The IRS has finally issued the long awaited and anticipated safe harbor rules for historic rehabilitation projects using the rehabilitation tax credit under Section 47 of the Internal Revenue Code. More to follow.
Rev. Proc. 2014-12
Tim Lynn
(315) 701-6426
Email Me
Tuesday, December 31, 2013
Thursday, September 19, 2013
WHAT EMPLOYERS & INDIVIDUALS NEED TO KNOW ABOUT THE AFFORDABLE HEALTH CARE ACT
Some helpful information on the Affordable Care Act from our friends at Grossman St. Amour CPAs.
archive.constantcontact.com/fs122/1102593417058/archive/1114968533399.html
Tim Lynn(315) 701-6426lynn.skan@gmail.com
archive.constantcontact.com/fs122/1102593417058/archive/1114968533399.html
Tim Lynn(315) 701-6426lynn.skan@gmail.com
Wednesday, August 21, 2013
New York - A Bad Role Model for California
Indicative of the legislative and judicial temperaments in New York and California, in NY the legislature tried to retroactively change the tax rules and the courts protected taxpayers. In Cali, the courts are trying to retroactively change the tax rules and the legislature is trying to protect taxpayers.
From foxnews.com:
California small business owners ordered to pay back millions in tax breaks
http://www.foxnews.com/politics/2013/08/21/calif-small-business-owners-ordered-to-pay-back-millions-in-tax-breaks/
Tim Lynn
(315) 701-6426
lynn.skan@gmail.com
From foxnews.com:
California small business owners ordered to pay back millions in tax breaks
http://www.foxnews.com/politics/2013/08/21/calif-small-business-owners-ordered-to-pay-back-millions-in-tax-breaks/
Tim Lynn
(315) 701-6426
lynn.skan@gmail.com
Friday, July 19, 2013
Wednesday, July 10, 2013
Wednesday, June 26, 2013
Saturday, June 15, 2013
Summary of Draft Tax-Free NY Proposed Legislation
Proposed Tax‐Free NY Summary of Provisions in Gov. Cuomo’s June 7, 2013 Draft Legislation
6/15/2013
TaFNY Tax Benefits
• Credit to eliminate income tax (personal/partnership)
• Credit to eliminate corporate franchise tax
• Real property tax exemption (treated as exempt educational institution property). Limited to property with educational exemption as of June 1, 2013.
• Credit/refund of sales and use tax for 120 month period
• Lease is exempt from real estate transfer taxes
• For a period of up to 10 years, eligible employees working at the site are exempt from state/NYC/Yonkers income taxes
• Also an exemption for MCTD payroll tax
Eligible Sites – SUNY/Community Colleges
• SUNY campuses, with the exception of Empire State College (except Saratoga), any property of Downstate Medical Center (except incubator property), the College of Optometry and the Maritime College
• Community colleges, except a community college whose main campus is in NYC
• Sites allowed consists of:
– vacant space and vacant land on campus
– Up to 200,000sf of vacant land owned or leased by the SUNY located within one mile of campus
– Potential certification by ommissioner of ESD of land located more than one mile from campus
Eligible Sites – CUNY
• Five CUNY campuses (one in each borough)
• Limitations on selecting campus located in area with high poverty
• Up to 200,000sf of land adjacent to the campus that is owned or leased by the CUNY
Eligible Sites – Private Colleges/Universities
• Up to 3 million sf of vacant space or vacant land on a campus of a private university or college located outside Nassau, Suffolk, Westchester, or NYC
• However, each of Nassau, Suffolk, Westchester, Brooklyn,Bronx, Queens and Staten Island will have 30,000 sf in high poverty areas
• The locations for the 30,000sf sites must be owned or leased by one of the following:
– Private college or university whose campus is in Nassau, Suffolk, Westchester or NYC
– One of the SUNY institutions excluded from the SUNY category
– A community college whose main campus in is NYC
– A CUNY excluded from the five sites
Eligible Sites – Educational Institutions
• All of the educational institutions are prohibited relocating academic, administrative, housing, dining athletics or any other facilities serving students in order to create vacant space
Eligible Sites – Strategic State Assets
• The TaFNY approval board may designate up to 20 strategic state assets as designated sites
• Each site must be affiliated with and supported by an educational institution]
• No limit on the size of the designated site
• A strategic state asset does not include land or buildings located in NYC
• Includes only land and buildings which are, as of June 15, 2013, closed, vacant or for which notice
of closure has been authorized by law
