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New York Direct Financial Incentives

New York's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment.

Corporate Taxes & Incentives Guide
Empire State Development (ESD) is New York State's primary agent for economic development. Our organization, with co-headquarters in Albany, Buffalo, and New York City, is supported by a network of additional ESD Locations throughout the state and around the world. ESD works in partnership with the public and private sectors to create an environment that spurs innovation and economic development.

Our services include:
•Conducting targeted corporate outreach to companies in key industry clusters while providing retention, expansion and attraction services to the State's largest and most important employers;
•Providing hands-on technical assistance to help businesses big and small meet their goals; and
•Helping companies identify the financial assistance that will most benefit their business. This includes direct loans, loan guarantees, and grants that can help companies reduce the costs of undertaking a job creation or retention project in the state.

Examples of ESD financial assistance programs include:

Start-Up NY
New York State Economic Development Fund
Excelsior Jobs Program
Manufacturing Assistance Program
Environmental Investment Program
Linked Deposit Program
Minority- and Women-owned Business Development
Small Business Revolving Loan Fund
Emerging Technology Tax Credits
Film and TV production tax credits
Economic Transformation Program

Tax-Free: Participating companies in START-UP NY will not pay any taxes (no income tax; no business, corporate state or local taxes; no sales tax; no property tax; and no franchise fees) for 10 years. Employees in participating companies will pay no income taxes for the first five years. For the second five years, employees will pay no taxes on income up to $200,000 of wages for individuals, $250,000 for a head of household, and $300,000 for taxpayers filing a joint return. The number of net new jobs eligible for personal income tax benefits will not exceed 10,000 new jobs per year.

Eligibility: In order to locate into a START-UP NY tax-free community, a business needs to be aligned with or further the academic mission of the campus, college or university sponsoring the tax-free community. Businesses participating in the program will need to have positive community and economic benefits. Every business must create and maintain net new jobs in order to participate. Businesses must:
• Be a new start-up company;
• Be a company from out-of-state that is relocating to New York State; or
• Be the expansion of an existing New York State company – for example, a company creating a new line of business or opening a new advanced manufacturing facility – as long as it can demonstrate that it is creating new jobs and not moving existing jobs.

In addition, New York State start-ups that “hatch” from New York State incubators will be eligible to enter tax-free communities and be eligible for the benefits under the program.

In New York City, Long Island and Westchester County, businesses must be start-ups or high-tech companies. Statewide, certain types of businesses are excluded from the program, including retail and wholesale businesses; restaurants and hospitality; professional practices like law firms and medical practices; and energy production and distribution companies.

Companies will be eligible to enter into the program until December 31, 2020, and by that time, ESD will prepare an evaluation of the effectiveness of the program in order to determine whether eligibility should be extended.

Each university community will develop a plan for the types of businesses it intends to attract and the locations that will be tax-free. Businesses will apply directly to the participating college and, once a business is accepted, ESD will have 60 days to review the application to ensure eligibility.

Bans Competition with Existing Businesses: Under the START-UP NY program, businesses that might compete unfairly with other local businesses outside the tax-free area would be ineligible to participate.

Eligible Colleges and Universities: SUNY, CUNY and independent colleges and universities will all have the opportunity to develop tax-free communities.

SUNY: Every SUNY community college and 4-year college/university can establish a tax-free community using:
• Vacant land on the SUNY campus (for every campus outside of New York City);
• Vacant space in buildings on the SUNY campus (for every campus outside of NYC);
• Any business incubator with a bona fide affiliation to the campus, university or college; and
• Up to 200,000 square feet within one mile of a campus (for every campus north or west of Westchester County), or further with approval from ESD.

CUNY: CUNY will be able to establish a tax-free community on a campus in each borough – Manhattan, the Bronx, Queens, Brooklyn and Staten Island – in an area of economic distress. CUNY Tax-Free NY communities may include:
• Vacant land on the CUNY campus;
• Vacant space in buildings on the CUNY campus; and
• Any business incubator with a bona fide affiliation to the campus, university or college.

Private Colleges: The program also provides 3 million square feet (with the potential of another 600,000 more) of tax-free areas primarily dedicated to private colleges and universities on land north of Westchester County, to be allocated by the START-UP NY program board (consisting of three members with significant experience in academic-based entrepreneurship appointed by the Governor, the Speaker of the Assembly and the Temporary President of the Senate) in a manner that ensures regional balance and balance among eligible rural, urban and suburban areas in the State.

For private colleges and universities north of Westchester County, the tax-free areas can include vacant land and vacant space on- or off-campus, as well as any business incubator with a bona fide affiliation to the campus, university or college.

Of these 3 million square feet, 75,000 square feet will be allocated for each of the following: Nassau County, Suffolk County, Westchester County, Brooklyn, the Bronx, Manhattan, Queens and Staten Island. Private colleges and universities in New York City and Westchester, Suffolk and Nassau Counties, as well as SUNY and CUNY campuses not specifically designated, may apply to sponsor these tax-free areas on college campuses. Once the 75,000-square-foot cap is reached in these counties and boroughs, the board may designate up to an additional 75,000 square feet in each. Therefore, a potential of 150,000 square feet of space will be available in these counties and boroughs.

20 Strategic State Properties: In addition, the 3-member board can also designate up to 20 strategic state assets as tax-free communities. These must be state-owned vacant land, state-owned vacant facilities or state-owned facilities that are in the process of closing and becoming vacant. Each will be affiliated with a SUNY, CUNY or independent college or university to attract new employers and new jobs and transform the site into a regional economic engine.

Robust Protections Against Fraud: START-UP NY includes strong provisions to protect against fraud. Businesses will have to submit certification to ESD, and falsifying certifications will be a felony. The legislation also includes strict provisions to guard against abuses such as shifting jobs among related entities or “shirt-changing,” when a company simply reincorporates under a new name and claims its existing employees are now new jobs. In addition, START-UP NY includes measures to prevent self-dealing and conflicts of interest. In cases of fraud, the state will be empowered to claw-back benefits granted to the business. Companies that do not meet the terms of the program – including meeting their job creation targets – may have their benefits reduced, suspended or terminated. ESD will have the authority to review company data to ensure that jobs have been created and maintained, and to end participation by companies that have not created net new jobs. ESD will be required to publish a comprehensive annual report to enable the public to evaluate the program’s impact.

New York State Contact:
Jeff Janiszewski
Vice President of Strategic Business Development
Empire State Development
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. This information was last updated November 2014.

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