START-UP NY
Empire State Development (ESD)
Up to 10 yrs tax-free
10 years tax-free on NY university campuses
New York's tax-free business incentive program allowing qualified businesses to operate rent-free on or near SUNY, CUNY, or private college campuses for up to 10 years with complete exemption from state and local taxes — business taxes, sales taxes, and personal income taxes for employees hired in New York. Must align with the campus's academic mission. Startups and growing companies in technology, life sciences, advanced manufacturing, and knowledge industries are primary targets.
- Funding type
- Tax Credit
- Level
- State
- Amount
- Tax exemptions valued at the company's actual New York state and local tax burden over up to 10 years. Includes: corporate franchise tax exemption, sales and use tax exemption, real property tax exemption (for on-campus space), and 100% personal income tax exemption for net new employees hired. Value varies entirely by company size and tax profile — a 20-person tech company with $3M revenue might save $150K–$400K over 10 years.
- Realistic amount
- For a typical early-stage startup with 5–20 employees, combined tax exemptions are worth $50K–$300K over 10 years. Large…
- Deadline
- Rolling — applications accepted year-round. Campus approval required before applying to ESD.
- Status
- active
- States
- NY
- Payment model
- tax offset
Who qualifies
- Business must operate in a Tax-Free NY Area (TFNA) — on or within 1 mile of a participating SUNY, CUNY, or private college campus
- Business must be creating new jobs in New York (not relocating existing NY jobs)
- Business must align with the academic mission of the partnering campus (technology, life sciences, manufacturing, agri-food, etc.)
- Campus must sponsor and approve the business's participation — Letter of Intent required before ESD application
- Business must enter into a 10-year participation agreement with ESD
- Business cannot be in a restricted industry (retail establishments, wholesale trade, restaurants, law firms, medical/dental practices, real estate brokers, finance, government entities)
Hard requirements
- Must be incorporated
What it covers
Eligible expenses
- New York State corporate franchise tax (complete exemption for business income from NY operations)
- New York State and local sales and use taxes on purchases for TFNA-located business operations
- Real property taxes on campus-approved on-campus facilities (where applicable)
- New York State personal income tax for net new employees hired in New York (100% exemption for employees)
- MTA payroll taxes and certain local business taxes (varies by location)
Ineligible expenses
- Federal income taxes are not exempt
- New York City taxes (NYC has its own tax structure; NYC campuses have modified rules)
- Taxes on business operations outside the TFNA
- Existing NY employees transferred from within the state cannot claim the personal income tax exemption
- Retail, restaurant, law, medical/dental, real estate, finance, government, and other restricted industries
How to apply
-
1
Identify a participating campus and contact their START-UP NY coordinator
Find a SUNY, CUNY, or private college campus with available Tax-Free NY Area space that aligns with your industry. Contact the campus economic development or research foundation office to discuss your business and request sponsorship consideration. Campus list available at esd.ny.gov.
~5 hrs
-
2
Obtain campus Letter of Intent
Work with the campus to demonstrate alignment with their academic mission. Campus provides a Letter of Intent (LOI) confirming they will sponsor your participation and have approved Tax-Free NY Area space for your use. This step can take 4–8 weeks.
~10 hrs
-
3
Submit application to Empire State Development
Complete ESD's START-UP NY application including business plan, ownership information, job-creation projections (new NY hires), proposed location within the TFNA, and description of how the business supports the campus's academic mission. Include the campus LOI.
~15 hrs
-
4
ESD review and approval
ESD reviews the application for eligibility and alignment. If approved, ESD issues a Certificate of Eligibility establishing the 10-year tax-free period start date and eligible tax exemptions.
~0 hrs
-
5
Annual reporting to ESD
Each year, file an annual report with ESD documenting the number of net new jobs created, employee wages, and continued operations within the TFNA. Reports must be filed to maintain eligibility. ESD can revoke benefits for non-compliance.
~4 hrs
The campus relationship is the whole game — ESD rarely rejects applications that have campus sponsorship. Focus your energy on finding the right campus fit. SUNY Poly (Albany/Utica), Cornell Tech (NYC), and RPI research parks have been most active. Restricted industry list is broad — confirm you're not in a prohibited category before investing time.
Deadline & timing
Process starts at the participating university campus, not with ESD. First secure a Letter of Intent from the campus, then apply to ESD. Total process from campus contact to ESD approval typically takes 2–4 months. The 10-year tax-free period begins when ESD issues the approval.
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Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.