New York Codes, Rules and Regulations
Title 5 - DEPARTMENT OF ECONOMIC DEVELOPMENT
Chapter XXII - Start-Up NY Program
Part 220 - Suny Tax-free Areas To Revitalize And Transform Upstate New York (start-up Ny) Program
Section 220.10 - Businesses locating in tax-free NY areas

Current through Register Vol. 44, No. 38, September 21, 2022

(a) To participate in START-UP NY, an eligible business must submit a complete application, as prescribed by the commissioner, on or before December 31, 2020.

(b) For purposes of encouraging eligible businesses to locate in a tax-free NY area and participate in the program, sponsors are permitted to solicit and accept application from eligible businesses pursuant to the provisions of this Part and article 21 of the EDL.

(c) A sponsor shall not accept any application to locate in a tax-free NY area from a business that would compete with other businesses in the same community but outside the tax-free NY area.

(d) As part of such application, a business applicant must:

(1) agree to allow the Department of Taxation and Finance to share its tax information with the department. The form created by the department to effectuate this information transfer shall be executed only by a person with authority to act on the business entity's behalf in this regard. Any tax information shared as a result of this agreement shall be exempt from disclosure or inspection in accordance with the Freedom of Information Law, article 6 of the Public Officers Law;

(2) agree to allow the Department of Labor to share its tax and employer information with the department. The form created by the department to effectuate this information transfer shall be executed only by a person with authority to act on the business entity's behalf in this regard. Any tax and employment information shared as a result of this agreement shall be exempt from disclosure or inspection in accordance with the Freedom of Information Law, article 6 of the Public Officers Law;

(3) allow the department and its agents access to any and all books and records deemed relevant by the department to monitor compliance with the requirements of the program;

(4) provide, upon request by the department, all of the following information:
(i) the name, address, and employer identification number of the business;

(ii) identification of any parent, subsidiary and affiliated businesses, if any;

(iii) a description of the nature of the business, i.e., identification of any goods produced or manufactured, or services to be rendered;

(iv) a description of the land or space the business will use, the terms of the lease agreement, if applicable, between the sponsor and the business, and whether or not the land or space being used by the business is being transferred or sublet to the business from some other business;

(v) description of any investment to be made in the tax-free NY area including, but not limited to, any plans for construction, rehabilitation or renovation; purchase or lease of equipment; estimated costs of investments; estimated schedule for the completion of any investment;

(vi) description of how the business plans to recruit employees from the local workforce;

(vii) certification by the business that it meets the eligibility criteria pursuant to this Part and article 21 of the EDL and will align with or further the academic mission of the sponsor;

(viii) certification of efforts to ascertain that, at the time of application, the business would not compete with any other business in the same community but outside the tax-free NY area, which certification shall include:
(a) an attestation by the sponsor that a review of 6-digit NAICS codes of businesses in the same community identifies no businesses in the same community with the same NAICS code;

(b) an affidavit of publication obtained by the sponsor from a daily print or online newspaper in the county where the applicable tax-free NY area is located that affirms that a notice regarding the application was published in such newspaper for no less than five consecutive days and an attestation by the sponsor that the published notice yielded no responses from businesses identifying themselves as competitors in the same community. Such notice shall include a detailed description of the applicant's proposed products or services and shall also include appropriate contact information for the university or college representative responsible for receiving START-UP NY business applications and all other information as determined by the commissioner;

(c) an attestation by the applicant that it does not compete with other businesses in the same community but outside the tax-free NY area;

(d) in the event that a potential competitor is identified, the sponsor must seek a letter from the commissioner determining whether the applicant business would compete with other businesses in the same community but outside the tax-free NY area. In such case, the commissioner shall conduct a review of available information and make a final determination as to whether the applicant has a competitor in the same community. Such review shall include, but not be limited to, a comparison of the products and/or services proposed to be provided by the business applicant and the products and/or services provided by the potential competitor or competitors. The commissioner will make the final determination about whether the business applicant will compete with other existing businesses in the same community but outside the tax-free NY area.

(ix) certification that the business's participation in the START-UP NY Program will have positive community and economic benefits;

(x) the prior three years of Federal and State income or franchise tax returns, unemployment insurance quarterly returns, real property tax bills and audited financial statements;

(xi) the employer identification or social security numbers for all related persons to the business, including those of any members of a limited liability company or partners in a partnership;

(xii) a list and description of all related persons to the business and certification that jobs are not being shifted within the State;

(xiii) certification, under penalty of perjury, that the applicant is in substantial compliance with all environmental, worker protection, and local, State and Federal tax laws;

(xiv) whether the business has previously applied for acceptance to locate into a tax-free NY area and the status of that application;

(5) include a statement of performance benchmarks, identifying the number of net new jobs that must be created, the schedule forecasting a five-year plan or projection for creating those jobs, and details on job titles and expected salaries. This statement of performance benchmarks must also indicate the maximum number of net new jobs eligible for the personal income tax benefit described in section 39(e) of the Tax Law to be created;

(6) include a statement of consequences for the failure to meet performance benchmarks, as determined by the business applicant and the sponsor, which shall include one or more of the following:
(i) suspension of such business's participation in the START-UP NY Program for one or more tax years as specified in such application;

