Amazon is getting massively different tax breaks from New York and Virginia

  • Amazon has made its decision on HQ2, and now comes the hard part: delivering.
  • Arlington, Virginia and New York City have both offered Amazon millions in incentives in exchange for choosing sites in two districts.
  • New York ended up offering about $1 billion more, though.

The chips are down, and now it's time for money to exchange hands.

Amazon has chosen Long Island City in Queens, New York and National Landing in Arlington, Virginia as its two cites for HQ2. Both will get roughly half of the promised HQ2 investment — $2.5 billion and 25,000 jobs — dumped on the cities throughout the next 10 years.

13 PHOTOS
Twitter reacts to Amazon HQ2 rumors
See Gallery
Twitter reacts to Amazon HQ2 rumors
OH MY GOD THIS WHOLE ODYSSEY DOESNT EVEN END WITH A SECOND HEADQUARTERS BUT JUST TWO ADDITIONAL OFFICES https://t.co/L6wLrwztxf
Gonna be hilarious when half the HQ2 employees work remotely from cities they could afford to buy homes in
If #HQ2 ends up in NYC & DC regions, 3 takeaways: 1. #Amazon picked existing super regions, as expected, highlighti… https://t.co/bSS5AnLawM
So Amazon lied throughout the entire H2 search process, making cities ante up in expectation of a far, far bigger d… https://t.co/quuOPDDDJG
this guy is right "HQ2" was basically an enormous PR stunt to get the best tax breaks possible from local governme… https://t.co/0YPwxFrCDj
Indeed. A shameful charade in which a wealthy corporation conned public officials into giving away public resources… https://t.co/qDNZDTCRZJ
the single most valuable thing to come out of HQ2 is the local journalism across the country about how cities tried… https://t.co/5m2VZ08c2G
Can’t wait to see your faces when @JeffBezos announces Amazon HQ2 will be a vast traveling city on gigantic tank tr… https://t.co/22f11OHwOe
I'd love to know what the 240 cities that applied for HQ2 think about this, especially the other 18 finalists that… https://t.co/2R77llb6oL
Hearing that @amazon is choosing their #HQ2 between the DC area, NYC and Dallas is like Bryce Harper choosing betwe… https://t.co/mBSFCBvcpi
This whole #HQ2 thing is so ridiculous — grotesque how Amazon has manipulated cities https://t.co/28Ijedw8qw
If Amazon is really about to name DC (or the outskirts of DC) as their HQ2, I'm going to vomit. It will be a clear… https://t.co/MMxVme4mz9
If #HQ2 is going to Northern Virginia (DC) as the obvious choice, I think residents of the 200+ other cities who lo… https://t.co/vwS1zPs9x7
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Arlington, Virginia and New York City have both offered Amazon millions in incentives in exchange for the privilege of choosing sites in two districts. 

That's about where the similarities stop, though. The two packages offered by the cities and states are wildly different.

First off is the total package size. All told Virginia offered a sizable $573 million in performance-based direct incentives. But New York opened its purse strings wide and has offered to the tune of $1.525 billion.

Both are based on the company's promise to hire for 25,000 jobs, and will be paid over the next 10-15 years.

New York State’s Excelsior Program is responsible for $1.2 billion of the New York incentive number. It was calculated based on the salaries Amazon expects to pay employees over the next 10 years. Taking into account an average wage Amazon estimates will exceed $150,000, that equals about $48,000 of state subsidy per employee. 

The $1.2 billion will be paid over the next 10 years, as hiring for the new office ramps up. New York is also giving a $325 million cash grant based on the 4 million to 8 million square feet of office space it intends to occupy, courtesy of Empire State Development.

Amazon has also said it will apply for other incentives including New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation and Employment Assistance Program (REAP).

The smaller package offered by Virginia includes a similar incentive. Virginia will offer Amazon $22,000 for each job the company hires for in the office over the next 12 years. Using for calculation of the predicted 25,000 jobs, that will equal $550 million.

In addition to that, Amazon will also get a cash grant from Arlington for $23 million if the company is able to grow the city's tax on local hotel rooms over the next 15 years.

See Also:

Read Full Story