New York officials are hoping it's back-to-school time for businesses.
A unique bill signed into law by Gov. Andrew Cuomo in June would allow new businesses to locate on or around college campuses in New York tax-free for 10 years.
Under Start-Up NY, or SUNY Tax-free Areas to Revitalize and Transform Upstate New York, certain types of businesses—start-ups, businesses expanding within New York and businesses relocating to New York from another state—will be able to locate in areas across New York where they would be exempt from paying property tax, sales tax and business or corporate taxes. Any one of the more than 150 private or public colleges are eligible to apply for a tax-free zone.
While other states, such as California, have created communities that give businesses tax credits, this bill would be the first to give tax breaks to businesses that locate to designated areas on or around college and university property.
Supporters of the bill say that these new businesses will bring new vibrancy and energy to areas of New York state that have seen decline over the past several years. New York was 35th in CNBC's Top States ranking. (Read More: How does your state stack up?)
"Generally speaking, the thinking is that an idea that is formed inside our SUNY campuses that is incubated and ready to take flight is leaving New York state right now," said Joanne Mahoney, the county executive from Onondaga County, home to Syracuse University, LeMoyne College and the SUNY College of Environmental Science and Forestry.
This bill, she added, would allow the upstate New York community to hold onto young entrepreneurs who might fall into that category.
"As taxpayers in New York, we spend a lot of money educating our young people through the SUNY system, so we're taking all of this taxpayer money and investing in these young people," she said. "If we can keep some of these young people with new ideas and start-up businesses, [and] stop them from leaving right now, we can turn it around."
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The nature of the bill, Mahoney said, would make New York state competitive with other states that currently collect zero income and corporate taxes. She said it would be more effective than an across-the-board cut in income tax, which would cost the state billions of dollars.
Aside from granting tax immunity to new businesses in these areas, the bill would exempt employees of these new businesses from paying income tax for five years and from paying income tax the following five years up to a certain wage.