A contested tax on industrial development agencies has been repealed by the state Legislature.
The Senate and Assembly passed budget legislation this week that included a provision to remove the two-year-old tax on IDA revenues. Gov. Andrew Cuomo, who has expressed support for ending the tax, must sign the bill before it becomes law.
The tax was meant to recoup up to $5 million for administrative assistance the state provides to 100-plus IDAs. Economic development groups, however, argued it was unfair to take money meant to spur job creation.
"The tax was based on an IDA's operating revenue, so it would have impeded the ability of IDAs to expand programming or reinvest back into the communities they were created to serve," said Brian McMahon, executive director of the New York State Economic Development Council, which led repeal efforts in court.
The first round of bills, totaling $5 million, went out in early 2010, prompting a lawsuit from the council and IDAs. The state eventually settled, and payments were refunded.
A second round of bills, totaling $2.9 million, went out late last year, which renewed efforts to eliminate the tax. In addition to filing another lawsuit, the council appealed to lawmakers to overturn the tax.
The bill passed on Tuesday refunds any payments already made; the tax was due by Wednesday.
The Saratoga County IDA already remitted its $54,500 payment for this year. The Warren-Washington Counties Industrial Development Agency owed $19,000, but had opted not to pay on time in light of efforts to repeal the tax.
McMahon said the council has not yet decided whether to drop the pending lawsuit.