Eligible Businesses
• Businesses that align with university mission
• Create and maintain net new jobs (including first year of operation)
• If a business has current operations in NYS or had operations in the last 5 years, it must apply for permission from the Commissioner of ESD to participate in TaFNY
• Excluded businesses:
– businesses providing utilities
– businesses engaged in generation or distribution of electricity, the distribution of natural gas, or the production of steam
– Retail/wholesale, restaurants, hotels
– Medical or dental practices
– Real estate brokers, accountants, attorneys
– Personal service businesses
– Finance and financial services
Approval Procedures
• The draft bill would providefor a process by which an educational institution would apply to have some
of its property designated as a TaFNY area
• The application requires a plan for the types of businesses and how these businesses align with the
educational mission of the institution
• A business desiring to participate in the program will apply first to the academic institution, which application, if approved, must be approved by the Commissioner of ESD
Welcome to the Utica Comets
Following up on the noteworthy success of Gary Heenan and the Utica College Pioneers at the refurbished Utica Aud (I miss the artwork of the bell-bottomed guitarist), we all welcome the Utica Comets to the AHL. Perfect timing with the Syracuse Crunch playoff run. Will it replace the Devils???
TheAHL.com | The American Hockey League | Home Page
TheAHL.com | The American Hockey League | Home Page
Tuesday, June 11, 2013
Monday, June 10, 2013
New York Department of Taxation and Finance Issues Guidance Regarding Annual Beer Tax Return Filing
The New York State Department of Taxation and Finance issued guidance on June 10, 2013 regarding technical amendments that permit farm breweries to file annual beer tax returns (rather than monthly filings). These changes bring consistent treatment for farm brewers, micro-breweries and restaurant breweries. To take advantage of annual filing, a farm brewer must file an election -- Application for Annual Filing Status for Certain Beer and Wine Manufacturers.
For further information, contact:
Tim Lynn
tim@bhlawpllc.com
(315) 701-6426
For further information, contact:
Tim Lynn
tim@bhlawpllc.com
(315) 701-6426
New York Consolidated Funding Application (CFA) Round 3 Announced
New York State has commenced Round 3 of the Consolidated Funding Application (CFA) process. Pursuant to this process, approximately $750 million will be awarded to projects located in the various economic development regions, as administered by the Regional Councils. More information can be found at CFA Application Manual 2013.
The deadline for submission is August 12, 2013.
For more information, please contact:
Tim Lynn
(315) 701-6426
Friday, June 7, 2013
Split Up New York?
In response to Gov. Cuomo's Tax-Free NY plan, James Banks, writing in policymic.com, asserts that Upstate New York's problems won't be solved by tax-free zones -- the real problem is that Upstate New York cannot thrive in a tax and regulatory environment designed for NYC:
Tax-Free NY Isn't Upstate New York's Solution
While his thoughts and critiques about the problem are convincing, I am not sure, at this point, Upstate New York could survive secession. At one time, Upstate probably did fund the NYC morass. That day has passed. Would a state of 7 million residents with a struggling economy, exodus of population and loss of identity thrive in the 21st century? Would the residents accept Medicaid cuts, decreases in hospital funding, additional prison closures, management of a massive complex of state facilities and a myriad of other financial problems?
Tax-Free NY Isn't Upstate New York's Solution
While his thoughts and critiques about the problem are convincing, I am not sure, at this point, Upstate New York could survive secession. At one time, Upstate probably did fund the NYC morass. That day has passed. Would a state of 7 million residents with a struggling economy, exodus of population and loss of identity thrive in the 21st century? Would the residents accept Medicaid cuts, decreases in hospital funding, additional prison closures, management of a massive complex of state facilities and a myriad of other financial problems?
Wednesday, June 5, 2013
ALERT: COURT OF APPEALS STRIKES RETROACTIVE DECERTIFICATION OF EMPIRE ZONE ENTERPRISES
On June 4, 2013,
the New York Court of Appeals issued its decision in Matter of WL, LLC v.
