§ 30-01 Definitions.
RCNY § 30-01
Aggregate employment shares. The term "aggregate employment shares" means the sum of all employment shares maintained by an eligible business in a taxable year.
(1)Determination of number of eligible aggregate employment shares.
(i)For purposes of the credit allowed by subdivision (i) of § 11-503, subdivision 17 of § 11-604 or § 11-643.7 of the Administrative Code of the City of New York and the reduction in base rent allowed by subdivision f of § 11-704 of such Code, the number of eligible aggregate employment shares of an eligible business is the amount, if any, by which the number of aggregate employment shares maintained by it in the eligible area in the taxable year in which it claims such credit or reduction exceeds the number of aggregate employment shares maintained by it in the eligible area in the taxable year immediately preceding the taxable year during which it first relocates. (Note: when used in these rules the term "relocate" has the meaning set forth in this definition section. Note also, the taxable year preceding the taxable year of an eligible business' first relocation shall hereafter be referred to as the "base year".) (ii) The amount determined under subparagraph (i) of this paragraph shall not exceed whichever of the following is the least: (A) the amount, if any, by which the number of aggregate employment shares maintained by the eligible business in particular to which it has relocated premises in the taxable year in which the credit or reduction is claimed exceeds the number of aggregate employment shares maintained in such premises in the taxable year immediately preceding the taxable year during which the eligible business relocates to such premises. (This amount shall hereafter be referred to as "Limitation 1".); (B) for any taxable year following the third taxable year immediately succeeding the taxable year of relocation to particular eligible premises, the amount, if any, by which the highest number of aggregate employment shares maintained by the eligible business in the premises in the taxable year during which it relocates to such premises or in any of the three immediately succeeding taxable years exceeds the number of aggregate employment shares maintained in such premises in the taxable year immediately preceding the taxable year of the relocation. (This amount shall hereafter be referred to as "Limitation 2".); (C) an amount equal to twice the number of aggregate employment shares maintained by the eligible business outside the eligible area in the base year. (This amount shall hereafter be referred to as "Limitation 3").
(iii)If an eligible business relocates to more than one particular premises, Limitations 1 and 2 must be calculated separately for each particular premises. In such case, the amount determined under subparagraph (i) of this paragraph shall not exceed the lesser of (A) the sum of the lesser of Limitations 1 and 2 for each particular premises or (B) Limitation 3.
(2)Calculation of shares. The calculation of eligible aggregate employment shares may be illustrated by the following examples (Assume that a year has exactly 52 weeks): Example 1: During 1987 a calendar year taxpayer has 200 full time employees, 100 of whom work in Manhattan south of 96th Street and 100 of whom work in New Jersey. On January 1, 1988, taxpayer relocates all 200 employees to eligible premises in Brooklyn, and hires an additional 50 employees to work at the new location. All 250 employees work full time during the taxable year. Taxpayer has 250 eligible aggregate employment shares in 1988. Example 2: Same facts as in example 1. For the commercial rent tax year ending May 31, 1988, the number of eligible aggregate employment shares is calculated by multiplying 250 workers by the number of weeks they worked ending within the period January 1, 1988 to May 31, 1988, then dividing by the number of weeks ending within the period of June 1, 1987 to May 31, 1988. From this amount, the number of aggregate employment shares in the base year would be subtracted (except that here the number is zero). The base year for the commercial rent tax is January 1, 1987 to December 31, 1987, the same as the base year for the general corporation tax, unincorporated business tax, or banking corporation tax, whichever is applicable. Example 3: Same facts as in example 1, except that the relocation and hiring take place on the first day of the 27th week of 1988. Taxpayer has 125 eligible aggregate employment shares in 1988 (250 workers times 26 work weeks per worker divided by 52 weeks in the taxable year). Example 4: Same facts as in example 1, except that, instead of having 100 employees in Manhattan, these employees were in non-eligible premises in Queens prior to relocation to Brooklyn. Taxpayer has 150 eligible aggregate employment shares in 1988 (250 shares in eligible area in 1988 less 100 shares in eligible area in 1987). Example 5: Same facts as in example 1, except that, instead of hiring 50 new employees at the eligible premises, taxpayer hires 300 new employees for a total of 500 employees at the eligible premises. Taxpayer has 400 eligible aggregate employment shares in 1988 (Limitation 3 