The Start Up NY Program, per the legislation, is ready for its long awaited unveiling. The program will help foster entrepreneurialism and job creation on a large scale through tax free communities across New York State; with concentrated focus in Upstate NY.

The goal of this program is to bring businesses and jobs to the New York State region, helping to foster growth and innovation.  Participating tax free communities include college campuses and Universities.

SUNY community college and 4-year college/University can establish a tax-free community using:

  • Vacant land on the SUNY campus (for every campus outside of New York City)

  • Vacant space in buildings on the SUNY campus (for every campus outside of NYC)

  • Any business incubator with a bona fide affiliation to the campus, university or college, and

  • Up to 200,000 square feet within one mile of a campus (for every campus north or west of Westchester County).

Private Colleges/Universities: The program also provides 3 million square feet of tax-free areas primarily dedicated to private colleges and universities on land north of Westchester County, to be allocated by the START-UP NY Program Board (consisting of three members with significant academic based entrepreneurship experience) in a manner that ensures regional balance and balance among eligible rural, urban and suburban areas in the State.

  • For private colleges and Universities north of Westchester County, the tax-free areas can include vacant land and vacant space on- or off-campus, as well as any business incubator with a bona fide affiliation to the campus, university or college.

  • Of these 3 million square feet, 75,000 square feet will be allocated for each of the following: Nassau County, Suffolk County, Westchester County, and the boroughs of Brooklyn, the Bronx, Manhattan, Queens and Staten Island. Private colleges and universities in New York City and Westchester, Suffolk and Nassau Counties, as well as SUNY and CUNY campuses not specifically designated, may apply to sponsor these tax-free areas. Once the 75,000 square foot cap is reached in these counties and boroughs, the board may designate up to an additional 75,000 square feet in each. Therefore, a potential of 150,000 square feet of space will be available in these counties and boroughs.

20 State Properties: In addition, the 3-member board can also designate up to 20 strategic State assets as tax-free communities. These must be State-owned vacant land, State-owned vacant facilities or State-owned facilities that are in the process of closing and becoming vacant. Each will be affiliated with a SUNY, CUNY or independent college or university to attract new employers and new jobs and transform the site into a regional economic engine.

In order for a business to be eligible and locate within a START-UP NY tax-free community, a business will need to be aligned with or further the academic mission of the campus, college or university sponsoring the tax-free community. Businesses participating in the program will need to have positive community and economic benefits; create and maintain net new jobs in order to participate, be a company from out of state that is relocating to NYS, or the expansion of an already existing NYS company- as long as it can demonstrate that it is creating new jobs and not simply moving “existing” jobs.

In addition, New York State start-ups "created" from New York State incubators will be eligible to enter tax-free communities and be eligible for the benefits under the program

Participating companies in this program will not pay any business, corporate, sales and/or property taxes for 10 years. Employees with participating companies will not pay income taxes for the first five years, after which they will pay partial income tax based on wage income for the remaining five years. 

This program will also impact the Excelsior Jobs Program, a state initiative that provides tax credits to businesses. Changes to the program include reducing, by half, the job creation requirements for businesses receiving tax credits through the Excelsior Jobs program; amended as follows:

  • Manufacturing – 10 net new jobs (originally 25)

  • Agriculture – 5 net new jobs (originally 10)

  • Financial service data center or financial services customer back office operation – 50 net new jobs (originally 100)

  • Scientific research and development – 5 net new jobs (originally 10)

  • Software development – 5 net new jobs (originally 10)

  • Back office operations – 50 net new jobs (originally 150)

  • Distribution center – 75 net new jobs (originally 150)  - this category was previously combined with back office

  • Targeted industry that retains 25 full-time jobs (originally 50) or a manufacturer retaining at least 10 full-time jobs (new provision) with a cost benefit ratio of 10:1.

In addition, a pro-rated reduction in the tax credit was created in the event that the minimum job threshold is achieved and new job creation is within 75% of the net new job creation goal.

For more information on the Excelsior Jobs Program, please visit our Excelsior Jobs page.

When it comes to taxes, Freed Maxick CPAs is different than most accounting firms in Western New York. What matters to you matters to us; giving you the most up to date information and legislative changes that may affect you and help you respond in a timely way. We serve all 50 states. Contact us today.

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