N.Y. State Empire Zone Program

The Empire Zone Program (EZ) was created to stimulate economic growth through a variety of financial incentives designed to attract new businesses and to enable existing businesses to expand and create more jobs. Businesses which make an investment and/or create new jobs in an EZ are eligible for a combination of State tax credits and benefits. In addition, municipalities which have been designated an EZ may offer additional incentives including a property tax abatement for improvement to real property in the zone.

The Empire Zone Program benefits have been extended to businesses that create "Regionally Significant Projects" (RSP). An RSP may be a manufacturer who is expanding and adding at least 50 jobs, certain high tech businesses and other businesses that are adding 300 or more jobs. If qualified and certified, these RSP businessman can access the EZ Program benefits, regardless of location.

EZ Tax Incentives and Benefits

Wage Tax Credit - A 50% wage tax credit for up to five consecutive years for hiring full-time employees in newly created jobs. For employees in special targeted groups, this credit equals $3,000 a year , with a credit of $1,500 a year for all other new hires. An Extra $500 credit may be available for certain employees earning over $40,000 a year in certain zones.   

Investment Tax Credit - An investment tax credit of 8% to 10% is available to certain businesses based on investments made in an EZ. This credit is available under the corporate franchise tax and personal income tax. A second credit, the Employment Incentive Credit, equaling 30% of the original investment tax credit is available for each of the next three consecutive years following the year in which the investment tax credit is taken against the corporate franchise tax. To be eligible for this added credit, the taxpayer must employ at least 101% of the average number of people employed in the year before the investment tax credit was claimed.

Real Property Tax Credit - A refundable credit that is also applied against business corporate taxes,  personal income  taxes, banking corporation taxes and insurance corporation taxes. The credit is computed by formula based  on the number of jobs created and the real property taxes paid on property in the Zone. The credit is available for a 14-year period -10 years at 100%, decreasing  20% each year thereafter. For businesses certified on or after April 1, 2005, the benefits are available for 10 years and are calculated based on wages paid or investment in the property.

Tax Reduction Tax Credit - A credit applied against business corporate taxes, personal income taxes, banking corporation taxes and insurance corporation taxes. The credit is computed by formula based on the number  of jobs created, the company's assets in the Zone and in New York State, and the income taxes owed. The credit is available for a 14-year period - 10 years at  100%, decreasing  20% each year thereafter (or 10 years if certified on or after April 1, 2005).

Sales Tax Exemption -There is an exemption from the 4 %  (or 4 3/8 % in the Metropolitan area) New York State sales and use taxes for tangible personal property and services purchased and used by qualified zone businesses.

Sales Tax Refund - Purchases of building materials to be used in connection with commercial or industrial real property located in an EZ are exempted from State sales tax through a refund process. A similar refund of local sales tax may be available at local option.

Zone Capital Credit - A 25% tax credit against personal or corporate income taxes is available for the purchase of a direct equity investment in a qualifiying certified zone business or for contributions to approved community development projects within an EZ.

Utility Rate Reductions - Special reduced electric and gas rates are available through investor-owned utilities in the State to businesses that locate or expand operations in an EZ.

Special Low-Interest Loans and Priority Attention - State agencies that have a role in economic development have developed special programs and services targeted to Empire Zones and will expedite applications received from zone businesses. In addition, a variety of local programs may also exist which provide additional opportunities for financial and technical assistance to new and existing businesses.

Many EZs have been designated throughout the State. Many have entrepreneurial assistance programs and low-cost incubator space. In addition, many offer small business start-up and micro loan programs, as well as one-stop, fast-track business assistance services.

Is your company taking advantage of
economic zone tax incentives?

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