The New York State Senate, in a late night session held on Thursday, July 16,

2009, by a vote of 57 – 0, passed changes to the Empire Zones legislation enacted

in April. The changes can be summarized as follows:

• Effective Date of Decertification. The effective date shall not be earlier than

the first day of the taxable year beginning on or after

• Certification in Multiple Zones. In its review of Qualified Empire Zone

Enterprises (“QEZE”) for purposes of the cost benefit analysis, the

Department of Economic Development will consider investment made and

wages paid by a QEZE at all its certified locations combined, rather than

analyzing investment made and wages paid at each location separately.

• Aggregated Analysis. QEZEs which have different federal identification

numbers, but which are related as defined by the Internal Revenue Code,

can elect to be reviewed in the aggregate.

• Entities Certified before August 1, 2002. An entity that was certified prior

to August 1, 2002, and which transferred employees or property from a

related entity will not be decertified if:

• the business enterprise has provided economic returns to the state

in the form of total remuneration to its employees and investments

in its facility greater in value than the tax benefits the business

enterprise used and had refunded to it: AND 

On April 23rd during the Dunkirk/Sheridan Empire Zone Board meeting two new businesses joined the zone. Absent from the picutre were Kristine Morabito of the CCIDA and Tom Carpenter representative for the Governor, and Kory Ahlstron, who all played key roles into moving this project forward. Click on link to read full story.

Hello All,
Please note that the Department of Taxation and Finance has posted a new Technical Services Bulletin on its website (see link) explaining the recent Empire Zones changes that all certified businesses will need to know about when filing returns for tax years beginning on or after January 1, 2008.

TSB-M-09 (5) and (4) pdf
Please note that the new law requires ESD to review all existing certified businesses to determine whether they qualify for an Empire Zone Retention Certificate (EZRC).   Every certified business seeking to claim empire zone tax credits for tax years beginning on or after January 1, 2008 will need an EZRC.  Businesses not qualifying for an EZRC will be sent decertification notices along with information on the appeals process.

We hope to complete our review and issue EZRCs as soon as possible for businesses that qualify and will keep everyone informed as the process unfolds.

In the meantime, if you are receiving phone calls from certified businesses about filing their 2008 tax returns, please refer them to the Tax Department website or email them the attached file.

Thanks, Randy 

Randal Coburn
Director
Empire Zones Program

The local newspaper interviewed the Empire Zone Board Chairperson, John H. Walker Jr and local zone Coordinator, Patrick Stokes regarding how the changes could effect Dunkirk/Sheridan economic development. Read full story by clicking here.

 The Empire Zone program has been modified as follows:

 • Existing certified businesses would have to pass a 1 to 1 cost-benefit test, or risk decertification.

• So called “shirt changers” would be decertified, unless allowed to continue through discretion by ESD Commissioner.

• Going forward, all businesses except manufacturers would have to achieve a 20 to 1 cost to benefit average. Manufacturers would have to achieve a 10 to 1 CBA. 

• Cost-benefit ratio would be calculated by dividing the sum of the estimated wages and benefits for all actual and estimated employees during the first three years of certification and the investment during the first three years of certification by estimated amount of Empire Zone benefits that may be used and refunded during the first three years of certification.

• New criteria added for certification, including a determination that the project is likely to create jobs in the zone; whether the project would result in relocation of employees from one business in the area to the applicant business, or from one region of the state to another; whether in 3 years preceding certification, businesses engaged in substantial labor law violation.

• During 2009, ESD will conduct a review of all Empire Zone certified businesses to determine if each such business should be decertified for failing to meet the 1 to 1 cost benefit test. and has not be determined to have committed any substantial labor violation. If businesses are determined to have met these tests, they will be issued a retention certification. Revocations could be appealed.

• If a retention certificate is not authorized, then business will not be allowed to carry over any unused credits.

• The Real Property Tax credit would be reduced to 75 percent.

• The role of the local Empire Zone administrative board would be limited to recommending businesses for certification.

• $0 for administrative funding

• The sunset date for the Empire Zone program moved-up by one year to June 30, 2010.

Please contact me at the telephone number below if you have any questions.

Governor Patterson spoke to the press today to discuss the 2009 NYS budget.

March 27, 2009 – Governor Paterson, Majority Leader Smith and Speaker Silver announce an agreement to reform the Rockefeller Drug Laws and Empire Zones. Click here to listen to the entire speech.