Foreign Trade Zone/Economic Development Overview
New York ranks among the top five states in the U.S. in attracting new corporate facilities and expansions. The state has taken an aggressive approach to attracting such investment through countless incentives and programs. And in no location is there a greater presence of economic incentive and assistance than at the New York International Plaza.
The Plaza sits at the crossroads of two of the most significant Interstates in the Northeast I-87 and I-84. Twenty-two percent of the U.S. population is accessed from this transportation vector. The Plaza is connected to the first privatized airport in the United States, Stewart International. Recently acquired by British-based National Express, the airport represents one of the fastest growing international hubs for both passenger and cargo service in the country. And it's only 55 miles to New York City!
The master plan for the Plaza includes a World Trade Center complex; Class "A" office space, Information Technology Centers, R&D facilities, Training Centers, and a host of supportive retail and hospitality facilities.
Together these elements offer an unparalleled setting for international and technology-based firms to call home - software design to pharmaceutical research; chip development to electronics manufacturing; and biotechnology labs to e-commerce distribution.
Add to this setting the incentives and cost advantages afforded by the designations of a Foreign Trade Zone and Economic Development Zone and the result is a very competitive, innovative place to do business, which we call the New York International Plaza.
Foreign Trade Zone
The growing numbers of businesses are choosing to locate at New York International Plaza in order to establish or expand the international trade of their goods and services. The Plaza is designated as a foreign trade zone (FTZ) established by the US Department of Commerce, and as such, offers significant cost savings to businesses engaging in such trade.
Essentially, when a product enters a FTZ, it is exempt from tariffs until it is moved off the zone. The duty-free status of the Plaza offers several advantages:
The delay in paying tariffs allows businesses to keep their money in their hands longer. In some case, a business could store the item in the zone until finding a buyer, and then use the money from the sale to pay customs duties. If an item never leaves the zone, it's never subject to duties.
Manufacturing, Assembly, Repackaging
If a company imports and uses materials or components for manufacturing at the Plaza, the company generally pays lower tariffs than if the materials were imported to a non-FTZ location. This benefit also applies to processes to paint, clean, sort, grade and repackage goods for domestic sale.
Timing of Trade
For distributors, the duty-deferral of the FTZ allows for the elimination of extra insurance costs by excluding taxes and duties from gross valuation; the flexibility to time entry to benefit from favorable exchange rates; the ability to collateralize goods in the FTZ for greater valuation; the ability to avoid errors and penalties for incorrect entry procedures; and the means to sample, market and sell goods prior to payment of duties.
If a company imports a product into the Plaza, then re-exports, it never technically "enters" the United States, and no duties are charged.
Economic Development Zone
The New York International Plaza lies within a designated Economic Development Zone (EDZ) by the State of New York. This designation allows tenants of the Plaza access to a host of state tax credits and benefits, representing significant savings in the operations of your business.
Wage and Tax Credits
·A 50% fundable refundable wage tax for up to 5 years for full-time employees in newly created jobs.
·A 50% refundable tax credit of 8% to 10% based on investments made within the EDZ. This credit is available under the corporate franchise tax and personal income tax.
·Additional credits, under the Employment Incentive Credit, equaling 30% of the investment tax credit is available for each of the next three years following the year the investment tax credit is taken.
Sales Tax Refund
Purchases of building materials used in connection with real property development within the EDZ are exempted from sales tax through a refund process. Similar refunds of local sales taxes may also be available.
Zone Capital Credit
A 25% tax credit against personal or corporate income taxes is available for direct investments made in a certified zone business; or for contributions to approved community development projects within the EDZ, or for purchase of shares in a zone capital corporation.
Zone Loan & Equity Capital
Businesses located at the Plaza may take advantage of Zone Capital Corporation funding, a unique statewide program for EDZs. This program provides for funding of both long and short-term loans, as well as mezzanine level equity placement. These funds may be used for working capital, equipment acquisition or real property acquisition and development. The program provides for funding up to 50% of project cost, with levels up to $500,000.