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Nys Income Tax Refund - DOC


Nys Income Tax Refund document sample

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									                                Description of Benefits
                              Rockland County Empire Zone

Disclaimer: The following descriptions and examples are for illustrative purposes only and
are highly simplified. Additional regulations and limits, not described below, apply. Please
consult with your accountant and lawyer to verify your eligibility. The Rockland County
Empire Zone Coordinator can also help you understand these formulas in more detail.


"New Employees" are those hired after a business has received Empire Zone Certification.

"Test Year Employment" is the average number of New York State FTEs in a business the
year prior to Empire Zone Certification.

"Employment Increase Factor" is the number of New Employees divided by Test Year
employment. Example: A company has 10 employees, becomes certified and hires an
additional 5 new positions. Test Year employment is 10, New Employment is 5, so the
employment increase factor is 5/10 or 50%.

“Targeted Employees” are individuals that meet any of the following criteria: received
public assistance within the past two years, honorably discharged member of the armed
services, ex-felon, high risk youth, vocational rehabilitation, qualified summer youth,
qualified food stamp recipient (18-24), economically disadvantaged family member,
dislocated worker- employee presently receiving or eligible to receive benefits under the
Workforce Investment Act, or qualified SSI recipient (or has received SSI within the past
two months). The Department of Labor provides assistance in determining if an employee
meets this definition.


Tax Reduction Credit - The Tax Reduction Credit allows for a credit against New York
State Income Tax. The Tax Reduction Credit is available to certified businesses for 10
years and is the product of multiple factors. The most important factor is the Employment
Increase Factor, explained above. In the example given, the company would have its NYS
income taxes reduced by up to 50%.

Wage Tax Credit - This New York State income tax credit is generally $1,500 per FTE
employee per year for 5 years (this applies to any position created after July 30, 2006).
However, a Targeted Employee paid at least 135% of minimum wage would qualify for
a wage tax credit of $3,000. The credit is used to reduce a business' NYS business
income taxes. New businesses that do not owe NYS taxes can receive a cash refund of up
to 50% of the credits and the remainder is carried over until utilized.

      Businesses located in an Investment Zone (i.e. Spring Valley and Haverstraw) are
       eligible to receive an additional $500 in Wage Tax Credit per employee per
       year for any new employees that receive $40,000 or more in total compensation
       (wage/salary + benefits).

Credit Against Real Property Taxes - Up to 100% of property taxes paid by the
certified business to the local municipal entities are eligible for a credit against NYS
income taxes for 10 years. This credit if fully refundable, which means that a certified
business can reduce its tax burden below zero and receive a refund payment from New
York State. The property tax credit calculation relies on a number of factors including
new employment and investment at the zone location. Payments-in-lieu-of-tax agreements
(PILOT) are considered "eligible real property taxes.”

Sales Tax Refunds – State sales tax paid on the purchase of any building materials used
in construction or renovation of a property located within the Empire Zone can be
refunded to the company. Some exclusions apply.

Sales Tax Exemption - The state sales tax exemption applies to most purchases made by
an Empire Zone certified business (unlike the refund, above, that only applies to
construction material). The exemption covers the majority of purchases for a ten year

Investment Tax Credit - The total effect of this benefit is up to a 19% return to the
company on its original investment in production equipment (10% up front, 3% in each of
the following three years). This benefit only applies to manufacturers, manufacturer-
equivalents and certain other specific industries. A portion of this credit may be
refundable to companies that meet the “new business” definition of the Empire Zones

Zone Capital Tax Credits - Economic Development Zone Capital Credits can be issued for
qualified new investments or contributions to an approved project in the zone. They can
be used by a business to attract new capital investment into a business or by a non-profit
to increase the tax incentive donors have access to for their contributions.

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