applies). Example 6: Same facts as in example 1, except that 100 of the employees were moved to non-eligible premises in Queens so that only 150 employees were working at the eligible premises in Brooklyn. Taxpayer has 150 eligible aggregate employment shares in 1988 (Limitation 1 applies). Example 7: Same facts as in example 1, with the following additional facts: The taxable year in question is 1991, the third taxable year after the year of relocation. On January 1, 1991, taxpayer hires 50 more employees for a total of 300 full-time employees working the entire year. Taxpayer has 300 eligible aggregate employment shares in 1991. Example 8: Same facts as in example 7, except that the taxable year in question is 1992, the fourth taxable year after the year of the relocation. On January 1, 1992, taxpayer hires an additional 100 employees to work at the eligible premises, for a total of 400 full-time employees working the entire year. Taxpayer has 300 eligible aggregate employment shares in 1992 (Limitation 2 applies). Example 9: Same facts as in example 1, with the following additional facts: On January 1, 1992, taxpayer hires 100 additional employees, 50 of whom work at the eligible premises in Brooklyn (P1) for a total of 300, and 50 of whom work at new eligible premises in the Bronx (P2). Taxpayer has 300 eligible aggregate employment shares in 1992. (Pursuant to Reg. § 13(c), the lesser of Limitations 1 and 2 for P1 is Limitation 2, or 250. This is added to 50 for P2 pursuant to limitation 1, resulting in a sum of 300.) Example 10. Same facts as in example 1, except that on June 1, 1988, taxpayer hires an additional 50 workers who work full-time through May 31, 1989. For the commercial rent tax year June 1, 1988 through May 31, 1989, taxpayer has 300 eligible aggregate employment shares. (Taxpayer has 300 aggregate employment shares in the year June 1, 1988 through May 31, 1989. Since there were no aggregate employment shares in the base year, which is calendar year 1987, no shares are subtracted.) Base year. "Base year" shall mean the taxable year preceding the taxable year during which an eligible business first relocates. Commencement date of improvements. For buildings receiving tax abatement benefits under the Industrial and Commercial Incentive Program, or from the Industrial and Commercial Incentive Board, commencement date shall mean the date a "Certificate of Eligibility" issued relating to such benefits is effective. For buildings owned by not-for-profit corporations, the Urban Development Corporation, or the City of New York, or for buildings financed with Industrial Development Agency bonds, commencement date shall mean the date of issuance of the first building permit which authorizes commencement of the work which involves the expenditures for improvements to real property which would qualify the premises for this program. Eligible area. "Eligible area" means the area of the city excluding that area in the borough of Manhattan lying south of the center line of 96th Street. Eligible business. "Eligible business" shall mean: (1) Any person subject to the unincorporated business tax imposed under Chapter 5, the general corporation tax imposed under Subchapter 2 of Chapter 6, or the banking corporation tax imposed under Subchapter 3 of Chapter 6 of Title 11 of the Administrative Code, or for purposes of the reduction in base rent allowed by the subdivision f of § 11-704 of the Code, any person subject to one of such taxes or any insurance corporation as defined in § 1500 of the New York State Tax Law, which: (i) has been conducting substantial business operations at one or more business locations outside the eligible area for at least 24 consecutive months immediately preceding the taxable year during which such eligible business relocates; and (ii) on or after May 27, 1987 relocates all or part of such business operations; and (iii) either: (A) on or after May 27, 1987 first enters into a contract to purchase or lease the premises to which it relocates, or a parcel on which will be constructed such eligible premises, or (B) as of May 27, 1987 owns such parcel or premises and has not prior to such date made application for benefits under the Industrial and Commercial Incentive Program pursuant to Part 4 of Subchapter 2 of Chapter 2 of Title 11 of the Administrative Code.
(3)The determination of whether premises meet the requirements for eligibility set forth in this definition shall be made as of the effective date of the initial certification of eligibility issued pursuant to 19 RCNY § 30-02(b). Notwithstanding the provisions of paragraphs (1) and (2) of this definition, if, subsequent to such date, the property in which such premises are contained ceases to meet the requirements of paragraphs (1) and (2) of this definition, such premises shall nonetheless remain eligible premises, provided that the eligible business continues to occupy such premises; provided however, that if after such property ceases to meet the requirements of paragraph (1) and (2), an eligible business first leases or purchases additional premises contained in such property, such additional premises shall not be considered eligible premises. Employment share.
