Am I Eligible for Tax Benefits From START-UP NY?

07 Mar

As a startup in New York State, you could be eligible for tax benefits. For information on the Innovation Hot Spot Program and its tax benefits, see this blog post. For details regarding the STARTUP-NY tax benefits, read on!

What is START-UP NY?

START-UP NY stands for “SUNY Tax-free Areas to Revitalize and Transform Upstate New York.” It is a program benefitting companies in NYS that meet certain requirements, such as partnering with a college or university and committing to job creation over a five-year period. For a list of participating colleges and universities, see here.

What are the START-UP NY tax benefits?

To qualify for START-UP NY, a company needs to secure the sponsorship of a participating college or university that attests to:

An academic connection or ‘alignment’ between the company and the university (you can search the list of participating colleges and universities here),
A commitment to create a certain number of jobs over a five-year period,
An agreement to occupy physical space that the university has designated as part of its START-UP NY Campus Plan,
No pre-existing competitor in the community.

When these conditions are met, the company can get:

A 10-year exemption from New York State taxes. For more specifics, go here.

What are the differences between Hot Spot and START-UP NY tax benefits?

Here are the differences in a nutshell:

START-UP NY offers 10 years of benefits; the Hot Spot program offers 5.
START-UP NY offers a personal income tax exemption for new employees; the Hot Spot exemption doesn’t.
START-UP NY requires an application and a campus to sponsor the company; the Hot Spot only requires that the company is a member of the Hot Spot.
START-UP NY requires the company to move into specific space that is designated as a ‘tax-free area’ in the participating university’s campus plan. Hot Spot benefits are available regardless of where the company is, as long as they meet the membership requirements of the incubator.

Answers to Common Questions:

Q: Can I start with Hot Spot tax benefits and then move into START-UP NY later?

A: Yes. The Hot Spot program is designed to support companies starting and developing in certified incubators. A company then has the option to apply for START-UP NY once they are at a point in their development where they can predict and quantify future job growth. To learn more about the Hot Spot Program, see this blog post.

Q: If I meet the above criteria, am I guaranteed tax benefits?

A: No, it is ultimately up to the NYS Department of Taxation and Finance on whether or not your company receives tax benefits.

Q: Are you my lawyer or tax advisor?

A: No! You should consult your own advisors to understand exactly how these programs might impact your own tax situation.

This is the third in a 3-part series on tax benefits by Marketing & Communications Associate Kristi Krulcik to be published throughout February and March. To stay up-to-date on new resources from the Southern Tier Startup Alliance, join our email newsletter.

Am I Eligible for Tax Benefits From START-UP NY?