Time to move to New York? The new tax-free zones in NY State

Maria Teresa Cometto —  January 20, 2014 — 1 Comment

Originally published on StartupItalia!

Time to move to New York?

While in Italy we are busy talking about “Jobs Act”, New York Council will create 10 thousand jobs per year by eliminating tax for startups for the next 10 years. Is it possible to do the same in Italy?

New York is taking care of business”. That’s the catch phrase of an adverting campaign that has been broadcasted on TV during the last few weeks. It’s about the new START-UP NY program launched by the New York State Governor Andrew Cuomo: the creation of tax-free zones across the state for new and expanding businesses. The approved businesses will operate 100% tax-free for ten years: «No business, corporate, state or local taxes, sales and property taxes, or franchise fees», stresses the publicity.

No wonder that hundreds of companies have already showed interest in the initiative that became effective at the beginning of January. Also non-US companies can apply, and in fact the website that explains how the program works has several non English editions: in Bengali, Chinese, French, German, Hebrew, Hindi, and Spanish. No, not in Italian, but Italian startups are welcomed too, explained Leslie Whatley, the executive vice president of START-UP NY, during an event at the Italian cultural institute in New York.

«Global competition is fierce and even New York state needs to offer incentives to attract talents and jobs if it doesn’t want companies to go to Mumbai or… Texas!», added Whatley.

Texas has indeed very low or zero state taxes and a very friendly treatment of businesses, that’s why it’s one of the states of the Union with the highest jobs’ growth rate. Maybe the Italian public administrators could look at this kind of policies if they really want to “restart” their economy.

The START-UP NY program’s goal is to create up to 10 thousand jobs per year, especially in the state’s areas less developed, north of New York City. It will cost New York taxpayers about $323 million.

The tax free zones will be on or near college campuses of public schools – like the State University of New York (SUNY) and City University of New York (CUNY) – and private not-for-profit educational institutions. There are 64 SUNY campuses, 29 CUNY campuses and 112 private colleges in NY state.

In order to be accepted to the program, «businesses need to support the academic mission of the college or university with which they hope to work – explains the website -. In New York City, Long Island and Westchester County, businesses must be startups or one of a number of broadly defined ‘high technology’ businesses. Eligible businesses must also: be a new company in New York State, or a company from out-of-state that is relocating to New York State, or an expansion of a company that already has employees in New York State. Expanding businesses applying for START-UP NY will have to demonstrate that they are creating new jobs and not moving existing jobs from elsewhere in the State».  Some types of businesses, including retailers, law firms, hotels, and medical offices, are not eligible.

The virtuous collaboration between business and academic research is apparently one of the features of the program. Each participating school will have a START-UP NY point person who will be able to help the companies interested in collaborating.

Empire State Development (ESD), the NY state’s leading economic development agency, is still selecting the locations for the tax free zones. But some of them have already been identified. In NYC there are three properties of the Downstate Medical Center, which are available right now for offices, labs or research facilities: BioBAT at the Brooklyn Army Terminal (85,000 sq. ft.), Synthetic Chemistry Facility (13,000 sq. ft.), and Biotechnology Incubator (26,000 sq. ft.).

There are much more opportunities out of the Big Apple. Of course the trade off is that you’ll miss being immersed in the vibrant tech startup community of the city, but overall costs will be lower. Besides, there are many interesting institutions out of NYC, from the College of Nanoscale Science and Engineering in Albany to the Ivy League Cornell University in Ithaca.

Maria Teresa Cometto

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  • teetem

    This is one giant scam,the New York tax payer should be screaming about this.