Sec. 5-11.5. Examples

Example 1:

Taxpayer A, a calendar year taxpayer, acquired property which qualified for the economic development zone investment tax credit on June 2, 1990 for $100,000 with a useful life of 10 years. Taxpayer A's average number of employees within the economic development zone are as follows:

1989	1991	1992	1993
200	205	201	202

Taxpayer A would be allowed credits against the tax due based on such property as follows:

1990 –	Economic development zone investment tax credit (10% × $100,000)	$10,000
1991 –	Economic development zone employment incentive tax credit (30% × $10,000)	$ 3,000
1992 –	No credit
1993 –	Economic development zone employment incentive tax credit (30% × $10,000)	$ 3,000

Example 2:

Assume the same facts as in Example 1 except that the property was disposed of or ceased to be in qualified use, as described in section 5-10.8 of this Part on December 30, 1990. Taxpayer A would be allowed credits against the tax due based on such property as follows:

1990 –	Economic development zone investment tax credit (10% × $100,000 × 7/120)	$583.33
1991 –	Economic development zone employment incentive tax credit (30% × 583.33)	$175.00
1992 –	No credit
1993 –	Economic development zone employment incentive tax credit (30% × 583.33)	$175.00

Example 3:

Assume the same facts as in Example 1 except that the property was disposed of or ceased to be in qualified use, as described in section 5-10.8 of this Part, on May 31, 1995. Taxpayer A would be allowed the credits against the tax due as shown in Example 1, but such taxpayer would have to compute the total amount of credits to be added back as follows:

Economic development zone investment tax credit
(60/120 × $10,000)	$ 5000
Economic development zone employment incentive tax credit
(30% × $5000 × 2 years)	$ 3000
Total amount to be added to the tax otherwise
due for taxable year 1995	$ 8000

Example 4:

Taxpayer B was incorporated in New York State on March 15, 1990, and elected to file its return on a calendar year basis. On July 1, 1990, such taxpayer acquired $100,000 worth of property which qualified for the economic development zone investment tax credit.

Taxpayer B has an allowable economic development zone investment tax credit of $10,000 for the calendar year 1990 and had an average of 100 employees within the economic development zone during 1990. During 1991, the average number of employees within the economic development zone was 104. Taxpayer B is entitled to an economic development zone employment incentive tax credit of $3,000 for the calendar year 1991.

Example 5:

Taxpayer C, incorporated in California on June 1, 1975, files its Federal tax return on a calendar year basis and first becomes subject to tax in New York State on August 1, 1990. Taxpayer C has an allowable economic development zone investment tax credit of $10,000 for the calendar year 1990 and has an average of 200 employees within the economic development zone during 1990. During 1991, the average number of employees within the economic development zone was 203. Taxpayer C is entitled to an economic development zone employment incentive tax credit of $3,000 for the calendar year 1991.

Example 6:

Taxpayer D, a calendar year taxpayer, acquired property which qualified for the economic development zone investment tax credit on July 1, 1988. The economic development zone in which such property was located was designated as such on June 22, 1988. Taxpayer D has an allowable economic development zone investment tax credit of $10,000 for the calendar year 1988. During 1987, the taxpayer had an average of 90 employees in the geographic area which subsequently constituted such zone. During 1989, the average number of employees within the economic development zone was 100. Taxpayer D is entitled to an economic development zone employment incentive tax credit of $3,000 for the calendar year 1989.