New York Advisory Opinion TSB-A-13(8)C: Must a taxpayer forfeit Empire Zone tax credits it already earned and is carrying forward if it enters the Excelsior Jobs Program?

Plain-English summary

A factory owner held about $17 million in Empire Zone (EZ) carryforward credits earned under an EZ certification (its EZ certification ran to April 1, 2014). The state offered to admit the factory into the Excelsior Jobs Program, with Excelsior benefits to begin in 2015. The owner asked whether joining Excelsior would force it to forfeit the EZ carryforward credits.

The Department said no. Economic Development Law § 354(d) requires Excelsior applicants to agree to be permanently disqualified from EZ benefits at locations that qualify for Excelsior benefits — but the purpose of that rule is only to stop a taxpayer from collecting both EZ and Excelsior benefits for the same activity or investment. The EZ credits here were earned in years before the taxpayer joined Excelsior, while Excelsior benefits must be earned by activities or investments made after receiving an Excelsior Certificate of Eligibility. Because the two sets of benefits relate to different periods and activities, there was no double-dipping, so the taxpayer could keep carrying forward and claiming the previously earned EZ credits.

What this means for you

Businesses transitioning from Empire Zones to Excelsior

Entering Excelsior does not wipe out EZ credits you already earned. The disqualification bites only on overlapping benefits — the same activity or investment generating both EZ and Excelsior credits. Credits banked before your Excelsior Certificate of Eligibility remain available to carry forward.

Accountants and tax professionals

The dividing line is timing: EZ credits earned before admission survive; Excelsior benefits accrue only on post-Certificate activity. Keep clear records of when each credit was earned to show there is no double-dipping under Economic Development Law § 354(d).

Common questions

Q: Do I lose my Empire Zone carryforward credits if I join Excelsior?
A: No, not the ones you earned before joining. The disqualification only prevents double benefits for the same activity or investment.

Q: When do Excelsior benefits start to accrue?
A: On activities or investments performed after you receive an Excelsior Certificate of Eligibility.

Q: Can my business rely on this opinion?
A: No. It binds the Department only as to this petitioner and these facts.

Citations and references

• Economic Development Law § 354(d) (Excelsior applicants permanently disqualified from EZ benefits at qualifying locations, to prevent double benefits for the same activity or investment)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/corporation_ao_2013.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/corporation/a13_8c.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Counsel
Advisory Opinion Unit

TSB-A-13(8)C
Corporation Tax
August 30, 2013

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. C130801A

The Department of Taxation and Finance received a Petition for Advisory Opinion
from name redacted. Petitioner asks whether its Empire Zone (EZ) tax credits, previously
earned and currently being carried forward, must be forfeited, if Petitioner is accepted into
the Excelsior Jobs Program (the Program) and begins claiming the Program tax credits.
We conclude that Petitioner may continue to carry forward and claim the EZ tax
credits that it earned prior to entering the Program.
Facts
Petitioner operates a factory located in New York State. Petitioner was approved
for EZ Certification for the factory site on December 23, 1998, and subsequently received
an EZ Retention Certificate on June 19, 2009. Petitioner’s EZ certification expires April 1,
2014. Petitioner currently maintains approximately $17 million in EZ carryforward
credits. The Department of Economic Development recently offered to admit Petitioner’s
New York State factory into the Program with tax benefits for Petitioner scheduled to
begin in 2015.
Analysis
Economic Development Law § 354(d) requires applicants for admission into the
Program to agree, if admitted into the Program, to be permanently disqualified for EZ
benefits at any location or locations that qualify for the Program benefits. The purpose of
this requirement is to prevent a taxpayer from receiving both EZ and Program benefits that
are attributable to the same activity or investment. The EZ tax benefits that Petitioner is
currently eligible to carry forward were earned in taxable years prior to Petitioner’s
admittance into the Program. The tax benefits that Petitioner may receive as a participant
in the Program must be earned by activities or investments performed after Petitioner has
received a Certificate of Eligibility to participate in the Program. Because the EZ benefits
at issue were earned prior to Petitioner’s acceptance into The Program, no possibility of

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TSB-A-13(8)C
Corporation Tax
August 30, 2013

double dipping exists. Thus, after Petitioner becomes a participant in the Program,
Petitioner can continue to claim the EZ carryforward credits that were earned prior to its
admission into the program.

DATED: August 30, 2013

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.