§ 14. Empire zones program. (a) Qualified empire zone enterprise. A
business enterprise which is certified under article eighteen-B of the
general municipal law and meets the employment test shall be a
"qualified empire zone enterprise":

(1) except as provided in paragraphs one-a and one-b of this
subdivision, for purposes of articles nine-A, twenty-two and
thirty-three of this chapter, for each of the taxable years within the
"business tax benefit period," which period shall consist of (A) in the
case of a business enterprise with a test date occurring on or before
December thirty-first, two thousand one, the first fifteen taxable years
beginning on or after January first, two thousand one, (B) in the case
of a business enterprise with a test date occurring on or after January
first, two thousand two, but prior to April first, two thousand five,
the fifteen taxable years next following the business enterprise's test
year, and (C) in the case of a business enterprise which is first
certified under article eighteen-B of the general municipal law on or
after April first, two thousand five, the ten taxable years starting
with the taxable year in which the business enterprise's first date of
certification under article eighteen-B of the general municipal law
occurs, but only with respect to each of such business tax benefit
period years for which the employment test is met,

(1-a) With respect to a business enterprise approved by the
commissioner of economic development as the owner of a qualified
investment project pursuant to subdivision (w) of section nine hundred
fifty-nine of the general municipal law, the business tax benefit period
shall mean the ten taxable years starting with the taxable year in which
the business enterprise's benefit period commencement date occurs, but
only with respect to each of such business tax benefit period years for
which the employment test is met, as the term "benefit period
commencement date" is defined in this paragraph. The term "benefit
period commencement date" shall mean either (i) the date of
certification pursuant to article eighteen-B of the general municipal
law of the business enterprise at the location of the qualified
investment project or (ii) the date when property constituting a
qualified investment project is first placed in service. The benefit
period commencement date shall be determined by an election made by the
business enterprise taxable year which includes the date of
certification of the business enterprise at the location of the
qualified investment project pursuant to article eighteen-B of the
general municipal law,. In the event no such election is made by the
business enterprise, the business tax benefit period shall be deemed to
commence in the taxable year in which the business enterprise is
certified at the location of the qualified investment project pursuant
to article eighteen-B of the general municipal law. The business tax
benefit period allowed under this paragraph shall be in addition to the
business tax benefit period allowed pursuant to paragraph one of this
subdivision.

(1-b) With respect to a business enterprise approved by the
commissioner of economic development as the owner of a significant
capital investment project pursuant to subdivision (w) of section nine
hundred fifty-nine of the general municipal law, the business tax
benefit period shall be increased to include the ten taxable years
starting with the taxable year in which property comprising the
significant capital investment project is first placed in service,
provided that such property is placed in service during the business
enterprise's business tax benefit period under paragraph one-a of this
subdivision. The business tax benefit period set forth in paragraph
one-a of this subdivision and any additional periods added to such
business tax benefit period pursuant to this paragraph shall constitute
one continuous business tax benefit period. During such entire business
tax benefit period, the business enterprise shall be allowed to claim
the tax credits provided pursuant to sections fifteen and sixteen of
this article with respect to such qualified investment project and such
significant capital investment project, provided the employment test is
met and the requirements of such credits are satisfied for each of those
taxable years, and provided further that, the benefit period factor as
set forth in subdivision (c) of section fifteen of this article shall be
1.0 during such entire business tax benefit period.

(2) for purposes of articles twenty-eight and twenty-nine of this
chapter, during the "sales and use tax benefit period." Such period
shall consist of one hundred twenty consecutive months beginning on the
later of (A) March first, two thousand one, or (B) with regard to
business enterprises certified pursuant to article eighteen-B of the
general municipal law prior to April first, two thousand nine, the first
day of the month next following the date of issuance of a qualified
empire zone enterprise certification by the commissioner under
subdivision (h) of this section, or (C) with regard to business
enterprises certified pursuant to such article eighteen-B on or after
April first, two thousand nine, the first day of the month next
following the date of certification under article eighteen-B as an
empire zone business. Provided however, such period shall not include
any month falling within a taxable year immediately preceded by a
taxable year with respect to which the business enterprise did not meet
the employment test.

(b) Employment test.

