For companies doing business, a large portion of revenue is dedicated to the payment of real estate taxes. These costs arise from real property taxes as well as those incurred during improvements to existing properties. When conducting business it can often feel overwhelming to have to keep handing over revenue when the business is struggling to expand and grow. The Otsego IDA understands this and through a series of economic incentive programs can offer a hand in your expansion, providing a little breathing room to reach your company’s potential and expand your business in Otsego County, NY.
By taking a nominal interest in a company’s real property, the Industrial Development Agency can provide the following benefits:
1. Payment in Lieu of Taxes (PILOT): Per section 874 of the General Municipal Law, any company or property the Otsego IDA partners with can benefit from tax abatements and exemptions for their properties and expansions. Otsego Now is dedicated to economic development and job growth in the Susquehanna Valley, and the incentives offered through reduced tax programs provides cost savings to such companies. To manage this, the we have established a process by which each project is assessed in the long-term value to the region in the form of income development and economic value as well as the cost of the tax reduction to the area. In these instances, a PILOT for municipalities and townships is required.
A review of the project and projected improvements and gains to the area, including revenue increases, long-term tax benefits, and jobs, is matched against the costs to the jurisdictions against the preliminary tax abatements and exemptions for the project period. Using the defined Uniform Tax Exemption Policy of the Otsego IDA, a predetermined Payment In Lieu in New York will be established for the course of the project.
The program for Payment In Lieu in New York enables businesses to expand and build their companies in Orange County, NY at a significantly reduced overall tax liability, while still providing a payment to the affected and involved jurisdictions.
2. Sales Tax on Construction Materials and Equipment: Sales taxes on construction materials can be waived during the project phase (usually 6-12 months).
3. Mortgage Recording Tax: Mortgage recording tax can be waived on projects involving real estate purchases, thereby reducing closing costs.