Fabric Wholesale Direct in East Farmingdale needed a second warehouse to fulfill increased orders for cloth used in face masks and medical gowns and vinyl for face shields.
The warehouse is expected to open in a couple of weeks, about a month after the small business sought help from the Suffolk County Industrial Development Agency through a new tax-break program.
Fabric Wholesale will save up to $25,875 on sales taxes for the purchase of shelves to store fabric rolls and to install a loading dock at the 480 Smith St. warehouse. The company is the first beneficiary of Suffolk’s COVID-19 Sales Tax Relief Equipment Program for businesses involved in the production of personal protective equipment and medicine.
The program, which offers a sales-tax exemption of up to $100,000 per company, is the first of its kind in the state, according to the New York State Economic Development Council, which represents IDAs in Albany. IDAs in Hempstead and Brookhaven towns have since begun offering the same exemption to PPE manufacturers and drugmakers.
All three IDAs have waived their usual application fees and promised swift decision-making.
“Overnight we’ve seen tremendous demand for certain fabrics that are being used for manufacturing face masks,” said Shawn Singh, chief operating officer at Fabric Wholesale, which was started by his father more than 30 years ago in Manhattan.
“We’ve completely shifted to providing fabrics for PPE, but we don’t have the capacity for this” deluge of orders, he said. “We need more space, more staff, and we need to retool our operations to handle this effectively.”
Singh learned about the COVID-19 sales-tax exemption from Suffolk IDA officials, while discussing another project that he’s pursuing in the county. He said the IDA approved the COVID-19 aid in four days.
“They understand that time is truly of the essence,” Singh said. “I definitely don’t think we could do this without the IDA’s help.”
A few doors from the new warehouse is 550 Smith St., which has served as Fabric Wholesale’s home since the company moved to Long Island from Manhattan six years ago.
The company has added four employees to its payroll of 25 since February and will hire three more within six months. Employees earn, on average, $35,000 per year, records show.
IDA executive director Anthony J. Catapano said the agency is spending $35,000 on radio advertising to promote the COVID-19 tax break. He said it’s modeled after a program the IDA started to help businesses recover from superstorm Sandy in October 2012.
More information is available by emailing firstname.lastname@example.org, said Kelly Morris, the agency’s deputy executive director.
In Brookhaven, IDA executive director Lisa M.G. Mulligan said it wants to assist both established PPE suppliers and those entering the market.
“The program is open to all businesses in the town that are currently engaged in or are beginning to manufacture, supply and/or distribute products for the treatment or prevention of COVID-19,” she said, directing potential applicants to brookhavenida.org.
In Hempstead Town, IDA CEO Fred Parola said its COVID-19 sales-tax exemption “will keep people employed, help to expedite the manufacturing and delivery of these critical supplies and keep people healthy.”
He said more information can be found at tohida.org or by calling 516-414-6578.
COVID-19 SALES TAX BREAKS
The Suffolk, Brookhaven and Hempstead Town industrial development agencies have launched tax incentives to spur production of personal protection equipment and medicine to combat the coronavirus.
Benefit amount: Sales-tax exemption of up to $100,000 on the purchase of equipment and building materials
Duration: Six months, with the possibility of an extension for another six months
Application process: Fees waived, decision by IDA staff instead of vote by full IDA board of directors
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