(1) General. In the case of a business enterprise which is first
certified under article eighteen-B of the general municipal law before
April first, two thousand five, the employment test shall be met with
respect to a taxable year if the business enterprise's employment number
in the empire zones for such taxable year equals or exceeds its
employment number in such zones for the base period, and its employment
number in the state outside of such zones for such taxable year equals
or exceeds its employment number in the state outside of such zones for
the base period. For entities first certified between August first, two
thousand two and March thirty-first, two thousand five, if the base
period is zero years and the enterprise has an employment number in such
zone of greater than zero with respect to a taxable year, then the
employment test will be met only if the enterprise qualifies as a new
business under subdivision (j) of this section. For entities first
certified prior to August first, two thousand two, if the entity had a
base period of zero years or zero employment in the base period, then
the employment test will be met only if the enterprise qualifies as a
new business under subdivision (j) of this section.

(2) Change in zone boundaries or newly designated zones. Provided,
however, where there has been one or more revisions of the boundaries of
an empire zone that resulted in the inclusion of the business enterprise
within such zone, the employment test shall be determined with respect
to a taxable year as if the boundaries of the revised zone on the last
day of the taxable year existed during the base period and test year and
as if the enterprise had been located in the revised zone during its
base period and test year. In addition, where an area has been newly
designated as an empire zone, the employment test shall be determined
with respect to a taxable year as if such newly designated zone existed
during the base period and test year and as if the enterprise had been
located in the newly designated zone during its base period and test
year.

(3) Relocation from a business incubator facility. Where a business
enterprise relocates to an empire zone from a business incubator
facility operated by a municipality or by a public or private
not-for-profit entity which provides space or business support services
or both space and business support services to newly established
enterprises, the employment test shall be determined with respect to a
taxable year as if such business enterprise was located in the empire
zone during the base period.

(4) In the case of a business enterprise which is first certified
under article eighteen-B of the general municipal law on or after April
first, two thousand five, and notwithstanding any other provision to the
contrary, in the case of a business enterprise which was first certified
between August first, two thousand two and March thirty-first, two
thousand five that conducts its operations on real property that it owns
or leases that is both located within an empire zone and that is subject
to a brownfield site cleanup agreement executed prior to January first,
two thousand six in accordance with section 27-1409 of the environmental
conservation law, the employment test shall be met with respect to a
taxable year if the business enterprise's employment number in the state
and the empire zones for such taxable year exceeds its employment number
in the state and the empire zones, respectively, for the base period. If
the base period is zero years or the base period employment is zero and
the enterprise has an employment number in such zone of greater than
zero with respect to a taxable year, then the employment test will be
met only if the enterprise qualifies as a new business under subdivision
(j) of this section.

(5) For purposes of the sales and use tax benefit period, in the case
of a business enterprise which is first certified under article
eighteen-B of the general municipal law on or after April first, two
thousand five, and is so certified during its first taxable year, the
employment test shall be met with respect to such first taxable year in
any month in which its employment number exceeds zero.

(c) Base period. (1) Except as provided in paragraphs two and three of
this subdivision, in the case of a business enterprise which is first
certified under article eighteen-B of the general municipal law before
April first, two thousand five, the term "base period" means the five
taxable years immediately preceding the test year. If the business
enterprise has fewer than five such years, then the term "base period"
means such smaller set of years.

(2) In the case of a business enterprise which is first certified
under article eighteen-B of the general municipal law on or after April
first, two thousand five, the term "base period" means the four taxable
years immediately preceding the taxable year in which the business
enterprise was first certified under article eighteen-B of the general
municipal law. If the business enterprise has fewer than four such
years, then the term "base period" means such smaller set of years.

(3) For purposes of the sales and use tax benefit period, in the case
of a business enterprise which is first certified under article
eighteen-B of the general municipal law on or after April first, two
thousand five, the term "base period" means the three taxable years
immediately preceding the business enterprise's test year. For this
purpose, the definitions set forth in subdivisions (d) and (e) of this
section shall apply. However, the definition of the term "test date" in
subdivision (e) shall be read as if the words "prior to July first, two
thousand five" were omitted from such definition.

