Updated Oct 10, 2024:
The Division of Criminal Justice Services (DCJS) is now accepting applications from businesses for the tax credit, with a submission deadline of Thursday, Oct 31, 2024. Initially, the tax credit required businesses to participate in a community anti-theft partnership; however, DCJS has announced that this requirement will not be implemented at this time. Thus, if an eligible small business has qualifying expenditures and does not owe past due state or local property taxes, they should apply for consideration via the online application here. If approved, the DCJS will issue a Certificate of Tax Credit with information to include on their annual state tax forms to claim the credit.
This article originally appeared on Doyle Security’s website here, and was co-authored by Alexandra Justis, Director of Marketing & Engagement, Doyle Security.
The newly enacted New York State fiscal year 2024-2025 budget includes an exciting new tax credit to incentivize the investment in commercial security systems, fight retail theft, and support small business protections. The Commercial Security Tax Credit, which is available for taxable years beginning on January 1, 2024, and ending before January 1, 2026, is meant to help offset the costs associated with implementing and enhancing security efforts.
Eligible businesses can claim a credit of up to $3,000 for each business retail location operating in NY if they meet all of the following eligibility criteria:
- Must operate one or more physical retail locations that are open to the public
- Must have 50 or fewer employees across all locations
- Must have qualified theft prevention expenses that exceed $4,000 (if 25 or fewer employees) or $6,000 (if more than 25 employees) for each NY retail location
- Must file a tax return and must not owe past due local, state, or property taxes (unless adhering to a binding payment agreement)
- Must participate in a community anti-theft partnership, which is a collaborative effort between local businesses and law enforcement agencies (details on certification requirements will be clarified by the tax commissioner in the coming months)
If a business is eligible, the tax credit can be used to offset expenses on security measures such as hiring security officers, installing security cameras and alarm systems, enhancing security lighting (interior and exterior), and adding locking mechanisms or access control systems. While there is no cap on the amount of credit that an individual business can claim, the total funding for this credit program is capped at $5 million per year across the state.
This tax credit is brand new, and additional guidance is expected soon, especially regarding the application process and the details around participation in anti-theft partnerships. We anticipate that businesses will file annual applications demonstrating eligibility and security spend each year in the fall, and we look forward to helping clients assess their eligibility. This new tax credit is a proactive and useful approach to helping small businesses safeguard their premises and inventories, and we will keep our clients informed as addition program details are released.
If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
