On January 1, 2014, New York Governor Andrew Cuomo launched START-UP NY. Using tax-free communities, START-UP NY is an initiative to attract new start-ups and high-tech businesses to New York. As a reward for bringing new jobs to the state, this program promises to allow businesses to operate “100% tax-free” for a 10-year period: “No business, corporate, state or local taxes, sales and property taxes, or franchise fees.”
Sound too good to be true? START-UP NY contains a variety of requirements and exceptions. Companies interested in the initiative should take a closer look at whether their business goals align with the program’s guidelines.
School is back in session! START-UP NY is meant to connect new, expanding or relocating businesses with New York’s colleges and universities by establishing 68 tax-free zones on campuses throughout the state. The initiative requires eligible businesses to operate their facilities on property affiliated with their chosen institution. In addition, they must support an academic mission of that college. Examples of support include providing research opportunities, internships or paid jobs.
The key word here is “eligible.” Interested businesses should make sure that they qualify for the program. Some businesses do not qualify, such as law firms, medical and dental practices, financial services providers, restaurants and accounting firms. However, if your business does qualify, START-UP NY offers substantial benefits.
A qualifying company is not required to pay any organization, real estate transfer, state, or local taxes. Likewise, such businesses are exempt from license and maintenance fees for an entire decade. In addition, enterprises that meet START-UP NY’s requirements will receive a sales tax credit or refund for certain goods and services purchased to run the company.
The perks are just as promising for employees. They will not have to pay state income taxes on their wages for 5 years, regardless of income. Additionally, they will pay no taxes on up to $200,000, for years 6 through 10.
According to Sam Hoyt, a member of Governor Cuomo’s administration, they are striving “to make New York state the least expensive place in the U.S. to locate a business.” Since the program’s launch, more than 800 businesses have applied for inclusion, and over 9,000 have visited the START-UP NY website. As recent television commercials for START-UP NY boldly declare, “The new New York is open.”
Has the Governor’s initiative placed you or your business in an Empire State of mind?