N.Y. Tax Law § 39 — Tax benefits for businesses located in tax-free NY areas and employees of such businesses

§ 39. Tax benefits for businesses located in tax-free NY areas and\nemployees of such businesses. (a) (1) Any business or owner of a\nbusiness in the case of a business taxed as a sole proprietorship,\npartnership or New York S corporation, that is located in a tax-free NY\narea approved pursuant to article twenty-one of the economic development\nlaw is eligible for the tax benefits described in this section. Unless\notherwise specified, such business or owner of such business shall be\neligible for these tax benefits for a period of ten consecutive taxable\nyears, commencing with the taxable year during which it locates in the\ntax-free NY area.\n (2) In order to be eligible for these tax benefits during any taxable\nyear, calendar quarter or sales tax quarter, such business must be\napproved to participate in the START-UP NY program, must operate at the\napproved location in the tax-free NY area, and must satisfy the\neligibility criteria specified in paragraph (b) of subdivision one of\nsection four hundred thirty-three of the economic development law.\n (b) Tax-free NY area elimination credit. Such business or the owner of\nsuch business shall be eligible for the tax-free NY area tax elimination\ncredit described in section forty of this article.\n (c-1) Excise tax on telecommunication services. Such business or owner\nof a business shall be eligible for a credit of the excise tax on\ntelecommunication services imposed by section one hundred eighty-six-e\nof this chapter that is passed through to such business, pursuant to the\nprovisions referenced in subdivision (k) of this section.\n (d) Metropolitan commuter transportation district mobility tax. If the\ntax-free NY area at which such business is located is within the\nmetropolitan commuter transportation district (MCTD), and such business\nis an employer engaged in business within the MCTD, the payroll expense\nof such business at such location within the tax-free NY area shall be\nexempt from the metropolitan commuter transportation district mobility\ntax imposed under article twenty-three of this chapter for forty\nconsecutive calendar quarters, commencing with the calendar quarter\nduring which the employer locates in the tax-free NY area within the\nMCTD. If the tax-free NY area at which such business is located is\nwithin the MCTD and the owner of such business is an individual who has\nnet earnings from self-employment at such location, such net earnings\nshall be exempt from the metropolitan commuter transportation district\nmobility tax imposed under article twenty-three of this chapter for ten\nconsecutive taxable years commencing with the taxable year during which\nthe business locates in the tax-free NY area.\n (e) To the extent specified, the wages of an individual who is an\nemployee of such business located within a tax-free NY area received\nfrom such business for employment in such tax-free NY area shall be\neligible for the benefits as provided in article twenty-two of this\nchapter, the New York city personal income tax as provided in article\nthirty of this chapter, the Yonkers city income tax as provided in\narticle thirty-A of this chapter, and the Yonkers earnings tax on\nnon-residents during the ten taxable year period for such business\nspecified in subdivision (a) of this section, provided the requirements\nof this subdivision are satisfied.\n (i) The individual when employed by such business must be engaged in\nwork performed exclusively at the location within the tax-free NY area\nduring the taxable year.\n (ii) The individual when employed by such business must be engaged in\nwork at the location of such business within the tax-free NY area for at\nleast one-half of the taxable year.\n (iii) Such business must be in compliance with the requirements set\nforth in subdivision (a) of this section.\n (iv) The individual must be employed by such business in a net new job\ncreated by such business in the tax-free NY area.\n (f) Sales and use tax. Such business shall be eligible for a credit or\nrefund for sales and use taxes imposed on the retail sale of tangible\npersonal property or services under subdivisions (a), (b), and (c) of\nsection eleven hundred five and section eleven hundred ten of this\nchapter and similar taxes imposed pursuant to the authority of article\ntwenty-nine of this chapter. The credit or refund shall be allowed for\none hundred twenty consecutive months beginning with the month during\nwhich such business locates in the tax-free NY area.\n (g) Real estate transfer taxes. Any lease of property to such business\nshall be exempt from any state or local real estate transfer tax or real\nproperty transfer tax.\n (h) (A) Notwithstanding any provision of this chapter to the contrary,\nthe commissioner, to the extent practicable, may disclose publicly the\nnames and addresses of the businesses receiving any of the tax benefits\nspecified in this section. In addition, the commissioner may disclose\npublicly the amounts of such benefits allowed to each such business, and\nwhether or not a business created or maintained net new jobs during the\ntaxable year. With regard to the income tax exemption specified in\nsubdivision (e) of this section, the commissioner may publicly disclose\nthe aggregate amounts of such tax exemption allowed to employees. In\naddition, the commissioner may publicly disclose the number of net new\njobs such business reports on its tax return or report or any other\ninformation necessary for the commissioner of economic development or\nthe campus, college or university sponsoring the tax-free NY area\napproved pursuant to article twenty-one of the economic development law\nto monitor and enforce compliance with the law, rules and regulations\ngoverning the START-UP NY program.\n (B) Notwithstanding any provision of this chapter to the contrary, the\ncommissioner, in determining whether a business or any of its owners is\nentitled to the tax benefits described in this section, may utilize and\nif necessary, disclose to the commissioner of economic development,\ninformation derived from the tax returns of such business or related\npersons of such business and wage reporting information relating to any\nemployees of such business or its related persons.\n (i) Such business shall not be allowed to claim any other tax credit\nallowed under this chapter with respect to its activities or employees\nin such tax-free NY area.\n (j) If the application of a business for participation in the START-UP\nNY program specifies that failure to meet the performance benchmarks\nspecified in such application shall result in proportional recovery of\ntax benefits awarded under the START-UP NY program, the business shall\nbe required to reduce the total amount of tax benefits described in this\nsection that the business or its owners claimed or received during the\ntaxable year by the percentage reduction in net new jobs promised by the\nperformance benchmarks, and if the tax benefits are reduced to an amount\nless than zero, those negative amounts shall be added back as tax. The\namount required to be added back shall be reported on such business's\ncorporate franchise tax report if such business is taxed as a\ncorporation or on the corporate franchise tax reports or personal income\ntax returns of the owners of such business if such business is taxed as\na sole proprietorship, partnership or New York S corporation.\n (k) Cross-references. For application of the tax benefits provided for\nin this section, see the following provisions of this chapter:\n (1) Section 40.\n (4) Article 9-A: section 210-B, subdivision 41 and subdivision 44.\n (5) Article 22: section 606, subsection (i), paragraph (1),\nsubparagraph (B), clause (xxxvi).\n (6) Article 22: section 606, subsection (ww) and subsection (yy).\n (7) Article 22: section 612, subsection (c), paragraph (40).\n (8) Article 23: section 803.\n (9) Article 28: section 1119, subdivision (d).\n (10) Article 31: section 1405, subdivision (b), paragraph 11.\n