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26 Jan 2015


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Is START-UP NY Good for Small Businesses

“Tax-free NY area means the land or vacant space of a state university or college that meets the eligibility criteria…and that has been approved as a tax-free NY area …”

The START-UP NY approval board consists of three(3) members, one appointed by the Governor, one appointed by the speaker of the assembly and one appointed by the temporary president of the senate.

Any business that wants to locate in a tax-free NY area must submit an application to the campus, university or college which is sponsoring the tax-free NY area by December thirty-first, two thousand twenty.

The sponsoring campus, university or college shall provide the application and all supporting documentation of any business it decides to accept into its tax-free NY area to the commissioner for review.

The commissioner will review the application and documentation within sixty days and render a decision.
Businesses submitting applications must be willing to divulge detail tax and labor information and open their books to the sponsoring university or college and the State.
There is an annual reporting requirement to the commissioner. 

In order to participate in the program the business must meet the following criteria:

1. mission and activities of the business must align with or further the academic mission of the campus, college or university sponsoring the tax-free NY area in which it seeks to locate and the business’s participation in the START-UP NY program must have positive community and economic benefits.

2. The business must demonstrate that it will, in its first year of operation, create net new jobs.

3. After its first year of operation, the business must maintain net new jobs.


4. In addition, the average number of employees of the business and its related persons in the state during the year must equal or exceed the sum of:

a.   the average number of employees of the business and its related persons in the state during the year immediately preceding the year in which the business submits its application to locate in a tax-free NY area; and

b.      net new jobs of the business in the tax-free NY area during the year.


5. At the time of submitting the application for the START-UP NY program new businesses must be not be operating or located within the state unless it is an in-state company that is granted special permission to be in the program.


6. The business must be organized as a corporation, a partnership, limited liability company or a sole proprietorship.


7. The new business or the owner of said business should not have operated in NY State in the last 5 years (unless granted special exemption).

The following types of businesses are not allowed to participate in the START-UP NY program.

1.       Retail and wholesale businesses

2.       Restaurants

3.       Real Estate Brokers

4.       Law firms

5.       Medical or Dental practices

6.       Real Estate management companies

7.       Hospitality

8.       Finance and Financial Services

9.       Businesses providing personal services

10.   Businesses providing business administrative or support services (unless granted special permission)

11.   Accounting Firms

12.   Businesses providing utilities

13.   Energy companies

If a business is accepted into the program they are granted certain tax benefits.  Tax benefits extends for 10 years from the time the business locates in the tax-free NY area.  Tax benefits includes.


1. Tax-Free NY area Elimination of Credit:  This is calculated by the business when filing it’s tax return.


2. Organization tax and License and Maintenance fees:  This tax is based on the value of a business’s stock.  Businesses could be exempted from paying 100% of this tax.


3. Metropolitan Commuter Transportation District Mobility tax:  This is a payroll tax.  Businesses could be exempted from paying 100% of this tax.


4. Sales and Use Tax:  Businesses could get a refund for sales and use taxes paid for goods and services used or consumed by the business’s operation.


5. Real Estate/Real Property Transfer Tax:  Get exemption from this tax if real property is leased to an approved business in the tax-free area.


6. Personal Income Taxes:   Employees hired for and whose jobs are certified as net new jobs in a tax-free area will pay no state or local income taxes for the first five years. For the second five years, employees will pay no taxes on income up to $200,000 for individuals, $250,000 for a head of household and $300,000 for taxpayers filing a joint return.  There are caps placed on the number of employees this can apply to.

If you wish to access this program visit the START-UP NY website.

START-UP NY Legislation
START-UP NY website

By Jack River














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