SUNY Tax-Free Areas to Revitalize & Transform Upstate New York (“START-UP NY”)


SUNY Tax-Free Areas to Revitalize & Transform Upstate New York (“START-UP NY”) By Sunny BarkatsThe START-UP New York program aims to revitalize upstate New York with tax incentives.

SUNY Tax-Free Areas to Revitalize & Transform Upstate New York (“START-UP NY”) is a program encouraging the formation and maintenance of new jobs by setting up “tax-free zones” affiliated with New York colleges/universities (“Schools”) – particularly SUNY. The program formally began on January 1, 2014 and applications were accepted beginning in late 2013.

Eligibility for Colleges/Universities

A School must sign up to become part of the “START-UP NY” program. It is the School’s responsibility to develop a plan which describes:

  • The land/space it has designated to the program;
  • Its academic mission; and
  • The kinds of companies it wants to attract.

Eligibility for Businesses

For a business to be eligible to apply for the START-UP NY program, it must either align with or further the academic mission of the participating School with which it hopes to work.

For a business to be eligible to participate in the START-UP NY program, it must be:

  1. A new company in New York State;
  2. A company from out of state that is relocating to New York State; or
  3. An expansion of a company that already has employees in New York State.

Tax Benefits to Participation in START-UP NY

Companies accepted under the START-UP NY program are eligible for tax-free status for a period of 10 consecutive years. During these 10 years, the company’s area taxes, organization taxes, real estate transfer taxes, and Metropolitan Commuter Transportation District (MCTD) taxes are all eliminated. Sales taxes are also eliminated for a limited time and for limited purposes.

Additionally, those holding “new” jobs created under the program may have their personal income taxes, on work performed exclusively within a tax-free zone, waived completely for the first 5 years that the employing company operates under the program.

Analysis of START-UP NY

STARTUP-NY is an interesting idea initiated by the Governor’s office to attract new business while also revitalizing the often overlooked upstate area. The mandate to create new jobs may be easier for out-of-state companies to satisfy for the simple reason that any job they bring into the state will be considered a “new” job. In-state companies would be forced to expand in order to enjoy the same benefit. If the New York program is effective in attracting out-of-state companies, it is highly likely that other states will then attempt similar programs, perhaps neutralizing long term benefits to New York.

Regardless of all its flaws, for those companies to whom a New York City location is not essential and who are willing to pioneer underdeveloped areas of upstate New York, the STARTUP-NY program could prove to be a major boon.

What is your company looking for in a potential new headquarters?

Sunny Joseph Barkats, Esq., Partner

Sunny J. Barkats


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