The New York Tax Appeals Tribunal ruled that a semiconductor manufacturer was eligible to use the carryover refund from both the Empire Zone investment tax credit (EZ-ITC) for new businesses and the qualified investment project (QUIP)/significant investment project (SCIP) tax credit in the same year, resulting in a $152.3 million refund for the 2014 tax year. 

In 1986, the Legislature created the Economic Development Zone Act to stimulate private investment and job creation in specific economically challenged areas of the state (the areas were later renamed Empire Zones). Among the tax incentives, the EZ-ITC allowed taxpayers a refund of 50% of its EZ-ITC carryover as a new business, and a 50% refund of its EZ-ITC carryover as the owner of a QUIP or SCIP. 

GlobalFoundries, as an operator of a manufacturing facility in a designated Empire Zone, filed a refund claim for 2014 on the basis that it was entitled to combine the new business credit carryover refund and the QUIP/SCIP credit carryover refund, which together effectively provided a 100% refund of its EZ-ITC credit carryover. The Division of Tax Appeals rejected GlobalFoundries’s refund claim, ruling that the two credit carryovers are mutually exclusive, and that GlobalFoundries was only entitled to the original 50% refund. 

On appeal, the Tax Appeals Tribunal overturned the ALJ’s decision, refraining from deferring to the Divisions requested deference to its interpretation and concluding that the new business credit and the QUIP/SCIP credit could be taken together. The Tribunal pointed to the unambiguous plain language of the statute, which “expressly provides” that a new business is entitled to a 50% refund of its EZ-ITC carryover, and the statute “also expressly provides that, in addition, any taxpayer that is approved as the owner of a QUIP or SCIP may elect to treat 50% of its EZ-ITC carryover as an overpayment of tax to be credited or refunded.” The Tribunal held that a natural reading of the language allows a taxpayer that qualifies for both benefits to receive both benefits. 

Matter of the Petition of GlobalFoundries U.S. Inc., DTA No. 829184 (Tax App. Trib., Jan. 19, 2023).