New York
Matter of Global Foundries U.S., Inc.
- Year:
- 2020
- Case No.:
- DTA No. 829184
- Court:
- New York State Division of Tax Appeals
- Subject:
- New York Empire Zone Investment Tax Credit — timeliness of refund claim for semiconductor manufacturing facility
An Administrative Law Judge denied the Division of Taxation's motion for partial summary determination seeking to bar, as untimely, over $219 million in Empire Zone Investment Tax Credit refund claims tied to Global Foundries' semiconductor manufacturing facility, holding that a factual dispute existed over whether the taxpayer had made a valid 'informal refund claim' before the formal filing deadline.
Download source PDFGlobal Foundries U.S., Inc. operates a semiconductor manufacturing facility within a designated Empire Zone in Malta, New York. The company sought a refund of Empire Zone Investment Tax Credits (EZ-ITCs) totaling $219,684,307 for the 2012 and 2014 tax years, formally claimed through an amended 2014 corporate franchise tax return filed in July 2018. The Division of Taxation denied the refund, reasoning that because it had already refunded 50% of Global Foundries' carryover EZ-ITCs as overpayments, no credit amount remained deferred, and the portion of the claim attributable to the 2012 tax year was untimely.
The Informal Refund Claim Doctrine
Global Foundries argued that it had effectively placed the Division on notice of its refund claim well before the formal filing, since the Division had audited every one of the company's returns since 2010 and was aware of the capital expenditures underlying the credits. The Administrative Law Judge applied the three-part 'informal refund claim' doctrine — requiring (1) notice that the taxpayer is asserting a right to a refund, (2) a description of the legal and factual basis for the refund, and (3) a written component — and found that whether Global Foundries had satisfied this doctrine before the statutory deadline was a fact-intensive, case-by-case inquiry not suited to summary resolution.
Because material and triable issues of fact existed as to whether an informal refund claim had been made, the Division's motion for partial summary determination was denied, and the matter was set to proceed to a full hearing on the merits.
Significance: While procedural rather than a merits ruling on the credit itself, this order illustrates how New York's informal refund claim doctrine can preserve a large research-and-development-adjacent Empire Zone credit claim for a major semiconductor manufacturer against an otherwise-applicable statute of limitations, provided the taxpayer can show the state tax authority had adequate notice of the claim's basis well before the formal filing.