START-UP NY Tax-Free Information

Pay zero taxes for 10 years? Yes, really.

Imagine what your company could do with the money saved by operating tax-free.

Business tax-free New York area elimination credit

This credit would be calculated by the business when filing its tax return. For businesses with 100% of their operations (assets and payroll) in a tax-free area(s), the credit would eliminate any tax liability. For businesses with operations in and out of a tax-free area, the credit would be prorated based on the percentage of assets and payroll within a tax-free area(s).

Excise Tax on Telecommunication Services

A participating business may apply to the Tax Department for a credit equal to the amount of excise tax paid by the business on telecommunication services for services rendered within the tax-free area.

Metropolitan Commuter Transportation District (MCTD) mobility tax

This tax is levied on businesses based on their payroll expense within the MCTD and is paid quarterly. If a business is 100% located in a tax-free area, the business would be exempt from this tax once certified.

Sales and use tax

Once certified, a business would apply to the Tax Department to receive a credit or refund for sales, and use taxes paid for goods and services used or consumed by the business’s operation in a tax-free area(s).

Real estate/Real property transfer tax

Leases of real property in a tax-free area to an approved business are exempt from the New York State real estate transfer tax. This exemption also applies to any local real estate or real property transfer tax imposed locally.

Personal income taxes (New York State, New York City, Yonkers)

Wages received by an individual as an employee of a business located within a TFA are eligible for the Personal Income Tax Exclusion for the first five years, based on the business’s ten year taxable period.  During the second five years of a business’s ten year taxable period, employees will pay no taxes on income up to $200,000 for individuals, $250,000 for a head of household and $300,000 for taxpayers filing a joint return. There is an annual cap per business on the number of employees that qualify for this exemption and an annual cap statewide of 10,000 net new jobs. For example, there will be a maximum of 10,000 tax-free jobs after year one, 20,000 tax-free jobs after year two, etc.


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