Incentives & Tax Abatements

The County, State of New York and the Federal government all offer incentives for job creation and business investment in new plants or equipment. The widest range of incentives are available to manufacturers.

Livingston County Industrial Development Agency (LCIDA)

The LCIDA can offer companies substantial benefits and incentives for job creation. They can be categorized into five categories, the first three of which are available for all projects financed through the LCIDA.

• Property Tax Abatements – For new construction, companies pay no County, Town or School property taxes for 5 years. (Village taxes are abated 75% for 6 years). In year 6 land & building property taxes are 80% abated followed by abatements of 60%, 40% and 20% (Villages included) in years 7,8 and 9 respectively.
  For acquisition or renovations of existing buildings, a seven year across the board property tax freeze is implemented.

• Mortgage Recording Tax – If a mortgage is recorded for the project transaction, the full 1% mortgage recording tax is exempted.
• State & Local Sales Taxes – From application acceptance until a local certificate of occupancy/use is issued, all sales taxes on fixed asset purchases are exempt from these taxes.
• Sub-Prime Fixed Asset Financing – For manufacturers and 501c 3 not-for-profit corporations only, the LCIDA may issue tax exempt Industrial Revenue Bonds (IRB). Purchasers of IRB debt financing pay no Federal or State income tax on bond interest therefore bond rates are 75% to 95% of Prime.
• Conduit Financing – Several types of State grants, particularly those for public infrastructure improvements benefiting a project require a public sponsor as grant recipient. The LCIDA regularly undertakes these roles and performs these functions in a seamless fashion with little or no cost.

Business Credits and Exemptions

New York State has become a national leader in cutting taxes. Nearly all taxes are below 1994 levels with substantial reductions in the personal income tax, business tax and estate tax.

• Investment Tax Credit – For new investments in manufacturing and agricultural production property and equipment with new job creation, may receive tax credits up to 10% of eligible investment may be claimed. New businesses may elect to receive a refund of certain credits, and all unused credits may be carried forward for 15 years.
• Research and Development Tax Credit – For new investments in R&D facilities, companies are eligible for a 9% credit against the corporate tax.
• Sales Tax Exemptions – Manufacturing and agricultural (farm) companies are exempt from state/local sales taxes for production equipment, R & D property and fuel/utilities used in production. Broader sales tax exemptions are available through the LCIDA.
• No Personal Property taxes – Many other States and Provinces impose taxes on both real estate and personal property and inventory. New York and its local governments and schools impose only property taxes. Personal property, whether tangible or intangible, is exempt from taxation.
• Real Property Tax Abatements – Companies that are not eligible or do not apply for LCIDA property tax abatements nonetheless qualify for a 10 year tax abatement, starting at 50%, from all local property taxes for assessment increases over $10,000 caused by improvements to company-owned business or commercial property.
• Treatment of Income for Taxation - The tax structure permits, subject to certain limitations, a carryover of any net operating loss, back three years and forward fifteen – a factor especially helpful to new operations. Corporations in New York State pay franchise taxes on either net income or capital, not on both. Many states tax corporations on both. New York is also one of the few states to permit single-state firms to allocate income on a destination-of-sales- basis. This means that even though all the company’s operations are located in New York, it may be taxed on only a portion of its’ net income.

Additional Agricultural Incentives

• Farm Property School Tax Credit – A credit against personal income tax or the Corporate franchise tax is equal to the School property taxes paid on certain farm property.
• Agricultural Assessments – property is assessed for real property tax purposes at it agricultural value versus development value.
• Real Property Tax Abatements- Newly constructed or reconstructed agricultural buildings are not taxed for 10 years.