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.
Research and development credit: A credit of 9 percent against the corporation franchise tax (or 7 percent against the personal income tax) is available for investment in property used for research and development in the experimental or laboratory sense.
Qualified Emerging Technology Employment Credit: A refundable credit of $1,000 per new full-time employee (employees in excess of 100 percent of base year employment level) is available for one three-year period (the year the credit is first claimed and in each of the next two years provided minimum employment levels are maintained).
Qualified Emerging Technology Company Capital Tax Credit:
An investors may be allowed a credit equal to a percentage of each qualified investment in a qualified emerging technology company certified by the Commissioner of Taxation and Finance as follows:
• Ten percent of qualified investments, provided the taxpayer certifies that it will not be sold, transferred, traded, or disposed of during the four years following the year in which the credit is first claimed; or
• Twenty percent of qualified investments, provided the taxpayer certifies that it will not be sold, transferred, traded or disposed of during the nine years following the year in which the credit is first claimed.
Investments made by or on behalf of an owner of the business, including but not limited to a stockholder, partner or sole proprietor, or any related person, are not eligible for this credit. The total amount of the credit allowable to a taxpayer for all years, taken in the aggregate, cannot exceed $150,000 (at the 10 percent rate) and $300,000 (at the 20 percent rate). The use of the credit is limited to 50 percent of the tax otherwise due; unused credits can be carried forward indefinitely (no refund provision). The program provides for the recapture of a pro rata share of the credit in the event the qualified investment is not held for the requisite period.
Biofuel Production Credit
A credit is available for biofuel produced at a biofuel plant in New York State on or after January 1, 2006. The credit is equal to 15-cents-per gallon after the production of the first 40,000 gallons per year presented to market. The credit is capped at $2.5 million per entity, per taxable year, for up to no more than four consecutive taxable years per biofuel plant.
Empire State Film Production Credit - A refundable credit against corporate franchise (income) tax and personal income tax for qualified film production companies, or sole proprietors of qualified film production companies.
- The credit is the product of 30 percent and the qualified production costs paid or incurred in the production of a qualified film, provided that at least 75% of the production costs ("stagework") are spent in New York State.
- The credit is allowed for the taxable year in which the production of such qualified film is completed.
- "Qualified Film" excludes documentary films, news or current events programs, interview or talk programs, game shows, award ceremonies, sports programming, soap operas, commercials, music videos, or "reality" programs.
- $420 million ("Additional pool 2") has been allocated for this credit for each of years 2010-2014.
- Credits are paid as follows:
•Credits for less than $1 million will be paid in full in State fiscal year 2009-10;
•Credits between $1-$5 million will be paid out 50 percent in each of State fiscal years 2009-10 and 2010-11;
•Credits greater than $5 million will be paid out in 33 percent increments in each of State fiscal years 2009-10, 2010-11, and 2011-12.
•Credit is available for tax years ending on/before December 31, 2014.
• New York City is authorized to allow this credit against NYC tax; NYC credit is 5 percent of qualified production costs; NYC program capped at $12.5 million per year.
Empire State Film Post Production Credit - Up to $7 million of the Empire State Film Production Credit must be made available annually for this new credit, which will be allocated by the Governor's Office of Motion Picture and Television Development in the same manner as the Empire State Film Production Credit.
•Credit is equal to 10 percent of qualified post-production costs, available to a qualified film production company, (unless such company is eligible for the Empire State Film Production Credit).
•To be eligible, qualified post-production costs at a qualified post production facility must meet or exceed 75 percent of the total post production costs at any post production facility.
•Note: Any qualified post production costs used by a taxpayer as the basis for this credit cannot be used by the taxpayer to claim any other credit.
•Credit is 50 percent refundable in year 1, with the remainder carried forward to the immediately succeeding taxable year, where any remaining unused credit is refundable in that year.
Investment Tax Credit for Qualified Film Production Facilities - The ITC is available for property principally used as a qualified film production facility (i.e., a film production facility in the State which contains at least one sound stage with a minimum of 7,000 square feet of contiguous production space) among that eligible for the investment tax credit (ITC), where the taxpayer (owner of the facility) is providing three or more services to any qualified film production company (an entity principally engaged in the production of a qualified film and which controls the qualified film during production) using the facility, including such services as: studio lighting grid; lighting and grip equipment; multi-line phone service; broadband information technology access; industrial scale electrical capacity; food services; security services; and heating, ventilation and air conditioning.
Credit for Rehabilitation of Historic Properties - A credit is allowed for the rehabilitation of depreciable historic properties located in New York State. Note: to be eligible for the credit, the rehabilitation project must be in a distressed area.
•The amount of the credit is equal to 100 percent (30 percent, effective 1/1/2015) of the federal credit under IRC section 47(c)(3).
•A certified historic structure is defined as a building and its structural components which are listed in the National Register of Historic Places or located in a registered historic district and certified to be of historic significance to the district.
•Credit is capped at $5 million ($100,000, effective 1/1/2015); any State credit must be recaptured if the federal credit upon which it is based is subject to recapture.
•Unused credits can be carried forward indefinitely.
• In the case of partnerships or S-corporations, the maximum credit is determined at the entity (rather than taxpayer) level. The credit may be used to reduce tax to the higher of the alternative minimum income tax or fixed dollar minimum tax; unused credits can be carried forward.
Long-term care insurance credit:
A credit is allowed for long-term care insurance premiums paid during the taxable year equal to 20 percent of the premium paid for long-term care insurance. The credit may not reduce the tax below the AMT or fixed dollar minimum. Unused credits can be carried forward indefinitely.
Automated external defibrillator credit:
A credit may be taken for the purchase of automated external defibrillators, such as those used for first-aid treatment of heart attacks. The credit is equal to the cost of each defibrillator purchased, but may not exceed $500 per unit. Credit cannot reduce tax below the AMT or fixed dollar minimum. Unused credits cannot be carried forward.
Security Training Tax Credit:
This is a refundable tax credit, administered by the State Office of Homeland Security in conjunction with the Tax Department, for qualified building owners. Taxpayers must apply to the State Office of Homeland Security for an allocation of credit and credit certification in order to claim this credit. The credit is equal to the sum of the number of qualified security officers providing protection to a building(s) owned by the taxpayer multiplied by $3,000.
New York State Contact:
Empire State Development
633 Third Avenue, 37th Floor
New York, NY 10017
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.