Saturday, June 15, 2013

Summary of Draft Tax-Free NY Proposed Legislation


Proposed Tax‐Free NY Summary of Provisions in Gov. Cuomo’s June 7, 2013 Draft Legislation

6/15/2013

TaFNY Tax Benefits

• Credit to eliminate income tax (personal/partnership)

• Credit to eliminate corporate franchise tax

• Real property tax exemption (treated as exempt educational institution property). Limited to property with educational exemption as of June 1, 2013.

• Credit/refund of sales and use tax for 120 month period

• Lease is exempt from real estate transfer taxes

• For a period of up to 10 years, eligible employees working at the site are exempt from state/NYC/Yonkers income taxes

• Also an exemption for MCTD payroll tax

Eligible Sites – SUNY/Community Colleges

• SUNY campuses, with the exception of Empire State College (except Saratoga), any property of  Downstate Medical Center (except incubator property), the College of Optometry and the Maritime College

• Community colleges, except a community college whose main campus is in NYC 

• Sites allowed consists of:
– vacant space and vacant land on campus
– Up to 200,000sf of vacant land owned or leased by the SUNY located within one mile of campus
– Potential certification by ommissioner of ESD of land located more than one mile from campus

Eligible Sites – CUNY

• Five CUNY campuses (one in each borough)

• Limitations on selecting campus located in area with high poverty

• Up to 200,000sf of land adjacent to the campus that is owned or leased by the CUNY

Eligible Sites – Private Colleges/Universities

• Up to 3 million sf of vacant space or vacant land on a campus of a private university or college located outside Nassau, Suffolk, Westchester, or NYC

• However, each of Nassau, Suffolk, Westchester, Brooklyn,Bronx, Queens and Staten Island will have 30,000 sf in high poverty areas

• The locations for the 30,000sf sites must be owned or leased by one of the following:
– Private college or university whose campus is in Nassau, Suffolk, Westchester or NYC
– One of the SUNY institutions excluded from the SUNY category
– A community college whose main campus in is NYC
– A CUNY excluded from the five sites

Eligible Sites – Educational Institutions

• All of the educational institutions are prohibited relocating academic, administrative, housing, dining athletics or any other facilities serving students in order to create vacant space

Eligible Sites – Strategic State Assets

• The TaFNY approval board may designate up to 20 strategic state assets as designated sites

• Each site must be affiliated with and supported by an educational institution]

• No limit on the size of the designated site 

• A strategic state asset does not include land or buildings located in NYC 
• Includes only land and buildings which are, as of June 15, 2013, closed, vacant or for which notice
of closure has been authorized by law 

Eligible Businesses

• Businesses that align with university mission

• Create and maintain net new jobs (including first year of operation)

• If a business has current operations in NYS or had operations in the last 5 years, it must apply for permission from the Commissioner of ESD to participate in TaFNY

• Excluded businesses:

– businesses providing utilities

– businesses engaged in generation or distribution of electricity, the distribution of natural gas, or the production of steam

– Retail/wholesale, restaurants, hotels

– Medical or dental practices

– Real estate brokers, accountants, attorneys

– Personal service businesses

– Finance and financial services

Approval Procedures

• The draft bill would providefor a process by which an educational institution would apply to have some
of its property designated as a TaFNY area

• The application requires a plan for the types of businesses and how these businesses align with the
educational mission of the institution

• A business desiring to participate in the program will apply first to the academic institution, which application, if approved, must be approved by the Commissioner of ESD