The economic developer’s toolkit in New York includes a variety of tax incentives, abatements, grants and loans that can be quite confusing, even for a seasoned professional. Many incentives at the state and local levels can be utilized for one project but not all incentives can be layered. In the case of the state’s two largest tax incentive programs – the Excelsior Jobs Program and Start Up NY – only one can be applied to a company’s project. That brings up the question – which program is best suited to benefit a company’s growth?
A detailed description of each incentive is available on our website through our Incentives Guide.
The Excelsior Jobs Program (Excelsior) is the workhorse of the state’s tax incentives programs. Excelsior provides job creation and investment incentives to firms in targeted industries such as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. Firms in these industries that create and maintain new jobs or make significant financial investment are eligible to receive fully refundable tax credits. Fully refundable means that even if a company’s state tax liability is $0, they will still receive their benefit in the form of a cash refund for that tax year (no need to carry forward).
Adopted in 2014, Start Up NY is Governor Cuomo’s groundbreaking new initiative to transform communities across the state into tax-free sites for new and expanding businesses through affiliations with public and private universities, colleges and community colleges. Businesses can operate 100% NYS tax-free for 10 years. No income tax, business, corporate, state or local taxes, sales and property taxes, or franchise fees on or near academic campuses.
What are some of the key differences between the two programs? Under Excelsior, there is a minimum job creation requirement for the targeted industries, e.g. a minimum of 10 new jobs for manufacturers. Under Start Up NY, only one new job has to be created to be eligible. Excelsior offers refundable tax credits which, in essence, gives cash back to the company. While Start Up NY allows for no income taxes. Excelsior can be used in conjunction with other state incentives. Start Up NY companies are not eligible for other NYS tax credits. A company can locate anywhere in NYS under Excelsior as long as they meet the minimum job creation thresholds. Start Up NY is limited to the eligible geography set by the college or university the company affiliates with.
Another factor to consider in deciding between the two programs is that as of 2015, the state corporate income tax rate for qualified manufacturers is 0%, making Excelsior that much more attractive to manufacturing companies.
The common denominator with both of this programs is that New York State wants your business here and is willing to help you figure out which path will be the most beneficial for the company’s bottom line. The economic development team at Invest Buffalo Niagara is well versed in these types of decisions and will facilitate the incentives process start to finish. Throughout the process, our project managers bring the right people to the table at the right times, all the while ensuring that the companies understand all the benefits of doing business in Buffalo Niagara.
