NYS incentivizes anti-theft protections with new commercial security tax credit

Is your business secure? If not, there are even more benefits to prioritizing anti-theft measures in the next year than protecting your small business from losses. New York State has included incentives for business owners in its 2024-2025 fiscal year budget to invest in commercial security systems and business protections.

The Commercial Security Tax Credit allows small businesses to claim up to $3,000 per business retail location for implementing and enhancing security efforts between Jan. 1, 2024-Jan. 1, 2026.

The credit was introduced to help business owners across the state effectively fight retail theft during a time when crime is on the rise. In fact, in Feb. 2024, Gov. Kathy Hochul revealed that local businesses across the state have suffered $4.4 billion in total annual losses from theft.

While opting into this credit incentive may be an obvious solution for many business owners, the state has established eligibility guidelines that must be adhered to collect on the benefit, as well as parameters around how the funding can be used.

 

Who is eligible?

While theft is a concern that impacts retail businesses across the board, this credit was created to aid small retail business owners of New York in advancing their security measures. Eligible businesses must have 50 or fewer total employees across locations and operate one or more physical retail locations currently open for business.

To protect the integrity of the tax credit, business owners that have incorrectly filed their taxes or owe past due local, state or property taxes are not eligible. Owners must also seek certification per the direction of the tax commissioner to join their community anti-theft partnership, which is a collaboration between local businesses and law enforcement to fight organized theft. More information and specifics on these partnerships are expected to be released soon.

Lastly, there are guidelines around how much a business must commit to spending in total on their security measures to be eligible for the $3,000 credit. For businesses with 25 or fewer employees, current theft prevention expenses must exceed $4,000 for each New York retail location, while businesses with more than 25 employees must have expenses exceeding $6,000 for each New York-based retail location.

 

What is eligible?

There are several security measures eligible for coverage under the new tax credit. They include physical security measures and monitoring and surveillance systems. Also eligible will be hiring security officers, installing security cameras or alarm systems, enhancing interior and exterior lighting on security systems, adding locking mechanisms, or updating access control systems.

The $3,000 credit is per eligible business location, but one business owner may have multiple retail locations that qualify. The only limitation imposed by the state is a $5 million per year total budget cap on the program across the state. In other words, if you would like to take advantage of the credit, it’s best to do so as soon as possible to ensure the availability of funds.

While we await more guidance about the specifics of the program, taking steps to enhance your security systems should be a priority this year to combat the rising rate of losses experienced across the state. While a tax credit is a great motivator, taking a proactive and useful approach to safeguarding your premises and inventories will protect not only your cost savings, but your peace of mind.

 

Jess LeDonne serves as The Bonadio Group’s director of policy and legislative affairs.

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.

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