(d) Test year. The term "test year" means the last taxable year of the
business enterprise ending before the test date. If a business
enterprise does not have a taxable year that ends on or before the test
date, such enterprise shall be deemed to have a test year which shall be
either the last calendar year ending on or before its test date, or if
the enterprise has as its taxable year a fiscal year, the last such
fiscal year ending on or before its test date (whether or not the
enterprise in fact had a taxable year during that period).

(e) Test date. The term "test date" means the later of July first, two
thousand or the date prior to July first, two thousand eleven on which
the business enterprise was first certified under article eighteen-B of
the general municipal law.

(f) Taxable year. The term "taxable year" means the taxable year of
the business enterprise under section one hundred eighty-three or one
hundred eighty-four or former section one hundred eighty-six of article
nine, or under article nine-A, twenty-two or thirty-three of this
chapter. If a business enterprise does not have a taxable year because
it is exempt from taxation or otherwise not required to file a return
under any of such sections of article nine or under article nine-A,
twenty-two or thirty-three, then the term "taxable year" means (i) the
business enterprise's federal taxable year, or, (ii) if the enterprise
does not have a federal taxable year, the calendar year.

(g) Employment number. (1) The term "employment number" shall mean the
average number of individuals, excluding general executive officers (in
the case of a corporation), employed full-time by the enterprise for at
least one-half of the taxable year. Such number shall be computed by
determining the number of such individuals employed by the taxpayer on
the thirty-first day of March, the thirtieth day of June, the thirtieth
day of September and the thirty-first day of December during the
applicable taxable year, adding together the number of such individuals
determined to be so employed on each of such dates and dividing the sum
so obtained by the number of such dates occurring within such applicable
taxable year. Such number shall not include individuals employed within
the state within the immediately preceding sixty months by a related
person to the QEZE, as such term "related person" is defined in
subparagraph (c) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code. For this purpose, a
"related person" shall include an entity which would have qualified as a
"related person" to the QEZE if it had not been dissolved, liquidated,
merged with another entity or otherwise ceased to exist or operate.

(2) For a business enterprise satisfying the criteria set forth in
this paragraph, the term "employment number" with respect to the
enterprise's first taxable year shall be computed by taking into
consideration only the number of individuals, excluding general
executive officers (in the case of a corporation), employed full-time by
the enterprise on the last day of such taxable year. Such business
enterprise shall satisfy the following criteria: (A) such enterprise
acquired real or tangible personal property during its first taxable
year from an entity which is not a related person (as such term is
defined in paragraph one of this subdivision); (B) the first taxable
year of such enterprise shall be a short taxable year of not more than
seven months in duration; and (C) the number of individuals employed
full-time on the last day of such first taxable year shall be at least
one hundred ninety and substantially all of such individuals must have
been previously employed by the entity from whom such enterprise
purchased its assets.

(h) Sales and use tax. (1) In addition to the other requirements of
this section, for business enterprises certified pursuant to article
eighteen-B of the general municipal law prior to April first, two
thousand nine, in order for an exemption under subdivision (z) of
section eleven hundred fifteen of this chapter or the credit or refund
described in subdivision (d) of section eleven hundred nineteen of this
chapter or any like exemption or credit or refund imposed pursuant to
the authority of article twenty-nine of this chapter to apply with
respect to a qualified empire zone enterprise, such enterprise shall
apply to the commissioner of taxation and finance for the issuance of a
qualified empire zone enterprise certification in the manner prescribed
by the commissioner. If such commissioner grants such certification,
such certification shall be subject to conditions specified by such
commissioner. Nothing herein or in any other law shall be construed to
prohibit the disclosure, in such manner as the commissioner of taxation
and finance deems appropriate, of the names and other appropriate
identifying information of those persons holding qualified empire zone
certifications pursuant to this subdivision, those persons whose
qualified empire zone enterprise certifications have been revoked or
persons whose qualified empire zone enterprise certifications have
expired. The commissioner shall not grant any certifications pursuant to
this subdivision after June thirtieth, two thousand ten.

