Sixty percent of companies accepted last year into Gov. Andrew M. Cuomo's economic development program of tax-free zones are either startups or businesses from other states and countries, according to a report released Wednesday night.
START-UP NY, a Cuomo idea that the State Legislature approved in 2013, enrolled 54 companies in its first months of operation: March through December 2014. They were selected from 92 applicants.
Of the group, 33 were new businesses that are developing products from academic research or companies from elsewhere that were attracted to New York State by the prospect of not paying taxes for a decade. Twenty-one were already in the state and are starting new operations in a tax-free zone.
"The primary goal of START-UP NY is to create jobs by stimulating growth in business, be it new companies, expanding New York companies or companies new to New York," Howard Zemsky, Cuomo's economic development czar, wrote in the report.
START-UP NY offers growing firms an exemption from state and local taxes for as many as 10 years if they move to a college campus and create jobs. Their employees will not pay state income taxes for as long as 10 years.
Businesses accepted into the program as of Dec. 31, 2014, pledged to hire 2,085 people in the next five years and spend $91 million on equipment.
Ten of the START-UP companies will operate from Stony Brook University. Tax-free zones also were granted to Farmingdale State College and LIU Post but neither had approved tenants by Dec. 31.
The 25-page report, prepared for state lawmakers, estimated that START-UP NY participants saved $56,560 in state taxes last year. "Most of the tax benefits will begin accruing in 2015," Zemsky said.
He predicted the employment and investment activity spurred by START-UP this year will be "more than twice" that of 2014. He also said "almost every" SUNY and CUNY campus will have a tax-free zone by year-end as well as many more private colleges.
Since Jan. 1, about 40 additional businesses have been enrolled in the program.