New York Laws
Article 1 - Short Title; Definitions; Miscellaneous
39 - Tax Benefits for Businesses Located in Tax-Free Ny Areas and Employees of Such Businesses.

(2) In order to be eligible for these tax benefits during any taxable
year, calendar quarter or sales tax quarter, such business must be
approved to participate in the START-UP NY program, must operate at the
approved location in the tax-free NY area, and must satisfy the
eligibility criteria specified in paragraph (b) of subdivision one of
section four hundred thirty-three of the economic development law.
(b) Tax-free NY area elimination credit. Such business or the owner of
such business shall be eligible for the tax-free NY area tax elimination
credit described in section forty of this article.
(c-1) Excise tax on telecommunication services. Such business or owner
of a business shall be eligible for a credit of the excise tax on
telecommunication services imposed by section one hundred eighty-six-e
of this chapter that is passed through to such business, pursuant to the
provisions referenced in subdivision (k) of this section.
(d) Metropolitan commuter transportation district mobility tax. If the
tax-free NY area at which such business is located is within the
metropolitan commuter transportation district (MCTD), and such business
is an employer engaged in business within the MCTD, the payroll expense
of such business at such location within the tax-free NY area shall be
exempt from the metropolitan commuter transportation district mobility
tax imposed under article twenty-three of this chapter for forty
consecutive calendar quarters, commencing with the calendar quarter
during which the employer locates in the tax-free NY area within the
MCTD. If the tax-free NY area at which such business is located is
within the MCTD and the owner of such business is an individual who has
net earnings from self-employment at such location, such net earnings
shall be exempt from the metropolitan commuter transportation district
mobility tax imposed under article twenty-three of this chapter for ten
consecutive taxable years commencing with the taxable year during which
the business locates in the tax-free NY area.
(e) To the extent specified, the wages of an individual who is an
employee of such business located within a tax-free NY area received
from such business for employment in such tax-free NY area shall be
eligible for the benefits as provided in article twenty-two of this
chapter, the New York city personal income tax as provided in article
thirty of this chapter, the Yonkers city income tax as provided in
article thirty-A of this chapter, and the Yonkers earnings tax on
non-residents during the ten taxable year period for such business
specified in subdivision (a) of this section, provided the requirements
of this subdivision are satisfied.
(i) The individual when employed by such business must be engaged in
work performed exclusively at the location within the tax-free NY area
during the taxable year.
(ii) The individual when employed by such business must be engaged in
work at the location of such business within the tax-free NY area for at
least one-half of the taxable year.
(iii) Such business must be in compliance with the requirements set
forth in subdivision (a) of this section.
(iv) The individual must be employed by such business in a net new job
created by such business in the tax-free NY area.
(f) Sales and use tax. Such business shall be eligible for a credit or
refund for sales and use taxes imposed on the retail sale of tangible
personal property or services under subdivisions (a), (b), and (c) of
section eleven hundred five and section eleven hundred ten of this
chapter and similar taxes imposed pursuant to the authority of article
twenty-nine of this chapter. The credit or refund shall be allowed for
one hundred twenty consecutive months beginning with the month during
which such business locates in the tax-free NY area.
(g) Real estate transfer taxes. Any lease of property to such business
shall be exempt from any state or local real estate transfer tax or real
property transfer tax.
(h) (A) Notwithstanding any provision of this chapter to the contrary,
the commissioner, to the extent practicable, may disclose publicly the
names and addresses of the businesses receiving any of the tax benefits
specified in this section. In addition, the commissioner may disclose
publicly the amounts of such benefits allowed to each such business, and
whether or not a business created or maintained net new jobs during the
taxable year. With regard to the income tax exemption specified in
subdivision (e) of this section, the commissioner may publicly disclose
the aggregate amounts of such tax exemption allowed to employees. In
addition, the commissioner may publicly disclose the number of net new
jobs such business reports on its tax return or report or any other
information necessary for the commissioner of economic development or
the campus, college or university sponsoring the tax-free NY area
approved pursuant to article twenty-one of the economic development law
to monitor and enforce compliance with the law, rules and regulations
governing the START-UP NY program.
(B) Notwithstanding any provision of this chapter to the contrary, the
commissioner, in determining whether a business or any of its owners is
entitled to the tax benefits described in this section, may utilize and
if necessary, disclose to the commissioner of economic development,
information derived from the tax returns of such business or related
persons of such business and wage reporting information relating to any
employees of such business or its related persons.
(i) Such business shall not be allowed to claim any other tax credit
allowed under this chapter with respect to its activities or employees
in such tax-free NY area.
(j) If the application of a business for participation in the START-UP
NY program specifies that failure to meet the performance benchmarks
specified in such application shall result in proportional recovery of
tax benefits awarded under the START-UP NY program, the business shall
be required to reduce the total amount of tax benefits described in this
section that the business or its owners claimed or received during the
taxable year by the percentage reduction in net new jobs promised by the
performance benchmarks, and if the tax benefits are reduced to an amount
less than zero, those negative amounts shall be added back as tax. The
amount required to be added back shall be reported on such business's
corporate franchise tax report if such business is taxed as a
corporation or on the corporate franchise tax reports or personal income
tax returns of the owners of such business if such business is taxed as
a sole proprietorship, partnership or New York S corporation.
(k) Cross-references. For application of the tax benefits provided for
in this section, see the following provisions of this chapter:
(1) Section 40.
(4) Article 9-A: section 210-B, subdivision 41 and subdivision 44.
(5) Article 22: section 606, subsection (i), paragraph (1),
subparagraph (B), clause (xxxvi).
(6) Article 22: section 606, subsection (ww) and subsection (yy).
(7) Article 22: section 612, subsection (c), paragraph (40).
(8) Article 23: section 803.
(9) Article 28: section 1119, subdivision (d).
(10) Article 31: section 1405, subdivision (b), paragraph 11.

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