Dep’t of Economic Development, et al., striking down retroactive
decertification of Empire Zone certified business enterprises. The case arises out of the June 2009
decertification by the Commissioner of Economic Development of hundreds of
Empire Zone enterprises. The
Commissioner made such decertifications effective as of January 1, 2008,
thereby attempting to deprive these business enterprises of certain Empire Zone
tax credits for the 2008 tax year. The
Court wrote, “[R]etroactively denying tax credits to plaintiffs did nothing to
spur investment, to create jobs, or to prevent prior shirt-changing. The retroactive application of the 2009
Amendments simply punished the Program participants more harshly for behavior
that already occurred and they could not alter.”
The decision
could have broad ramifications.
Decertified business enterprises that preserved their rights to seek
2008 Empire Zone benefits are likely to use the decision as a basis to claim
those benefits. Business enterprises
that did not challenge their decertification administratively or through
litigation may also seek to use the decision to claim 2008 benefits, provided
affected taxpayers have a procedural method under applicable tax rules to
assert their claims..
It is noteworthy
that the Court has not addressed the validity of the decertifications of the
alleged (and so-called) “shirt-changers” other than to indicate that those
decertifications could not be retroactive to 2008. Numerous pending cases challenge these
decertifications on grounds not addressed in the Court’s decision, and those
cases remain open and will likely continue to be litigated.
For further
information, contact:
Tim Lynn
(315) 701-6426
Tuesday, June 4, 2013
Thursday, May 30, 2013
Thursday, May 23, 2013
Governor Cuomo Proposes Tax-Free Zones
On
May 22, 2013, Governor Cuomo unveiled a new economic development proposal
intended to create tax free zones for qualified new businesses operating near
SUNY campuses, designated private colleges and certain state owned properties
for a period of up to ten years. The
“Tax-Free NY” proposal is intended to transform SUNY campuses and university
communities within New York
State
Few
details are available but the Governor’s Office has released highlights of the
“Tax-Free NY” initiative that include:
- Establishment of Tax-Free Communities: Under the proposed program, qualifying businesses in the designated zones will be tax free -- exempt from sales, property, and/or business/franchise/corporate taxes. According to the information released, the zones consist 120 million square feet of space on SUNY campuses, private colleges and certain designated state properties. The tax-free communities include up to 200,000 square feet surrounding the campus at SUNY institutions.
- Employees Exempt from Income Taxes: Employees of businesses that qualify as Tax-Free NY communities will be exempt from paying income taxes under the proposed program.
- Businesses Eligible for Tax-Free NY: Eligible businesses include companies with a relationship to the academic mission of the university and companies creating new jobs, including new businesses, out-of-state businesses that relocate to New York and existing businesses that expand their New York operations while maintaining their existing jobs.
The
proposal will need to pass the New York State Legislature, with only four weeks
remaining in the current legislative session.
Wednesday, May 22, 2013
Some initial thoughts on Tax-Free NY
Gov. Cuomo's somewhat dramatic announcement of Tax-Free NY today has added a new wrinkle to New York's economic development climate. More information on Tax-Free NY. While the program may have a significant impact in a few small areas of the state, it will not address most of the key problems facing Upstate New York.
The Proposal:
It is reassuring that state government is recognizing the economic development hurdles faced by Upstate New York. Since 2005, economic development efforts Upstate have been, in general, under attack in Albany. The tide may be turning. However, the proposal seems to fall far short of what Upstate needs. Since the demise of the Empire Zones Program, there has been little concerted, strategic effort invested in improving Upstate's distressed urban areas.
Tim Lynn
tim@bhlawpllc.com
(315) 701-6426
The Proposal:
- The proposal would create "tax-free communities" at and around SUNY campuses, private colleges and certain state owned properties.
- Qualifying businesses located in these tax-free communities would be exempt from sales tax, property taxes and business/corporate taxes.
- Employees working at these businesses would not pay income tax.
