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New York State Incentives
Empire Zones
National Grid Incentives
New York State has become the nation's leader in cutting taxes. Nearly all taxes in New York State have been cut, with substantial reductions achieved in business, estate, sales, property and personal income taxes. New York State now has one of the lowest corporate income tax rates in the Northeast.
In addition to lower taxes, New York offers a variety of incentives to companies expanding or relocating in the Empire State. These include:
- Investment Tax Credit (ITC). Businesses that create new jobs and make new investments in production property and equipment may qualify for tax credits of up to 10% of their eligible investment. New businesses may elect to receive a refund of certain credits, and all unused credits can be carried forward for 15 years.
- Research and Development Tax Credit. Investments in research and development facilities are eligible for a 9% corporate tax credit. Additional credits are available to encourage the creation and expansion of emerging technology businesses, including a three-year job creation credit of $1,000 per employee and a capital credit for investments in emerging technologies.
- Sales Tax Exemptions. New York State offers exemptions for purchases of production machinery and equipment, research and development property, and fuels/utilities used in manufacturing and R&D. Other exemptions may be available through local Industrial Development Agencies (IDA.) Download a list of IDAs.
- Real Property Tax Abatement. To encourage development, expansion, and improvement of commercial property, a 10-year property tax abatement is available to offset increased assessments due to improvements to business and commercial property.
- No Personal Property Tax. Unlike many other states, which tax both real property and personal property, property taxes in New York State are imposed on real property only. Personal property, whether tangible or intangible, is exempt from state and local taxes.
Empire Zone Tax Credits
New York State has designated 72 zones as Empire Zones (EZs), which offer a host of benefits. These include discounts on electricity, enhanced tax credits for investment and job creation, and additional sales and property tax exemptions.
For additional information, forms, and instructions for business tax incentives, visit New York Love Biz / Tax & Financial Incentives.
Single Sales Factor
Phases in a single sales factor (i.e., 100% receipts allocation) business allocation percentage for determining amount of corporate income subject to New York State tax.
- For taxable years beginning on/after January 1, 2006 and before January 1, 2007, prescribes an allocation formula of: 20% property; 20% payroll; 60% sales;
- For taxable years beginning on/after January 1, 2007 and before January 1, 2008, prescribes an allocation formula of: 10% property; 10% payroll; 80% sales; and
- For taxable years beginning on/after January 1, 2008, prescribes for a single sales factor allocation percentage.
For more information go to the Tax Department's Summary of Tax Provisions of the 2009-10 Budget.
New York State Tax Guide for New Businesses
New York State’s Empire Zone program was created to stimulate economic growth through a variety of State tax incentives designed to attract new businesses to New York State and to enable existing businesses to expand and create more jobs. Today, there are over 8,700 certified businesses employing more than 344,000 people in 85 Empire Zones statewide.
Eligibility & Certification
To participate in the Empire Zones Program, a business must first be located in an empire zone, or qualify as a regionally significant project, and become zone certified. To qualify for certification, a business must be able to demonstrate that it will create new jobs and/or make investments in the empire zone and be consistent with the local zone’s development plan, including a cost-benefit analysis.
Applications approved by local zone officials are then forwarded to the State for review and approval by the Departments of Economic Development (Empire State Development) and Labor. Contact your local zone coordinator to discuss whether your business qualifies for zone certification. Once a business is certified it is eligible to claim tax credits, subject to requirements and performance based formulas set in Tax Law.
Qualified Empire Zone Enterprises (QEZEs) are eligible for sales tax exemption, real property and business tax credits for businesses locating and expanding in EZs. The purpose of the Empire Zones Program is to give companies that increase employment the opportunity to operate on an almost "tax-free" basis for up to 10 years in designated areas of the State, with additional savings available on a declining basis in years 11 through 15.
- QEZE Sales Tax Benefits: Qualified Empire Zone Enterprises (QEZEs) receive a refund or credit on State and, in some cases, local sales tax on purchases of goods and services (including utility and telephone services) used predominantly in an Empire Zone.
- QEZE Credit for Real Property Taxes: Qualified Empire Zone Enterprises may claim a refundable credit against business or income tax equal to a percentage of real property taxes paid in the zone (effective for taxable years beginning on or after January 1, 2001).
- QEZE Tax Reduction Credit: Qualified Empire Zone Enterprises may claim a credit against business or income tax equal to a percentage of taxes attributable to the zone enterprise (effective taxable years beginning on or after January 1, 2001).
