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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.
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.
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.
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