New York Empire Zones Sales Tax Credit
- Feb 11, 2013 | Gail Cole
QEZE is more than just an awesome acronym: it is Department of Taxation and Finance explains that certain businesses may still be eligible for a credit or refund of paid sales tax under QEZE.
The QEZE Sales Tax Credit or Refund bulletin reads:
"[I]f your business is a Qualified Empire Zone Enterprise and is located in an area formerly designated as an empire zone, you may still be eligible to apply for a credit or refund of the sales tax paid on certain property and services."
Eligibility depends on the following:
- Date of certification as a QEZE business;
- Whether or not you were required to be certified as a QEZE by the Tax Department; and
- Types of items and services bought and used.
In order to qualify for sales tax refund or credit, "[t]angible personal property and services must be directly and predominantly … used or consumed by the QEZE in an empire zone where the QEZE qualifies for benefits."
Services such as utilities and prepaid telephone calling services are eligible only if used or consumed entirely "by the QEZE in an empire zone where the QEZE has qualified for benefits."
Purchases of taxable food and drink; rent for hotel occupancy; and assorted amusement charges (admissions, club dues, etc) are not eligible for a sales tax credit or refund under QEZE.
The benefit period for qualified QEZE businesses for sales tax purposes is 120 months after the start date, which varies depending on the date of certification. Sales tax credit or refund "is available only for purchases made during your benefit period and only for tax years for which you pass the employment test." Benefits are not retroactive.
Claiming Refund or Credit
The following forms should be used to claim a sales tax refund or tax credit under QEZE:
- Application for Credit or Refund of Sales or Use Tax - Qualified Empire Zone Enterprise (QEZE);
- Report of Purchases Eligible for Credit by a Qualified Empire Zone Enterprise (QEZE); and
- Application for Refund of Sales Tax Paid on Petroleum Products.
Additional information is available at How to Apply for a Refund of Sales and Use Tax.
The bulletin notes that the sales tax refund or credit on certain building materials use in a QEZE has expired.
Careful reading of Tax Bulletin ST-730 is recommended if you think you may be eligible for a sales tax refund or credit under QEZE.
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