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Proposal to curtail sales tax exemptions could hamper job growth projects locally

A proposal by Gov. Andrew Cuomo to curtail sales tax exemptions on new development and redevelopment projects could hurt such projects locally, according to City Manager Jason Molino and Steve Hyde, CEO of the Genesee County Economic Development Center.

"Losing the ability to offer state portion of sales tax exemptions dilutes our financial assistance offerings at the local level," Hyde said. "That hurts since we remain the 49th most expensive state to do business in."

Nearly all projects that come to the Industrial Development Agency for assistance and the promise of job growth receive a sales tax exemption on building materials, plant expansion and/or new equipment.

The City of Batavia has been aggressively pursuing projects that redevelop commercial parts of the city -- called "brownfield redevelopment" -- and the loss of the sales tax exemption could be a setback for those plans.

While Molino is reserved in his judgement since the governor's budget is still in the early proposal phase, he said if the elimination of sales tax exemptions goes through, it won't be good for Batavia.

"I think it has the potential to negatively affect any economic development effort that would use sales tax exemptions as part of its model for development," Molino said.

Hyde said much of the redevelopment necessary in the city won't qualify for the state's "excelsior program," which provides tax credits for strategically targeted industries, so maintaining the sales tax exemption is critical.

"We can support some really exciting things developing in the city to the fullest extent possible," Hyde said.

The Buffalo News carried a story this morning about how the budget proposal will be a setback for redevelopment in Buffalo.

Hyde encouraged constituents to reach out to the governor's office and express concern about the proposal.

"This topic is important as community development projects will be negatively impacted considerably and those are the lifestyle projects important to our  residents," Hyde said.

scott williams
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This os certainly a big decision maker for company's moving here this governor talks out of both sides of his mouth. He is gonna have the same legacy as one of the worst gov. We ever had his dear old Daddy drove away more biz. In this state than any other gov.

Jeff Allen
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Not to worry fellow New Yorkers, businesses will not be swayed from building in the Empire State, we have commercials with Robert DeNiro saying the we are open for business...that should offset any financial and tax disincentives.

Jack Dorf
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This should make some people very happy that post on this site. Myself not included.

Mark Potwora
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Whats Hyde care about what happens in the city of Batavia..The GDCEC does nothing for Batavia ..We have our own EDC what does she think..

Michael Piazza
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I don't know for sure, but maybe if NYS didn't have the 2nd highest taxes in the US, maybe we wouldn't need to "bribe" companies & industries to stay here......somebody has to make up these "tax breaks" that are given to certain businesses'........NYS is a total mess and until there is some sort of reform in Albany, we will continue to be one of the leaders of the pack of out of control taxes(gasoline, sales taxes, property taxes and on and on). Not to mention all the regulations placed on businesses. NYS is not very business friendly is what I'm just trying to say......

Mark Brudz
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Well you would be wrong, States are in competition, and they all do the incentive game to lure business

New York isn't even in the top ten for tax incentives but is in the top 2 for taxes required. To simply cut this off in NY state would place us at a huge disadvantage.

Below I went through three states alphabetically then New York, then Texas which gives the most incentive, ironically, Texas is one of the top growth states for business in the US.
Pay particular attention to cost per dollar of budgets and per capita cost
____________________________________

Alabama spends at least $277 million per year on incentive programs, according to the most recent data available. That is roughly:
$58per capita
4¢per dollar of state budget
.
Top Incentives by type
$129 million in Cash grant, loan or loan guarantee
$64.9 million in Sales tax refund, exemptions or other sales tax discounts
$49.8 million in Corporate income tax credit, rebate or reduction

Top Incentives by industry
$22.5 million in Technology
$15 million in Film
_______________________________
Alaska
Alaska spends at least $704 million per year on incentive programs, according to the most recent data available. That is roughly:
$991per capita
11¢per dollar of state budget
.
Top Incentives by type
$697 million in Corporate income tax credit, rebate or reduction
$6.93 million in Cash grant, loan or loan guarantee

Top Incentives by industry
$691 million in Oil, gas, mining
$6.12 million in Agriculture
$3.65 million in Film
_______________________________
Arizona
$230per capita
16¢per dollar of state budget
.
Top Incentives by type
$1.37 billion in Sales tax refund, exemptions or other sales tax discounts
$64.6 million in Corporate income tax credit, rebate or reduction
$41 million in Cash grant, loan or loan guarantee

Top Incentives by industry
$51.8 million in Manufacturing
$43.6 million in Oil, gas, mining
$20.4 million in Electricity
__________________________________
New York
New York spends at least $4.06 billion per year on incentive programs, according to the most recent data available. That is roughly:
$210per capita
7¢per dollar of state budget
.
Top Incentives by type
$1.82 billion in Corporate income tax credit, rebate or reduction
$1.11 billion in Property tax abatement
$871 million in Sales tax refund, exemptions or other sales tax discounts

