State of New York Provides Retailers with Tax Credit for Security Improvements

What Retailers Need to Know About Using New York’s Retail Security Tax Credit

On April 20, the New York State legislature passed its annual budget measure for fiscal year 2025 which addresses multiple priorities and enacts key proposals from Governor Kathy Hochul. Of significance to New York business owners, workers and consumers, the measure included a new Retail Security Tax Credit, which for tax years 2024 and 2025 will provide assistance to small businesses for investing in necessary equipment to protect both their employees and merchandise.

Each year, retailers throughout the state lose around $4.4 billion a year from various kinds of thefts. The budget agreement includes the new tax credit among Governor Hochul’s 5 point policy plan aimed at fighting organized retail theft which includes:

• Increasing criminal penalties for any individual who attacks a retail worker from a misdemeanor to a Class E felony.
• Prosecutors will now be allowed to combine the value of all stolen goods from different stores when charges are brought against the criminal.
• $40.2 million to support Retail Theft Teams at State Police, District Attorneys’ Offices, and local law enforcement agencies, including the addition of 100 New York State Police personnel who specifically focus on retail crimes.
• A total of $5 million in tax credits will be available for small businesses in each of the calendar years 2024 and 2025 to invest in extra security measures, for businesses that spend the threshold amount on their retail theft prevention measures (see below).

Retail Council of New York State President and CEO Melissa O’Connor was quoted in a release from the Governor’s office, saying, “The retail industry strongly supports each budget provision related to organized retail crime and habitual retail theft in New York State, as we have prioritized many of these initiatives for years. I want to thank Governor Kathy Hochul for listening to the challenges facing stores and employees and leading us to a point where we will soon have new laws to effectively prevent this illegal activity. Our work on store and community safety will not stop upon enactment of this year’s state budget. We will continue to engage with all stakeholders to ensure a safe shopping environment for all New Yorkers.”

About the New Retail Security Tax Credit:

• For a business to be eligible for the tax credit, the following are required:
  • Have 25 or less total employees and must operate one or more physical retail locations that are open to the public.
  • Must file a tax return pursuant to articles9, 9-A or22 of the tax code.
  • Must have qualified retail theft prevention measure expenses that exceed $3,000 for each New York retail location during each taxable year.
  • Provide certification in a manner that is described by the tax commissioner that the business participates in a community anti-theft partnership as established by the division between local business and law enforcement agencies.
  • May not owe past due local, state or property taxes unless there is a prior, agreed upon, and binding payment agreement.
• “Qualified retail theft prevention measure expenses” refers to any combination of costs related to retail theft prevention measures that is paid or incurred by a qualifying business that exceeds $3,000 per New York retail location. There is a cap on the amount of credits available, at $5 million per calendar year.
• All of the following are considered retail theft prevention measures under the credit:
  • Security officers
  • Security cameras
  • Perimeter security lighting (interior & exterior)
  • Locking or hardening mechanisms
  • Alarm systems
  • Access control systems
• To get approved for the credit, a business owner must submit a completed application yearly as prescribed by the Tax Commissioner by October 31 of each year.

SIA members seeking more insight into this tax credit program can contact George Sewell, SIA government relations coordinator, at gsewell@securityindustry.org.