Description

Note: Although this tax credit can be claimed on personal income taxes, the building eligibility rules are such that it is not available for single-family residential homes.

In 2000, New York enacted a Green Building Tax Credit for business and personal income taxpayers. The credit can be applied against corporate taxes, personal income, insurance corporation taxes and banking corporation taxes. The incentive applies to owners and tenants of eligible buildings and tenant spaces which meet certain "green" standards. These standards increase energy efficiency, improve indoor air quality, and reduce the environmental impacts of large commercial and residential buildings in New York State, among other benefits.

The original 2000 legislation (Period I) allowed applicants to apply for a Credit Component Certificate in years 2001-2004 and to claim the credits over five years. Legislation in 2005 (Period II) extended the program, allowing applicants to apply for a Credit Component Certificate from 2005-2009. The 2005 legislation also contained a clause allowing Credit Component Certificates to be issued through 2010 if the full Period II allocation of tax credits has not been exhausted, which it has not. Taxpayers who are issued an Initial Credit Component Certificates for Period II have nine taxable years (2006-2014) to claim the credits. The original law provided for $25 million in credit certificates; the 2005 legislation added another $25 million. The 2005 legislation also caps incentives at $2 million per building in aggregate. Taxpayers who received credits under Period I may not seek additional credits for the same building for Period II.

Owners and tenants must work through an architect or engineer who will help obtain a credit certificate from the state for their project. The credits are distributed over a five year period with any unredeemed portion able to be carried forward indefinitely or transferred to a new owner or tenant.

Projects can qualify for credits under six different program components:

1. Whole Building Credit (owner or tenant), where base building and all tenant space are green;
2. Base Building Credit (owner), for non-dwelling spaces;
3. Tenant Space Credit (owner or tenant), where the base building must be green to qualify if the tenant space is under 10,000 square feet;
4. Fuel Cell Credit, for systems fueled by a "qualifying alternate energy source";
5. Photovoltaic Module Credit; and
6. Green Refrigerant Credit, for new air conditioning equipment using an EPA-approved non-ozone depleting refrigerant.

The components 4, 5 and 6 above must serve green spaces. For example, to qualify for the PV Module Credit, the building which the system serves must meet all requirements for energy, indoor air quality, materials, water conservation and commissioning. Credit cannot be earned by simply placing a PV system, for example, on a building.

The New York Department of Environmental Conservation must update the tax credit regulations (6NYCRR Part 638) before applications can be accepted for the $25 million allocated for Period II. The required amendment appeared on the DEC’s 2009 annual regulatory agenda; however, as of July 2010 it does not appear that new rules have officially been proposed. Visit the program web site above for announcements regarding updated regulations.