On April 20, 2024, 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 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.
The introduction of the Retail Security Tax Credit is a significant step toward addressing the growing issue of retail theft in New York State. Each year, retailers throughout the state of New York lose around $4.4 billion from various kinds of thefts. The financial burden of theft on retailers is substantial, and this tax credit aims to alleviate some of that pressure by incentivizing businesses to invest in robust security measures. By doing so, it not only helps protect the merchandise but also ensures the safety of employees and customers.
Moreover, the comprehensive approach taken by Gov. Hochul’s administration, which includes increased penalties for offenders and enhanced support for law enforcement, underscores the seriousness with which the state is tackling organized retail crime. The budget agreement includes the new tax credit among Gov. Hochul’s five-point policy plan aimed at creating more secure environments for both businesses and consumers. It 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).
“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,” said Retail Council of New York State President and CEO Melissa O’Connor in a release from the governor’s office.
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The collaboration between local businesses and law enforcement through community antitheft partnerships is another crucial aspect of this initiative. Such partnerships are designed to foster a cooperative approach to crime prevention, ensuring that businesses are not left to tackle these challenges alone.
Details About the New Retail Security Tax Credit
To be eligible for this tax credit, a business must meet these requirements:
- Must have 25 or fewer total employees and must operate one or more physical retail locations that are open to the public.
- Must 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.
- Must 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.
- May 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 well, as long as they meet the criteria listed above.
A “qualified retail theft prevention measure expense” 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 total amount of credits businesses can claim – up to $5 million per calendar year. All of 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 Tax Commissioner by Oct. 31 of each year.
While the New York State government has yet to make the link to apply available, interested business owners can visit the New York Department of Taxation and Finance website for more information to come.
“Given what we’ve seen in retail crime lately, our recommendations for what security technologies are most useful depend on the types of incidents your business is facing,” said SIA CEO Don Erickson. “If your store is experiencing shoplifting during operating hours, SIA recommends investing in solutions like video security systems and shop theft alarms, whereas if your business is seeing more incidents of smash-and-grab theft after hours, the areas most important to invest in include perimeter security lighting and intrusion alarm systems.”
In conclusion, the Retail Security Tax Credit, along with the other measures outlined in Gov. Hochul’s five-point policy plan, represents a proactive and comprehensive approach to combating retail theft in New York State. By providing financial incentives for security investments and strengthening the legal framework to deter criminal activities, the state is taking significant steps to protect its retail sector and ensure a safer shopping experience for all New Yorkers.
As Senior Director of Government Relations for the Security Industry Association (SIA), Jake Parker leads the development of the association’s legislative and regulatory programs. Parker came to SIA with more than 12 years of experience on Capitol Hill, most recently as legislative director for U.S. Rep. Tom Latham (R-Iowa), a senior member of the House Appropriations Committee. He holds a bachelor’s degree in political science and history from Tennessee Temple University, a master’s degree in international relations from Salve Regina University and a graduate diploma in national security studies from the U.S. Naval War College.
