New York’s tax credit for retail security improvements: what businesses need to know

In late April, the New York State legislature passed its annual budget measure for fiscal year 2025, which addresses multiple priorities and enacts key proposals from Gov. Kathy Hochul.

Of significance to New York business owners, workers and consumers, the measure includes a new Retail Security Tax Credit, which for tax years 2024 and 2025 will provide assistance to businesses for investing in necessary equipment to protect their employees and merchandise.

Each year, retailers throughout the state of New York lose around $4.4 billion a year from various kinds of thefts. The budget agreement includes the new tax credit among Gov. 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.
• Allowing prosecutors 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 for 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).

To be eligible for this tax credit, a business must:

• Have 25 or fewer total employees and must operate one or more physical retail locations that are open to the public.
• File a tax return pursuant to articles 9, 9-A or 33 of the tax law.
• 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 commissioner that the business participates in a community antitheft partnership as established by the division between local business and law enforcement agencies.
• Not owe past due local, state or property taxes unless there is a prior, agreed-upon and binding payment agreement.

Commercial businesses may apply for this credit as long as they meet the criteria listed above.

A “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 a business can claim, up to $5 million per calendar year. All the following are considered retail theft prevention measures:

• Security officers
• Security cameras
• Perimeter security lighting (interior and 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 commissioner by Oct. 31 of each year.

SIA invites members and industry professionals interested in learning more to reach out to George Sewell, SIA’s government relations coordinator, at [email protected].