Greater Jamestown New York Empire Zone Benefits

E M P I R E Z O N E B E N E F I T S

TAX CREDITS AND BUSINESS INCENTIVES

New York State Empire Zone tax credits are available to all types of businesses: industrial, commercial, retail, and service, located within the boundaries of an Empire Zone. To be eligible, the applicant business must plan to (1) create new jobs; and/or (2) add or expand facilities in the Zone within five years of certification. An application form is available below or in the Zone office.

Use of NYS tax credits are based on new jobs. The credits for Zone Certified Businesses (ZCB) include:

Employment Incentive Credit (EIC)

Investment Tax Credit (ITC)

Linked Deposit

Real Property Tax Credit (RPTC)

Sales Tax Exemption

Tax Reduction Credit (TRC)

Wage Tax Credit (WTC)

Zone Capital Credit

Qualified Empire Zone Enterprise Benefits
The QEZEs are enhanced Empire Zone Benefits.

To become QEZE eligible, a business must be located in the Zone, be Zone Certified, and pass an annual employment test.

This employment test will vary depending on when you a business is certified.

The Employment Test- certified prior 4/1/05
The business employment number of all the company's facilities in the Zone(s) equals or exceeds the employment number of its facilities in the Zone(s) during the base period, AND, The employment number of all the company's NYS facilities outside the Zone(s) equals or exceeds its employment number of all its NYS facilities out side the Zone(s) during the base period.

Base Period - Five tax years immediately preceding the test year
Test Year - The business' last taxable year ending before the test date
Test Date - Date the business was certified

The Employment Test- certified after 4/1/05
The business employment number of all the company's facilities in the Zone(s) equals or exceeds the employment number of its facilities in the Zone(s) during the base period, AND, The employment number of all the company's NYS facilities outside the Zone(s) equals or exceeds its employment number of all its NYS facilities out side the Zone(s) during the base period.

Base Period - Five tax years immediately preceding the test year
Test Year - The business' last taxable year ending before the test date
Test Date - Date the business was certified

For the Tax Reduction and the real Property Tax Credit, a QEZE must also meet an employment increase factor.
Definitions -
Employment Increase Factor
There are two methods to calculate the employment increase factor. A business uses the greater of the two factors. The factor cannot exceed 1.

Method 1
(Tax Year Employment - Test Year Employment)
Test year employment = Employment Increase Factor
Method 2
(Tax Year Employment - Test Year Employment)
100 = Employment Increase Factor

Zone Allocation Factor
The Zone allocation factor is the percentage that represents the taxpayer's economic presence in Empire Zones in which the taxpayer is certified. The percentage is calculated by adding the two percentages determined in (1) and (2) below and then dividing the result by 2. Where a taxpayer has only one percentage to determine from either (1) or (2) below, that percentage should be used as the Zone allocation factor.

(1) Determine the percentage of the taxpayer's real and tangible personal property in Empire Zones by dividing the average value of real and tangible personal property, whether owned or rented, in Empire Zones during the period covered by the average value of all the taxpayer's real and tangible personal property, whether owned or rented, within the state during that same period.

Value of the taxpayer's real and tangible personal property means the adjusted basis of properties for federal income tax purposes (except that the value of rental property will be 8 times the gross rents paid for the rental property for the taxable year). However, if a taxpayer has made a one-time, revocable election, which has not been revoked, to use fair market value as the value of all of the taxpayer's real and tangible personal property for purposes of the property factor of the business allocation percentage, the taxpayer may also use fair market value for purposes of this computation.

(2) Determine the percentage of the taxpayer's wages in Empire Zones by dividing the total wages and salaries of employees within Empire Zones, except general executive officers, by the total wages and salaries of all the taxpayer's employees within the state, except general executive officers.

For Article 22 (personal income tax) purposes, reference to property, wages and salaries are considered to be references to only those items connected with the conduct of a business. Therefore, the reference to entire net income in (2) above would be net profit (loss) or ordinary income (loss) for Article 22 purposes.

