.44 and 606(tt)) for purchases/costs on or after January 1, 2011, so check which credit applies by date.

Common questions

Q: Can I claim the credit on a used van someone else converted?
A: Yes, for the incremental cost you paid (the excess over a comparable non-accessible van), up to $10,000, if no credit was previously claimed on that vehicle and it is used as a taxicab or livery.

Q: How much is the credit?
A: Up to $10,000 per vehicle, and it can be claimed only once per vehicle (20 NYCRR § 5-5.4(a)).

Q: What could disqualify the claim here?
A: If the van isn't a taxicab or livery service vehicle (the facts didn't establish that) or if the credit was already claimed on it.

Citations and references

• Tax Law § 210.40 (credit for the incremental cost of accessible taxicab/livery vehicles)
• 20 NYCRR § 5-5.2 (definition of incremental cost)
• 20 NYCRR § 5-5.4(a) ($10,000 cap; one credit per vehicle)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/corporation_ao_2012.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/corporation/a12_5c.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Counsel
Advisory Opinion Unit

TSB-A-12(5)C
Corportion Tax
September 27, 2012

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. C111118A

The Department of Taxation and Finance received a Petition for Advisory Opinion from
name redacted, (Petitioner). Petitioner asks whether it is entitled to a tax credit for the
incremental costs specifically associated with the purchase price of a taxicab or livery service
vehicle accessible by individuals with disabilities. We conclude that Petitioner is entitled to
claim a tax credit for those incremental costs specifically associated with the purchase price of
the vehicle accessible by individuals with disabilities if a tax credit for that vehicle has not
previously been claimed.
Facts
In October 2010, Petitioner, a corporation, purchased a used 2008 van from a finance
company. The finance company repossessed the van from its previous owner. The previous
owner converted the van to an ‘ambulette’ accessible to persons with disabilities. Petitioner
states that it paid a higher price for the converted van than for a van of the same make and model
except for the equipment needed to convert the vehicle to one accessible to persons with
disabilities. Petitioner was not required to incur any additional costs to make the van accessible
to persons with disabilities.
Analysis
A taxpayer who provides a taxicab or a livery service is allowed a credit against its
business corporation franchise tax for the incremental costs incurred on or after January 1, 2006
and before January 1, 20111 which are specifically associated with upgrading a vehicle so that it
is accessible by individuals with disabilities. See Tax Law § 210.40 & 20 NYCRR § 5-5.2. The
term “incremental cost” means the expenses specifically associated with the excess purchase
price of a vehicle accessible by individuals with disabilities over the purchase price of a motor
vehicle that is the same make and model except for the equipment necessary to convert it to a
vehicle accessible by individuals with disabilities. See 20 NYCRR § 5.5.2(d). The credit shall

1

Chapter 604 of the Laws of 2011 added sections 210.44 and 606(tt) to the Tax Law to allow a tax credit for 1) the
incremental cost of upgrading a vehicle used in providing a taxicab or livery service so that it is accessible to
persons with disabilities; and 2) the purchase of certain new vehicles that are accessible to persons with disabilities.
The credit allowed under these new sections apply to purchases of new vehicles and to incremental costs incurred
for taxable years beginning on or after January 1, 2011, but expire for purchases or costs incurred after December
31, 2016. TSB-M-12(1)C, (1)I.

-2-

TSB-A-12(5)C
Corporation Tax
September 27, 2012

not exceed $10,000 per vehicle and it may only be claimed once per vehicle. See 20 NYCRR §
5-5.4(a).
In the opinion request you asked if Petitioner may claim a credit for the van that was
converted by the previous owner for the incremental costs associated with Petitioner’s excess
purchase price of the van. The Petitioner did not provide any information on whether the van
qualifies as a taxicab or livery service. Thus we cannot reach a conclusion on this aspect of the
credit requirements. Assuming the van qualifies as a taxicab or livery service, Petitioner will be
entitled to claim a tax credit for the incremental costs specifically associated with the purchase
price of the van in accordance with the statutory and regulatory requirements listed above in an
amount not to exceed $10,000, provided that a tax credit for this vehicle was not previously
claimed.

DATED: September 27, 2012

NOTE:

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the
facts set forth therein and is binding on the Department only with respect to the
person or entity to whom it is issued and only if the person or entity fully and
accurately describes all relevant facts. An Advisory Opinion is based on the law,
regulations, and Department policies in effect as of the date the Opinion is issued or
for the specific time period at issue in the Opinion. The information provided in this
document does not cover every situation and is not intended to replace the law or
change its meaning.