The Empire Zones Program, formerly known as the Economic Development Zones Program, was created by NYS in 1986 to stimulate growth in a number of the State's most severely distressed areas. Unlike most zones designated by census tracts, the Town of Riverhead's zone was established based on the closure of the former Grumman military defense facility in Calverton. The area is now known as The Enterprise Park at Calverton.

The zones program seeks to assist such areas through a variety of financial incentives and economic development benefits designed to attract new businesses and to enable existing businesses to expand, create new jobs and encourage private investment within the designated zones. Moreover, Empire zone localities facilitate access to job training, childcare and other assistance that will prepare individuals for the workplace. Specific benefits that the program provides are a combination of tax credits, reduced utility rates, authorization for special low-interest loans, and priority attention from State agencies for new and expanding businesses. Hence, this program enables The Suffolk County/ Riverhead Empire Zone to virtually be a tax-free zone in "best-case" scenarios.

Tax Credits, Benefits, & Financial Incentives

Standard Empire Zone Benefits

• Real Property Tax Abatement: For projects not qualifying for the real property tax credit, the Empire Zone may offer a tax abatement, based on improvements to real property, for up to 10 years.
• Sales Tax Refund: Purchases of building materials to be used for improvements to or construction of commercial or industrial real property located in an Empire Zone are eligible for a refund of New York Sate sales tax.
• Wage Tax Credit (WTC): This credit is available for up to five consecutive years for companies hiring full-time employees in newly created jobs. This credit equals $1,500 per employee per year, or $3,000 per targeted employee per year.
• Empire Zone Investment Tax and Employment Incentives Credit (ITC-EIC): Businesses that create new jobs and make new investments in production, property, and equipment may qualify for tax credits of up to 19% of the company's eligible investment.
• New Business Refund: Businesses new to New York State are entitled to a 50% cash refund of unused Empire Zone Wage Tax Credits and Investment Tax Credits. Other businesses may carry forward unused credits indefinitely.
• Zone Capital Credit: A 25% tax credit against personal or corporate income taxes is available for contributing or purchasing shares in a Zone Capital Corporation; or making a direct equity investment in a certified Zone business; or for contributions to an approved community-development project within the Empire Zone.
• Utility Rate Savings: Businesses that locate in an Empire Zone may be eligible for reduced electric and gas rates through the local provider.
• Technical Assistance: The Town of Riverhead Empire Zone is staffed with professionals that are qualified to assist your business in locating or expanding in an Empire Zone.

Enhanced Empire Zone Benefits
Qualified Empire Zone Enterprises (QEZE) are eligible for sales tax, property tax, and business tax credits for businesses locating and expanding in an Empire Zone.

• QEZE Sales Tax Exemptions: Eligible projects are granted a 10-year exemption from State sales tax on purchases of goods and services (including utility services) used predominantly in such zones.
• QEZE Credit for Real Property Taxes: Eligible projects are allowed a refundable credit against business income taxes equal to a percentage of real property taxes paid in the zone.
• QEZE Tax Reduction Credit: Eligible projects are allowed a credit against business income taxes equal to a percentage of taxes attributable to the zone enterprise.

To qualify for Empire Zone Credits, a business must:

• Be EZ certified prior to July 1, 2005
• Maintain or increase employment in the Zone and in the State in the year you are qualifying based on a previously determined five-year-average employment number.

Empire Zone credits are self-administering in that they are claimed when the taxpayer files its tax return on an annual basis. Eligibility must be self-determined each year based on the above criteria.

State's Case Study Examples

Case Study: Manufacturer XYZ moves from New Jersey to EPCAL with 25 employees and purchases 30,000 square foot building for $2million with an additional $150,000 in renovation costs. They increase their employment by 80 in the same year. Zone savings: $695,625; investment Tax Credit and Employment Incentive Tax Credit: $28,500; Sales Tax Exemption: $638; Real Property Tax Credit: $1,755; Tax Reduction Credit: $1,404. Total $727,922.