Institutional Federal Compliance Report 2021

______________________________________________________________________________________________ STATE OF NEW YORK • 79 Program Name . . . . . . . . . . . . . . . . . . . . . . . . Empire Zones (EZ) Qualified Empire Zones Enterprise (QEZE) Program Purpose . . . . . . . . . . . . . . . . . . . . . . The program is designed to bring new businesses and jobs to the State in areas that need revitalization. This program is designed to create jobs and prevent loss of employment in the Empire Zone and to enhance economic climate in EZ areas.

Taxes being abated . . . . . . . . . . . . . . . . . . . . Personal income tax, Corporate franchise tax, Bank and Insurance taxes and Corporate tax.

Personal income tax, Sales and use tax, Corporate franchise tax, Bank and Insurance taxes and Corporate tax. State tax law: Article 22, Section 606(bb) and 606(cc) Article 28, Section 1119(d) Article 9-A, Section 210-B(5) and 210-B(6) Article 9, Section 187-J Article 33, Section 1511(r) and 1511(s) Businesses in the EZ apply to be certified as QEZEs. QEZEs are certified businesses that meet the employment test (increase level of employment between tax year and base year).

Authority under which abatements are entered into . . . . . . . . . . . . . . . . . . . . .

State tax law: Article 22, Section 606(j)(1), 606(k) and 606(l) Article 9-A, Section 210-B(3 & 4) and 210-B(46) Article 33, Section 1511(g) and 1511(h) Article 9, Section 187-K, 187-L and 187-M An agreement is made between the State and a local government to designate an area as an EZ. Businesses will apply to be certified, and then will conduct business and make investments in the EZ to create new jobs, or prevent loss of employment.

Criteria to be eligible to receive abatements and commitment of the taxpayer . . . . . . . .

How taxes are reduced . . . . . . . . . . . . . . . . . Allowance of credit against taxes. Taxpayer receives the amount of the credit only up to the amount of their liability (nonrefundable credit) and can carry forward the credit against future tax liability. Refundable credit available for new businesses. How amount of abatement is determined . . . . The Investment Tax Credit and Employment Incentive Credit are equal to a percentage of the cost or other basis of tangible personal property for federal income tax purposes, including buildings and structural components of buildings located within a designated EZ.

Allowance of credit against taxes. Refundable credit.

A credit is available for tax paid on tangible personal property and certain services purchased by a QEZE and used or consumed in an EZ. The Real Property Tax Credit equals 25 percent of the wages plus health and retirement benefits of net new employees.

The Wage Tax Credit is calculated on the average number of newly hired employees. It is $3,000 per targeted and $1,500 per nontargeted employee. The Capital Credit equals 25 percent of the sum of each type of investment.

The Tax Reduction Credit is based on benefit period, employment increase, zone allocation and tax factors.

Provisions for recapturing abated taxes . . . . . N/A

N/A

Type of commitments other than taxes . . . . . . N/A

N/A

Total revenue estimated to be reduced for calendar year 2018 . . . . . . . . . $143 million

$86 million