Amazon will receive different tax breaks from New York and Virginia

Scenes from Long Island
City, Queens and Crystal City, Virginia.
AP/Mark Lennihan AND AP/Cliff Owen

• 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.

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.

Read more about Amazon’s HQ2: