If you are considering a construction, renovation, or expansion project or other economic development activity in Ulster County, you should begin with a call the Ulster County Industrial Development Agency (IDA).
 
The IDA actively promotes, encourages, attracts and develops job and recreational opportunities, economically sound commerce and industry in cities, towns, and villages throughout Ulster County. It does so by providing various types of financial assistance in connection with the development of a project, including:
 

• Real estate tax abatements;
• Sales and use tax exemption; and
• Mortgage recording tax exemption.

 
The IDA may also issue tax exempt bonds for projects on behalf of hospitals, universities, and not-for-profit corporations which qualify as Section 501(c)(3) organizations under the Internal Revue Code and to finance certain manufacturing facilities (under $10,000,000), retirement facilities, solid waste disposal facilities and multi-family housing facilities.
 
Real property owned by the IDA, or under the jurisdiction and control of the IDA, is exempt from real property taxes. Customarily, the IDA requires a project proponent to enter into a payment in lieu of tax agreement (“PILOT”). While real property owned or controlled by an IDA is not subject to ad valorem real property taxes it is still subject to special assessments and user fees. The IDA typically offers a ten-year real property tax incentive formula that can save the applicant property tax costs.
 
Another benefit of financing a project through the IDA is that materials purchased by or in the name of the IDA and incorporated into the project are exempt from sales and use tax. Also financing a project through the IDA will exempt a mortgage from the mortgage recording tax.

The IDA also promotes economic growth through “straight lease” or “sale/leaseback” transactions. In this type of transaction, a company will transfer title to real property on which a project is be constructed to the IDA and the IDA will then lease back or sell the property back to the company. The company uses conventional bank financing to finance the cost of the project and the IDA joins in the mortgage to exempt it from mortgage recording tax. In addition, in straight lease transaction, a company may also obtain a PILOT and sales tax exemption.
 
For more information about the tax benefits and financial savings available through the IDA contact Peter Gallagher of UCDC at 845-338-8840 or visit www.ulsterny.com.