Statement In Lieu of 3115 – Tax Announcement

Statement In Lieu of 3115 – Tax Announcement

Analysis

Application For Change In Accounting Method

Rev. Proc. 2011-14 APPENDIX § 15.11(2)(b) authorizes a taxpayer to file a statement in lieu of a Form 3115. Such statement is deemed an application if it satisfies the requirements of § 15.11(2)(b). The Service recognizes that because taxpayers are not required to file a duplicate copy of the application with either the National Office or the Ogden office, some taxpayers may have interpreted the scope requirements of section 4.02(1) of Rev. Proc. 2011-14 as not applying to the new automatic consent provision. As a result, those taxpayers changed their method of accounting under APPENDIX § 15.11 without obtaining Consent of Director.

Generally, a taxpayer under examination and not in either a 90-day or 120-day window, must obtain Consent of Director to be within the scope of the automatic consent procedure. See Rev. Proc. 2011-14, § 6.03. The Director will consent to the filing of an application to change from a clearly permissible method of accounting. Because § 15.11 of the APPENDIX applies only to taxpayers already properly deferring income under Rev. Proc. 2004-34, Consent of Director will be provided in every case where a taxpayer meets the requirements of § 15.11(1).

Since the taxpayer who meets the requirements of APPENDIX § 15.11 will need to obtain “Consent of Director” to implement the change, we are concerned about inefficient use of Exam resources and increased taxpayer burden for taxpayers intending to use the new automatic consent method change while under examination.

New Tax Exemptions For Energy Efficient Buildings In NY

New Tax Exemptions For Energy Efficient Buildings In NY

State Legislature Approves Property Tax Exemptions for Green Building

This week, the New York State Legislature approved a law authored by local Assemblyman Fred W. Thiele, Jr. that would provide a tax incentive to builders and homeowners constructing energy efficient green buildings.

Thiele said the “Energy Conservation Bill” is his most significant environmental legislation since the Community Preservation Fund was created for the five East End towns in 1999.

The bill passed in the Assembly and the State Senate unanimously.

The law, which must be ratified by Governor Andrew Cuomo, gives local governments or school districts the right to provide property tax exemptions —through a local law, ordinance or resolution — for construction or improvements made after January 1, 2013 that meet Leadership in Energy and Environmental Design (LEED) certification standards for green buildings. This includes commercial or residential development.

In addition to LEED certification, the Green Building Initiative’s Green Globes rating system, the American National Standards Institute, or other substantially equivalent standards for certification using a similar program for green buildings as determined by the municipal corporation would also be eligible for the exemption.

According to the legislation, eligible parties could receive a 100-percent property tax exemption if they meet Silver, Gold or Platinum LEED status for at least three years. After that the level of exemption — except for Platinum LEED status, declines by 20-percent each successive year. Those who achieve Platinum LEED status — the most difficult level to achieve — would be eligible for a 100-percent exemption for a total of six years.

To be eligible for the tax exemption, the construction must exceed $10,000, be certified as a green building, and be the subject of a valid building permit. Ordinary maintenance and repairs are not eligible for the exemption. The local assessor must approve the exemption.

“Under Governor Andrew Cuomo, New York has become pro-active in promoting efforts to reduce energy demands and greenhouse gas emissions by promoting energy efficiency in homes and businesses throughout the state,” said Thiele. “Significant measures have already been enacted in an effort to accomplish this goal such as on-bill financing, solar feed-in tariffs, and net metering. This legislation, my most significant environmental bill since the creation of the Community Preservation Fund (CPF), would provide another major incentive to promote energy efficiency and conservation. Not only will this legislation reduce energy demand, it will promote economic development by encouraging new construction that meets green building standards.”

“This bill will make a real difference in encouraging green construction for both homes and businesses,” he added. “It is imperative that we promote energy efficiency in our communities with whatever tools are at our disposal. These incentives will encourage the use of the highest level of energy design in new construction. We can reduce our costs and our reliance on expensive energy by reducing demand in the first place.”

The legislation was delivered to Governor Cuomo on July 6. He has until next Monday to ratify the law.