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STEG monitors the hundreds of bills that pass through Albany each year—watching for those that will impact businesses and economic development efforts in our area. To encourage you to get involved in the legislative process, we invite you to post comments or questions regarding those issues that have the greatest impact on your business or organization. Perhaps other visitors will initiate a dialogue and/or join together to increase your collective political clout.

New York State’s Legislative Highlights
Below is a summary of the state budget’s tax and economic development highlights. Please note that several of NYSEDC’s budget priorities were adopted, including the repeal of the GRT (immediate for manufacturers, phased-in for other businesses and residences) and expansion by 300 megawatts of the power for jobs program.

Tax Reductions/Personal Income Tax
Earned Income Tax Credit: Increases from 25% to 30% of the federal credit. (Fully effective in 2003)

Increases the current Child and Dependent Care Credit to 110% of the federal credit for taxpayers with incomes of less than $25,000. The credit will equal 100% of the federal credit for people with incomes of between $40,000 and $50,000.

Gives people a choice of either receiving an itemized deduction or a refundable credit of 100% of qualified tuition expenses up to $10,000.

The standard deduction for married taxpayers filing jointly will increase from $13,000 to $14,600. (Phased-in over three years)

Provides taxpayers with an income tax credit equal to 10% of their long-term care insurance premiums beginning in 2002.

Alternative Fuel Cell Credit provides taxpayers with an income tax credit equal to 20% of the cost of purchasing and installing a fuel cell to supply power to homes, up to a maximum of $1,500.

Petroleum Storage Tank Credit provides homeowners who replace a residential fuel oil storage tank with a $500 income tax credit.

Tax Reductions/Business Taxes
GRT will be repealed for commercial and industrial users retroactive to January 1, 2000. Changes the method of taxing utilities from a gross receipts to a method based on net income. The sales tax on unbundled transmission and distribution of gas and electricity will be eliminated over a five-year period.

Power for Jobs program will receive an additional 300 megawatts of low-cost power to be allocated to businesses that create or maintain jobs.

Economic Development Zones: An additional $40 million in incentives to businesses located in ED Zones was included in the budget. They include:

An income tax credit for real property paid by the business in the zone. The amount of the credit will be dependent on the amount of increased employment. The full credit will be available for 10 years.

A sales tax exemption (State part of the sales tax) on the purchase of tangible personal property or services used or consumed by a Qualified Empire Zone Enterprise.

A credit against tax liability in the zone as a result of business activity conducted in the zone will be available for 10 years, and the amount of the credit will be dependent on the level of increased employment.

The proposal would also make available $150 million in tax credits to insurance companies that invest in venture capital pools that invest in NY businesses. One-third of this amount must be invested in Empire Zones. One-third must be invested in areas currently not benefiting from CAPCOs, and the remainder of the credits may invested statewide.

Allows ED Zone Employment Incentive Credits to be used against the Alternative Minimum Tax.

Sales Tax Allocation for Financial Service Companies: Changes the method by which financial service companies allocate receipts from the location of the services provided to the location of the customer's domicile.

Small Business Tax Reduction: Reduces the Entire Net Income (ENI) rate of 7.5% that small businesses face under the Corporate Franchise Tax to 6.85%.

ITC Carryover: Allows ITC earned by companies to be transferred to a spin-off company if the assets on which the ITC was earned are transferred to the new company.

Green Buildings Tax Credit: Provides tax credits for the construction or rehabilitation of buildings that exceed current environmental standards.

Low Income Housing Credit: Creates a state credit to supplement the federal low-income housing tax credit, which provides incentives for the construction of apartment buildings for low to moderate-income families.

ITC for Insurers: Extends the ITC to insurance companies for investments in equipment used for securities trading, including computer and telecommunications technology.

Web Hosting Facilities: Provides a sales tax exemption for tangible personal property and services used in Internet data centers.

PBT: Reduces the Petroleum Business Tax on heating oil utilized for commercial purposes by one-third.

Pollution Abatement Equipment: Exempts certain types of pollution equipment and machinery from sales tax.

Ton-Mileage Tax: Provides a 10% reduction in the supplemental tax imposed for the privilege of operating certain vehicles in NY.

Upstate Technology Incentive: Applies to qualified technology corporations located in the 50 counties located outside the MTA region.

Economic Development Program Budget Highlights

Economic Development Zone Administration:	$2.9 million
NYS Technology Enterprise Corporation:	$1.5 million
Business Marketing:	$4.5 million
Tourism Advertising:	$11.015 million
Tourism Matching Grant Program:	$4.276 million
Jobs Now Program:	$42 million
Empire State Economic Development Fund:	$37 million
Urban & Community Development Program:	$3.5 million
Federal Empowerment Zone Adm:	$10 million
Biomedical Initiatives:	$10 million
Rome Lab/Griffiss Airbase Infrastructure:	$3 million
Plattsburgh Air base/Infrastructure:	$2.5 million
Unspecified Project Fund subject to MOU with legislative leaders:	$19 million