What Is the Innovation Hot Spot Tax Incentive Program?

Launched in 2013 by New York State, the IHS Tax Incentive Program aims to bolster business incubators and extend crucial tax incentives to qualifying ventures within these environments. The Hudson Valley Venture Hub proudly serves as the designated Innovation Hot Spot for our region, ready to certify companies for eligibility and support them on their entrepreneurial journey.

What Are the Benefits?

The IHS Tax Incentive Program provides an exceptional five-year window during which companies can enjoy exemptions from New York State income tax (personal taxes for founders) and state sales tax on purchases (for the business). This period of relief is invaluable, allowing startups to reinvest in their growth while navigating the often-challenging early stages of business development.

Who Is Eligible?

To qualify for the IHS Tax Incentive, companies must:

1. Be enrolled and in good standing with the Hudson Valley Venture Hub incubator.
2. Be within their first five years of operations (or seven years for life sciences ventures).
3. Be in the formative stages of development, defined as:
• Still in the testing or development phase of their product.
• Having raised less than $1M in equity capital.
• Not yet earning profits from sales.

How to Apply

For those working within the Hudson Valley Venture Hub Accelerator Program, an initial acceptance letter provides a unique business identification number and a link to the necessary templated documents. To proceed with your application, ensure you send the following three documents to the Hudson Valley Venture Hub Program Director:

1. IHS Worksheet (Excel document)
2. CEO Endorsement Letter (Word document, sent as a PDF)
3. Articles of Incorporation (to verify your business's age)

Once submitted, our team will review your documents and provide a letter of support (if eligible), which will then be sent to the New York State Empire State Development (ESD). After that, it’s up to each founder to collaborate with their accountant to file and claim the tax benefits.

Helpful Resources

To make the application process even smoother, we’ve produced a comprehensive video that covers the benefits, filing steps, and tips for maximizing your tax incentives. Additionally, we have an entire FAQ page available to answer any lingering questions.

Innovation Hot Spot Tax Benefits Explanation Video 

Don’t Miss Out!

As the end of the year approaches, now is the perfect time to enroll in the Innovation Hot Spot Tax Incentive Program. Take advantage of this incredible opportunity to support your business’s growth and sustainability. Ensure you complete your application by the year-end deadline to unlock these benefits!

For more information, check out our video and FAQ page, and don’t hesitate to reach out to the Hudson Valley Venture Hub if you have any questions. Let’s make the most of what the IHS Tax Incentive Program has to offer—your entrepreneurial success awaits!