Changes to the Empire Zones program enacted in the 2009 NYS budget establish new requirements for certification and claiming incentives.

All certified businesses will now be required to pass a cost benefit test conducted by NYS Empire State Development. Based on the Business Annual Report, businesses in the program for at least three years must demonstrate that payroll and investments minimally equal the EZ benefits claimed. ESD will contact all certified businesses by mail with further information.

Businesses that pass the cost benefit test will be issued an Empire Zone Retention Certificate which they will need to present with their 2008 tax returns. Businesses that do not pass the test will be sent notices of decertification, along with information on the appeals process. Specifics about the timeline for issuing retention certificates have not yet been released. Please be advised that any business that receives a decertification notice will have only 15 days from the date of notification to send a notice of appeal.

Businesses that have already filed 2008 tax returns without the Empire Zone Retention Certificate will need to submit an amended tax return after receiving the retention certificate.

For information on how the NYS Department of Taxation and Finance will process claims for EZ tax credits for years that begin on or after January 1, 2008, see TSB-M-09(5)C and TSB-M-09(4).

This bulletin also describes other changes to the Empire Zones program in detail. Please refer to it for information regarding the retention certificates, and how to file an amended tax return.

For an overview of the most important changes to the Empire Zones program, please also refer to this chart.

Please contact your accountant immediately to inform them of these changes as they will affect your business and your tax filings.

The Tax Department has recently posted answers to a number of frequently asked questions about Empire Zone Retention Certificates. To view the questions and answers, please go to the following link on the Tax Department's website http://www.tax.state.ny.us/sbc/ezrc.htm and scroll down to FAQS