Sales Tax Exemption

Purchases of tangible property and services made by a Qualified Empire Zone Enterprise (QEZE) are exempt from the state 4% sales tax and from the .375% Metropolitan Commuter Transportation District (MCTD) tax after the QEZE passes the employment test (see also description of QEZE: Definitions).

To qualify, an EZ certified company completes the employment test on form DTF-80. That form is then submitted to NYS Department of Taxation and Finance and the company is issued an exemption certificate. The exemption certificate is valid for each year the business passes the employment test. The employment test varies depending on when a business receives Empire Zone certification. The company "self-determines" if it meets the employment test on an annual basis. This exemption is available for 120 consecutive months beginning the month after the company files the DTF-80 (See also description of QEZE: Employment Test).

Newly formed businesses (certified on or after 8/1/02) must also meet a new business test in order to be eligible for the Sales Tax Exemption. This test requires that a new business have either new activity or new ownership.

All tangible personal property eligible for the sales and uses tax exemption must be predominantly (50% or more) used or consumed by the QEZE, including:

• Motor vehicles, if they are predominantly used by the qualified business, or if they predominantly originate and terminate at the Zone facility.
• Automotive parts and gasoline for these qualifying vehicles are also eligible, however a different procedure applies.
• All tangible personal property sold to a contractor, sub-contractor or repairman used in construction on property owned by a QEZE.

Services must be used directly and exclusively by the qualified business in the Empire Zone (EZ), including utilities. For telephone, the service must be delivered and billed to the business at an address in the Zone.