SBIDC will help you utilize all city, state, and federal tax incentives available to your business. Our staff is well versed in programs such as the Industrial & Commercial Abatement Program (ICAP), Relocation Employee Assistance Program (REAP), and Federal Research & Development tax credits just to name a few. See below for a short list of the most effective programs:
Relocation Employee Assistance Program (REAP)
The program provides business income tax credits up to $3,000 per employee per year for twelve years, based on the number of qualified jobs. Any business relocating from outside NYC or Manhattan south of 96th Street into a property that is taking advantage of a city benefit e.g. ICIP, IDA financing, or lease from a NYC-owned property will qualify. If no benefit applies to the building, the relocating party must purchase or lease the space for a term of at least 3 years with expenditures of a minimum of $25 per square foot.
Industrial Business Zone (IBZ) Relocation Tax Credit
This program provides a one-time tax credit of $1,000 per relocated employee. Industrial and manufacturing firms that are relocating to or within an IBZ are eligible for the credit.
CAPITAL IMPROVEMENT INCENTIVES:
Industrial & Commercial Abatement Program (ICAP)
ICAP is a NYC property tax abatement to encourage property owners to make capital improvements to commercial and industrial facilities. This program abates a portion of tax increases resulting from improvements to a facility and lasts for 15 – 25 years (including a phase-out period), depending on the project location.
ICAP benefits are passed to the property owner (taxpayer) and must structure lease to ensure benefits are passed through to tenant. To be eligible, business must invest a “minimum required expenditure” (MRE) of at least 30% of the property’s assessed value.
Commercial Expansion Program (CEP)
The Commercial Expansion Program (CEP) provides property tax abatements for new, renewal, and expansion leases for commercial offices and industrial spaces to increase tenant occupancy in a designated abatement zone. Benefits are offered for qualified New, Renewal, and Expansion Leases on commercial offices and industrial/manufacturing spaces. For manufacturing businesses, the abatement lasts for up to ten years depending on the lease. Commercial and manufacturing businesses apply within 180 days of lease commencement. Retail businesses are ineligible.
PURCHASING EQUIPMENT INCENTIVES:
Investment Tax Credit (ITC)
ITC is a business tax credit on purchases of machinery and equipment used in processing or manufacturing of goods. Credit is equal to 5% of the total cost of the equipment. To apply, file for credit with NYS taxes (Form CT-46).
Accelerated Sales Tax Exemption Program (A-STEP)
A-STEP allows eligible companies to apply for City and State sales tax exemptions of up to $100,000 per company on the purchase, installation, and maintenance of construction materials, and other equipment and furnishings for projects. Improvements must begin within one year of signing a sales tax exemption benefit agreement with NYCIDA, and the sales tax exemption will expire no later than two years from the date of the agreement.
Section 179 Deduction
Federal tax credit up to $25,000 for certain qualified property and equipment (purchased or leased) for business use. Businesses should apply when filing taxes.
Energy Cost Savings Program (ECSP)
This program can reduce regulated energy costs up to 45 percent and regulated natural gas costs up to 35 percent for eligible businesses. Companies that qualify for the Industrial and Commercial Abatement Program (ICAP--see above) or the Industrial Development Agency (IDA) are eligible for ECSP. Businesses located in a Special Eligible Premise (SEP) or are relocating from outside the city or Manhattan are eligible as relocators for the program. If relocating, a business must apply prior to signing lease/contract of sale; or within 120 days of moving into a Special Eligible Premises. If renovating, generally prior to issuance of building permit. Manufacturing and commercial businesses are eligible for this program, excluding retail business and hotels.
Con Edison Small Business Direct Installation (SBDI)
This program offers free energy survey and incentives of up to 70% for free or subsidized efficiency upgrades to help you use less electricity in targeted neighborhoods, and free smart thermostat to manage central A/C. You must have at least a month or two of billing history before ConEd can provide upgrades for your business.
NYSERDA Pre-Qualified Incentives
The goal of this program is to encourage businesses to make energy efficient improvements that measurably reduce energy costs. The program provides reimbursements for qualified purchases of lighting, chiller systems, HVAC equipment, boilers, furnaces, and water heaters. Businesses can receive up to $60,000 in pre-qualified incentives per calendar year.
Con Edison Business Incentive Rate (BIR)
BIR provides an additional reduction on regulated electric costs by 30% - 35% for five – ten years. Commercial / industrial buildings that have been vacant for 12 consecutive months out of the previous 24 months or new construction and receive other city or state benefits, such as ICAP, IDA or ECSP are eligible.
Customized Training Grant
Customized Training is a competitive program that provides funding to help NYC-based businesses invest in their staff by covering up to 70% of the costs to train. Businesses identify training needs for their staff and apply for awards between $10,000 - $400,000. If selected, businesses have up to one year to carry out training for at least 10 trainees (including new hires) and are required to provide wage increases to employees six months after all training is complete.
On the Job Training Grant (OJT)
OJT provides a grant award to offset 70% of up to 280 hours of training wages incurred while the newly hired employee(s) participates in on-the-job training. The on-the-job training program is designed to support the employment and skill development of long-term unemployed, Hurricane Sandy-impacted, veteran and military spouse, and new graduate workers.
Work Opportunity Tax Credit (WOTC)
WOTC is a federal tax credit up to $9,000 for employers who hire members of target groups. The employee and employer must complete two forms: the pre-screening notice/certification request (Form 8850) and the individual characteristics form 9061, and submit them to the NYS Dept of Labor Workforce Agency before the employee is hired. The State Workforce Agency (SWA) must receive the forms within 28 days of hire.
To discuss available incentives in greater detail, please contact:
Business Services Manager
718-965-3100 x 106