Senator Lavalle Fights to Protect Empire Zone Tax Credits
May 5, 2009
(Long Island, N.Y.) Senator Kenneth P. LaValle has joined members of the Senate Republican Conference in urging Governor David Paterson, Senate Majority Leader Malcolm Smith, and Assembly Speaker Sheldon Silver to address a problem that would create a significant hardship for businesses located in Empire Zones. In a letter to the Governor, Senator Smith, and Speaker Silver, the Senators expressed outrage over a measure in the 2009-10 budget that will give the state at least a year-long interest-free loan of more than half a billion dollars.
According to Senator LaValle, new language in the state budget decertifies businesses located in Empire Zones retroactive to January 1, 2008 and takes away anticipated zone tax credits. Businesses will have to reapply for certification and will receive the tax credits only if they meet updated criteria for investment and job creation. “Under this budget provision, businesses located in an Empire Zone have to go through a recertification process that could take as long as six months and, if approved, wait another six months for a tax refund,” said Senator LaValle. “This is clearly an example of ‘bad business’ at its worst.”
The letter sent by the member of the Republican Conference states:
“This means that businesses that have done everything the law requires to maintain Empire Zone status and are expecting tax credits for tax returns they filed before this law was enacted, instead will have to pay larger state tax bills now, and receive their zone benefits later.
This situation essentially creates at least a year-long, interest free loan. Many businesses are calling it a “last straw” issue that could force them to leave the state or go out of business entirely. It also damages the state’s credibility in the eyes of out-of-state businesses that may be considering locating here.”
Senator LaValle fought a plan in the Executive Budget which would have completely eliminated Empire Zone benefits. Governor Paterson assured those businesses that this problem had been fixed, however the final adopted budget included the new provisions addressed in the letter.
The letter goes on to state:
“This situation must be corrected to restore fairness to a program that is crucial to our economy. Many communities, especially Upstate, have effectively managed Empire Zones to create economic growth and new jobs. Either the budget language should be amended or removed or the time frame for recertification of businesses in Empire Zones should be significantly shortened.
The problems created by the changes in the Empire Zone program are just the tip of an iceberg that could sink many businesses. The 2009-10 state budget raised their utility taxes, took away low-cost power and will subject thousands of small businesses that pay the personal income tax to a record increase. All this without a single proposal to promote economic development.”
Senator LaValle noted that Senate Republicans have advanced a job creation plan that reduces taxes on businesses, makes us more economically competitive and would position New York’s economy for a rebound.
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Posted by News LI Editor · Filed Under Money
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