Virtually every industrial development agency in New York has come out against Governor Andrew Cuomo's proposal to restrict their ability to offer state sales tax exemptions to businesses. The Monroe County Industrial Development Agency is part of the opposition.
"We've been doing it since 1969 and it's been effective," says COMIDA executive director Judy Seil.
"It" is providing sales tax breaks to a variety of projects. COMIDA has awarded state sales tax exemptions, along with county sales tax exemptions and other tax incentives, to projects including the new ESL headquarters in the city, the Culver Road Armory mixed use development, and Harris Corporation's Henrietta facilities. The University of Rochester-initiated College Town project is one of the more recent recipients of sales tax benefits.
The governor's plan would change who can receive the benefits, and none of the projects mentioned above would have been eligible under the new arrangement, Seil says. In 2011, COMIDA exempted approximately $3.4 million from state sales tax.
Cuomo's proposed 2013 to 2014 budget says that IDA's currently provide the exemptions without input from the state or regional economic development councils. He says he wants to limit the industries that can receive the exemptions to scientific research and development, software development, agriculture, back office operations, distribution centers, financial services, data centers, and manufacturing. Housing and retail — which IDA critics say shouldn't receive exemptions in the first place — would not be eligible.
Cuomo also wants the regional economic development councils to approve the state sales tax exemptions.
Seil has one other criticism of the governor's plan. Any companies that receive the exemptions would have to pay the sales tax upfront and then seek reimbursement, but Seil says many companies use the savings from the tax breaks as cash-flow tools.