September 24, 2010

New York Excelsior Program

New York Excelsior Program Tax & Business

On Wednesday September 8, 2010 Governor Paterson announced the launch of the Excelsior Jobs Program which replaces the Empire Zone Program in offering significant tax credits to qualifying New York State businesses . The Empire Zone Program was the primary economic development program in New York State prior to its sunset in June.

The Excelsior Program became effective July 1, 2010 and applications were released on September 8, 2010 (Click here to view the application).

The Excelsior Program provides job creation and investment incentives to firms in targeted industries such as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. The program encourages firms to expand or relocate to New York while monitoring the firms to make sure they deliver on job and investment commitments. The Governor described the Program as, “furthering our goals for the New Economy as it focuses on the growth and expansion of the high-tech and clean energy jobs of tomorrow, while supporting the manufacturing sector that remains the backbone of our economy.”

Administered by Empire State Development (ESD), the new Program provides tax credits to taxpayers who make substantial commitments to growth under applications approved by ESD. ESD, with ten locations throughout the state, will issue certificates to approved taxpayers annually, entitling them to take the credits on their returns (similar to Empire Zone Retention Certificates).

Excelsior offers four new fully refundable tax credits:

  • The Excelsior Jobs Tax Credit – a refundable tax credit of between $2,500 and $5,000 per new job (available to all certified firms).
  • The Excelsior Investment Tax Credit – a refundable credit equal to 2% of the cost of qualified investments (available to all certified firms). Generally, a qualified investment is depreciable property with a useful life of four or more years located in New York and placed in service on or after the date ESD issues an eligibility certificate to the taxpayer.
  • The Excelsior Research and Development Credit – a refundable tax credit equal to 10% of new investments based on the Federal Research and Development Credit (available to all certified firms).
  • The Excelsior Real Property Tax Credit – this refundable 5 year tax credit is available only to businesses located in designated distressed areas of the state (generally, zones formerly designated as Investment Zones under the Empire Zones Program). The credit is equal to 50% of the property taxes assessed and paid in the year prior to a taxpayer’s application to the Excelsior Program. The credit decreases by 10% each year following thereafter.

To ensure longevity, Excelsior credits are capped at $250 million annually and firms will be granted the credits only after they have met the annual program requirements. Eligibility is based upon projected long term growth, job creation and expansion in New York.

Please contact your Marcum LLP Tax Professional to learn how to enroll and qualify for this important tax incentive Program as soon as possible.

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