If a company claimed the investment tax credit for several years on property that was also eligible for the (larger) eligible business facility credit, can it go back and amend its returns to switch to the eligible business facility credit instead?

Plain-English summary

Flexovit USA, Inc. received certificates of eligibility from the New York State Job Incentive Board for an eligible business facility covering 1978 through 1981. For each of those four years, Petitioner claimed the investment tax credit (Tax Law § 210.12) on the property that was also eligible for the separate, and potentially more generous, eligible business facility credit (§ 210.11) -- but never claimed the latter credit at all.

Petitioner asked whether it could now go back and retroactively substitute the eligible business facility credit for the investment tax credit it had already claimed. The Department said yes: Section 5-1.4 of the Franchise Tax Regulations specifically allows a taxpayer to amend a return, eliminating the investment tax credit for property that becomes eligible for the eligible business facility credit, as long as the amendment is made within the statute of limitations. Where the change creates an overpayment, the amended return is treated as a refund claim, and is allowable only if filed within the Tax Law § 1087 window -- generally three years from filing the original return or two years from paying the tax, whichever expires later. There is no such time limit on an amendment that produces a deficiency or no change at all.

The Department also rejected Petitioner's suggestion that it was somehow required to have started using the credit in 1978: nothing mandates when in the certified period a taxpayer must begin claiming the eligible business facility credit, so Petitioner may start in the earliest year still open under the limitations period. Finally, the Department flagged a coordination rule: if Petitioner uses the eligible business facility credit for 1979, 1980, or 1981, but not for 1978, the credit will apply only to property that was NOT already the subject of the 1978 (or any later) investment tax credit claim -- preventing double-crediting the same property under both regimes.

What this means for you

Businesses holding Job Incentive Board certificates who claimed the "wrong" credit

If your property qualified for both the investment tax credit and the eligible business facility credit but you only claimed one, you can amend to switch -- but only within the standard refund limitations period (three years from filing, or two years from payment, whichever is later).

Coordinating credits across multiple years

You don't have to switch credits for every certified year at once. But if you switch for some years and not others, the years where you keep the investment tax credit "use up" that property -- it can't also be claimed for the eligible business facility credit in a switched year.

Common questions

Q: Can I amend an old return to claim a different, more favorable credit on the same property?
A: Yes, if you're within the statute of limitations for a refund claim (three years from filing or two years from payment, whichever is later) -- or with no time limit at all if the change doesn't create a refund.

Q: Do I have to start claiming a Job Incentive credit in the first year I'm certified?
A: No -- you may begin claiming it in the earliest year that's still open under the limitations period.

Q: Can I use the eligible business facility credit for some years and the investment tax credit for others on the same property?
A: No -- property already credited under the investment tax credit for a given year can't also be claimed under the eligible business facility credit for a different year; the two credits don't stack on the same property.

Q: Can another company rely on this Opinion to make the same switch?
A: No. It binds the Department only as to Flexovit USA's own facts and can't be relied upon by other taxpayers, even those holding similar Job Incentive Board certificates.

Citations and references

Statutes and regulations:

• Tax Law § 210.11 (eligible business facility credit)
• Tax Law § 210.12 (investment tax credit)
• Section 5-1.4 of the Franchise Tax Regulations
• Tax Law § 1087 (refund limitations period)
• 20 NYCRR 154.4(c) (analogous Personal Income Tax rule)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/corporation_ao_1984.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/corporation/a84_13c.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-84 (13) C
Corporation Tax
October 16, 1984

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. C821207A

On December 7, 1982 a Petition for Advisory Opinion was received from Flexovit USA, Inc.,
1305 Eden-Evans Center Road, Angola, New York 14006.
Petitioner inquires as to the availability of the eligible business facility credit under the
circumstances described herein.
Petitioner received certificates of eligibility from the New York State Job Incentive Board
with respect to an eligible business facility for the years 1978 through 1981. Petitioner, with respect
to each of those years, claimed an investment tax credit, pursuant to Section 210.12 of the Tax Law,
based on property includible as eligible property for purposes of the eligible business facility credit
provided for under Section 210.11 of the Tax Law. Petitioner did not claim the eligible business
facility credit with respect to any of the four years in question.
Petitioner inquires as to whether it may retroactively claim the eligible business facility credit
in place of the investment tax credit. Petitioner may file an amended return, if done in a timely
manner, deleting its claim for the investment tax credit and asserting a claim for the eligible business
facilities credit. Thus, Section 5-1.4 of the Franchise Tax Regulations provides, in relevant part, as
follows:
. . . if the property for which an investment tax credit has been
claimed becomes eligible for the eligible business facility credit, the
report on which the investment tax credit was claimed may be
amended so as to eliminate the investment tax credit for the eligible
property, if the amendment is made within the statute of limitations.
Where the amendment to the original return results in an overpayment of tax, such
amendment will be deemed a claim for refund. Such refund will be allowable only if the amended
return is filed within the time allowed under section 1087 of the Tax Law, generally within three
years from the filing of the original return or within two years from the payment of tax, whichever
of such periods expires the later. No such time limitation is applicable to an amended return which
results in a deficiency or underpayment of tax or in no change. While such procedures are not
explicitly mandated by the Franchise Tax Regulations, they are consistent with 20 NYCRR 154.4(c),
which deals with changes of election under Personal Income Tax provisions essentially similar to
those operable with regard to Article 9-A. If Petitioner's eligible business facilities credit is utilized
for any of the tax years 1979, 1980 or 1981, but not for 1978, such credit will be applicable only to
property which was not the subject of the 1978 (or any subsequent) investment tax credit.

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-84 (13) C
Corporation Tax
October 16, 1984

Finally, Petitioner states that it was advised by the Job Incentive Board in 1979 that it had
a "three year period in which to select the beginning of the use of the JIB program credits. However,
now we are advised that the JIB credits should have been used beginning in 1978." Petitioner
requests a clarification on this point. Petitioner is advised that there is no requirement applicable to
its situation which would mandate the commencement of use of the eligible business facility credit
in 1978. Petitioner may commence its use of the credit in the earliest year permissible under the
statute of limitations referred to in the preceding paragraph.

DATED: October 3, 1984

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.