The Agency can provide various benefits to applicants who qualify for IDA assistance, such as:
Federal and State Tax Exemption on Certain Debt
When the Agency issues debt in the form of bonds or notes, interest on that debt is exempt from personal income taxes imposed by the State of New York and all political subdivisions thereof. In certain circumstances, interest on debt of the Agency may also be exempt from gross income for federal income tax purposes if the particular Applicant Project meets the requirements of the Internal Revenue Code. These exemptions of interest from certain income taxation allows the Agency to borrow at lower interest rates than a private entity can borrow at, thus lowering the cost of borrowing for a project.
State Tax Abatement Benefits
Qualifying Agency Projects may also be exempt from the New York State Mortgage Recording Tax, the New York State Deed Transfer Tax, and State Sales Tax on the purchase of equipment, building supplies and other personal property. These exemptions from state and local taxes enable the Agency to lower the cost of undertaking and financing a project.
Real Property Tax Exemption
Real property owned by the Agency is exempt from certain real property taxes. This exemption from real property taxes may allow the Agency to lower the operating costs of a project. The Agency may enter into a Payment in Lieu of Taxes (PILOT) Agreement to require the Applicant to make payments in lieu of taxes with respect to the project. Payment in Lieu of Taxes Agreements are at the discretion of the IDA Board.
In addition, the Agency possesses other powers that can facilitate projects.