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Frequently
Asked Questions
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| Everything
you ever wanted to know about Columbia County – from
its rich agricultural traditions to its electronic infrastructure
to advice on getting capital for your business – is
right here at your fingertips. And if you still have questions,
contact the EZone via e-mail. |
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Empire
Zone Certification back
to top |
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What
is a "QEZE"? |
Qualified
Empire Zone Enterprise (QEZE) is a term used to represent a Zone-certified
business that qualifies to apply the new enhanced tax credits:
Sales Tax Exemption, Tax Reduction Tax Credit and the Real Property
Tax Credit. |
I
was certified by ESDC as an EDZ business on July 1, 1999, not
as an Empire Zone business. Do I qualify for the new enhanced
Zone credits?
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If
certified prior to July 1, 2005, you do not have to be re-certified.
However, you must meet the employment test where the taxpayer's
employment must equal or exceed its employment in the base period. |
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I operate more than one company
in an Empire Zone. Can I certify each company?
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Yes, providing that each company is a separate tax paying entity
and each company possesses a separate and distinct Taxpayer Identification
Number or Employer Identification Number (EIN).
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I operate two companies and
file New York State tax under one EIN. Do I certify each company?
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No.
You would be eligible to apply for certification for the company
that is located within the Empire Zone. The Empire Zone tax credits
and exemptions would only be applicable to business activities
and tax liability to the business located within the Empire Zone. |
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I am already a Zone-certified business.
The new enhanced tax credits indicate that I must qualify on an annual
basis to access these credits. Does "qualify" mean that
I have to be certified again?
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No. Certification is mostly a one-time occurrence that is expedited
through a local Zone Coordinator. “Qualify,” indicates
that a Zone-certified business has calculated the employment comparative
between the tax year that the company is applying for credits AND
a base period or test year. If your accountant determines that your
employment comparative equals or exceeds the base period or test
year, you can qualify for the enhanced credits.
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I am a new business to New York. I have
no previous employment history. What is my 5-year base period?
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New businesses that create jobs in New York State will have a base
period employment equal to zero (0). Any new business that creates
jobs would – in the first and future years – meet the employment
test for maintaining or increasing employment.
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I have an existing business in an area of
the State of New York that is not in an Empire Zone. I plan to move
all my employees and business into an Empire Zone in another part
of the State of New York. Will I qualify for the newly enhanced EZ
benefits?
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No. You must maintain your employment average in the area that is
outside of an Empire Zone in order to qualify for enhanced Zone benefits
inside the Zone. Additionally, you must apply for permission with
your current location's municipal officer to access Zone credits
prior to your move into the Zone because of your shift in operations.
After a public hearing and written approval from the municipal authority
where you are closing your operations, you may be eligible to claim
the basic Zone benefits and not the enhanced benefits. |
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tax reduction tax credit can bring my tax liability down to $0.00.
How do I qualify? |
A single taxpaying Zone certified business must be located 100% within
the Zone. It cannot have any other property or payroll outside the
Zone. |
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I am a certified Zone business and currently
claim the Investment Tax Credit. Will claiming other credits affect
my eligibility for the enhanced QEZE credits? |
Claiming
other incentives, such as the Investment Tax Credit, or the Employment
Incentive Tax Credit will not affect your eligibility to claim
the enhanced QEZE credits. |
| How
will I get my QEZE Sales Tax exemption certificate, DTF-81?
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You will apply to the Department of Taxation & Finance to obtain
your QEZE exemption certificate. You must first obtain and complete
the Tax form DTF-80. You may obtain this form from the New York State
Department of Tax & Finance Website at (www.tax.state.ny.us)
or apply directly to the Department for a copy to be sent by mail.
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| Will
I have to apply for a QEZE Sales Tax exemption certificate annually?
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The Department of Taxation & Finance is currently examining the
issue. |
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What if I am already a certified business?
How do I determine whether I am eligible to claim the sales and use
tax exemptions as of March 1st, 2001? |
You
will be eligible to claim the sales and use tax exemptions on March
1st, 2001, if your employment number in 2000 (the taxable year
immediately preceding the year in which the QEZE is seeking the
sales and use tax exemptions) equals or exceeds your employment
number in your base period of 1994-1998. |
| What
if I am a new business in New York State in the year I become
certified? Will I qualify as a QEZE? |
As
a new business creating jobs in New York State, you would have
a base period of 0. You would, in the first and future years, meet
the employment test for maintaining or increasing employment. |
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I am a certified Empire Zone business and
will qualify under the 5-year base period employment test. When can
I start claiming my credits and sales tax exemptions? |
Credits
can be claimed for tax years beginning on or after January 1, 2001.
The sales tax exemptions begin March 1, 2001. You must also meet
an annual employment test to continue to claim the benefits. |
| I
qualify to claim the Investment Tax Credit, the Wage Tax Credit,
the new Tax Reduction Tax Credit and the new Real Property Tax
Credit. What is the ordering of credits on my tax return? |
Credits that
cannot be carried forward are applied first. Refundable credits
are applied last. The ordering of the credits for your tax return
would be:
Tax Reduction
Tax Credit; Wage Tax Credit; Investment Tax Credit; Real Property
Tax Credit.
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Is a QEZE for sales and use tax purposes
the same as a QEZE for corporate and income tax purposes?
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No,
the tests are not identical. While both have to be businesses certified
under Article 18-B of the General Municipal Law, a QEZE for sales
tax purposes must satisfy the employment test for the taxable year
immediately preceding the year in which the QEZE is seeking the
sales and use tax exemptions. For an individual or a corporation
seeking to claim the QEZE tax credits, it must satisfy the employment
test for the year it intends to claim the credits. |
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What does the term "employment number" mean?