The Tax Factor is:

Article 9-A taxpayers:
The larger of the tax on the entire net income base or the minimum taxable income base.
For Article 9-A taxpayers, the credit deducted for each taxable year cannot reduce the to an amount less than the fixed dollar minimum. However, Article 9-A taxpayers that have a Zone allocation factor of 100 percent are not subject to this limitation and the credit deducted for each taxable year can reduce the tax to zero for these taxpayers.
Article 32 taxpayers:
The larger of the tax on entire net income or alternative entire net income. For Article 32 taxpayers, the credit deducted for each taxable year cannot reduce the tax to an amount less than the fixed dollar minimum tax.
Article 33 taxpayers:
The larger of the tax on entire net income or the entire net income plus compensation alternative. For Article 33 taxpayers, the credit deducted for each taxable year cannot reduce the tax to an amount less than the fixed dollar minimum tax.
Article 22 taxpayers:
The tax as determined under Article 22. For Article 22 taxpayers, the credit deducted for each taxable year can reduce the tax to zero. The QEZE Tax Reduction Credit has been amended to codify the computation of the tax factor for sole proprietors, partners and S corporation shareholders of a QEZE.

Sole proprietors, New York S corporation shareholders and individual partners of a QEZE shall determine the tax factor used in the computation of the tax reduction credit by multiplying the New York State tax shown on their return by a ratio, the numerator of which is the income from the QEZE allocated within New York State and included in their New York adjusted gross income and the denominator of which is their New York adjusted gross income. In no event may the ratio exceed one. The commissioner of the Department of Taxation and Finance may prescribe other methods which reasonably reflect the portion of tax attributable to the QEZE.

These provisions are a codification of current Tax Department policy and are effective for tax years beginning on or after January 1, 2001.
http://www.tax.state.ny.us/Forms/

Forms & Publications

**Further information about the NYS Empire Zones program and tax credits is also available at the following:

Greater Jamestown Empire Zone
Phone: 716/483-7773 Fax: 716/483-7770
E-mail: info@greaterjamestownez.com

For information about the NYS Empire Zones program and tax credits log on to:

