State officials are aiming for a decision this month on whether to repay millions of dollars of Empire Zone tax credits to as many as 40 companies.
The businesses in question used to receive Empire Zone benefits, once New York’s signature business incentives. At its peak, 9,000 companies received a combined $550 million or more per year.
The state changed Empire Zone rules in 2009, and businesses were removed if their performance from past years did not meet the new requirements—sparking outrage in the business community.
Since then, companies have been suing the state—and many are winning. Empire State Development Corp. on April 10 revived an appeals board to take fresh looks at certain cases, an action prompted by court rulings against the state.
If a company wins its appeal, the state will pay back tax credits it had revoked, dating to 2008. Winning companies will also remain in the Empire Zone program for future years, as they would have if the state had never removed them in the first place.
The board set an April 30 target for final votes on whether to readmit companies into the Empire Zone program, or reject their appeals again.
Only a unanimous 7-0 vote will allow a company back into the program. The board’s next public meetings are April 16 and 17, where it will go over each case.
A company can get its tax credits back if board members rule that “extraordinary circumstances” merit restoring the benefits. One hitch: The board first has to define what that term means.
“There is nothing in statute that guides us—literally, nothing,” said Tom Regan, a state attorney.
Attorneys for the board said companies cannot now come out of the woodwork to try to recover benefits, because their window of time to challenge the state’s decisions has passed. The board is only reviewing companies that sued the state, winning a second chance to get their tax credits back.