- EZ Wage Tax Credit: Companies hiring full-time employees in newly created jobs may claim this credit for up to five consecutive years. For employees in special targeted groups, this credit equals $3,000 per year, with a credit of $1,500 per year effective 1/1/2001, for all other new hires.
- EZ Investment Tax and Employment Incentive Credits: Businesses that create new jobs and make new investments in production, property and equipment may qualify for tax credits of up to 19% of the company's eligible investment.
- New Business Refund: Businesses new to New York State are entitled to a 50% cash refund of unused EZ-WTC and ITC amounts. Other businesses may carry forward unused credits indefinitely.
- Utility Rate Savings: Special reduced electric and gas rates may be available through investor-owned utilities in New York State. Businesses that locate or expand their operations in an EZ may receive significantly reduced rates.
- Zone Capital Credit: A 25% tax credit against personal or corporate income taxes is available for contributing or purchasing shares in a zone capital corporation; or for a direct equity investment in a certified zone business; or for contributions to approved community development projects within an EZ.
- Sales Tax Refund or Credit: Purchases of building materials to be used in construction, expansion, or rehabilitation of commercial or industrial real property located in an EZ are eligible for a refund or credit of NYS and, in some cases, local sales taxes.
- Real Property Tax Abatement: EZs may offer tax abatements from an increased assessment, with the abatement value based on improvements to real property for up to 10 years. This holds true for up to seven years at 100%, decreasing over the last three years of the exemption.
- Technical Assistance: Professionals qualified to assist businesses locating or expanding in an EZ staff each local zone office.
Link to the NYS Tax Department for more information on Empire Zone tax incentives.
Empire Zone Special Report
Energy Pricing Programs
Empire Zone Rates
Through its Empire Zone Rider (EZR), National Grid offers businesses that locate or expand in an Economic Development Zone (now known as Empire Zones) up to ten years of deep discounts on the delivery of incremental (new) electricity and natural gas supply.
This program generally provides discounts of 50% or more from standard electric delivery rates. The customers actual discounts depend on their service classification, delivery voltage and energy use profile. The main components of the discounted EZR electric bill are:
- A standard monthly customer charge ranging from $21.02 for a small commercial customer (customers with no demand) to $3,172 per month for a large industrial customer (customers with demand >2,000 kW), depending on service classification and delivery voltage
- A transmission delivery charge -- $1.89 per kW per month for demand metered customers
- A cost-based, distribution delivery charge ranging from $.00307 per kWh (3/10 of one cent per kWh) to .00705 per kWh (7/10 of one cent per kWh), depending on service classification and delivery voltage. There is no distribution delivery charge for customers taking service at sub-transmission (34.5 kV or higher) or transmission voltage (115 kV)
- An electricity supply (generation) charge, which is a simple "pass through" of market-priced, electric generation costs. This generation charge is variable and can increase or decrease monthly with the market price of electricity supply. Customer can “shop” for this portion of their electric requirements. A list of qualified energy brokers and marketers can be found at http://www.nationalgridus.com/niagaramohawk/
Natural Gas Discounts
The EZR natural gas program offers discounts that range from 3 to 5 cents per therm, depending on service classification and consumption.
Minimum Qualifications
After local and state certification, customers are eligible for a full ten years of benefits on qualifying usage; the ten year term begins with the first discounted bill. In order to access the discounted EZR rates, customers must become certified and contact National Grid within six months of locating or expanding in an EZ.
All EZR discounts are applicable only to incremental (new to National Grid), permanent electric and gas load. New customers are eligible for discounts on their entire usage. Existing National Grid customers must increase their usage in order receive discounts, as follows:
- Electric demand metered customers must increase their demand (kW) by the lesser of 100 kW or 25 percent of existing demand
- Electric non-demand metered customers must increase their usage (kWh) by at least 25 percent.
- Existing natural gas customers must also exceed historical usage in order to qualify; small general service gas customers must exceed 280 therms per month.
- A change in ownership in and of itself does not qualify for EZR discounts.
- All eligible energy use must be physically located in Empire Zone boundaries.
- Customers must remain current in their payments to National Grid.
- Customers who become “decertified” by New York State for whatever reason will no longer receive the discount.
