If you are looking to expand or relocate your business the Southwest Brookly IDC will help you to utilize all of New York City's tax incentive programs. Our staff is well versed in every program offered through the City, and we can help you find the programs that will best benefit your business. See below for a short list of the City's most effective incentive programs:
Industrial Business Zone Relocation Tax Credit
Relocation Employee Assistance Program (REAP)
Industrial and Commercial Incentive Program (ICIP)
Commercial Expansion Program (rent abatement program)
Industrial Business Zone Relocation Tax Credit
Benefit:
The IBZ Relocation Credit is a one-time tax credit for industrial firms moving to a property within an Industrial Business Zone (IBZ). Businesses receive a credit against their NYC Incorporated / Unincorporated Business Taxes up to the lesser of $1,000 per full-time employee or $100,000.
Who is Eligible:
Industrial firms relocating to an IBZ from outside of an IBZ
Firms already in an IBZ, but moving to a different property within that IBZ
When to Apply:
The credit can be applied to firms’ NYC Incorporated / Unincorporated Business Tax incurred during the tax year of the move. (For businesses that entered into an agreement to purchase or lease property between July 1, 2005, and December 31, 2005, the credit can be taken during the 2006 tax year.)
Note: A tax form will be provided by the Department of Finance in late 2006 and posted at www.nyc.gov/imb.
Requirements:
- Firms may purchase or lease the move-in site
- Eligible premises must be located entirely within an IBZ
- Firms must be engaged in industrial and manufacturing activities
- Eligible businesses must have been conducting substantial business operations continuously during the past 24 months immediately preceding the relocation.
- Firms and their affiliates cannot own the move-out location unless it can be demonstrated that the new lease or building purchase is for expansion space
- Firms must continuously occupy the move-in site for a minimum of 5 years immediately following relocation
- Firms providing utilities and waste management services are not eligible.
For application forms or further information about these or any other programs, please contact Chris Shepard at 718-965-3100 x106 or cshepard@sbidc.org, or Stephanie Lee at x105 or slee@sbidc.org
Relocation Employee Assistance Program (REAP)
The program provides business income tax credits ranging from $500 to $3,000 per employee per year for twelve years, base on the number of qualified jobs. Any business relocating from outside NYC or Manhattan south of 96th Street into a property that is taking advantage of a city benefit e.g. ICIP, IDA financing, or lease from a NYC property will qualify. If no benefit applies to the building, the relocating party must purchase or lease the space for a term of at least 3 year with expenditures of at least $25. per square foot.
For further information on the REAP Program contact Stephanie Lee at 718-965-3100 x105 or slee@sbidc.org
For application forms or further information about these or any other programs, please contact Chris Shepard at 718-965-3100 x106 or cshepard@sbidc.org
Industrial and Commercial Incentive Program (ICIP)
This program provides a partial exemption from or abatement of property taxes for varying periods of up to 25 years for eligible industrial and commercial buildings that are built, modernized, rehabilitated, expanded, or otherwise physically improved. Eligibility for ICIP benefits may also allow a participant to receive reduced energy rates through programs administered by the NYC Department of Business Services.
Eligibility: Location
Because the area that Southwest Brooklyn Industrial Development Corp services is in an Empire Zone, the properties within this area would be eligible for the Special Exemption. To be eligible for benefits for commercial renovation, applicant may be expanding, modernizing, or otherwise improving an existing structure are available anywhere in the City except in Manhattan, between the centerline of 59th Street and the centerline of 96th Street.
Expenditures:
Applicants must meet minimum required expenditure (MRE) targets. The MRE is a percentage of assessed value of the project in the year of the issuance of the building permit or, if no permit is required, the start of construction.
Industrial projects must meet a 10 percent MRE threshold to be granted an exemption. Industrial projects that meet the 25 percent MRE threshold will also be eligible for a tax abatement.
Commercial projects require a 10 percent MRE threshold, except for commercial renovation projects in Manhattan, south of 59th Street, which require a 20 percent MRE.
Requirements:
- Applicants must submit two ICIP applications - a Preliminary Application for Certificate of Eligibility and a Final one.
- Applicant must notify the ICIP Unit, in writing, 15 business days before beginning construction or renovation.
- Applicant must notify the Division of Labor Services 15 business days before beginning work and submit an Employment Report for projects with
construction contracts in excess of one million dollars.
- Once the applicant receives the building permit (if one is required), applicant must file the Final ICIP Application.
- Interim construction reports must be submitted to Finance semi-annually throughout the duration of the construction or renovation.
Level of Benefit:
Commercial Projects
Commercial projects receive a full exemption on the increase in assessed value attributable to the improvements made for 11 years, followed by 4 years of exemption declining 20 percent per year.
Commercial project in designated special exemption areas (see below) receive a full exemption for 16 years, with the exemption declining by 10 percent annually for the next 9 years.
Industrial Projects
Industrial projects receive a full exemption for 16 years, with the exemption declining by 10 percent annually for the next 9 years.
Industrial projects may also be eligible for a partial tax abatement based on the real estate taxes levied in the year prior to commencement of construction. For the first 4 years, the abatement equals 50 percent of the property tax, followed by 8 years in which the abatement declines by 10 percent every 2 years.
Exemption Calculations
An exemption is granted on that portion of a property's assessed valuation known as the exemption base. The exemption base for each year is limited to the increase in assessed valuation solely attributable to improvements made to the commercial or industrial property.
All industrial projects receive 25-year exemptions - 16 years at full exemption, with 9 years of an exemption that declines by 10 percent per year. There are three kinds of exemptions for commercial projects:
Special - Commercial construction work performed in special exemption areas receives the same exemptions as industrial projects.
Regular - Commercial construction work performed in regular exemption areas receives a full exemption on the exemption base for 11 years, followed by
4 years of an exemption that declines by 20 percent per year. Full taxes are
due in the 16th year.
Renovation - Commercial construction work performed in a renovation area receives a full exemption on the exemption base for 8 years, followed by 4
years of an exemption that declines by 20per year. Full taxes are due
in the 12th year.
Deadlines
The Preliminary ICIP application must be filed before the receipt of the first building permit, or, if no permit is required, before the start of construction. The Final Application is filed after the building permit is received and the work begins.
For application forms or further information about these or any other programs, please contact Chris Shepard at 718-965-3100 x106 or cshepard@sbidc.org
The Commercial Expansion Program (rent abatement program)
Eligibility Requirements
A completed Commercial Expansion Program application, with Proof of Expenditure and Proof of Employment forms, and a $500 application fee (in the form of a money order or certified check) must be submitted within 180 days of the lease commencement dateThe lease must be for a term of not less than 3 years and must begin on or after July 1, 2005 but not later than June 30, 2010. Improvements to the premises are required. Premises must be used or occupied for industrial or manufacturing activities, which do not include waste management or utility services. Premises occupied for retail, hotel, or residential purposes are not eligible. The premises must be in a nonresidential or mixed-use building in the designated abatement zone. The abatement zone is defined as any area that is zoned C4, C5, C6, M1, M2, or M3 in the Bronx, Brooklyn, Queens, or Staten Island, and in Manhattan north of 96th Street.
Expenditure
Minimum expenditures of $2.50 per square foot are required for all new and expansion leases.
Benefit
The benefit period may not exceed 10 years. The abatement base will equal the tax liability per square foot, but will not be greater than $2.50 per square foot, for the entire benefit period. For application forms or further information about these or any other programs, please contact Chris Shepard at 718-965-3100 x106 or cshepard@sbidc.org
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