What's Becoming of Empire Zones?
Alexis pointed out to me that there have been several articles in recent issues of the Capital District Business Review regarding the upcoming changes in qualifying for business tax credits under New York's Empire Zone program.
Here's what's happening, in a nutshell:
1) Recent legislation states that businesses that qualified under the 2008 provisions of the law will now have to re-apply in 2009 under new guidelines.
2) There are roughly 9,000 companies in New York that currently qualify. The new legislation a) will remove companies that fail to meet a ratio of at least $1 of wages & investment for every $1 received as a credit from the state; b) requires new applicants to meet a $20-to-$1 ratio ($10-to-$1 for manufacturers); and c) ends the program on June 30, 2010 (a year earlier than previously scheduled).
Empire State Development has been charged with verifying which companies among the current 9,000 are still eligible. ESD plans to have much of this process finished by June (which opponents to this legislation doubt can happen). No company can claim Empire Zone tax credits until they have been confirmed as having met the new standards. Those who do would be subject to repayment of the credit, plus interest.
As you can imagine, this is a political hot-potato. Republicans charge the legislation as being yet another disincentive to starting and running a business in New York. Democrats counter that the system has been abused for too long, and that this legislation will make its operation more fair, and more efficient.
According to Malcolm Smith (the Senate Majority Leader), the Democratic majority is planning to enact an improved version of this program in time for the vote on the 2010-11 budget. Groups like the Business Council of New York State are already preparing to contribute to the conversation.
Here's a link to ESD's page on the Empire Zone Program. Keep an eye on this. With all the rancor, compromise is likely.
Here's what's happening, in a nutshell:
1) Recent legislation states that businesses that qualified under the 2008 provisions of the law will now have to re-apply in 2009 under new guidelines.
2) There are roughly 9,000 companies in New York that currently qualify. The new legislation a) will remove companies that fail to meet a ratio of at least $1 of wages & investment for every $1 received as a credit from the state; b) requires new applicants to meet a $20-to-$1 ratio ($10-to-$1 for manufacturers); and c) ends the program on June 30, 2010 (a year earlier than previously scheduled).
Empire State Development has been charged with verifying which companies among the current 9,000 are still eligible. ESD plans to have much of this process finished by June (which opponents to this legislation doubt can happen). No company can claim Empire Zone tax credits until they have been confirmed as having met the new standards. Those who do would be subject to repayment of the credit, plus interest.
As you can imagine, this is a political hot-potato. Republicans charge the legislation as being yet another disincentive to starting and running a business in New York. Democrats counter that the system has been abused for too long, and that this legislation will make its operation more fair, and more efficient.
According to Malcolm Smith (the Senate Majority Leader), the Democratic majority is planning to enact an improved version of this program in time for the vote on the 2010-11 budget. Groups like the Business Council of New York State are already preparing to contribute to the conversation.
Here's a link to ESD's page on the Empire Zone Program. Keep an eye on this. With all the rancor, compromise is likely.
Comments