| | RELOCATION & EMPLOYMENT ASSISTANCE PROGRAM (REAP) |
| PROGRAM DESCRIPTION |  |
| The Relocation and Employment Assistance Program (REAP) provides a tax credit for businesses that relocate from outside of New York City or from Manhattan below 96th Street to either Manhattan above 96th Street or in Brooklyn, Queens, the Bronx, or Staten Island. | |
| ELIGIBILITY & TIPS | |
| ELIGIBILITY | | |
Relocation
The business must relocate from outside of the City or from Manhattan below 96th Street to Manhattan above 96th Street or the outer boroughs.
The premises must meet one set of criteria below:
- Lease Type: Its leased premises must be in property that is (a) eligible for the City’s Industrial Commercial Incentive Program; (b) leased from the City’s Industrial Development Agency; (c) owned by the City; or (d) leased from the Port Authority or the New York State Urban Development Corporation; and
- Expenditures: Its leasehold expenditures must total at least 50% of the assessed value of the property.
OR
- Lease Term: Its lease must extend to at least 3 years after the later of (a) the lease commencement date; or (b) the date of relocation; and
- Expenditures: Its leasehold expenditures must total at least $25 PSF.
Restriction
Retail stores, residential buildings, and hotel services do not qualify. | |
| TIPS | | |
- Applications must be received by July 1, 2008.
- Companies receiving REAP benefits that relocate within the REAP area will continue to receive benefits.
- Companies relocating from Lower Manhattan to a REAP-eligible area will receive benefits as-of-right if 100 or fewer jobs are relocated, or at the Mayor’s discretion if more than 100 jobs are relocated.
- Similar benefits are available for businesses relocating to Lower Manhattan under the Lower Manhattan REAP.
- Companies must be in continuous operation for two years prior to application.
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| PROGRAM BENEFITS | |
- Tax credit of up to $3,000 per job per year for (a) 12 years for each job relocated; and (b) the remainder of the REAP term for each job added within 5 years of relocation.
- Jobs eligible for benefits are capped at the lesser of (a) then-current jobs in the premises minus jobs in the premises before relocation; or (b) greater of 100 or twice the number of company jobs outside the REAP- eligible area before the move.
- Credit may be taken against the General Corporation Tax, Bank Tax, Unincorporated Business Tax and/or Utility Tax.
- If credit cannot be used in the year received, it can be refunded in the year of relocation and the following 4 years. Thereafter credit may be carried forward for 5 years.
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| EXAMPLE BENEFITS CALCULATION | |
XYZ Corporation, a financial services firm, relocates 200 jobs from Midtown Manhattan to Downtown Brooklyn. Its annual tax liability is $500,000, growing by $20,000 per year. The company adds 10 jobs per year in its new office, all of which are eligible for REAP benefits.
| Year |
Income Tax
Liability |
Eligible Jobs |
Earned Credits |
Applied Credits |
Cash Refund |
| 1 |
$500,000 |
200 |
$600,000 |
$500,000 |
$100,000 |
| 2 |
$520,000 |
210 |
$630,000 |
$520,000 |
$110,000 |
| 3 |
$540,000 |
220 |
$660,000 |
$540,000 |
$120,000 |
| 4 |
$560,000 |
230 |
$690,000 |
$560,000 |
$130,000 |
| 5 |
$580,000 |
240 |
$720,000 |
$580,000 |
$140,000 |
| 6 |
$600,000 |
250 |
$720,000 |
$600,000 |
— |
| 7 |
$620,000 |
260 |
$720,000 |
$620,000 |
— |
| 8 |
$640,000 |
270 |
$720,000 |
$640,000 |
— |
| 9 |
$660,000 |
280 |
$720,000 |
$660,000 |
— |
| 10 |
$680,000 |
290 |
$720,000 |
$680,000 |
— |
| 11 |
$700,000 |
300 |
$720,000 |
$700,000 |
— |
| 12 |
$720,000 |
310 |
$720,000 |
$700,000 |
— |
| Total (Nominal) |
|
|
|
$7,320,000 |
$600,000 |
| NPV (6.25%) |
|
|
|
$4,926,328 |
$496,999 |
As shown above, REAP will result in an aggregate savings of $7,320,000 in taxes over 12 years of which $600,000 will be refundable during the first 5 years. | |
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| CONTACT INFORMATION | |
For more information about REAP visit the New York City Department of Finance section of the City’s Website.
Relocation and Employment Assistance Program (REAP)
66 John Street
13th Floor
New York, NY 10038
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