NY Law Makes Businesses Held Accountable for Tax Breaks
Author: |August 5, 2015
The new deal
NY Law Makes Businesses Held Accountable for Tax Breaks
The new deal
Last week, New York state legislators passed a bill that makes businesses held accountable for tax incentives if they do not meet job creation goals. The bill is a significant development because the state tax incentives totaled $554 million last year, a nine percent increase over 2013.
The new law is expected to take effect within the next six months. Industrial development agencies play a key role in employment creation with tax breaks enabling these companies to relocate to New York state. These tax breaks and incentives are viewed as vital aspects of conducting business in New York state because they help companies offset other tax and utility expenses. Ultimately, the new law means that industrial development agencies in New York state will be required to create policies in the event of discontinuing tax breaks when a company halts operations, relocates or misses job creation and retention goals. Therefore, employers will now be held responsible for meeting the job creation goals they set in order to qualify for certain state business tax breaks.
Criticism
However, according to the New York State Comptroller’s Office, these businesses and real estate development firms have established job creation goals for the tax breaks without following through on their promises. Comptroller Thomas DiNapoli was critical of the system in place because it does not hold companies accountable for ensuring that they reach their specific quotas for job creation. The goal of the new legislation is to make these businesses and industrial development agencies more transparent. With more scrutiny in the process of industrial development agency project applications, DiNapoli feels that requiring agreements in the project will ensure that companies meet job creation goals. Otherwise, their tax incentives will be revoked and they will be responsible for the unpaid taxes. Ultimately, DiNapoli feels that the new legislation will increase the benefits of job creation.
“By increasing scrutiny of IDA project applications and requiring project agreements to include the recapture of benefits if job creation goals are not met, we can address many of the concerns raised in audits by my office over the years,” noted DiNapoli.
The impact
The significance of the tax incentives was highlighted in the legislation, particularly in the Albany region. Albany was awarded 397 projects in 2014, with $93.7 million in tax exemptions, more than any other region in the state. This included a series of recent major industrial development projects such as the $110 million restructuring of the Albany Medical Center.
NY Law Makes Businesses Held Accountable for Tax Breaks
Author:
Last week, New York state legislators passed a bill that makes businesses held accountable for tax incentives if they do not meet job creation goals. The bill is a significant development because the state tax incentives totaled $554 million last year, a nine percent increase over 2013.
The new law is expected to take effect within the next six months. Industrial development agencies play a key role in employment creation with tax breaks enabling these companies to relocate to New York state. These tax breaks and incentives are viewed as vital aspects of conducting business in New York state because they help companies offset other tax and utility expenses. Ultimately, the new law means that industrial development agencies in New York state will be required to create policies in the event of discontinuing tax breaks when a company halts operations, relocates or misses job creation and retention goals. Therefore, employers will now be held responsible for meeting the job creation goals they set in order to qualify for certain state business tax breaks.
Criticism
However, according to the New York State Comptroller’s Office, these businesses and real estate development firms have established job creation goals for the tax breaks without following through on their promises. Comptroller Thomas DiNapoli was critical of the system in place because it does not hold companies accountable for ensuring that they reach their specific quotas for job creation. The goal of the new legislation is to make these businesses and industrial development agencies more transparent. With more scrutiny in the process of industrial development agency project applications, DiNapoli feels that requiring agreements in the project will ensure that companies meet job creation goals. Otherwise, their tax incentives will be revoked and they will be responsible for the unpaid taxes. Ultimately, DiNapoli feels that the new legislation will increase the benefits of job creation.
“By increasing scrutiny of IDA project applications and requiring project agreements to include the recapture of benefits if job creation goals are not met, we can address many of the concerns raised in audits by my office over the years,” noted DiNapoli.
The impact
The significance of the tax incentives was highlighted in the legislation, particularly in the Albany region. Albany was awarded 397 projects in 2014, with $93.7 million in tax exemptions, more than any other region in the state. This included a series of recent major industrial development projects such as the $110 million restructuring of the Albany Medical Center.
