IDA Benefits

Payment in Lieu of Tax (PILOT)

Payment in Lieu of Tax (PILOT) is an agreement between the Agency and all affected taxing jurisdictions that contains a scheduled payment plan based on current tax rates and a mutually agreed project value. Ordinarily, the exemption is for 10 years with a 95% exemption in the first year, and decreasing by 10% in each succeeding nine years. The project is typically wholly taxable again in the eleventh year.

The end result is a property tax liability of approximately 50% over the ten years of the agreement.  The cost to attain benefits includes an additional 1% of estimated benefits received, to be divided by ten and paid to the Agency on an annual basis.

Tax Exempt Industrial Revenue Bond

With the issuance and sale by the IDA of a tax exempt industrial development revenue bond (IRB), the interest payable to the lender on monies borrowed to finance project costs is exempt from the payment of federal and NYS income tax. This income tax savings to the lender enables the lender to offer an annual interest rate on the borrowed monies that is lower than the prevailing market rate.
Ordinarily, an IRB is issued only for the new construction of and equipping of manufacturing facilities. The use of an IRB for the purchase of existing facilities or the renovation of existing facilities or for non-manufacturing purposes is prohibited or limited.

The IDA is not a lender or source of capital. It is solely the responsibility of the project applicant to secure the required project financing, including the purchaser of an IRB, through a bank or other lawful lending source.

Sale/Lease Back Transactions

In instances where the County of Chenango Industrial Development Agency is not requested to play a role in the issuance of bonds, many of the above incentives can be accessed by eligible firms through the development of a simple sale/lease-back agreement between the project sponsor and the CCIDA.
In a sale/leaseback transaction, title to the property or equipment (the project) is conveyed to the Agency. The Agency enters into a lease or sale agreement with the company for the project. The agency agrees to grant mortgages on and security interest in the project in favor of lenders on behalf of the company to secure the loans necessary to build or equip the facility. There is no set property value for which this option may be considered.

NYS Sales and Use Tax Exemption

Exemption from New York State sales and use taxes on the cost of construction materials, construction equipment rentals, non-manufacturing equipment and fixtures.

Mortgage Recording Tax Exemption

An exemption from the mortgage recording tax otherwise imposed by law at the rate of $7.50 per each $1,000 of monies borrowed for project costs, the repayment of which is secured by a real estate mortgage.

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