http://www.nylovesbiz.com http://www.tax.state.ny.us




	E M P I R E Z O N E B E N E F I T S TAX CREDITS AND BUSINESS INCENTIVES New York State Empire Zone tax credits are available to all types of businesses: industrial, commercial, retail, and service, located within the boundaries of an Empire Zone. To be eligible, the applicant business must plan to (1) create new jobs; and/or (2) add or expand facilities in the Zone within five years of certification. An application form is available below or in the Zone office. Use of NYS tax credits are based on new jobs. The credits for Zone Certified Businesses (ZCB) include: Employment Incentive Credit (EIC) Investment Tax Credit (ITC) Linked Deposit Real Property Tax Credit (RPTC) Sales Tax Exemption Tax Reduction Credit (TRC) Wage Tax Credit (WTC) Zone Capital Credit Qualified Empire Zone Enterprise Benefits The QEZEs are enhanced Empire Zone Benefits. To become QEZE eligible, a business must be located in the Zone, be Zone Certified, and pass an annual employment test. This employment test will vary depending on when you a business is certified. The Employment Test- certified prior 4/1/05 The business employment number of all the company's facilities in the Zone(s) equals or exceeds the employment number of its facilities in the Zone(s) during the base period, AND, The employment number of all the company's NYS facilities outside the Zone(s) equals or exceeds its employment number of all its NYS facilities out side the Zone(s) during the base period. Base Period - Five tax years immediately preceding the test year Test Year - The business' last taxable year ending before the test date Test Date - Date the business was certified The Employment Test- certified after 4/1/05 The business employment number of all the company's facilities in the Zone(s) equals or exceeds the employment number of its facilities in the Zone(s) during the base period, AND, The employment number of all the company's NYS facilities outside the Zone(s) equals or exceeds its employment number of all its NYS facilities out side the Zone(s) during the base period. Base Period - Five tax years immediately preceding the test year Test Year - The business' last taxable year ending before the test date Test Date - Date the business was certified For the Tax Reduction and the real Property Tax Credit, a QEZE must also meet an employment increase factor. Definitions - Employment Increase Factor There are two methods to calculate the employment increase factor. A business uses the greater of the two factors. The factor cannot exceed 1. Method 1 (Tax Year Employment - Test Year Employment) Test year employment = Employment Increase Factor Method 2 (Tax Year Employment - Test Year Employment) 100 = Employment Increase Factor Zone Allocation Factor The Zone allocation factor is the percentage that represents the taxpayer's economic presence in Empire Zones in which the taxpayer is certified. The percentage is calculated by adding the two percentages determined in (1) and (2) below and then dividing the result by 2. Where a taxpayer has only one percentage to determine from either (1) or (2) below, that percentage should be used as the Zone allocation factor. (1) Determine the percentage of the taxpayer's real and tangible personal property in Empire Zones by dividing the average value of real and tangible personal property, whether owned or rented, in Empire Zones during the period covered by the average value of all the taxpayer's real and tangible personal property, whether owned or rented, within the state during that same period. Value of the taxpayer's real and tangible personal property means the adjusted basis of properties for federal income tax purposes (except that the value of rental property will be 8 times the gross rents paid for the rental property for the taxable year). However, if a taxpayer has made a one-time, revocable election, which has not been revoked, to use fair market value as the value of all of the taxpayer's real and tangible personal property for purposes of the property factor of the business allocation percentage, the taxpayer may also use fair market value for purposes of this computation. (2) Determine the percentage of the taxpayer's wages in Empire Zones by dividing the total wages and salaries of employees within Empire Zones, except general executive officers, by the total wages and salaries of all the taxpayer's employees within the state, except general executive officers. For Article 22 (personal income tax) purposes, reference to property, wages and salaries are considered to be references to only those items connected with the conduct of a business. Therefore, the reference to entire net income in (2) above would be net profit (loss) or ordinary income (loss) for Article 22 purposes. The Tax Factor is: Article 9-A taxpayers: The larger of the tax on the entire net income base or the minimum taxable income base. For Article 9-A taxpayers, the credit deducted for each taxable year cannot reduce the to an amount less than the fixed dollar minimum. However, Article 9-A taxpayers that have a Zone allocation factor of 100 percent are not subject to this limitation and the credit deducted for each taxable year can reduce the tax to zero for these taxpayers. Article 32 taxpayers: The larger of the tax on entire net income or alternative entire net income. For Article 32 taxpayers, the credit deducted for each taxable year cannot reduce the tax to an amount less than the fixed dollar minimum tax. Article 33 taxpayers: The larger of the tax on entire net income or the entire net income plus compensation alternative. For Article 33 taxpayers, the credit deducted for each taxable year cannot reduce the tax to an amount less than the fixed dollar minimum tax. Article 22 taxpayers: The tax as determined under Article 22. For Article 22 taxpayers, the credit deducted for each taxable year can reduce the tax to zero. The QEZE Tax Reduction Credit has been amended to codify the computation of the tax factor for sole proprietors, partners and S corporation shareholders of a QEZE. Sole proprietors, New York S corporation shareholders and individual partners of a QEZE shall determine the tax factor used in the computation of the tax reduction credit by multiplying the New York State tax shown on their return by a ratio, the numerator of which is the income from the QEZE allocated within New York State and included in their New York adjusted gross income and the denominator of which is their New York adjusted gross income. In no event may the ratio exceed one. The commissioner of the Department of Taxation and Finance may prescribe other methods which reasonably reflect the portion of tax attributable to the QEZE. These provisions are a codification of current Tax Department policy and are effective for tax years beginning on or after January 1, 2001. http://www.tax.state.ny.us/Forms/ Forms & Publications **Further information about the NYS Empire Zones program and tax credits is also available at the following: Greater Jamestown Empire Zone Phone: 716/483-7773 Fax: 716/483-7770 E-mail: info@greaterjamestownez.com For information about the NYS Empire Zones program and tax credits log on to: http://www.nylovesbiz.com http://www.tax.state.ny.us About I News & Info I EZ Benefits I ZCC I Renewal Community I Links I Contact