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Empire Zones program tax benefits

Qualifying businesses located within an Empire Zone (EZ) are eligible to receive the following tax credits and exemptions (for zone capital tax credit, the investor does not have to be in a zone):

QEZE Sales Tax Benefits: Qualified Empire Zone Enterprises (QEZEs) receive a refund or credit on State and,  in some cases, local sales tax on purchases of goods and services (including utility and telephone services) used in a qualifying manner in an Empire Zone.

QEZE Credit for Real Property Taxes: Qualified Empire Zone Enterprises may claim a refundable credit against business or income tax based on real property taxes paid in the zone (effective for taxable years beginning on or after January 1, 2001).

QEZE Tax Reduction Credit: Qualified Empire Zone Enterprises may claim a credit against business or income tax equal to a percentage of taxes attributable to the zone enterprise (effective taxable years beginning on or after January 1, 2001).

EZ Wage Tax Credit: Companies hiring full-time employees in newly created jobs may claim this credit for up to five consecutive years. For employees in special targeted groups, this credit equals $3,000 per year, with a credit of $1,500 per year effective 1/1/2001, for all other new hires.

EZ Investment Tax and Employment Incentive Credits: Businesses that create new jobs and make new investments in production, property and equipment may qualify for tax credits based on the company's eligible investment.

New Business Refund: Businesses new to New York State are entitled to a 50% cash refund of unused EZ-WTC and ITC amounts. Other businesses may carry forward unused credits indefinitely.

Utility Rate Savings: Special reduced electric and gas rates may be available through investor-owned utilities in New York State. Businesses that locate or expand their operations in an EZ may receive significantly reduced rates.

Zone Capital Credit: A 25% tax credit against personal or corporate income taxes is available for contributions to approved community development projects within an EZ.

Sales Tax Refund or Credit: Purchases of building materials to be used in construction, expansion, or rehabilitation of commercial or industrial real property located in an EZ are eligible for a refund or credit of NYS and, in some cases, local sales taxes.

Real Property Tax Abatement: EZs may offer tax abatements from an increased assessment, with the abatement value based on improvements to real property for up to 10 years. This holds true for up to seven years at 100%, decreasing over the last three years of the exemption.

Technical Assistance: Professionals qualified to assist businesses locating or expanding in an EZ staff each local zone office.

Updated: November 18, 2011