- While the overall footprint is large (an asserted 120 million square feet), with campus space often very limited, the available footprints may be limited, perhaps primarily the proposed 200,000 sf around SUNY campuses (of which there are 64) and one would expect a similarly limited scope around private colleges and the designated state properties. Some important questions: (1) Who will decide what 200,000 sf will be designated? (2) Will this become a bonanza for certain strategically located real property owners? (3) Will 200,000 sf allocated to a campus surrounded by residential neighborhoods go to waste? (4) How will rural schools utilize 200,000 sf? (5) Will SUNY institutions and private colleges become the landlord of choice for businesses of all shapes and sizes?
- What impact will this have on the local property tax base? A 200,000 sf development could have a significant impact on local services in some of the smaller college-towns. Without property taxes from private enterprise, how will this burden be funded?
- What impact will this have on existing (but excluded) businesses? Is it fair to subject a long-standing local business (that has been paying sales taxes, property taxes and income taxes and supporting the local community for years) to contrived competition from a business free of the hassle of paying taxes?
- How much of a say will local officials have in defining the designated areas and the types of businesses receiving the benefits?
It is reassuring that state government is recognizing the economic development hurdles faced by Upstate New York. Since 2005, economic development efforts Upstate have been, in general, under attack in Albany. The tide may be turning. However, the proposal seems to fall far short of what Upstate needs. Since the demise of the Empire Zones Program, there has been little concerted, strategic effort invested in improving Upstate's distressed urban areas.
Tim Lynn
tim@bhlawpllc.com
(315) 701-6426
Monday, May 20, 2013
Federal Interest Rates
It is a recurring shock when the IRS releases each month's applicable federal rates. Rev. Rul. 2013-12 (May 20, 2013). For June 2013, the annual short-term, mid-term and long-term AFRs are 0.18%, 0.95% and 2.47%. WSJ prime rate continues its long stand at 3.25%.
Thursday, May 16, 2013
New York's 548-day Rule for Persons Domiciled in New York But Living in a Foreign Country
The New York Department of Taxation and Finance has issued guidance providing that, with respect to a taxpayer, domiciled in New York but living in a foreign country, legally separated from his spouse, the time such taxpayer's minor child spends in New York will not count towards such taxpayer's 90 days spent in New York, provided that the days in question are not days upon which taxpayer has custody or visitation rights. TSB-A-12(3.1)I.
Tim Lynn
tim@bhlawpllc.com
(315) 701-6426
Tim Lynn
tim@bhlawpllc.com
(315) 701-6426
Tuesday, May 14, 2013
Proposed Changes for Public Charities in New York
A bill (S.5115/A.2118) pending in the New York legislature would make significant changes in the executive compensation rules for New York Not-For-Profit Corporations. The stated purpose of the law is to provide clear rules that ensure executive compensation is "reasonable and not excessive." While the changes are targeted towards executive compensation issues, the impact, if adopted, would touch on other operational issues for Not-For-Profit Corporations.
Summary of Key Points:
For more information, I can be contacted at tim@bhlawpllc.com or at (315) 701-6426.
Summary of Key Points:
- Employees of a "public charity" (as defined under the Internal Revenue Code) and relatives of the employee would be ineligible to serve as directors (with an exception for an employee serving in an ex officio capacity).
- All Not-For-Profit Corporations that are required to obtain an audit and all Not-For-Profit Corporations with gross receipts of $250,000 or more would be required to have a board consisting of at least five directors.
- The fixing of compensation for directors, officers and "key employees" would require action by the full board and could not be reserved to an executive committee or compensation committee.
- The bill would prohibit the payment of compensation to directors, except reimbursement for reasonable expenses.
- The bill would allow email notices and email consents with respect to board of directors' unanimous written consent approvals.
For more information, I can be contacted at tim@bhlawpllc.com or at (315) 701-6426.
Wednesday, February 13, 2013
Decertified Empire Zone Enterprises - Filing Amended 2009 Tax Returns
bhlawpllc.com/resources/pdf/Memo to 2009 Empire Zone Clients from Tim Lynn.pdf
MEMORANDUM
To: Empire Zone Clients
From: Timothy M. Lynn, Esq.
