November 17, 2011

New York State Business Incentive Programs

New York State Business Incentive Programs Tax & Business

Companies conducting business in New York State should be aware of the numerous business incentive programs provided by the State’s umbrella organization, Empire State Development (ESD). ESD’s primary mission is the facilitation of business growth and job creation across New York State, and is responsible for the delivery of the State’s economic development initiatives through the offering of a wide array of incentive programs to companies investing in their businesses with an aim towards future growth. These incentive programs include loans, grants, tax credits, and other types of financing assistance.

One such business incentive program offered by ESD is called the Manufacturer’s Assistance Program (MAP), which was created to assist New York manufacturers who plan to invest in new capital projects that significantly improve key elements of their business. Eligible businesses for this program include small to midsized manufacturers in New York State that employ 50 to 1,000 workers and either export at least 30% of their production beyond the immediate region, or supply at least 30% of their production to a prime manufacturer that exports beyond the region. Qualifying businesses making capital investments of at least $1 million in machinery and equipment, as well as related building modifications, that result in measurable improvements in production output, productivity, and competitiveness can qualify for cash awards of up to $1 million.

The Excelsior Jobs Program encourages both the expansion of businesses within New York State as well as the relocation of out of state businesses to New York while maintaining strict accountability standards to guarantee that they deliver on job and investment commitments. It provides job creation and investment incentives to firms in such targeted industries as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture, and manufacturing. Firms in these industries that create and maintain new jobs or make significant financial investment are eligible to apply for up to four types of tax credits. These credits include the Excelsior Jobs Tax Credit (a credit of 6.85 percent of wages per new job to cover a portion of the associated payroll cost), the Excelsior Investment Tax Credit (valued at two percent of qualified investments), the Excelsior Research & Development Credit (a credit of fifty percent of the federal research & development credit up to a cap of three percent of research expenditures in New York State), and the Excelsior Real Property Tax Credit (available to firms locating in certain distressed areas and to firms in targeted industries that meet higher employment and investment thresholds).

Another incentive program offered by ESD is the Linked Deposit Program (LDP). This program assists existing New York State businesses in obtaining reduced rate financing so they can undertake projects to improve their competiveness, market access and product development, modernize their equipment, or expand their facilities for productivity growth. LDP provides businesses with affordable capital through bank loans at reduced interest rates. Bank loans are subsidized by corresponding linked state deposits and provide a savings of two to three percentage points on the prevailing interest rate to make borrowing less expensive with a maximum loan of $500,000 for up to four years. Borrowers may apply for an additional four year extension on an existing four year LDP loan, thereby increasing the total term of assistance on certain loans to eight years.

ESD offers many other kinds of economic incentive programs aimed at helping businesses grow and expand in New York State. These programs, including the ones outlined above, can be found in more detail on ESD’s website at While some of these incentive programs can require extensive documentation and accountability in order to receive benefits, the potential savings can be substantial.

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