Top Incentives by industry
$816 million in Manufacturing
$359 million in Film
$130 million in Agriculture
___________________________________

Texas

Texas spends at least $19.1 billion per year on incentive programs, according to the most recent data available. That is roughly:
$759per capita
51¢per dollar of state budget
.
Top Incentives by type
$14.9 billion in Sales tax refund, exemptions or other sales tax discounts
$3.27 billion in Property tax abatement
$743 million in Corporate income tax credit, rebate or reduction

Top Incentives by industry
$11.7 billion in Manufacturing
$2.79 billion in Agriculture
$77.3 million in Health care

__________________________________
There is a neat little look up tool on the right side mid way down the article on this page.

http://www.nytimes.com/2012/12/03/us/winners-and-losers-in-texas.html?pa...

Things are rarely as simple as people try to make them

Frank Bartholomew
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Jack, could you be more specific as to why this news would make some who post on this site happy.

Jack Dorf
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In the past some people have posted that they are against tax breaks that are given to businesses. Now they may get their way.

Scott Blossom
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Ok, sales tax is a zero sum game. You collect it, then turn it over to the state. Period!

So, you collect the tax and keep it? If you are of a certain type of developing business? Please spare me!

If for one, then why not for all? Help out every business if that is your aim.

I have been trying to grow my own business, with no government help or welfare. Its painfully slow, but I am still here doing it. From the SBA to the local agencies I am just a peon. Fine no problem. I collect the sales tax and turn it over in complete compliance of the law. Getting exemptions is theft in my view, and a knife in my back and everyone else trying to run a business. Let alone the citizens who pay the tax which should go back to the county but is kept by these pet project developments.

Kill it all, no sales tax exemptions period! You dont gain or lose as a business, its a zero sum game!

Check out my business website (its low budget and self made) and maybe you might like what you see. Maybe you would like to help me grow my business the old fashioned way, quality work at a fair price. The money in my business account is earned, not tax payer money stolen from tax payers.

www.flowerbedphotography.com

Scott Blossom
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Ok, I miss understood the Buffalo article. Sorry its been a long day.

That still gives an unfair advantage to some over others.

Equality is equality.

The only sales tax that am not charged is for printing images because I collect it from the customer.

Whatever happened to putting up your own capital or getting business loans for your own business or project? Why do tax payers foot the bill for this stuff?

Do the Buffalo Bills need tax payer money for their stadium? No they dont. If they are a viable business, do it themselves. Yet they get tax payer dollars and the league blacks out games for low attendence. The tax payers pay for it, thay should get to see it on TV.

Back to topic, not paying sales tax cheats cheats the county tax payers. That lost revenue gets made up through other means. And those business that have to pay the tax on materials and what not, are at a disadvantage to those who get out of it.

Plain and simple, if your business or project is viable, you can raise the capital needed to do it. If not, find something else to do. Stop stealing from the tax payer.

Scott Blossom
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Not us.

What good do tax breaks and incentives do if the business goes under like so many do that we read about everyday. Money lost.

How many housing projects wind up on government subsities, constant money drain.

Need I continue?

My opinion, we get too many pigs at the trough. And we are running out of slop.

Mark Potwora
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Nearly all projects that come to the Industrial Development Agency for assistance and the promise of job growth receive a sales tax exemption on building materials, plant expansion and/or new equipment......Thats a huge tax break...sales tax is 8.2 %...If i buy a new car for 20,000 dollars i pay 1700 dollars sales taxes..No tax break for me.. A company spends 1 million dollars they get over 80,000 dollar tax break..I say end it all..Who is spose to pick up the tab for all these breaks...A company such as Pepsi does not need a sales tax break..How are we going to support our schools and city and county government If no one has to pay sales tax..All this does is place more of a tax burden on the property owner..Lower the tax for all...Then on top of it all they get a property tax abatement...Coumo is right to get rid of this...Lower the tax rates for all and you wouldn't need all these IDA...How do you every expand the tax base...When no companies have to pay taxes..The State has had all these give aways in place for years ..New York is still shrinking in size..They have created zero growth...They don't work..All you have to do is promise job growth to get this tax break...What happens when you don't deliver on the job growth do they come and get the money back from you..Or put you in jail like they do a welfare cheat..

Mark Potwora
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"We can support some really exciting things developing in the city to the fullest extent possible," Hyde said.....Like what Mr.Hyde..We have an EDC head we don't need you to tell the city what to do.....The GCEDC hasn't shone and interest in the city ,so the city had to go ahead and hire an Economic development coordinator for 60,000 dollars because the GCEDC wasn't doing anything for the city......

Raymond Richardson
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Local Governments should not be putting the meat and potatoes on the table until these business', corporations, etc., actually open up shop.

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