The Bronx Empowerment Zone Benefits
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The Bronx Overall Economic Development Corporation (BOEDC), the administrator of the Bronx Empowerment Zone (EZ), offers two loan programs for qualified Bronx Empowerment Zone companies. Both programs offer loans at a very low interest rate and long terms in return for the borrowers commitment to hire Bronx Empowerment Zone residents. The Business Assistance Initiative (BAI) can generally lend up to $1 million to finance up to half of a project's cost. The EZ Loan Fund can finance up to 80% of a project's cost up to loans of $200,000.
Tax-Related Empowerment Zone Benefits
Employee Wage Tax Credit
Employers can claim a federal tax credit of up to $3,000 for each full- or part-time employee who is an Empowerment Zone resident. The credit is based on 20% of the first $15,000 in wages earned by the qualifying employee, and is available through December 31, 2009.
Increased Section 179 Deduction
Certain Empowerment Zone businesses can elect to deduct an additional $35,000 over the standard IRS Section 179 deduction on the cost of qualifying property in the year it is placed in service, instead of recovering that cost through depreciation over time. This benefit is also available through December 31, 2009.
Tax-Exempt Bond Financing
Tax-exempt bonds have lower interest rates than conventional funding. A new category of triple tax-exempt private activity bonds was created especially for qualified New York Empowerment Zone companies.
Five Year Analysis
|Number of EZ and EDZ resident employees (1) (2)|
(Full time EZ and targeted Economic Development Zone employees)
(Based on qualified property placed in service in year 1)
(Construction cost and equipment purchases by the EZ)
|EZ Borrowing Rate|
(Illustrative EZ tax exempt bond financing rate)
(Based on current borrowing rate)
|Property Development Investment|
(Estimated development cost of a new facility)
|Cost of building materials|
(Based on qualifying materials used for property development)
|Assessed value of property||$1,000,000|
|Property tax rate||$ 4.53%|
|Annual electricity bill||$60,000|
|Annual Gas bill||$60,000|
For more information on these benefits call BOEDC at 718.590.6252