Government Giveaways: Only For The Well-Informed

Freeman & Davis, LLP

Freeman & Davis LLP, a full service accounting firm in New York City and its consulting services affiliate, FD Consulting Services LLC has over 13 years of experience in consulting on economic development benefits for businesses looking to locate or relocate within New York State.

Many business owners are unaware of the significant cost saving opportunities that are available through Municipal, State and Federal sponsored economic development incentive programs. These programs are created to attract and retain many types of businesses to specific geographic areas; raise general levels of employment in designated locales and/or to provide jobs to individuals that meet certain targeted profiles. The governing bodies (sponsors) of these program have varied motivations for offering their programs, but their goals are very clear – to bring business growth and opportunity to lower and middle income communities for the benefit of both its residents and the business owners. Almost any type of business can qualify. Small, medium, large, startups, mature enterprises, domestic and foreign owned companies, even divisions of mega-companies can qualify.

Businesses can realize cost savings and benefits in the form of (a) tax credits, exemptions, reductions and reimbursements; (b) energy cost discounts; (c) outright grants; and (d) reduced interest rates on financing. Tax savings can result from wage tax credits; equipment purchase credits; sales tax reduction or elimination; real estate tax rebates and other featured programs. While there are many business incentive programs offered throughout the nation, New York State and New York City are among the most proactive sponsors of business incentive cost savings programs in the nation.

Oftentimes these programs are not taken advantage of to their fullest extent simply because business owners and management are unaware of their eligibility. Sometimes businessmen don’t claim their benefits because of perceived complexity in complying with rules or just not wanting any interaction with the government bureaucracy. However, for many qualifying businesses, the beneficial results can be staggeringly large.

To achieve maximum benefits, qualified professional advisors need to be engaged at the earliest possible stage of the planning process. Professionals experienced with government sponsored incentive programs should be a appointed by the business to research available programs and report their findings to management. It is critical to research and plan for these programs at the earliest possible stage of the process because most of these money savings programs are structured to be “incentives” rather than “rewards”. Accordingly, many programs will award or disburse benefits only to businesses that obtain prior approval before starting their project.

The extent of benefits that a business may receive can vary, based on the business profile, growth plans and successes in their current, new or expanded locations. If addressed very early in the planning process, there are usually significant advance opportunities to structure the business plan, improve on the plan of formation of legal entities and develop operational procedures so as to maximize the benefits that the business will ultimately receive.