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Innovation Hot Spot

NYS Incentives for early-stage companies

NYS Hot Spot at INSPYRE

Innovation Hot Spot is a program of NYSTAR (New York State Office of Science, Technology, and Research) designed to provide early-stage companies opportunities to tap into regional support for growth and sustainability. Central New York is one of 10 Innovation Hot Spots across the state, located at the INSPYRE Innovation Hub by CenterState. The INSPYRE Innovation Hub offers a range of services including office space, coaching, mentoring, networking and access to tax incentives.

    Benefits of Hot Spot Certification

    These incentives provide up to five years of corporate tax exemptions in New York State, in addition to state sales tax refunds. Data collected through this program allows helps improve and build on the region’s entrepreneurial ecosystem, and attract new companies to the Central New York.  

      Eligibility

      Eligible companies must meet the following criteria: 

      • Enrolled and be in good standing with either the INSPYRE Innovation Hub or the CNY Biotech Accelerator. 
      • The company is a legal entity in the first five years of existence (seven years for life science companies). 
      • The company, or a related person, is not a publicly traded entity. 
      • Tech-focused (industry-agnostic). 
      • In the formative stage of business growth: Less than $1 million in annual revenue or equity capital and/or;  
      • In the prototyping/development phase or earlier and/or on a path towards sustainability and/or growth. 

      Application Process

      • If already a client, complete the Hot Spot application below and provide the required documentation, including: 
        • Company information as well as limited financial information.  
        • A CEO Endorsement letter.  
        • Articles of incorporation to show that your company is in its first five years of operation.  
      • When the application and supporting documents are received, your company will be issued a letter of certification and a unique identification number, which you will need to provide to your accountant. 
      • We will notify Empire State Development/NYSTAR of your eligibility for tax benefits. You should work with your account to claim your benefits each year.  

      Get Started

      Tax Forms

      Work with your accountant to complete and submit these forms with your tax return. You will need your unique identification number for the IT 223 form.  

      Tax Form IT 223 (personal income) 

      Tax Form NYS AU-AA (sales tax exception) 

      Tax Form CT 223 (Hot Spot deduction) 

       

      Frequently Asked Questions

      What is an Innovation Hot Spot?

      An Innovation Hot Spot is a designation granted by Empire State Development (ESD) to a university-affiliated incubator in New York State. Incubators affiliated with a college, or an independent research institution are also eligible. INSPYRE Innovation Hub manages the Central New York Hot Spot with partner, CNY Biotech Accelerator, Upstate Medical University’s NYS Certified Business incubator/accelerator.

      What are the benefits of joining an Innovation Hot Spot-affiliated incubator?

      Eligible companies can receive up to five years of tax benefits and credits, such as a refund of sales tax or a sales tax credit and income tax deductions. In addition, regional Innovation Hot Spots and individual incubators may offer workshops, networking opportunities, access to industry resources, co-working spaces and more. 

      Who is eligible for Innovation Hot Spot tax benefits?

      Eligible companies, known as “Qualified Entities,” must be companies located in New York State, in the development stage of their business, and a member of a designated incubator (INSPYRE Innovation Hub or CNY Biotech Accelerator). Designated incubators will confer Hot Spot Certification on eligible companies after confirmation that eligibility requirements have been met. To be certified, companies must be:  

      • In good standing and a client at INSPYRE Innovation Hub or CNY Biotech Accelerator 

      • In their first five years of operations. 

      • On a path toward scalable development. 

      • Be pre-revenue – Once qualified, a company enters a five-year eligibility window of corporate tax elimination credit or in certain circumstances, a personal income tax elimination credit. Companies also receive a credit or refund of the 4% state sales and use tax. This window lasts five years, regardless of company age, when entering the program, provided the company remains in good standing as a resident or graduate of its incubator.

      How do I join an Innovation Hot Spot incubator?

      Incubators are regional. Visit ESD’s website see all the Innovation Hot Spot regions, then contact the incubator you want to join directly. Application processes will vary. Join the INPSYRE Innovation Hub to be eligible for Hot Spot. 

      Can you address my specific tax situation?

      You should consult your advisor or accountant to understand how these programs might impact your tax situation.

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