(2) A business enterprise, certified as an empire zone business under
article eighteen-B of the general municipal law prior to April first,
two thousand nine, and certified as a qualified empire zone enterprise
by the commissioner of taxation and finance prior to August first, two
thousand nine, is eligible to claim the exemption under subdivision (z)
of section eleven hundred fifteen of this chapter or any like exemption
from tax imposed pursuant to the authority of article twenty-nine of
this chapter until September first, two thousand nine, provided that the
other requirements of the statute are met. A business enterprise
certified as an empire zone business under article eighteen-B of the
general municipal law prior to April first, two thousand nine, and
certified as a qualified empire zone enterprise by the commissioner of
taxation and finance as of or prior to June thirtieth, two thousand ten,
is eligible to claim the credit or refund under subdivision (d) of
section eleven hundred nineteen of this chapter or any like credit or
refund imposed pursuant to the authority of article twenty-nine of this
chapter, provided that the other requirements of the statute are met
during the term of its sales and use tax benefit period notwithstanding
the expiration of the empire zones program under article eighteen-B of
the general municipal law.

(3) During the period that a business enterprise is eligible to apply,
or is qualified, for an exemption or a credit or refund of the sales and
compensating use taxes under this section, the commissioner of economic
development shall, at the time such commissioner certifies or
decertifies a business enterprise under article eighteen-B of the
general municipal law, notify the commissioner of taxation and finance
of such certification or decertification, which notification shall
include the full legal name, address and federal employer identification
number of such enterprise. The commissioner of economic development
shall, at the time of any such certification, also advise such
enterprise of the requirements in paragraph one of this subdivision.

(i) Cessation of status. A business enterprise shall cease to be a
qualified empire zone enterprise:

(1) for purposes of articles nine-A, twenty-two and thirty-three of
this chapter, on the first day of the taxable year during which
revocation of its certification under article eighteen-B of the general
municipal law occurs, and

(2) for purposes of articles twenty-eight and twenty-nine of this
chapter, on the day such revocation occurs.

(j) New business. (1) A new business shall include any corporation,
except a corporation which is substantially similar in operation and in
ownership to a business entity (or entities) taxable, or previously
taxable, under section one hundred eighty-three, one hundred
eighty-four, former section one hundred eighty-five or former section
one hundred eighty-six of article nine; article nine-A or thirty-three
of this chapter; article twenty-three of this chapter or which would
have been subject to tax under such article twenty-three (as such
article was in effect on January first, nineteen hundred eighty),
article thirty-two of this chapter or which would have been subject to
tax under such article thirty-two (as such article was in effect on
December thirty-first, two thousand fourteen) or the income (or losses)
of which is (or was) includable under article twenty-two of this
chapter.

(2) For purposes of article twenty-two of this chapter, an individual
who is either a sole proprietor or a member of a partnership shall
qualify as an owner of a new business unless the business of which the
individual is an owner is substantially similar in operation and in
ownership to a business entity taxable, or previously taxable, under
section one hundred eighty-three, one hundred eighty-four, former
section one hundred eighty-five or former section one hundred eighty-six
of article nine; article nine-A or article thirty-three of this chapter;
article twenty-three of this chapter or which would have been subject to
tax under such article twenty-three (as such article was in effect on
January first, nineteen hundred eighty); article thirty-two of this
chapter or which would have been subject to tax under such article
thirty-two as such article was in effect on December thirty-first, two
thousand fourteen or the income (or losses) of which is (or was)
includable under article twenty-two.

(3) For purposes of article twenty-two of this chapter, a shareholder
of a New York S corporation shall be treated as the owner of a new
business with respect to such share if the corporation qualifies as a
new business pursuant to paragraph one of this subdivision.

(4) (A)(i) Notwithstanding paragraphs one and two of this subdivision,
a new business shall include any corporation which is identical in
operation and ownership to a business entity (or entities) taxable under
section one hundred eighty-three or one hundred eighty-four or former
section one hundred eighty-five of article nine; article nine-A or
thirty-three of this chapter or the income (or losses) of which is
includable under article twenty-two of this chapter, provided such
corporation and such business entity or entities are operating in
different counties in the state.

(ii) Notwithstanding paragraphs one and two of this subdivision, an
individual who is either a sole proprietor or a member of a partnership
shall qualify as an owner of a new business if the business of which the
individual is an owner is identical in operation and in ownership to a
business entity (or entities) taxable under section one hundred
eighty-three or one hundred eighty-four or former section one hundred
eighty-five of article nine; article nine-A or thirty-three of this
chapter or the income (or losses) of which is includable under article
twenty-two of this chapter, provided such business and such business
entity or entities are operating in different counties in the state.

