Now NY small businesses in certain industries can get significant tax benefits if they qualify and participate in the new Excelsior Program. This is an important step taken by the government in an effort to encourage these businesses to develop and stay in New York State despite the hard economic times. I have personally noticed a lot of enthusiasm around the City with respect to creation of new high-tech or clean energy start-ups, and it seems that the government is backing up these efforts.
In short, the Program is run by the Empire State Development (ESD) and provides tax credits to the qualifying businesses to be used over a five-year term. The Program offers four new fully refundable tax credits:
1. the Excelsior Jobs Tax Credit (a refundable tax credit of up to $5,000 per new job, available to all certified firms);
2. the Excelsior Investment Tax Credit (a refundable credit equal to 2% of the cost of qualified investments, available to all certified firms). Generally, a qualified investment is depreciable property with a useful life of four or more years located in New York and placed in service on or after the date ESD issues an eligibility certificate to the taxpayer;
3. the Excelsior Research and Development Credit (a refundable tax credit equal to 10% of new investments based on the Federal Research and Development Credit, available to all certified firms); and
4. the Excelsior Real Property Tax Credit - this refundable 5 year tax credit is available only to businesses located in designated distressed areas of the state and to businesses in targeted industries that meet higher employment and investment thresholds. The credit is equal to 50% of the property taxes assessed and paid in the year prior to a taxpayer’s application to the Excelsior Program. The credit decreases by 10% each year following thereafter.
The credits are capped at $250 million annually and businesses will be granted the credits only after they have met the annual program requirements. Eligibility is based upon projected long term growth, job creation and expansion in New York.
For more information, click here: http://www.empire.state.ny.us/BusinessPrograms/Data/Excelsior/Excelsior_ProgramOverviewedit.pdf.