New York State recently enacted a budget bill for the fiscal-year 2024- 2025 that includes a new Commercial Security Tax Credit designed to help alleviate the burden on small businesses for implementing additional security measures. The credit is being offered to incentivize retail businesses operating in New York to invest in the necessary security equipment to safeguard both their employees and store merchandise from retail theft. The credit is available for tax years beginning on January 1, 2024, and ending before January 1, 2026.
An eligible business entity may claim a tax credit of $3,000 for each business retail location if they satisfy the following criteria:
- Must operate one or more physical retail locations in New York State that are open to the public.
- Must be required to file an income tax return and not owe past due local, state or property taxes, unless there is a prior, agreed-upon and binding payment agreement.
- Must have qualified retail theft prevention measure expenses exceeding $4,000 (for businesses with 25 or fewer employees) or $6,000 (for businesses with more than 25 employees) for each retail location during the taxable year.
- Must provide certification that the business entity participates in an established community anti-theft partnership.
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 or hardening mechanisms or access control systems. The total amount of tax credits available to eligible New York State businesses is $5 million for each of the calendar years 2024 and 2025.
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 expenditures incurred each year. This new credit offers a proactive approach to helping small businesses safeguard their premises and inventories, and we will keep our clients informed as additional program details are released.