National Grid EZR Contact:
Bryan Archambault 315-428-6702
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Electric Pricing Discounts (SC-12)
This electric pricing program has greatly enhanced National Grid's ability to help existing and prospective customers capitalize on business opportunities. SC-12 is an umbrella program that covers the full range of competitive situations, including business attraction, business expansion and customer retention.
SC-12 utilizes standardized discount schedules for customers who meet basic eligibility criteria. Generally, these discounts are administered as a 5-year, declining percentage discount to the energy (per kWh) charge. In addition, National Grid has the ability to individually negotiate SC-12 terms and conditions outside this standard structure in special cases—generally, situations involving extremely energy intensive customers or extremely large employers.
Eligibility for SC-12 is generally limited to manufacturing and certain service sector businesses such as wholesale trade, warehousing/storage, professional/scientific/technical services, and administrative/support services. Customer eligibility is driven by the North American Industry Classification System (NAICS), which is the new government standard for classifying businesses.
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SC-12 Growth Programs
- Business Attraction-This program offers discounts to prospective customers who are evaluating locations both inside and outside National Grid's service territory. It is also open to new businesses considering a start-up of operations in the National Grid service territory. There are two levels of attraction discounts, the deeper of which is available to more energy intensive manufacturers, as defined in the tariff with specific NAICS code.
- Business Expansion-Our business expansion program is available to current National Grid customers (25 kW or larger) who are evaluating an expansion of their existing usage—either through physical expansion (i.e., increase in kW) or increased utilization (i.e., higher kWh usage). The customer's existing usage is "baselined," and discounts are applied above those historical levels of usage. Certain growth thresholds must be hit in order to qualify for discounts.
SC-12 Retention Programs
- Revitalization-This program is designed to retain large manufacturing facilities in danger of closure due to financial distress. In order to qualify for discounts, customers must provide detailed financial information that demonstrates financial distress, identify and implement non-energy cost savings, and develop a comprehensive revitalization plan that will return the company to profitability within the five-year discount period.
- Relocation-Open primarily to our larger industrial customers, this program offers discounts to prevent the relocation of manufacturing facilities to areas outside the National Grid service territory. In order to qualify, customers must demonstrate that they have an economically viable relocation alternative. And in recognition of the fact that electricity cost by itself is seldom the only factor driving a relocation challenge, the SC-12 discount must be part of a comprehensive competitiveness plan that includes public involvement in the form of state and/or local incentives or concessions.
Gas Pricing Discounts
National Grid, like all utilities, purchases natural gas in a competitive national market where prices rise and fall depending on market conditions. The prices National Grid pays to purchase gas for customers are passed through to those customers dollar for dollar. In other words, National Grid does not mark up those prices or make a profit from them.
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Energy Infrastructure Programs
Electric Capital Investment Incentive *
The Electric Capital Investment Incentive Program provides funds to help offset the customer costs associated with upgrading utility infrastructure to accommodate a business expansion or new construction project.
Program Description for Capital Investment Incentives
Online Program Application
Natural Gas Capital Investment Incentive *
The Natural Gas Capital Investment Incentive Program provides funds to help offset customer costs associated with upgrading natural gas infrastructure to accommodate a business expansion or new construction project.
Program Description for Capital Investment Incentives
Online Program Application
Industrial Building Redevelopment *
The Industrial Building Assistance program provides grants of up to $250,000 to building owners undertaking efforts to retrofit the interior electric and gas infrastructure required to convert these buildings to multi-tenant industrial use. The grants will be made through local industrial development agencies or other quasi public development corporations.
Program Description for Industrial Building Redevelopment
Online Program Application
Brownfield Redevelopment *
The Brownfield Redevelopment program provides grants to fund utility related infrastructure improvements and other costs that are necessary to progress the redevelopment of a brownfield site or vacant building.
Program Description for Brownfield Redevelopment
Online Program Application
Three Phase Power Incentive *
The 3-Phase Power Incentive program provides grants of up to $50,000 to help fund the extension of 3-phase electric service to eligible National Grid customers.
Program Description for Three Phase Power Incentives
Online Program Application
Renewable Energy and Economic Development
This program will fund a limited number of projects in the National Grid service territory that demonstrate alternative generation technologies while producing significant economic development benefits for the region.
Program Descriptions for Renewable Energy and Economic Developmen\t
Online Program Application
* These programs are part of the New York State Public Service Commission approved National Grid's New York Economic Develoment Plan
Local Incentives
Additional Programs
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