As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in New York. I was able to speak with some New York economic development professionals and learned some of their details (New York’s Business First site click here).
A big difference between New York and most other states is that they have some of the highest corporate and personal tax burdens. New York ranks 50th in the The Tax Foundation’s 2014 Business Tax Climate Index (clickhere).
That being said, New York has a vast array of incentives, credits, and programs to assist businesses, education, nonprofits, and communities for “investment” in New York jobs and development. The Regional Economic Development Council (REDC) initiative yearly application round closed on June 16. It covers up to $750 million in grants, tax credits, loans, and “other resources.” A Consolidated Funding Application (CFA) serves as a single application for state economic development resources from numerous state agencies and regional councils. START-UP NY is a new initiative that sets up university-sited or connected tax-free zones for new and expanding businesses (click here). You may have seen the TV advertisements for this program, and it sounds great, but there are a LOT of hoops to jump through, including business type and location.
Another big consideration — a long application and approval process is required for all of New York’s primary incentives. And, New York’s credits and incentives are far more complicated than most other states.
Compared to Georgia, New York has:
- Higher taxes: Higher corporate income tax. Far higher personal state income taxes. Higher sales taxes and far higher property taxes.
- A narrower range of industries eligible for incentives if adding jobs, a narrower range for capital investments, and a far narrower range for training incentives.
- NO opportunities for incentives unless pre-approved by state and/or regional council officials.
- Location, location, location — if that’s what is important to the business
To summarize, New York is not very competitive for new and expanding businesses, unless those businesses really need New York’s prime location for global finance, corporate headquarters, global media and culture.
Do any of your clients have New York connections? Make sure you review their potential qualifying activities early to maximize their $$ benefits!!