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Start-up NY: 100% Tax-Free for 10 Years?

startup-ny.com

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Re: Start-up NY: 100% Tax-Free for 10 Years?

#51

Post by _delirium »

suyash wrote: post #25

What about Income Tax and Payroll Tax? That is more important for employees.

From the FAQ:

Employees hired for and whose jobs are certified as net new jobs in a tax-free area will pay no state or local income taxes for the first five years. For the second five years, employees will pay no taxes on income up to $200,000 for individuals, $250,000 for a head of household and $300,000 for taxpayers filing a joint return. There is an annual cap per business on the number of employees that qualify for this exemption and an annual cap statewide of 10,000 net new jobs (i.e., there will be a maximum of 10,000 tax-free jobs after year one, 20,000 tax-free jobs after year two, etc.)

Re: Start-up NY: 100% Tax-Free for 10 Years?

#52

Post by ajiang »

Read through the regulations, here's the gist:

-- New initiative to establish tax-free zones near and on university campuses

-- Businesses in those zones will operate 100% tax free for 10 years – no income, business, corporate, state, local, sales, property taxes nor franchise fees

-- Employees can be eligible to pay no income taxes as well

-- Business have to be either new startups OR expansion of existing businesses that will bring new jobs to New York state

-- Some industries are prohibited from participating

-- Types of companies targeted are in high-tech – generally engaged in the “design, development, and introduction of new biotech, IT, advanced materials, process engineering, electronic technology, and/or innovative manufacturing process”

Re: Start-up NY: 100% Tax-Free for 10 Years?

#53

Post by crazygringo »

dworin wrote: post #38
gnicholas wrote: post #32

Not sure this is anywhere as good as it sounds. Most startups aren't profitable for several years (if ever), so income tax would not be an issue during this period. Even after there is income, there would be loss carry-forwards that would have soaked up income taxes from the first couple of profitable years. So this probably doesn't produce much benefit for much/most of the 10 years. Eliminating sales tax isn't that…

I didn't think they were waiving personal income taxes either, but it actually looks like they are: What is the Personal Income Tax exemption for employees? Employees of businesses in START-UP NY will pay no income taxes on their wages for the first five years. For the second five years, employees will pay no taxes on income up to $200,000 of wages for individuals, $250,000 for a head of household and $300,000 for ta…

Still, that only applies to NYS/NYC income taxes.

You're still on the hook for federal income tax, which is most of your income tax. (Obviously, the state can't do anything about that!)

Re: Start-up NY: 100% Tax-Free for 10 Years?

#54

Post by crazygringo »

This is pretty awesome, and it seems to apply to New York City too:

- In New York City, Long Island and Westchester County, businesses must be start-ups or one of a number of broadly defined “high technology” businesses.

But this looks like a major caveat:

- Participation in START-UP NY does not necessarily require that your business be on or next to a campus, but it must be located on property affiliated with a university.

That's a very "interesting" requirement. I wonder how it will work in practice? What does it mean for a property to be "affiliated"?

Edit: here are the 3 NYC locations: http://startup-ny.com/properties/new-york-city-properties/

Re: Start-up NY: 100% Tax-Free for 10 Years?

#55

Post by notastartup »

Okay but the rents must be cheaper than Vancouver, BC right? Taxation must be lower too?

I signed up and planning to move there IF this is not one of those 'too good to be true' deal that ends up in snow flakes.

The tax rates in BC is insane both as an employee and employer. The cost of hiring an employee because of taxation and other social welfare benefits in an attempt to become more 'Netherlandly' forces down salary for software engineers and designers. What makes it worse the scarcity of such jobs forces engineers to compete with each other on the non-paid overtime one can work to become 'invaluable'. Plenty of software sweatshops here in BC, where a nurse or a manager at mcdonalds find more stability and higher pay (when you count the unpaid overtime).

Not to mention that up to 40% of any money you make goes to federal government and the BC government still trying to pay off the loans from holding the winter olympics.

Not to mention the special taxes on rent, food, bars, everything.

