Sec. 5-8.5. Recomputation of economic development zone capital tax credit on disposition of qualified investments

Tax Law, § 21(20)(d)

(a) When a taxpayer;

(1) sells, transfers or otherwise disposes of corporate stock, a partnership interest or other ownership interest obtained by making a qualified investment, as provided in section 5-8.2(c) of this Part; or

(2) recovers in any manner, a contribution or investment, as described in section 5-8.2(a)(2) or (3) of this Part, which stock, interest, contribution or investment was the basis, in whole or in part, for the allowance of the credit, and the disposition or recovery occurs during the taxable year or within 36 months from the close of the tax year in which the credit is allowed, the taxpayer shall add back to the tax, in the taxable year in which the disposition or recovery occurs, the required portion of the credit originally allowed, as determined in accordance with subdivision (b) of this section.

(b)

(1) The required portion of the credit originally allowed shall be the product of:

(i) the portion of the credit attributable to the property disposed of or the payment or contribution recovered; and

(ii) the applicable percentage provided in paragraph (2) of this subdivision.

(2) The applicable percentage shall be:

(i) 100 percent, if the disposition or recovery occurs within the taxable year in which the credit is allowed or within 12 months of the end of such taxable year;

(ii) 67 percent, if the disposition or recovery occurs more than 12 months but not more than 24 months after the end of the taxable year with respect to which the credit is allowed; or

(iii) 33 percent, if the disposition or recovery occurs more than 24 months but not more than 36 months after the end of the taxable year with respect to which the credit is allowed.