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The "employment
number" is the average number of people that the business
enterprise employs full-time for at least half of the business'
taxable year. For corporations, it does not include general executive
officers. You compute that average by determining how many of those
people were employed on March 31st, June 30th, September 30th,
and December 31st and averaging those 4 numbers.
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What is the difference between the Sales
and Use Tax Incentive and the new Sales Tax Exemption?
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The
Sales and Use Tax Incentive is a credit or refund of the sales
or use tax paid on building materials that are incorporated into
a qualifying commercial or industrial structure within an Empire
Zone. The Sales Tax Exemption is not a refund. It is an exemption
from the 4% NYS sales and uses taxes for tangible personal property
and services sold to a qualified business. A company must register
with the New York State Department of Taxation & Finance and
be issued an exemption certificate. The certificate is valid for
a 10-year period as long as the business meets or exceeds its base
year employment number.
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How will I get my QEZE Sales Tax exemption
certificate, DTF-81?
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You
will apply to the Department of Taxation & Finance to obtain
your QEZE exemption certificate. You must first obtain and complete
the Tax form DTF-80. You may obtain this form from the NYS Department
of Tax & Finance Website at: www.tax.state.ny.us or apply directly
to the Department for a copy to be sent by mail.
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Will I have to apply for a QEZE Sales Tax
exemption certificate annually?
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The Department of Taxation & Finance is currently examining the
issue.
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| How
will I use my Sales Tax exemption certificate?
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While
this question has not been finally decided by the Department of
Taxation & Finance, it is likely that a QEZE would give an
exemption document to each vendor at the time of purchase, as either
a single use or blanket certificate.
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Will my purchase be exempt from local sales
and use taxes?
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Your
purchases will be exempt from local sales and use taxes, if the
county, city or school district in which the QEZE is located has
elected to provide the QEZE exemptions.
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Will I need a separate QEZE Sales Tax exemption certificate
for the local sales and use taxes?
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No.
The QEZE exemption certificate will be applicable for both state
and local sales and use tax exemptions, provided that the locality
has elected to provide the exemptions.
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| How
will I know if a municipality has elected to provide the QEZE
Sales Tax exemptions?
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The
Department will maintain a list of localities, which have elected
the exemptions.
The Department
will advise vendors of which localities have elected to participate
with the sales tax exemptions. The list of localities may change
each year. If a locality elects to provide the QEZE exemptions, that
election takes effect on March 1st and stays in effect until the
locality chooses the rescind the exemptions. However, the locality
may not rescind the exemptions in the middle of a year. All changes
may take effect only on March 1st of a given year.
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| Is
a QEZE for sales and use tax purposes the same as a QEZE for
corporate and income tax purposes?
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No, the tests are not identical. While both have to be businesses
certified under Article 18-B of the General Municipal Law, a QEZE
for sales tax purposes must satisfy the employment test for the taxable
year immediately preceding the year in which the QEZE is seeking
the sales and use tax exemptions. For an individual or a corporation
seeking to claim the QEZE tax credits, it must satisfy the employment
test for the year it intends to claim the credits.
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| How
are the QEZE sales and use tax benefits different from the existing
Empire Zone sales and use tax provisions?
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The QEZE sales and use tax exemptions are an alternative to the Empire
Zone refund/credit provisions. The QEZE exemptions provide an up-front
exemption at the time of purchase rather than a refund or credit.
In addition, they apply to a broad class of tangible personal property
and to utility and other services, provided that the property or
services are used by the QEZE in the Empire Zone. The existing Empire
Zone refund/credit provisions apply only to tangible personal property
that is incorporated into industrial
or commercial real property which is being constructed, expanded
or rehabilitated within an Empire Zone and which becomes an integral
component part of that real property. The QEZE benefits may only
be claimed by a certified business. The person claiming the existing
sales and use tax refund or credit does not have to be a certified
business.
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What if I am already a certified business?
How do I determine whether I am eligible to claim the sales and use
tax exemptions on March 1st, 2001?
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You will be eligible to claim the sales and use tax exemptions on
March 1st, 2001, if your employment number in 2000 (the taxable year
immediately preceding the year in which the QEZE is seeking the sales
and use tax exemptions) equals or exceeds your employment number
in your base period of 1994-1998. |
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I have always paid tax under the capital
base as applied to the corporate franchise tax. If I paid the capital
tax in 2001, am I eligible for the tax reduction credit provided
I meet the other qualifications?
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The tax reduction tax credit is measured by a taxpayer's income base.
For the corporation franchise tax, this is the entire net income
base and the alternative minimum tax base. If you pay tax under the
capital base, because it was higher that the income base, you would
still be eligible to claim the tax reduction credit measured by that
income base.
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The tax reduction tax credit can bring my
tax liability down to $0.00. How do I qualify?
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A single taxpaying Zone-certified business must be located 100% within
the Zone. It cannot have any other property or payroll outside the
Zone.
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Does the credit for real property taxes
reduce my real property tax bill?
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No. The credit for real property taxes is applied against your tax
under the Tax Law. Business corporations would use the credit to
reduce their corporation franchise tax and sole proprietors would
use it to reduce their personal income tax.
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| Company
ABC has a payment in lieu of tax (PILOT) agreement with an Industrial
Development Authority (IDA). Will PILOT payments qualify as real
property taxes paid for the QEZE credit for real property?
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If the QEZE transfers title to an IDA so as to receive financial
assistance from the IDA and enters into a PILOT agreement with the
IDA, the QEZE will be considered the owner of the property and the
PILOT payments will be considered to be real property taxes paid
by the QEZE.
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Can I apply remaining Real Property Tax
Credits to future tax years?
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You would not need to apply remaining Real Property Tax Credits to
future tax years as all remaining credit is fully refundable in a
cash refund.
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