Federal Brownfields Tax Incentive
The Internal Revenue Service allows an income tax deduction to encourage the cleanup and redevelopment of brownfields. Under Section 198 of the IRS code, eligible expenses can be fully deducted in the year incurred instead of capitalized over a period of years. For a site to qualify, there must be a release (or threat of release) or disposal of a federally-defined hazardous substance or petroleum product. For the list of CERCLA hazardous substances see CFR 40 Part 302.4. Furthermore, sites on or proposed to be on the federal National Priorities List (Superfund) do not qualify for the tax incentive, and the property must be owned by the taxpayer for business or income generation purposes. For further information on site eligibility, please visit the EPA's Brownfields Tax Incentive Web Page.
The State's role is to provide certification the site is a "qualified contaminated site" as defined in the tax code. The State cannot determine which project costs are eligible for the incentive. For information on eligible expenses, please consult a tax advisor. An advisor may also provide guidance on how using the federal incentive may impact the tax credits available under New York State's Brownfield Cleanup Program.
This tax expensing program had expired at the end of 2007. In October 2008, it was extended to December 31, 2009 and made retroactive back to December 31, 2007. Eligibility for petroleum products applies to cleanup expenses incurred from January 1, 2006 to the tax incentive's current expiration date of December 31, 2009. Any corporation that is considering filing an amended return to take advantage of the retroactive tax deduction must do so within three years after the date it filed its original return, or within two years after the date it paid the tax.
To request a certification for a site in New York State, please send a letter to:
Bureau of Program Management
New York State Department of Environmental Conservation
Division of Environmental Remediation
625 Broadway
Albany, New York 12233-7012
phone (518) 402-9711
fax (518) 402-9722
Your request for a certification needs to include sufficient information about your project for this agency to make the required certification. Your request must include, at a minimum: a description of the project, the site's street address, site number (if applicable), the contaminants involved, an indication of whether or not the site is on the federal National Priorities List, and a contact name and phone number in case we have questions about your request.
More about Federal Brownfields Tax Incentive:
- Brownfields FAQ's - Municipalities, businesses and nonprofit organizations across New York have taken advantage of DEC's brownfield programs. Hundreds of underused sites are being turned into productive properties.
- Brownfield Financial Resources Manual - The manual provides information on funding and financial incentives, as well as technical assistance and liability protection available for the cleanup and redevelopment of brownfields in New York.
