Northern New York Newspapers
Watertown
Ogdensburg
Massena-Potsdam
Lowville
Carthage
Malone
NNY Business
NNY Living
NNY Ads
Wed., Nov. 26
SUBSCRIBE
Serving the community of Ogdensburg, New York
30°F
Related Stories

IDA leaders praise stiffened rules on tax breaks for retailers

PREV
NEXT
ARTICLE OPTIONS
A A
print this article
e-mail this article

Tax breaks for housing projects in Jefferson County occasionally stir up controversy, but the Industrial Development Agency has not issued tax incentives to retailers as a policy matter.

That’s why agency leaders have lauded criteria in the 2013 state budget that will reduce the ability of IDAs to grant tax incentives for retail projects.

IDAs were prevented from offering tax incentives to retail operations because of a ban from 1993 to 2008, but when those restrictions expired, many began to do so.

While JCIDA had that option, its board of directors decided extending incentives to retailers would create unfair competition among small local businesses such as grocery stores, wine shops and restaurants.

JCIDA frequently hands out microloans of less than $40,000 to retailers but has never given them tax incentives such as payment in lieu of taxes and sale-leaseback agreements. Such tax breaks granted to small retailers have been controversial in regions such as the Buffalo area, where doughnut shops and liquor stores have cashed in.

“The board has felt that it would have the potential to create competition for local businesses here,” said Donald C. Alexander, the agency’s chief executive officer. “If a person wants to set up a barbershop and wants a sales leaseback, for example, there are others here that have to pay. Or if someone wants to move a doughnut shop from one region to another to get a tax break, I think that creates a bad stigma for IDAs across the state. People have the right to ask why they’re getting tax breaks.”

Mr. Alexander said JCIDA has offered numerous tax incentives for hotel projects, which are technically in the retail sector.

But those tourism-related projects are granted under state policy because they bring wealth to the region.

The new rules in the state budget will allow IDAs to grant tax incentives to retailers only if projects are in an economically distressed area, are part of a regional tourism project or provide services and goods that aren’t otherwise available.

Another reason Jefferson County officials like the policy is it was part of a compromise that thwarted previous restrictions in the budget proposed by Gov. Andrew M. Cuomo.

Those restrictions would have forced agencies seeking to approve sales-tax breaks to first get approval from regional economic development councils.

“That would have been a barrier to get major development projects going by slowing down the speed of business,” said David J. Zembiec, the agency’s deputy CEO. Mr. Zembiec said the government — which acknowledged extra oversight could delay projects — developed the restrictions on incentives for retailers to accomplish the same goal.

“This new law negates the reason for the first one by preventing the kind of abuse” caused by IDAs offering incentives to retailers, he said.

Commenting rules:
  1. Stick to the topic of the article/letter/editorial.
  2. When responding to issues raised by other commenters, do not engage in personal attacks or name-calling.
  3. Comments that include profanity/obscenities or are libelous in nature will be removed without warning.
Violators' commenting privileges may be revoked indefinitely. By commenting you agree to our full Terms of Use.
Giveaway
Syracuse Football Tickets Giveaway
Connect with Us
OGD on FacebookOGD on Twitter
Tuesday 's Covers