Sales and Use Taxes Exemption by jameshardy

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									  Sales and Use Taxes Exemption
  Lower Manhattan Commercial Incentives
  Administering Agency: NYS Department of Taxation and Finance
                                          http://www.empire.state.ny.us/wtc/m05_12s.pdf

                                                           Program Description
Exemption from State and City sales and use taxes for certain purchases of tangible personal property and services
related to leased commercial office space in lower Manhattan.


                                                                 Benefits
                Description of Benefits                                  Example Benefits Calculation – WTC/WFC/BPC
• Exemption from State and City sales and use              123 Pelican Corp., a financial company with 250 employees, signs a 10-year
    taxes for office furniture, equipment and              lease for 100,000 SF at 3 World Financial Center. During the first year of this
    build-out costs for commercial businesses              new lease, the company spends $250,000 for build-out costs and $150,000
    that lease space at the World Trade Center             for FF&E. Assuming that 100% of these expenditures is subject to sales tax,
                                                           the company would save approximately $33,500 (based on the current NYC
    site (including 7 WTC), the World Financial
                                                           sales tax rate of 8.375%).
    Center, and Battery Park City for 10 years or
    more.
                                                                 Example Benefits Calculation – Elsewhere in Lower Manhattan
• Exemptions for build-out costs* only for eligible                    (South of Murray St. between South and West Sts.)
    leases with a minimum term of 10 years
                                                           321 Penguin Corp., a publishing company with 250 employees, signs a 10-
    elsewhere in lower Manhattan south of
                                                           year lease for 100,000 SF at an office building on Maiden Lane. During the
    Murray Street between South and West                   first year of this lease, the company spends $250,000 for build-out.
    Streets.                                               Assuming that 100% of these expenditures is subject to sales tax, the
                                                           company would save approximately $20,938 (based on the current NYC
                                                           sales tax rate of 8.375%).
* Build-out costs is defined as property purchased by
tenant or landlord for improving commercial premises;
property sold to a contractor for use in improving
commercial premises; and service of installing property.




                                                            Eligibility & Tips

                                       Eligibility                                                             Tips
• Lease – A minimum lease term of at least 10 years commencing between                  • To claim exemptions on build-out materials
     September 1, 2005 and September 1, 2009 is required. At the WTC site,                   that will become part of the fixed real
     the WFC, and Battery Park City area, eligible leases with a minimum term                estate, use the NYS tax form, ST 120.1 –
     of 10 years must commence on or before September 1, 2011. The tenant                    Contractor’s Exempt Purchase Certificate.
     (the entity on the lease) is the same one that is making the improvements               Contractors making qualifying purchases of
     or using the property and applying for the exemptions.                                  tangible personal property or installation
                                                                                             service must submit the completed form to
• Benefit Period - The exemptions apply only to eligible purchases made and                  the vendor.
     uses occurring during the first year of the eligible lease, with property          • To claim exemptions on non-fixed FF&E
     delivered and services rendered within 90 days of the first year of the               items, use NYS tax form “ST-121 – Exempt
     lease. The exemptions for eligible leases at the WTC site, the WFC, and               Use Certificate”. The tenant/landlord must
     Battery Park City expires on December 1, 2012; elsewhere in lower                     issue the completed form to the vendor at
     Manhattan, the exemption expiration date is December 1, 2010.                         the time of purchase.
                                                                                        • Relevant Legislation: Section 1115 (ee) of
                                                                                           the NYS Tax Law




                                                                                                                                  April 2007

								
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