NYS IDA Benefits Now Support Energy Efficient Projects

SALT Chat

10.28.19 | SALT Chat

It’s great to see New York State at the forefront with some positive energy.

Signed by the Governor on October 23, 2019 and effective immediately, New York State has enacted legislation to specifically incorporate in the umbrella of benefits available from the Industrial Development Agency (“IDA”) projects which:

“will utilize, to the fullest extent practicable and economically feasible, resource conservation, energy efficiency, green technologies, and alternative and renewable energy sources.”

In short – legislation with the future seriously in mind.

IDAs offer various benefits including:

• The abatement of mortgage recording tax,
• Sales tax benefits for purchases of construction materials and equipment,
• Real property tax abatements and reductions, and even
• The issuance of tax exempt and taxable bonds for financing qualifying projects.

IDA benefits are widely discretionary in nature and generally focus on assisting projects that involve substantial capital investment, will increase employment retention and growth, as well as increase tax revenues. Before granting benefits, IDAs are required to perform a cost-benefit analysis for the project.

The new legislation is unique in that it now specifically states that projects can qualify for IDA benefits based on resource and energy conservation. Traditionally the focus has been on industrial and manufacturing projects as well as office buildings, education facilities, sports arenas and the like.

Exactly how the new legislation will be implemented is yet unknown, but it certainly provides a valuable incentive for developers to pay careful mind to resource utilization and energy efficiency.

If you have questions about IDA benefits, contact me at wberkowitz@berdonllp.com or your Berdon Advisor.

Wayne Berkowitz, a tax partner and co-leader of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.