If the door opens, I'm going to be the first in line to get to NY if the tax thing turns out to be true. I hear New Yorkers are mean and cold, that's totally fine with me, I'd rather have someone admit they are an asshole and not hide behind it, rather than try to deny it to keep some false image as the 'warmest part of Canada and the whole world' thing. I've been part of this hypocrisy too long.

Re: Start-up NY: 100% Tax-Free for 10 Years?

#56

Post by rdl »

gnicholas wrote: post #35
logicallee wrote: post #17

um...silicon valley already has this covered: you only pay taxes on revenues. (badam CHING).

profits, actually. But yes, "pre-revenue" companies have little to worry about in terms of corporate-level income taxes. Of course, if one of these pre-revenue startups gets gobbled up a la Instagram, then the founders and investors end up with large personal income tax bills—which are not affected by the NY policy. And yes, I realize your original comment was a joke, but it does raise a relevant point about the impa…

SF and WA State have essentially a gross receipts tax, so there's some tax on revenue :(

Re: Start-up NY: 100% Tax-Free for 10 Years?

#57

Post by jusben1369 »

dworin wrote: post #36
jrockway wrote: post #11

Don't start your startup in New York or San Francisco. Rents here are twice what they are in more reasonable parts of the country, and you get absolutely nothing in exchange except maybe a slightly-less-shallow talent pool. (Oh, and cockroaches. Lots of cockroaches.) Your employees will be paid twice as well, and your offices will be twice as nice... for free... if you locate yourself outside the expensive parts of t…

I have a small company in New York, and agree with all of your reasons why it's terrible. The one advantage besides talent pool (which is a big advantage!) that both New York and San Francisco have, and that's often overlooked, is proximity to customers. If you're in a business where high touch sales are important, or where you need to be able to meet regularly with your customers, it's very difficult to do remotely.…

Great point and I think the answer is both. We're in Durham and it's fundamentally cheaper for us to be here and for me to fly to the Bay Area every 90 days for a week (admittedly I have family there still so accommodation is free) However, there are a lot of customers or prospective customers I never met because I have to formally schedule it around a trip. No random meet ups. No "Oh, you guys are just 4 blocks over? To heck with email let's get coffee and explain what we're doing"

Re: Start-up NY: 100% Tax-Free for 10 Years?

#58

Post by jusben1369 »

crazygringo wrote: post #53
dworin wrote: post #38

Earlier quoted context omitted.

I didn't think they were waiving personal income taxes either, but it actually looks like they are: What is the Personal Income Tax exemption for employees? Employees of businesses in START-UP NY will pay no income taxes on their wages for the first five years. For the second five years, employees will pay no taxes on income up to $200,000 of wages for individuals, $250,000 for a head of household and $300,000 for ta…

Still, that only applies to NYS/NYC income taxes. You're still on the hook for federal income tax, which is most of your income tax. (Obviously, the state can't do anything about that!)

Right and we're comparing this to other state/s with income tax. What's CA up to now? I'm sure they're the bullseye target.

Re: Start-up NY: 100% Tax-Free for 10 Years?

#59

Post by jusben1369 »

ChrisNorstrom wrote: post #4

Clever, both financially and psychologically. If you plan on leaving after 10 years consider this, after a decade you will have built your entire logistics, business partnerships, network, staff, and support system in NYC. Moving out will be very difficult. You won't want to.

I suspect most people understand the hook and motive of NY for doing this.

Re: Start-up NY: 100% Tax-Free for 10 Years?

#60

Post by thekevan »

jrockway wrote: post #11

Don't start your startup in New York or San Francisco. Rents here are twice what they are in more reasonable parts of the country, and you get absolutely nothing in exchange except maybe a slightly-less-shallow talent pool. (Oh, and cockroaches. Lots of cockroaches.) Your employees will be paid twice as well, and your offices will be twice as nice... for free... if you locate yourself outside the expensive parts of t…

You mean New York City. There is a whole state outside of NYC that is great for start-ups.
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