New York Basic Business Taxes 2012
New York's economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include corporate income tax, investment tax credits, and the Excelsior Jobs Program.
The Excelsior Jobs Program, administered by Empire State Development (ESD), will provide job creation and investment incentives to firms in such targeted industries as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. Firms in these strategic industries that create and maintain new jobs or make significant financial investment may be eligible to apply for up to four new refundable tax credits. Businesses claim the credits over a five year period.
• The Excelsior Jobs Tax Credit: A credit equal to 6.85% of gross wages per new job to cover a portion of the associated payroll cost.
• The Excelsior Investment Tax Credit: Valued at two percent of qualified investments.
• The Excelsior Research and Development Tax Credit: A credit equal to 50 percent of the Federal Research and Development Credit, capped at 3% of R&D expenditures in NYS.
• The Excelsior Real Property Tax Credit: Available to firms locating in certain distressed areas and to firms in targeted industries that meet higher employment and investment thresholds (Regionally Significant Project).
Economic Transformation Program
The Economic Transformation Program, administered by Empire State Development, provides tax credits for projects that leverage investments to create jobs and support economic development initiatives in areas affected by the closure of certain correctional and juvenile justice facilities.
New businesses in targeted industries that create at least five net new jobs may qualify for up to five new, fully refundable tax benefits:
a jobs tax credit of 6.85% of the wages of each net new job;
an investment tax credit of 6% of capital investments with the credit increasing to 10% if it is at the site of a closed facility (credit capped at $4 million per firm for investments outside a facility and $8 million for all investments at the facility).
A 5-year real property tax credit: For firms outside a facility, the real property tax credit is 25% of eligible property taxes in the first year, phasing down to 5% in year 5; The credit is 50% of eligible property taxes for firms located at the facility phasing down to 10% in year 5;
A job training tax credit of 50% of training expenses, capped at $4,000 per eligible employee per year (Eligibility for this credit is limited to instances where former facility employees are hired by a new firm); and
a sales tax refund on tangible personal property used for construction at an eligible site.
Empire State Jobs Retention Program
The Empire State Jobs Retention Program Credit is a refundable tax credit available to for-profit, non-service provider businesses damaged physically and economically by an emergency as declared by the Governor on or after January 1, 2011. The Program is administered by the Department of Economic Development.
In order to participate in the program, a business entity described above must:
be located in a county in which an emergency has been declared by the Governor on or after January 1, 2011;
demonstrate substantial physical damage and economic harm resulting from the event leading to the emergency declaration by the Governor; and,
have had at least 100 full-time equivalent jobs in the county in which an emergency has been declared by the Governor on the day immediately preceding the day on
which the event leading to the emergency declaration by the Governor occurred, and must retain or exceed that number of jobs in New York State; and
must apply to the Department of Economic Development within 180 days of the declaration of emergency (or 180 days from enactment of this provision, if later) and be approved as a participant.
A participant may claim tax benefits commencing in the first taxable year that the business enterprise receives a certificate of tax credit or the first taxable year listed on its preliminary schedule of benefits, whichever is later.
The credit is equal to 6.85% of the gross wages paid for the "impacted jobs," and is available for 10 consecutive years.
"Impacted jobs" are defined as jobs existing at a business enterprise at a location(s) within the county declared an emergency by the Governor on the day immediately preceding the day on which the event leading to the emergency declaration by the Governor occurred.
The credit is available for tax years beginning on/after January 1, 2012.
New York Youth Works Tax Credit Program
Administered by the NYS Department of Labor, the New York Youth Works Tax Credit Program provides tax incentives to employers for employing at-risk youths in part-time and full-time positions in 2012 and 2013 (up to $25 million of tax credits may be allocated under this program).
Qualified employers certified by the Labor Commissioner are entitled to a refundable tax credit equal to:
$500 per month for up to 6 months for each qualified employee the employer employs in a full time job, or $250 per month for up to 6 months for each qualified employee employed in a part-time job of at least 20 hours per week (this portion of the credit is allowed for the tax year beginning on/after January 1, 2012 and before January 1, 2013); and, $1,000 for each qualified employee who is employed for at least an additional 6 months by the qualified employer, or $500 for each qualified employee who is employed for at least an additional 6 months by the qualified employer in a part-time job of at least 20 hours per week (this portion of the credit is allowed for the tax year beginning on/after January 1, 2012 and before January 1, 2013).
Qualified employee means an individual:
Who is between the age of 16 and 24;
Who resides in a city with a population of 62,000 or more, or a town with a population of 480,000 or more;
Who is low-income or at-risk, as those terms are defined by the Commissioner; and
Who will be working for the qualified employer in a full-time or part-time position that pays wages equivalent to the wages paid for similar jobs (with adjustments for experience and training) and for which no other employer has been terminated, or where the employer has not otherwise reduced its workforce by involuntary terminations with the intention of filling the vacancy by creating a new hire.
Brownfield redevelopment credit:
Three refundable credits are available to taxpayers that have executed a "Brownfield Cleanup Agreement" with the Department of Environmental Conservation and have received a remediation certificate pursuant to such agreement.
• Brownfield Redevelopment Credit - consists of the sum of the site preparation costs, tangible property costs, and on-site groundwater remediation costs.
For qualified sites admitted to the Brownfield Cleanup Program on/after June 23, 2008:
•the tangible property credit component is capped at:
o $35 million, or three times the costs included in the calculation of the site preparation credit component and the on-site groundwater remediation credit component, whichever is less; or
o $45 million, or six times the costs included in the calculation of the site preparation credit component and the on-site groundwater remediation credit component, whichever is less, in the case of a qualified site to be used primarily for manufacturing activities.
•the applicable percentages, up to a maximum of 50 percent, for purposes of calculating the site preparation credit component and the on-site groundwater remediation credit component are based on the level of cleanup achieved, as follows:
- soil cleanup for unrestricted use, the protection of groundwater or the protection of ecological resources, the applicable percentage shall be 50 percent;
- soil cleanup for residential use, the applicable percentage shall be 40 percent, except for Track 4 which shall be 25 percent;
- soil cleanup for commercial use, the applicable percentage shall be 33 percent, except for Track 4 which shall be 25 percent;
- soil cleanup for industrial use, the applicable percentage shall be 27 percent, except for Track 4 which shall be 22 percent.
• Remediated Brownfield Credit for Property Taxes - The amount of the credit against the taxpayer's income tax increases based upon the number of persons employed at the qualified site and is generally equal to 25 percent of the product of the "employment number factor" and the eligible property taxes paid. If the property is located in an Environmental Zone, the credit is not subject to the 25 percent limitation.
• Environmental Remediation Insurance Credit - For premiums paid for environmental remediation insurance, up to the lesser of $30,000 or 50 percent of the cost of premiums.
A credit is available for employers who employ individuals with disabilities. The credit equals 35 percent of the first $6,000 of first-year wages paid to the disabled employee (maximum of $2,100 per employee). However, if the first-year wages qualify for the federal work opportunity tax credit, the New York credit will apply to the second-year wages.