Photo by Rich Bockmann
By Rich Bockmann

Hoping to shed New York’s reputation as a tax-heavy place that sends startups to places like California, Gov. Andrew Cuomo last week announced Jamaica’s York College will be one of a number of havens across the state where new and high-tech businesses can work tax-free for the next decade.

“In a tax-free environment, no one can match what New York has to offer,” Cuomo said. “Businesses that are looking to start up or expand, and most importantly create jobs, should look no further.”

New York is a powerhouse when it comes to producing new tech companies, but is not so great at keeping them. The state ranks second across the country in terms of high-tech startups, but 75 percent of them leave before five years, often wooed to areas with lower taxes.

A 2010 report by a task force convened to study diversifying the state’s economy by leveraging partnership between industry and academia found that New York’s universities spent $4 billion a year — second only to those in California — on research, but only 4.6 percent of that spending came from industry.

In order to spur innovation, Cuomo came up with the SUNY Tax-free Areas to Revitalize and Transform Upstate NY and, despite the name, the program is setting up a tax-free zone at one City University of New York campus in each of the five boroughs.

Companies that participate in the program will pay no taxes for 10 years, while their employees will pay no income taxes for the first five years.

In the city, the program is restricted to startups and high-tech companies. Certain kinds of companies are banned, such as retail and wholesale businesses, restaurants and hospitality, professional practices like law firms and energy production as well as distribution companies.

York Vice President Ronald Thomas said there is a 5-acre plot of land on the college’s campus that could house an incubator that would feed off the school’s intellectual capital.

York is home to CUNY’s aviation institute and has a partnership with the U.S. Food and Drug Administration, which has its regional office on the college campus.

“One could conceivably see an incubator in logistics and transportation management,” Thomas said, noting that the project was still in its infancy. “It’s quite exciting, frankly, the thought of southeast Queens being home to businesses created by the local community and beyond.”

Reach reporter Rich Bockmann by e-mail at rbockmann@cnglocal.com or by phone at 718-260-4574.

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