LCS&Z, CPA & Consulting Firm : CHANGES TO THE NEW YORK STATE EMPIRE ZONES PROGRAM

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CHANGES TO THE NEW YORK STATE EMPIRE ZONES PROGRAM

Newly enacted legislative changes include significant changes to both the Empire Zone filing and qualification requirements as well as to credits available; affecting existing and potential new certified Empire Zone businesses. The most immediate of the changes, is a requirement that existing Empire Zone business enterprises obtain a retention certificate from Empire State Development. Empire State Development will review all certified Empire Zone business enterprises and apply new criteria for continued certification. Empire State Development will then issue a retention certificate to businesses meeting the criteria. This retention certificate needs to accompany all tax return claiming any EZ credits (including carryovers) for tax years beginning on or after January 1, 2008.

This legislative change was announced on April 15, 2009 and is retroactive to calendar year 2008. Therefore, for those taxpayers who have already filed their 2008 tax return, claimed EZ credits but did not submit a retention certificate, the credits will be denied, and the return will be processed without the benefit of the credit. Interest will be charged on any unpaid balance.

Upon receiving a retention certificate from Empire State Development, taxpayers must then file an amended return, including a copy of the retention certificate, in order to receive their EZ credits.

Many of the other legislative changes affect new, first time Empire Zone applicants. Some of these changes include:

raising the cost benefit ratio to $20 to $1

limiting the property tax credit to 75% of property taxes paid

eliminating the sales tax credit if the applicants county does not also offer an exemption

The new legislation also moves up the expiration date of the program to June 2010.

All of the above changes will significantly and immediately affect existing, certified businesses as well as those looking to become certified. With the program now scheduled to sunset earlier than previously expected, any business currently located in an Empire Zone who believes they may qualify or one that is planning to move to an Empire Zone, should file an application with the local zone coordinator as soon as possible so as to take advantage of the tax credits and other benefits offered through the program. Please call Rick Anastasia in our Latham office to see how LSC&Z, L.L.P. can help your Zone business take full advantage of the credits and navigate these changes.