(ii)In the case of an employee, partner or sole proprietor who works part of the week within and part of the week without a particular premises, hours are attributable to such particular premises as follows: (A) If an employee, partner or sole proprietor spends substantially all of his or her time at a particular premises, all hours are attributable to such premises. (B) If an employee, partner or sole proprietor does not spend substantially all of his or her time at a particular premises, all hours are nonetheless attributable to such premises if the employee, partner or sole proprietor is present at such premises at the beginning or end of each work day and all of the employee's, partner's or sole proprietor's time spent outside of such premises relates primarily to business operations carried on at such premises, provided that hours worked at a particular premises cannot be attributed by reason of this subparagraph to another particular premises maintained by the same eligible business. If an eligible business has both eligible and non-eligible premises in the same building, hours worked at the non-eligible premises cannot be attributed by reason of this subparagraph (ii)(B) to the eligible premises. (C) If neither subparagraph (ii)(A) or (ii)(B) of this paragraph (3) applies, only hours worked at a particular premises are attributable to such premises.
(iv)The operation of this paragraph (3) is illustrated by the following examples: Example 1: X, an employee of ABC Corporation, an eligible business having one eligible premises, works 40 hours a week driving a truck and making deliveries. X loads his truck every morning at ABC Corp.'s eligible premises and spends the rest of his time making deliveries outside the eligible area. Since X starts each day at the eligible premises and spends the rest of his time on deliveries from the eligible premises, all of his time will be attributable to the eligible premises. Thus, ABC Corp. may count a full time work week in the eligible area and at the eligible premises with respect to each week worked by X. Example 2: Y, who also drives a truck and works 40 hours a week for ABC Corp., spends 10 hours each week loading at the eligible premises, 10 hours loading at premises maintained by the business outside of the eligible area, and 20 hours making deliveries outside of the eligible area. The 10 hours spent at the eligible premises are counted toward a work week at the eligible premises. The 10 hours spent at the non-eligible premises are counted toward the non-eligible premises and do not qualify. The 20 hours spent making deliveries cannot be counted toward either premises. Thus, Y does not have a full or part time work week in the eligible area or at the eligible premises. Example 3: Z, a salesman, spends substantially all of his time in Alaska selling products manufactured at ABC Corp.'s eligible premises. Since Z does not start or end each day at the eligible premises, none of Z's time is attributable to the eligible premises. Example 4: E, an executive of ABC Corp., spends 16 hours a week at ABC Corp.'s eligible premises and 25 hours at the premises outside the eligible area. Only 16 hours (i.e., a part-time work week) are attributable to the eligible premises.
(v)It shall be within the discretion of the Commissioner to determine whether hours worked by an employee, partner or sole proprietor outside of eligible premises maintained by the eligible business have been fairly apportioned within and without the eligible area, and within and without the eligible premises.
(4)In the case of an employee, partner or sole proprietor with work weeks both within and without the eligible area in a given taxable year, the employment shares maintained by the eligible business within the eligible area with respect to the employee shall be the sum of (i) the number of full-time work weeks worked by the employee, partner or sole proprietor during the eligible business' taxable year attributable to the eligible area divided by the number of weeks in the taxable year, and (ii) the number of part-time work weeks worked by such employee, partner or sole proprietor during the eligible business' taxable year attributable to the eligible area divided by an amount equal to twice the number of weeks in the taxable year.
(5)In the case of an employee, partner or sole proprietor with work weeks both within and without the eligible premises in a given taxable year, the employment shares maintained by the eligible business within the eligible premises with respect to the employee, partner or sole proprietor shall be the sum of (i) the number of full-time work weeks worked by the employee, partner or sole proprietor during the eligible business' taxable year attributable to the eligible premises divided by the number of weeks in the taxable year and (ii) the number of part-time work weeks worked by such employee, partner or sole proprietor during the eligible business' taxable year attributable to the eligible premises divided by an amount equal to twice the number of weeks in the taxable year. Expenditure. "Expenditure" shall mean an amount actually paid, incurred, or provided in kind to improve the real property which in part improves the premises. Expenditures may include those made for: construction contracts, materials, labor, rental equipment, insurance, permit fees and other direct expenses of construction; installation of partitions and other tenant work by or for the first tenant or occupant of new or substantially renovated space; architectural, engineering, construction management, legal, accounting and other services rendered in connection with the construction work; marketing, brokerage, legal and other services rendered in connection with the initial leasing or sale of eligible property created or substantially renovated by eligible construction work; interest on construction loans, insurance and other fixed costs arising during the course of construction; and fees for connection to existing sewer, water or utility lines. Expenditures shall not include the costs of acquiring the site. Hotel services. "Hotel services" shall mean: (1) Any services which consist predominantly of the lodging of guests at a building or a portion thereof which is regularly used and kept open for such services. The term "hotel services" shall include the lodging of guests at an apartment hotel, a hotel, boarding house or club, whether or not meals are served.