(ii) termination of such business's participation in the START-UP NY Program; or

(iii) proportional recovery of tax benefits awarded under the START-UP NY Program as specified in section 39 of the Tax Law.
(a) In the event that the business chooses proportional recovery of tax benefits as a consequence of realizing job creation less than the estimated amount, and the number of net new jobs created is at least 75 percent of the number of net new jobs promised, then the tax benefits shall be reduced by the percentage by which the business failed to meet its performance benchmark, calculated as the ratio of the difference between new net jobs promised and actual net new jobs created divided by the net new jobs promised. For purposes of example, if the business promised to create 100 net new jobs but created only 90 net new jobs, the difference is 10 net new jobs. Dividing those 10 jobs not created by the 100 jobs promised shows that the number of jobs created is 10 percent less than the number of jobs promised. The business's tax benefits would therefore be reduced by 10 percent.

(b) In the event that the business chooses proportional recovery of tax benefits as a consequence of realizing job creation less than the estimated amount, and the number of net new jobs created is less than 75 percent of the number of net new jobs promised in any three years during the 10-year job creation schedule, then:
(1) in the first year that the business does not meet the 75 percent threshold, there shall be a proportional recovery of tax benefits;

(2) in the second year that the business does not meet the 75 percent threshold, such business's participation in the START-UP NY Program will be suspended; and

(3) in the third year that the business does not meet the 75 percent threshold, such business's participation in the START-UP NY Program may be terminated;

(7) in accordance with section 89(5) of the Public Officers Law, identify with specificity any information in the application that the applicant deems to be a trade secret or otherwise exempt from disclosure under the Freedom of Information Law, article 6 of the Public Officers Law.

(e) The sponsor, upon receipt of a complete application from a business applicant, shall determine whether the business applicant meets the eligibility criteria set forth in section 220.6 of this Part. An application that meets the eligibility criteria set forth in section 220.6 of this Part may then be forwarded by the sponsor to the commissioner for further review to determine whether the business meets all of the requirements, as well as the intended purpose, of article 21 of the EDL.

(1) Where the sponsor is a SUNY college or university and proposes to enter into a lease with a term greater than 40 years (including any options to renew) with the business applicant for eligible land in a tax-free NY area or for eligible land in a tax-free NY area of one million or more square feet, the sponsor must also submit a copy of the proposed lease to the START-UP NY Approval Board at the same time the application is provided to the commissioner. If the board disapproves of the lease, it must provide to the sponsor a statement of reason for disapproval and suggestions for modifications within 30 days of receipt. The sponsor may then submit a modified lease in accordance with the board's suggestions to the commissioner for review as part of the business application. If the board does not disapprove of the lease within 30 days of receipt, it shall be deemed approved by the board and the application shall be deemed ready for review by the commissioner.

(f) When forwarding a completed business application to the commissioner, the sponsor must include a certification that it will adhere to any and all applicable requirements under article 21 of the EDL, article 8 of the Labor Law and article 15-A of the Executive Law.

(g) An applicant that does not meet the criteria set forth in section 220.6 of this Part shall not be approved to locate to a tax-free NY area or be accepted into the program.

(h) The commissioner, upon receipt of a complete application from a sponsor, shall conduct a further review to determine whether the business meets all of the requirements, as well as the intended purpose, of article 21 of the EDL. The commissioner shall consider, among other things, whether the applicant:

(1) meets all of the eligibility criteria set forth in section 220.6 of this Part;

(2) has submitted a complete application;

(3) has complied with the application requirements of this section; and

(4) demonstrated that the business's participation in the START-UP NY Program will have positive community and economic benefits.

(i) The commissioner may reject the application upon a determination that the applicant does not meet the eligibility criteria set forth in section 220.6 of this Part or any other requirement, as well as the intended purpose, of article 21 of the EDL.

(j) If the commissioner rejects the application, he or she shall provide written notice of such rejection to the sponsor.

(k) The commissioner may approve the application anytime after receipt; if the commissioner approves the application, the business applicant is deemed accepted into the START-UP NY Program and can locate to the sponsor's tax-free NY area. If the commissioner does not reject the application within 60 days of receipt, the business applicant is deemed accepted into the START-UP NY Program and can locate to the sponsor's tax-free NY area. The commissioner's 60-day review period is suspended pending any review or modification of any proposed lease, if any, between a SUNY sponsor and an applicant. The application of the business shall constitute the contract between the business and sponsor. The sponsor must provide an accepted business with documentation of its acceptance in such form as prescribed by the Commissioner of Taxation and Finance, which will be used to demonstrate such business's eligibility for the tax benefits specified in section 39 of the Tax Law.

(l) Where the commissioner determines that the number of net new jobs eligible for the personal income tax benefit under section 39(e) of the Tax Law will exceed the allowable total aggregate net new jobs in the year in which the application is accepted, the business will be given priority in the subsequent year and all net new jobs identified in the business application's performance benchmarks will be eligible for the personal income tax benefit the following year.

(m) At the conclusion of the lease term between the sponsor and the business for land or space in a tax-free NY area owned by the sponsor, if applicable, the leased land or space and any improvements thereon shall revert to the sponsor, unless the lease is renewed.

Amended New York State Register November 20, 2019/Volume XLI, Issue 47, eff. 11/20/2019

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