NY TSB-A-16(2)I Income Tax 2016-05-20

What is the last year a brownfield tangible-property credit may be claimed when the Certificate of Completion issued December 31, 2008?

Short answer: The tangible-property credit may be claimed for qualified property placed in service for up to ten taxable years after the year the Certificate of Completion (CoC) issued. With a December 31, 2008 CoC, the last year to place property in service and claim the credit is the year ending December 31, 2018.

Disclaimer: This is an official New York State Department of Taxation and Finance Advisory Opinion (TSB-A), issued by the Office of Counsel at a taxpayer's request. It is limited to the facts set forth in it and binds the Department only with respect to the petitioner to whom it was issued, and only if that petitioner fully and accurately described all relevant facts; another taxpayer cannot rely on it. It reflects the law, regulations, and Department policy in effect when issued and may since have changed. Taxpayer-identifying details are redacted. New York State and local sales taxes are administered centrally by the Department. This summary is informational only and is not legal or tax advice. Consult a licensed New York tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

A brownfield site received its Certificate of Completion (CoC) on December 31, 2008. The original developer placed tangible property in service starting in 2008; in 2015 it assigned an interest in the undeveloped portion (and the CoC) to a new taxpayer who plans further construction. The new taxpayer asked the last date qualified tangible property may be placed in service and the tangible-property credit component (Tax Law § 21(a)(3)) claimed.

The Office of Counsel concluded the tangible-property credit may be claimed for qualified property placed in service for up to ten taxable years after the year the CoC issued. With a 2008 CoC (calendar-year taxpayer), the window runs through the year ending December 31, 2018.

What this means for you

Brownfield developers and credit assignees

The tangible-property component has a long tail - ten years after the CoC year - and an assignee who takes an interest in the site and CoC can keep placing qualified property in service and claiming the credit within that window. Track the CoC year carefully; that's what starts the clock.

Accountants and tax preparers

Distinguish the tangible-property component (ten years after the CoC year) from the site-preparation component (five years; see TSB-A-15(9)I / TSB-A-20(13)I). Pre-April 13, 2015 CoCs follow the older § 21 rules.

Common questions

Q: When does the tangible-property credit window close?
A: Ten taxable years after the year the CoC issued (here, year-end 2018 for a December 31, 2008 CoC).

Q: Can a later assignee of the site claim it?
A: Yes, for qualified property it places in service within the ten-year window, assuming the property meets § 21(b)(3).

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Use it as guidance and confirm your own facts.

Citations and references

Statutes and regulations:
- Tax Law §§ 21(a)(3), 21(b)(3), 22
- ECL § 27-1419; DTF Publication 300

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_2016.htm
Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a16_2i.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-16(2)I
Income Tax
May 20, 2016

Office of Counsel
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. Z160314A

The Department of Taxation and Finance (“DTF”) received a Petition for an Advisory
Opinion from REDACTEDREDACTEDREDACTED (“Petitioner”). Petitioner requests
guidance on one issue involving the Brownfield Redevelopment Tax Credit under Tax Law § 21.
Petitioner asks what is the last day that qualified tangible property may be placed in
service, and the tangible property credit component under Tax Law § 21(a)(3) claimed, where a
Certificate of Completion was issued on December 31, 2008, with tangible personal property
first placed in service on the site in 2008. We conclude that the last day qualified tangible
property may be placed in service is December 31, 2018, and the last taxable year the tangible
property credit may be claimed is the year ending December 31, 2018, because the tangible
property credit component may be claimed for up to ten tax years after the year the Certificate is
issued.
Facts
The City of Yonkers Industrial Development Agency ("YIDA") owns a brownfield site
(the “site” or “property”). REDACTEDREDACTED ("CY XX") held a ground lease to the site
from YIDA. CY XX has the calendar year as its taxable year. On May 31, 2005, CY XX entered
into a Brownfield Site Cleanup Agreement (the "BCA") with New York State Department of
Environmental Conservation pertaining to the site. The BCA was subsequently amended in 2008
to add several of CY XX's affiliates as parties.
From 2005 through 2008, CY XX conducted environmental remediation activities at the
site. On December 31, 2008, NYSDEC issued to CY XX and its affiliates a Certificate of
Completion for the Site under Environmental Conservation Law § 27-1419 (the "CoC"). CY XX
constructed a residential apartment complex and apartment garage on the site. CY XX first
placed property in service on the site in 2008 and thereafter placed additional property in service
in subsequent years. CY XX filed concomitant claims for the tangible property credit component
for each of the years in which property was placed in service.
In 2015 CY XX transferred and assigned to Petitioner an interest in the undeveloped
portion of the brownfield site and a concomitant interest in the CoC. Petitioner seeks to
construct, place in service, and operate improvements to the site. At Petitioner’s request, for
purposes of this opinion we assume that any such improvements, when placed in service, would
meet the criteria enumerated in Tax Law § 21(b)(3) to constitute "qualified tangible property."
Petitioner was formed in 2010, but did not have members and did not have a taxable year
for federal income tax purposes until 2015. Petitioner's first taxable year for federal and New

TSB-A-16(2)I
Income Tax
May 20, 2016

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York State income tax purposes was the full calendar year 2015. Petitioner has the calendar year
as its taxable year. 1
Analysis
The brownfield redevelopment tax credit is comprised of several tax credits located in
Tax Law §§ 21 and 22 2. At issue here is the “tangible property credit component” of Tax Law §
21. Specifically, the issue is at what time can a taxpayer claim the credit and for how long can it
be claimed.
The tangible property credit component “…shall be allowed for the taxable year in which
such qualified tangible property is placed in service on a qualified site with respect to which a
certificate of completion has been issued to the taxpayer for up to ten taxable years after the date
of the issuance of such certificate of completion.” Id. at § 21(a)(3). New York State Department
of Taxation and Finance Publication 300 clarifies that the tangible property credit “…may be
claimed for qualified tangible property placed in service for up to ten tax years after the year the
CoC is issued.” DTF Publication 300, p. 12.
Petitioners contend that the “ten taxable years” period, during which qualified tangible
property may be placed in service and the tangible property credit claimed, begins to run in the
tax year ending December 31, 2009, because the credit may be claimed for qualified property
placed in service for up to ten tax years after the year to CoC is issued. The CoC was issued on
December 31, 2008. Petitioner’s interpretation is consistent with the plain language of Tax Law
§ 21(a)(3) and the guidance provided by DTF Publication 300. Specifically, those provisions
state that the credit may be claimed for the taxable year in which qualified property is placed in
service on a site which has received a CoC, for up to ten taxable years after the year the CoC is
issued. We conclude that, where a CoC was issued on December 31, 2008, the tangible property
credit may be claimed for qualified property placed in service in tax year 2008 through the tax
year ending December 31, 2018.

DATED: May 20, 2016

/S/
DEBORAH LIEBMAN
Deputy Counsel

NOTE:

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

The analysis and conclusions contained herein are based on the assumption that the taxpayer will continue to have
a January 1 – December 31 tax year and will not have any short tax years.
2
Because the CoC was issued on December 31, 2008 this opinion applies to the brownfield redevelopment tax credit
as it existed prior to April 13, 2015. The amendments signed into law on April 13, 2015, L.2015, c.56, Part BB, are
not applicable to this opinion.

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TSB-A-16(2)I
Income Tax
May 20, 2016

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.