(iii) Any corporation qualifying as a new business or any individual
qualifying as an owner of a new business as a result of the provisions
of this subparagraph shall have the same business tax benefit period and
sales and use tax benefit period as the business entity to which it is
identical in operation and in ownership.

(B) Notwithstanding any provisions of this subdivision to the contrary
and notwithstanding subdivision c of section eighteen of part CC of
chapter eighty-five of the laws of two thousand two, a corporation or
partnership, which was first certified under article eighteen-B of the
general municipal law before August first, two thousand two, has a base
period of zero years or zero employment for its base period, and is
similar in operation and in ownership to a business entity or entities
taxable, or previously taxable, under sections specified in paragraph
one or two of this subdivision or which would have been subject to tax
under article twenty-three of this chapter (as such article was in
effect on January first, nineteen hundred eighty) or which would have
been subject to tax under article thirty-two of this chapter (as such
article was in effect on December thirty-first, two thousand fourteen)
or the income or losses of which is or was includable under article
twenty-two of this chapter shall not be deemed a new business if it was
not formed for a valid business purpose, as such term is defined in
clause (D) of subparagraph one of paragraph (o) of subdivision nine of
section two hundred eight of this chapter and was formed solely to gain
empire zone benefits.

(5) Notwithstanding any other provision of this section, a business
enterprise which is approved by the commissioner of economic development
as the owner of a qualified investment project or a significant capital
investment project pursuant to subdivision (w) of section nine hundred
fifty-nine of the general municipal law, has a base period of zero years
and places in service property (or a project that includes such
property) which comprises such qualified investment project or such
significant capital investment project, shall be deemed to be a new
business under this section. Provided, however, to be deemed a new
business under this paragraph, such business enterprise shall have
received certification under article eighteen-B of the general business
law by December thirty-first, two thousand seven.

(k) If the designation of an area as an empire zone is no longer in
effect because section nine hundred sixty-nine of the general municipal
law was not amended to extend the effective date of such designation so
that the designations of all empire zones pursuant to article eighteen-B
of the general municipal law have expired, a business enterprise that
was certified pursuant to article eighteen-B of the general municipal
law on the day immediately preceding the day on which such designation
expired shall be deemed to continue to be certified under such article
eighteen-B for purposes of this section, and sections fifteen, sixteen,
subdivisions five and six of section two hundred ten-B, subsections (bb)
and (cc) of section six hundred six, subdivision (d) of section eleven
hundred nineteen and subdivisions (r) and (s) of section fifteen hundred
eleven of this chapter. In addition, if the designation of an area as an
empire zone is no longer in effect because section nine hundred
sixty-nine of the general municipal law was not amended to extend the
effective date of such designation so that the designations of all
empire zones pursuant to article eighteen-B of the general municipal law
have expired, all references to empire zones in the provisions of this
chapter listed in the previous sentence shall be read as meaning areas
designated as empire zones on the day immediately preceding the day on
which such designation expired.

(1) Manufacturer. For the purposes of sections fifteen and sixteen of
this article, the term "manufacturer" shall mean a taxpayer which during
the taxable year is principally engaged in the production of goods by
manufacturing, processing, assembling, refining, mining, extracting,
farming, agriculture, horticulture, floriculture, viticulture, or
commercial fishing, or a business engaged in emerging technologies
pursuant to section thirty-one hundred two-e of the public authorities
law.

(n) Clean energy enterprises. In determining tax benefits under this
chapter for clean energy enterprises certified under article eighteen-B
of the general municipal law, references in this section and other
sections in this chapter relating to qualified empire zone enterprises
and empire zone benefits to "an empire zone", "the empire zone" and "the
empire zones" shall be read as references to "New York State", and any
tests or measurements relating to employment for purpose of empire zone
benefits under this chapter shall be calculated with respect to
employment within the entire state, and references to "QEZES" shall be
read as including references to such clean energy enterprises that meet
the employment test in this section. For purposes of the tax reduction
credit allowed under section sixteen of this article, for a clean energy
enterprise, the zone allocation factor shall be one hundred percent.