N.Y. Tax Law 39 – Tax benefits for businesses located in tax-free NY areas and employees of such businesses
§ 39. Tax benefits for businesses located in tax-free NY areas and employees of such businesses. (a) (1) Any business or owner of a business in the case of a business taxed as a sole proprietorship, partnership or New York S corporation, that is located in a tax-free NY area approved pursuant to Article 21 of the economic development law is eligible for the tax benefits described in this section. Unless otherwise specified, such business or owner of such business shall be eligible for these tax benefits for a period of ten consecutive taxable years, commencing with the taxable year during which it locates in the tax-free NY area.
Terms Used In N.Y. Tax Law 39
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Personal property: All property that is not real property.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(2) In order to be eligible for these tax benefits during any taxable year, calendar quarter or sales tax quarter, such business must be approved to participate in the START-UP NY program, must operate at the approved location in the tax-free NY area, and must satisfy the eligibility criteria specified in paragraph (b) of subdivision one of § 433 of the economic development law.
(b) Tax-free NY area elimination credit. Such business or the owner of such business shall be eligible for the tax-free NY area tax elimination credit described in section forty of this article.
(c-1) Excise tax on telecommunication services. Such business or owner of a business shall be eligible for a credit of the excise tax on telecommunication services imposed by section one hundred eighty-six-e of this chapter that is passed through to such business, pursuant to the provisions referenced in subdivision (k) of this section.
(d) Metropolitan commuter transportation district mobility tax. If the tax-free NY area at which such business is located is within the metropolitan commuter transportation district (MCTD), and such business is an employer engaged in business within the MCTD, the payroll expense of such business at such location within the tax-free NY area shall be exempt from the metropolitan commuter transportation district mobility tax imposed under article twenty-three of this chapter for forty consecutive calendar quarters, commencing with the calendar quarter during which the employer locates in the tax-free NY area within the MCTD. If the tax-free NY area at which such business is located is within the MCTD and the owner of such business is an individual who has net earnings from self-employment at such location, such net earnings shall be exempt from the metropolitan commuter transportation district mobility tax imposed under article twenty-three of this chapter for ten consecutive taxable years commencing with the taxable year during which the business locates in the tax-free NY area.
(e) To the extent specified, the wages of an individual who is an employee of such business located within a tax-free NY area received from such business for employment in such tax-free NY area shall be eligible for the benefits as provided in article twenty-two of this chapter, the New York city personal income tax as provided in article thirty of this chapter, the Yonkers city income tax as provided in article thirty-A of this chapter, and the Yonkers earnings tax on non-residents during the ten taxable year period for such business specified in subdivision (a) of this section, provided the requirements of this subdivision are satisfied.
(i) The individual when employed by such business must be engaged in work performed exclusively at the location within the tax-free NY area during the taxable year.
(ii) The individual when employed by such business must be engaged in work at the location of such business within the tax-free NY area for at least one-half of the taxable year.
(iii) Such business must be in compliance with the requirements set forth in subdivision (a) of this section.
(iv) The individual must be employed by such business in a net new job created by such business in the tax-free NY area.
(f) Sales and use tax. Such business shall be eligible for a credit or refund for sales and use taxes imposed on the retail sale of tangible personal property or services under subdivisions (a), (b), and (c) of section eleven hundred five and section eleven hundred ten of this chapter and similar taxes imposed pursuant to the authority of article twenty-nine of this chapter. The credit or refund shall be allowed for one hundred twenty consecutive months beginning with the month during which such business locates in the tax-free NY area.
(g) Real estate transfer taxes. Any lease of property to such business shall be exempt from any state or local real estate transfer tax or real property transfer tax.
(h) (A) Notwithstanding any provision of this chapter to the contrary, the commissioner, to the extent practicable, may disclose publicly the names and addresses of the businesses receiving any of the tax benefits specified in this section. In addition, the commissioner may disclose publicly the amounts of such benefits allowed to each such business, and whether or not a business created or maintained net new jobs during the taxable year. With regard to the income tax exemption specified in subdivision (e) of this section, the commissioner may publicly disclose the aggregate amounts of such tax exemption allowed to employees. In addition, the commissioner may publicly disclose the number of net new jobs such business reports on its tax return or report or any other information necessary for the commissioner of economic development or the campus, college or university sponsoring the tax-free NY area approved pursuant to Article 21 of the economic development law to monitor and enforce compliance with the law, rules and regulations governing the START-UP NY program.
(B) Notwithstanding any provision of this chapter to the contrary, the commissioner, in determining whether a business or any of its owners is entitled to the tax benefits described in this section, may utilize and if necessary, disclose to the commissioner of economic development, information derived from the tax returns of such business or related persons of such business and wage reporting information relating to any employees of such business or its related persons.
(i) Such business shall not be allowed to claim any other tax credit allowed under this chapter with respect to its activities or employees in such tax-free NY area.
(j) If the application of a business for participation in the START-UP NY program specifies that failure to meet the performance benchmarks specified in such application shall result in proportional recovery of tax benefits awarded under the START-UP NY program, the business shall be required to reduce the total amount of tax benefits described in this section that the business or its owners claimed or received during the taxable year by the percentage reduction in net new jobs promised by the performance benchmarks, and if the tax benefits are reduced to an amount less than zero, those negative amounts shall be added back as tax. The amount required to be added back shall be reported on such business's corporate franchise tax report if such business is taxed as a corporation or on the corporate franchise tax reports or personal income tax returns of the owners of such business if such business is taxed as a sole proprietorship, partnership or New York S corporation.
(k) Cross-references. For application of the tax benefits provided for in this section, see the following provisions of this chapter:
(1) Section 40.
(4) Article 9-A: section 210-B, subdivision 41 and subdivision 44.
(5) Article 22: section 606, subsection (i), paragraph (1), subparagraph (B), clause (xxxvi).
(6) Article 22: section 606, subsection (ww) and subsection (yy).
(7) Article 22: section 612, subsection (c), paragraph (40).
(8) Article 23: section 803.
(9) Article 28: section 1119, subdivision (d).
(10) Article 31: section 1405, subdivision (b), paragraph 11.