1. (1) The empire zone wage tax credit is allowed for up to five consecutive taxable years, beginning in the first taxable year in which the taxpayer meets the eligibility rules described in section 210.19 of the Tax Law. Effective for taxable years beginning on or after January 1, 2001, the zone equivalent area wage tax credit is also allowed for up to five consecutive taxable years, beginning in the first taxable year in which the taxpayer meets the eligibility rules described in section 210.19 of the Tax Law.

2. (2) Transition Rule. For purposes of the zone equivalent area wage tax credit:

   1. (i) a taxpayer who is first eligible to claim the zone equivalent area wage tax credit prior to January 1, 1997 will be allowed to claim the zone equivalent area wage tax credit for up to two consecutive years, beginning in the first taxable year in which the taxpayer meets the eligibility rules described in section 210.19 of the Tax Law;

   2. (ii) a taxpayer who is first eligible to claim the zone equivalent area wage tax credit on or after January 1, 1997 and before January 1, 2001, will be allowed to claim the zone equivalent area wage tax credit for up to two consecutive taxable years beginning in the first taxable year in which the taxpayer meets the eligibility rules described in section 210.19 of the Tax Law. In addition, for taxable years beginning on or after January 1, 2001, such taxpayer will be allowed to claim the credit for up to three additional consecutive taxable years, in which the taxpayer continues to meet such eligibility rules. Each of such additional taxable years must fall within the five year period beginning with the first taxable year in which the taxpayer is eligible to claim the zone equivalent area wage tax credit.

      Example:

      Taxpayer B is a calendar year taxpayer, located in a zone equivalent area. Taxpayer B meets the eligibility requirements, described in section 210.19 of the Tax Law, to claim the zone equivalent area wage tax credit for taxable years 1997 and 1998 and claims the credit for such years. Taxpayer B continues to meet such eligibility requirements for taxable years 1999 and 2000. Since the extension of the zone equivalent area wage tax credit to a period of up to five consecutive taxable years is not effective until January 1, 2001, Taxpayer B may not claim the zone equivalent area wage tax credit for taxable years 1999 or 2000. However, if Taxpayer B continues to meet the eligibility rules in taxable year 2001, it may claim the credit for that one additional taxable year. (Taxable year 2001 would fall within the five year period beginning when Taxpayer B originally claimed the credit [1997], and such taxable year begins on or after January 1, 2001.)

3. (b) In addition to the eligibility rules described in section 210.19 of the Tax Law, the following also applies. Taxpayers which have shifted their operations or portions thereof from an area within New York State, which is not an empire zone or zone equivalent area, to an area which is an empire zone or zone equivalent area, and have been certified under section 959(a) of article 18-B of the General Municipal Law, are eligible to include the employees which have been shifted from the area which is not an empire zone or zone equivalent area, when determining the number of full-time employees employed by the taxpayer in the zone or area during the taxable year. Taxpayers which have shifted their operations or portions thereof from an area outside New York State are similarly eligible to include the employees which have been shifted from outside the State.

Tax Law, § 210(19)

(a)