New York State offers an Investment Tax Credit (ITC) that is among the most generous in the country. A company can write off 5% of an investment in fixed assets in the year in which the investment is made. The ITC can be carried forward for up to 20 years. Projects located in a New York State Economic Development Zone (EDZ) are eligible for a 10 % ITC. The Employee Incentive Credit (EIC) allows 1⁄2 of the ITC in each of the three years following the investment year as long as the company maintains certain minimum employment levels. New York State does not tax personal property. Real property taxes are collected at the local level. Manufacturing companies are eligible for abatements in real property taxes through involvement with a local county industrial development agency (IDA). IDA bond financing and sale-leaseback arrangements can be attached to PILOT (payment in lieu of taxes) programs, which usually abate property taxes and phase them in over a 20-year term. Sales taxes on materials used in construction are abated as well as the mortgage recording tax. These abatement programs can add up to significant savings for an expanding business. In Rochester, the County of Monroe Industrial Development Agency (COMIDA) can provide further details in this regard
Investment Tax Credit (ITC)
Business that make new investments in production, property and equipment and create new jobs may qualify for tax credits of up to 10% of their eligible investment. New businesses may elect to receive a refund of certain credits, and all unused credits can be carried over for 15 years.
Investment Research and Development Tax Credit
Investments in research and development facilities are eligible for a 9% credit against corporate tax. Additional credits are available to encourage the creation and expansion of emerging technology enterprises including a three-year job creation credit of $1,000 per employee and a capital credit for investments in emerging technology businesses.
Sales Tax Exemptions
New York State offers exemptions for purchases of production machinery and equipment, research and development property, and fuels/utilities used in manufacturing and R&D. Other exemptions may be available through local IDA's.
Real Property Tax Abatement
To encourage development, expansion and improvement of commercial property, 20-year property tax abatement is available to offset increased assessments due to improvements to businesses and commercial property.
No Personal Property Tax
Unlike many other states, which tax both real property and personal property, property taxes in New York State are imposed on real property only.
Economic Development Zone/Empire Zone Tax Credits
New York State has designated 52 zones as Economic Development Zones/Empire Zones (EZ's), which offer a host of benefits. These include electric discounts, enhanced tax credits for investment and job creation, and additional sales and property tax exemptions.
