§ 16. QEZE tax reduction credit. (a) Allowance of credit. A taxpayer
which is a qualified empire zone enterprise (QEZE), or which is a sole
proprietor of a QEZE or a member of a partnership which is a QEZE, and
which is subject to tax under article nine-A, twenty-two or thirty-three
of this chapter, shall be allowed a credit against such tax, pursuant to
the provisions referenced in subdivision (g) of this section, to be
computed as hereinafter provided.

(b) Amount of credit. The amount of the credit shall be the product of
(i) the benefit period factor, (ii) the employment increase factor,
(iii) the zone allocation factor and (iv) the tax factor.

(c) Benefit period factor. The benefit period factor for the taxable
year shall be as prescribed in subdivision (c) of section fifteen of
this article.

(d) Employment increase factor. The employment increase factor for the
taxable year shall be as prescribed in subdivision (d) of section
fifteen of this article.

(e) Zone allocation factor. The zone allocation factor shall be the
percentage representing the QEZE's economic presence in empire zones
with respect to which the QEZE is certified under article eighteen-B of
the general municipal law. This percentage shall be computed by:

(1) ascertaining the percentage which the average value of the QEZE's
real and tangible personal property, whether owned or rented to it, in
empire zones with respect to which the QEZE is certified under article
eighteen-B of the general municipal law during the period covered by the
taxpayer's report or return bears to the average value of the QEZE's
real and tangible personal property, whether owned or rented to it,
within the state during such period; provided that the term "value of
the QEZE's real and tangible personal property" shall have the same
meaning as such term has in subparagraph one of paragraph (a) of
subdivision three of section two hundred ten of this chapter; and

(2) ascertaining the percentage of the total wages, salaries and other
personal service compensation, similarly computed, during such period of
employees, except general executive officers, of the QEZE in empire
zones with respect to which the QEZE is certified under article
eighteen-B of the general municipal law, to the total wages, salaries
and other personal service compensation, similarly computed, during such
period, of all the QEZE's employees within the state, except general
executive officers; and

(3) adding together the percentages so determined and dividing the
result by the number of percentages.

For purposes of article twenty-two of this chapter, references in this
subdivision to property, wages, salaries and other personal service
compensation shall be deemed to be references to such items connected
with the conduct of a business.

(f) Tax factor. (1) General. The tax factor shall be, in the case of
article nine-A of this chapter, the amount of tax determined for the
taxable year under paragraph (a) of subdivision one of section two
hundred ten of such article. The tax factor shall be, in the case of
article twenty-two of this chapter, the tax determined for the taxable
year under subsections (a) through (d) of section six hundred one of
such article. The tax factor shall be, in the case of article
thirty-three of this chapter, the larger of the amounts of tax
determined for the taxable year under paragraphs one and three of
subdivision (a) of section fifteen hundred two of such article.

(2) Sole proprietors, partners and S corporation shareholders. (A)
Where the taxpayer is a sole proprietor of a qualified empire zone
enterprise, the taxpayer's tax factor shall be that portion of the
amount determined in paragraph one of this subdivision which is
attributable to the income of the qualified empire zone enterprise. Such
attribution shall be made in accordance with the ratio of the taxpayer's
income from the qualified empire zone enterprise allocated within the
state, entering into New York adjusted gross income, to the taxpayer's
New York adjusted gross income, or in accordance with such other methods
as the commissioner may prescribe as providing an apportionment which
reasonably reflects the portion of the taxpayer's tax attributable to
the income of the qualified empire zone enterprise. In no event may the
ratio so determined exceed 1.0.

(B)(i) Where the taxpayer is a member of a partnership which is a
qualified empire zone enterprise, the taxpayer's tax factor shall be
that portion of the amount determined in paragraph one of this
subdivision which is attributable to the income of the partnership. Such
attribution shall be made in accordance with the ratio of the partner's
income from the partnership allocated within the state to the partner's
entire income, or in accordance with such other methods as the
commissioner may prescribe as providing an apportionment which
reasonably reflects the portion of the partner's tax attributable to the
income of the partnership. In no event may the ratio so determined
exceed 1.0.

(ii) For purposes of article nine-A of this chapter, the term
"partner's income from the partnership" means partnership items of
income, gain, loss and deduction, and New York modifications thereto,
entering into business income and the term "partner's entire income"
means business income allocated within the state. For purposes of
article thirty-three of this chapter, the term "partner's income from
the partnership" means partnership items of income, gain, loss and
deduction, and New York modifications thereto, entering into entire net
income or entire net income plus compensation and the term "partner's
entire income" means entire net income, or entire net income plus
compensation, allocated within the state. For purposes of article
twenty-two of this chapter, the term "partner's income from the
partnership" means partnership items of income, gain, loss and
deduction, and New York modifications thereto, entering into New York
adjusted gross income, and the term "partner's entire income" means New
York adjusted gross income.

(C) Where the taxpayer is a shareholder of a New York S corporation
which is a qualified empire zone enterprise, the shareholder's tax
factor shall be that portion of the amount determined in paragraph one
of this subdivision which is attributable to the income of the S
corporation. Such attribution shall be made in accordance with the ratio
of the shareholder's income from the S corporation allocated within the
state, entering into New York adjusted gross income, to the
shareholder's New York adjusted gross income, or in accordance with such
other methods as the commissioner may prescribe as providing an
apportionment which reasonably reflects the portion of the shareholder's
tax attributable to the income of the qualified empire zone enterprise.
In no event may the ratio so determined exceed 1.0.

(3) Combined returns or reports. (A) Where the taxpayer is a
qualified empire zone enterprise and is required or permitted to make a
return or report on a combined basis under article nine-A or article
thirty-three of this chapter, the taxpayer's tax factor shall be the
amount determined in paragraph one of this subdivision which is
attributable to the income of the qualified empire zone enterprise. Such
attribution shall be made in accordance with the ratio of the qualified
empire zone enterprise's income allocated within the state to the
combined group's income, or in accordance with such other methods as the
commissioner may prescribe as providing an apportionment which
reasonably reflects the portion of the combined group's tax attributable
to the income of the qualified empire zone enterprise. In no event may
the ratio so determined exceed 1.0.

(B) The term "income of the qualified empire zone enterprise" means
entire net income, minimum taxable income, alternative entire net income
or entire net income plus compensation calculated as if the taxpayer was
filing separately and the term "combined group's income" means entire
net income, minimum taxable income, alternative entire net income or
entire net income plus compensation as shown on the combined return or
report, allocated within the state.

(4) If the amount determined in paragraph one of this subdivision is
less than zero, a taxpayer shall not be allowed a credit under this
section.

(g) Definitions and cross-references. For definitions of terms used in
this section see sections fourteen and fifteen of this article. For
application of the credit provided for in this section, see the
following provisions of this chapter:

(1) Article 9-A: Section 210-B: subdivision 6.

(2) Article 22: Section 606: subsections (i) and (cc).

(3) Article 33: Section 1511: subdivision (s).