Crossroads seeks Empire Zone status; 10 years of free NYS taxes could result

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By Jay Braman Jr.
Crossroads Ventures LLC, the company trying to gain approval to build a $400 million resort project on the Ulster/Delaware county border next to Belleayre Mountain Ski Center, is taking steps to have the project site declared an Empire Zone.
On Tuesday Steven Finkle, the Empire Zone administrator for Ulster County, confirmed that his office was investigating the possibility at the developer’s request, but noted that the former supervisor of the Town of Shandaken, where much of the project is located, also submitted a request prior to leaving office at the end of 2007.
The Empire Zone program is a New York State economic development program de-signed to encourage businesses to locate, expand and create new jobs in the state.‚ÄÇ The purpose of this program is to enable businesses to operate free of New York State taxes for up to 10 years.‚ÄÇ In order to qualify for the benefits of this program a business must be located in an empire zone, make new investments in their business and create new jobs.
In Ulster County there are seven existing “sub zones,” the most allowed under program guidelines. They are the City of Kingston, the Town of Ulster, Northern Saugerties, Southern Saugerties, the Town of Warwarsing, Ellenville and the Town of Lloyd.
Finkle said Crossroads could get a sub-zone designation if two existing zones were consolidated. Asked which zones would be joined together, Finkle said discussion on that is premature but he believes it can be done.
“There is an opportunity here,” Finkle said
But first, he said, the Shandaken Town Board would need to pass a resolution requesting the status. The first steps toward that action are expected to take place on Monday, April 7 at Shandaken Town Hall. Supervisor Peter DiSclafani said he expects Crossroads’ representatives to give a presentation that evening, and Finkle said he expected to be on hand to provide information. DiSclafani said that no resolution has been prepared yet.
DiSclafani reserved judgment on the plan this week, opting to wait until he hears the presentation before making any decisions.
Participating businesses are eligible to receive the following tax credits and exemptions:
QEZE Sales Tax Exemptions: Qualified Empire Zone Enterprises (QEZEs) are granted a 10-year exemption from state sales tax on purchases of goods and services (including utility services) used predominantly in an Empire Zone.
QEZE Credit for Real Property Taxes: Qualified Empire Zone Enterprises are allowed a refundable credit against business or income tax equal to a percentage of real property taxes paid in the zone.
QEZE Tax Reduction Credit: Qualified Empire Zone Enterprises are allowed a credit against business or income tax equal to a percentage of taxes attributable to the zone enterprise.
EZ Wage Tax Credit: This credit is available for up to five consecutive years for companies hiring full-time employees in newly created jobs. For employees in special targeted groups, this credit equals $3,000 per year, with a credit of $1,500 per year for all other new hires.
EZ Investment Tax and Employment Incentive Credits: Businesses that create new jobs and make new investments in production, property and equipment may qualify for tax credits of up to 19 percent of the company’s eligible investment.
New Business Refund: Businesses new to New York State are entitled to a 50 percent cash refund of unused EZ-WTC and ITC amounts. Other businesses may carry forward unused credits indefinitely.
Utility Rate Savings: Special reduced electric and gas rates may be available through investor-owned utilities in New York State. Businesses that locate or expand their operations in an EZ may receive significantly reduced rates.
Zone Capital Credit: A 25 percent tax credit against personal or corporate income taxes is available for contributing or purchasing shares in a zone capital corporation; or for a direct equity investment in a certified zone business; or for contributions to approved community development projects within an EZ.
Sales Tax Refund or Credit: Purchases of building materials to be used for commercial or industrial real property located in an EZ are eligible for a refund or credit of NYS sales taxes.
Real Property Tax Abatement: EZs may offer tax abatements from an increased assessment, with the abatement value based on improvements to real property for up to 10 years. This holds true for up to seven years at 10 percent, decreasing over the last three years of the exemption.
Technical Assistance: Each local zone office is staffed with professionals qualified to assist businesses locating or expanding in an EZ.