Date: February 13, 2013
Re: Filing Amended 2009 Empire Zone Related Tax Returns
There are numerous lawsuits pending that challenge the 2009 Empire Zone decertifications, including challenges to (i) the constitutionality of the decertifications and (ii) the constitutionality of the requirement that a retention certificate be attached to the 2009 tax return (in addition to 2008 and all years after 2009). If the courts find either that the decertifications were unconstitutional or that the retention certificate requirement is unconstitutional, taxpayers may have the right to use these decisions even if the taxpayer did not challenge their decertification in court.
We cannot gauge the likelihood of success in these constitutional challenges. Nevertheless, in the event the courts ultimately deem the decertifications or the retention certificate requirement to be unconstitutional, taxpayers may face a statute of limitations problem in claiming their 2009 (or future years) Empire Zone credits. The statute of limitations to amend 2009 tax returns will run on March 15, 2013 or April 15, 2013 (possibly later if filed on extension).
Taxpayers wishing to preserve their rights should consider taking the following action:
1- File a timely amendment of the tax return of the certified entity or other business enterprise for 2009 attaching all Empire Zone forms (and, in the case of disregarded entities, sole proprietorships and C corporations, demanding a refund);
-and-
2- For pass-through entities, the ultimate taxpayer-owners would file timely amended 2009 returns attaching all Empire Zone forms and demanding a refund.
Please note:
· For future years (until all of the litigation is resolved) these steps would be repeated (i.e., 2010 amendments would be considered next year before the 2010 statute of limitations expires).
· In those circumstances where the Empire Zone forms were included in the original filings, analysis should be done of whether there is a more immediate statute of limitations issue and whether different action needs to be taken to preserve rights.
· The amended returns could serve to extend the statute of limitations for at least another two years. Specific statute of limitations analysis should be done for each taxpayer.
· Timely filing of the amended returns must be done for both the QEZE and the taxpayers claiming credits.
If a taxpayer chooses to file an amended return, an explanatory statement should be included to provide context to the Department of Taxation and Finance.
If you have any questions or comments, please contact me.
Timothy M. Lynn
(315) 701-6426
Tuesday, February 12, 2013
Wednesday, January 23, 2013
Tuesday, January 22, 2013
Dramatic Improvements to New York's Historic Tax Credit Proposed By Governor Cuomo
Governor Cuomo has submitted his proposed FY 2013-14 Executive Budget to the Legislature. Therein, the Governor has proposed dramatic enhancements to New York's Historic Rehabilitation Tax Credit. While these changes would make significant improvements to the program, there are features of the changes that need further discussion and examination.
The proposal makes three significant changes:
Developers of historic properties have two issues they may wish to address with the Legislature. First, the Governor's proposal tacitly rejects the increase in the cap on the credit (from $5 million to $12 million). While this will not impact very many projects, it will have a dramatic impact on a few projects across the state that are key to economic redevelopment of distressed urban areas.
Second, the Governor's proposal would delay refundability until 2015. This raises the following questions and comments:
If you have any questions or comments, you can reach me at tim@bhlawpllc.com or at (315) 701-6426.
The proposal makes three significant changes:
- Extender. The proposal would extend New York's current Historic Rehabilitation Tax Credit until 2020 (under current law, the credit would revert to its traditional $100,000 cap at the end of 2014).
- Census Tracts. The proposal would change the criteria for determining census tracts that are eligible for the New York credit (presumably in a fashion better targeted towards blight, unemployment and poverty).
- Refundability. The proposal would make, beginning in 2015, the New York credit fully refundable.
Developers of historic properties have two issues they may wish to address with the Legislature. First, the Governor's proposal tacitly rejects the increase in the cap on the credit (from $5 million to $12 million). While this will not impact very many projects, it will have a dramatic impact on a few projects across the state that are key to economic redevelopment of distressed urban areas.
Second, the Governor's proposal would delay refundability until 2015. This raises the following questions and comments:
- As the credit is currently an unlimited carry-forward item, will refundability be available in 2015 for tax credit claimed in prior tax years? This may include projects placed in service in prior years or in 2013 and 2014.
- With the delay in refundability, and with many projects currently in planning that have an expected placed in service date in 2013 or 2014, should the credit be made refundable beginning with tax years commencing on or after January 1, 2013?
If you have any questions or comments, you can reach me at tim@bhlawpllc.com or at (315) 701-6426.
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