Qualified Empire Zone Enterprise (QEZE)

A QEZE is a certified business that is eligible for incentives based on an employment test. The Sales Tax Exemption, Tax Reduction Credit, and Real Property Tax Credit depend on the business' ability to pass this employment test. The first time the test is required is in the Application for Qualified Empire Zone Enterprise Sales Tax Exemption, also referred to as Form DTF-80. Similar information is also required when completing the forms for the Tax Reduction and Real Property Tax Credit.

Please contact EZ staff with any questions regarding QEZE eligibility and employment tests.

Employment Test: There are two different employment tests depending on when the business is certified.

For companies certified prior to April 1, 2005, to meet the employment test, the company's employment number in (a) all Empire Zones in the state must equal or exceed the company's employment in the Zones during the five-year base period, and (b) the company's employment in the state outside the Zones must equal or exceed the company's employment number in the state outside the Zones during the base period. A company must pass the employment test for each year for which QEZE credits are claimed.
For companies certified on or after April 1, 2005, to meet the employment test, (a) the company's employment in all Empire Zones must exceed the company's employment number in all EZ's for the base period, and (b) the company's employment number in the state must exceed the company's employment in the state for the base period.

Definitions Used to Determine Credits For QEZES:

Test Date – the date that determines the beginning of a company's benefit period. For companies certified prior to July 1, 2000, the test date is July 1, 2000. For companies certified between July 1, 2000 and July 1, 2005, the test date is the eligibility date on the company's Empire Zone certificate.

Test Year – the company's last taxable year prior to the test date.

Base Period – the base period varies depending on when the company was certified. It also varies by tax incentive.

For companies certified prior to April 1, 2005, it is the five taxable years immediately preceding the Test Year.

For companies certified on or after April 1, 2005, it follows this schedule:

Sales Tax Exemption:	3 years preceding the test year
Tax Reduction Credit:	4 years preceding the year of certification
Real Property Tax Credit:	4 years preceding the year of certification

Employment Number – the average number of individuals excluding corporate officers, working full-time (or full-time equivalent) for at least half of the business tax year. This number does not include any employees who worked for a related business or person during the previous 60 months. The employment is computed quarterly.

New Business – For new businesses certified after August 1, 2002, if there are zero years in the base period, the business must pass a new business test. For the purposes of the QEZE credits, a new business is defined as any business entity except one that is substantially similar in operation and in ownership to another taxable business entity within NY State. If there are zero years in the base period and the company does not meet the definition of a new business, it cannot apply for or receive QEZE incentives. For more information about the new business test and to see if your company will pass this test, please contact EZ staff.

Benefit Period – the time period the company is eligible to qualify for the QEZE Tax Credits.

Real Property Tax Credit/Tax Reduction Credit

For companies certified prior to January 1, 2001, the benefit period begins January 1, 2001.

For companies certified between January 1, 2001 and April 1, 2005, the benefit period begins on the effective date on the Empire Zone certificate. These credits have a 15-year benefit period.

For companies certified on or after April 1, 2005, the benefit period also begins on the date that the effective date on the Empire Zone certificate. However, the credits have a 10 year benefit period.

Sales Tax Exemption

The Sales Tax Exemption has a 10 year benefit period. Please see the Sales Tax Exemption section of this website for more information on when it begins.