The RDRC Community Update
By Curtis Archer, Executive Director
Hello everyone! I hope you all enjoyed a wonderful Thanksgiving in spite of these troubling times. Family and friends are what it’s all about. Well, for my second installment I wanted to concentrate on RDRC’s Business and Professional Services Division.
The Business and Professional Service Division has a host of programs to afford the residents of Far Rockaway. These programs focus on renewing and discovering the business potential of Far Rockaway. RDRC understands that the health of the community depends on its economic base and that only long-term answers to helping a severely distress neighborhood is through economic development. Therefore, the mission of Business and Professional Service Division is to attract new businesses and service existing businesses. One program that is essential to achieving this goal is the Empire Zones Program (formerly known as the Economic Development Zones Program). Below is a brief overview of the incentives associated with the Empire Zones Program.
The Empire Zones Program (EZ) was created to stimulate economic growth through a variety of financial incentives designed to attract new businesses and to enable existing businesses to expand and create more jobs. Businesses that make an investment and/or create new jobs in an EZ are eligible for a combination of State tax credits and benefits. In addition, municipalities which have been designated an EZ may offer additional incentives including a property tax abatement for improvement to real property in the zone.
Wage Tax Credit – A 50% refundable wage tax credit for up to five consecutive years for hiring full- time employees in newly created jobs. For employees in special targeted groups, this credit equals $1,500 a year, with a credit of $750 a year for all other new hires. Beginning with tax year 2001, these credits will double to $3,000 for targeted employees and $1,500 for non-targeted employees.
Investment Tax Credit – A refundable investment tax credit of 8% to 10% is available to certain businesses based on investments made in an EZ. This credit is available under the corporate franchise tax and personal income tax. A second credit, the Employment Incentive Credit, equaling 30% of the investment tax credit is available for each of the next three consecutive years following the year in which the investment tax credit is taken against the corporate franchise tax. To be eligible for this added credit, the taxpayer must employ at least 101% of the average number of people employed in the year before the investment tax credit was claimed.
Sales Tax Refund – Purchases of building materials to be used in connection with commercial or industrial real property located in an EZ are exempted from State sales tax through a refund process. A similar refund of local sales tax may be available at local option.
Zone Capital Credit – A 25% tax credit against personal or corporate income taxes is available for the contribution or purchase of 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. Low interest rate loans from $30,000 to $300,000 may be available from the Statewide Zone Capital Credit Corporation.
Utility Rate Reductions – Special reduced electric and gas rates are available through investor-owned utilities in the State to businesses that locate or expand operations in an EZ.
Special Low-Interest Loans and Priority Attention – State agencies that have a role in economic development have developed special programs and services targeted to Economic Development Zones and will expedite applications received from zone businesses. In addition, a variety of local programs may also exist which provide additional opportunities for financial and technical assistance to new and existing businesses.
In addition to the above-mentioned incentives through the EZ, RDRC offers entrepreneurial assistance, real estate assistance and small business start-up and micro loan programs through the Business and Professional Services Division.
If you are business owner or you just want some information about the programs and incentives that are available through the EZ, please do not hesitate to call RDRC at (718) 327-5300.