In June 2013, New York State enacted the START-UP NY program to encourage new businesses to move to New York, especially upstate New York, by offering a full tax exemption from New York state taxes for businesses locating in tax-free areas on or near certain institutions of higher education. The START-UP NY program may provide significant benefits and should be considered by out-of-state businesses operating in high tax states or foreign businesses seeking to establish or expand their U.S. presence.
The tax benefits from the program are scheduled to commence on January 1, 2014 and the last date for businesses to be accepted into the program is December 31, 2020.
Benefits: The program offers a host of tax benefits for a 10-year period including:
- The business being exempt from:
- New York state income taxes1;
- State and local sales taxes;
- State and local real estate transfer taxes on leases of property to the business; and
- The organization tax, and the Metropolitan Commuter Transportation District mobility tax.
- Employees being exempt from:
- All New York state and New York City incomes taxes on wages from the business during the first 5 years that the business participates in the program; and
- New York state and New York City income taxes on the first $200,000 ($300,000 if married) of wages in years 6 through 10.
The following types of business will not be eligible for the program:
- Retail and wholesale businesses;
- Real estate brokers;
- Law firms;
- Medical practices;
- Real estate management companies;
- Finance and financial services;
- Businesses providing personal services;
- Businesses providing business administration or support services;
- Accounting firms;
- Businesses providing utilities; and
- Energy production and distribution companies.
1. It does not appear as though businesses locating in New York City under the program would be exempt from New York City income taxes.↩