Tax Benefits for Your Business

New York City Industrial Development Agency (NYCIDA) supports business growth, relocation, and expansion across the five boroughs by lowering the cost of capital investment. NYCIDA’s tax incentive programs bolster the local economy, create jobs for New Yorkers, and uphold the city’s position as a global business hub.

Program Benefits

• Property tax: Property tax abatement for up to 25 years
• Mortgage recording tax: The mortgage recording tax applicable to a project mortgage is reduced from 2.8% to 0.3%, lowering upfront costs
• Sales tax: The 8.875% City and State sales tax is waived on purchases of materials and equipment related to construction

If an industrial project is in an Industrial Business Zone (IBZ), a full land tax abatement may be available (after 20 years, benefits phase out at not more than 20 percent per year). View the City’s Industrial Business Zones.

For industrial projects outside of IBZs, land tax abatements may be further abated based on the value of improvements:

(Exclusive of Acquisition Cost)

You Should Apply for NYCIDA

NYCIDA will assess the need for financial assistance and the economic impact of the proposed project. All benefits are discretionary. Factors considered by NYCIDA:

• Size of capital investment exclusive of acquisition value (minimum of $1M for industrial projects and $5M for commercial office space)
• Number of jobs created and average wages
• Nature of the businesses occupying the space
• Geography of the proposed project
• Overall financial profile of business or property owner
• For developer projects, proposed tenanting strategy and delivery timeframe
• Environmental review

Application Process Steps

Read our step-by-step guide to the NYCIDA application process and review timing and fee schedules.

Step 1: Meet with NYCIDA Staff for Preliminary Assessment of Eligibility

Note: NYCIDA assistance must be requested AND approved before entering into project commitments unless existing commitments are contingent upon NYCIDA assistance. Before you enter into any contracts, contact NYCIDA for conditional language that must be included. Agency staff will provide application materials.

NYCIDA benefits are discretionary and are intended to assist projects that meet New York City goals and that would be beneficial for the City. To be considered for benefits, a company must first make an inducement argument, demonstrating that without the incentives the project would not occur as proposed. NYCIDA transactions also aim to maximize City returns, while recognizing private sector operating realities.

Companies seeking discretionary benefits from NYCIDA must demonstrate the following basic requirements:

• The need for benefits for the project to go forward as proposed
• Substantial capital investment, together with retention and growth of employment as a result of the project
• Substantial increase in tax revenues to the City or other public benefits as a result of the proposed project

Selection criteria also include:

• Eligibility of project and applicant under applicable laws and regulations: Uniform Tax Exemption Policy
• Bond transactions must be eligible under the Internal Revenue Code
• Applicant's ability to pay for proposed project, and ability to obtain financing commitments from third-party sources
• The applicant must make a commitment to the HireNYC Program, and provide a living wage (if it applies)

Step 2: Prepare the Notice of Hearing by Submitting the Core Application (Pages 1-9)

This step must be taken at least seven weeks before the NYCIDA Board Meeting. Once you have met with NYCIDA staff to assess the eligibility of your project, the public must be notified of your intent to apply for NYCIDA benefits. To be considered for the next NYCIDA Public Hearing, please complete and submit the Core Application by the Core Application deadline, which can be found on our Board Meetings & Public Hearings page.

Step 3: NYCIDA Public Hearing Notice Publication

Upon submission of your application, an NYCIDA project manager will work with you to review your eligibility and confirm the scheduling and timing of your application.

Step 4: Posting of Public Hearing Package

Approximately 2 weeks after the public hearing notice is published a Public Hearing Package consisting of a cost benefit analysis, redacted application, and redacted short environmental assessment form will be posted on our website. The information can be found on our Board Meetings & Public Hearings page.

Cost-Benefit Analysis

As part of assessing eligibility and benefit levels, NYCIDA performs analyses to determine the net fiscal impact on the City of providing the benefits requested. Our cost-benefit analysis describes the assumptions and methodologies used in an analysis of the costs and benefits of projects. 

Step 5: NYCIDA Public Hearing

30 days after the public hearing notice is published the NYCIDA will conduct a public hearing to allow members of the public to provide testimony on a particular project. Information on upcoming public hearing can be found on our Board Meetings & Public Hearings page.

Step 6: NYCIDA Board of Directors Review and Vote

Bond program transactions require additional steps of approval:

• After obtaining NYCIDA Board of Directors' authorization, bond transaction applicants must request the Mayor's sign-off pursuant to Tax Equity and Fiscal Responsibility Act ("TEFRA"), typically obtained within two weeks.
• For public offerings, marketing the bonds to investors commences upon receipt of TEFRA sign-off.

Step 7: Additional Approvals

If the Board approves benefits, the deal is memorialized in a binding, multi-year contract executed by NYCIDA and the recipient. Contracts are drafted to ensure that recipients meet agreed-upon conditions to maintain benefits.

Step 8: Closing

If the Board approves benefits, the deal is memorialized in a binding, multi-year contract executed by NYCIDA and the recipient. Contracts are drafted to ensure that recipients meet agreed-upon conditions to maintain benefits. Upon closing project finance and annual compliance are due to the NYCIDA. The current NYCIDA fee schedule can be found here.

Timing

Transactions eligible for assistance that have financing commitments can typically complete the application and approval procedures within ninety days or less.

For the most part, triple tax-exempt bond proceeds may be used to reimburse project expenditures incurred no earlier than sixty days before NYCIDA Board of Directors Inducement.