In a new, significant initiative to create jobs and strengthen the state’s economy, the New York State Senate today gave final passage to legislation (S5903) to establish the START-UP NY program that will create tax-free areas around the state’s colleges, universities and other designated areas. The bill would also address the need for regulatory relief for businesses, a major priority of the Senate Majority Coalition.
“The START-UP NY program will help build a stronger economy and help businesses create new jobs, particularly in areas of the state that need revitalization the most,” Senate Majority Coalition Leader Dean Skelos said. “The centerpiece of the program, establishing tax-free areas at college campuses, will attract new businesses, investments and jobs to New York and encourage existing businesses to expand here and add jobs.”
"New York must attract new businesses without hurting the job creators we already have," said Senator Tom Libous (R-C-I, Binghamton). "Binghamton University continues to have the potential of being an economic powerhouse, and Start-Up NY will help BU, as well as colleges and universities across the state, pull New York closer to becoming an economic powerhouse of new businesses, jobs and careers."
Senator Kenneth P. LaValle (R-C-I, Port Jefferson), Chair of the Senate's Higher Education Committee said: “Linking higher education with technology and energy businesses will produce good paying jobs for New Yorkers and establish an environment in which we can challenge Silicon Valley."
In addition, the legislation broadens the authority of the Mandate Relief Council to permit the council to review and determine whether regulatory mandates on businesses are unsound, burdensome or too costly. Businesses and local governments will be able to request that the renamed Mandate and Regulatory Relief Council conduct such a review of specific statutes, regulations or rules. This fulfills a key goal of the Senate Majority Coalition’s regulatory reform initiative.
Senator Patrick M. Gallivan (R-C-I, Elma), Deputy Republican Conference Leader for Economic Development, said: "The myriad of regulatory red tape that small businesses and entrepreneurs are expected to navigate has become tantamount to death-by-a-thousand-cuts for the private sector, particularly Upstate. I welcome the input and insight of the business community as we work to identify and eliminate the state’s most burdensome mandates and regulations, and ultimately, transform New York into a state where new businesses want to locate and existing ones are able to prosper."
The SUNY Tax-Free Areas to Revitalize and Transform Upstate (START-UP) New York program will create tax-free areas around the state’s colleges and universities. Tax-free areas will encompass vacant land or space on the campus of SUNY schools and community colleges. Under the program, businesses will be virtually exempt from all taxes for 10 years, including the following:
> No corporate income and no personal income taxes on business income;
> No sales and use taxes on personal tangible property and services purchased by businesses;
> No real property taxes due on property owned by a college or university; and
> Employees working at the business will be authorized to claim a personal income tax deduction equal to the wages earned from the business in the tax-free area.
The personal income tax deduction will apply to all wages and salaries in the first five years of tax benefits. In the remaining five years, for single individuals, heads of households, and married couples the deduction will apply to the first $200,000, $250,000, and $300,000 of wages, respectively. The total number of new employees eligible for the personal income tax deduction will be capped at 10,000 per year.
At SUNY schools and community colleges outside Long Island, New York City, or Westchester County, 200,000 square feet of property within a mile of a campus will be eligible and property outside the one-mile radius of the campus could be eligible with the approval of the state Department of Economic Development.
At SUNY schools and community colleges in Westchester County, New York City, and on Long Island, tax-free areas will be limited to on-campus projects and businesses locating in the tax free areas will have to be high-tech/bio-tech or start-ups. START-UP NY tax-free areas will also apply to five CUNY schools, one per borough.
In addition, up to three million square feet of property will be eligible to be tax-free areas at private colleges, including 75,000 square feet per county in Nassau, Suffolk and Westchester counties and each of the five boroughs of New York City.
Businesses will not be eligible if they compete with existing businesses in the community that are not within the tax-free area. The following types of businesses would not be eligible for the program:
-- Retail, wholesale, or personal service businesses;
-- Restaurants or hospitality businesses;
-- Real estate brokers or real estate management companies;
-- Law firms; or
-- Medical or dental practices
In addition, business incubators affiliated with a SUNY school will be considered tax-free areas and the Empire State Development Corporation (ESDC) will be able to designate 20 strategic state assets as tax-free zones, including property owned by the state that is closed or vacant such as closed prisons, mental health institutions and youth facilities.
When locating tax-free zones off campus, colleges and universities are encouraged to identify underutilized properties, such as vacant industrial parks and manufacturing facilities.
The bill was sent to the Governor for his consideration.