If you are an entrepreneur in New York looking to blaze trails in your home state, or a business owner who has been conducting business there for years, that “Empire State of Mind” may or may not be rewarded by your governor. Democratic Governor Andrew Cuomo’s plan of 10 years of tax freedom to new and expanding businesses will only benefit a select few and leave other businesses holding the bill.

Earlier this week, Governor Andrew Cuomo formally launched START-UP NY, a “game-changing” initiative for Upstate New York. Cuomo’s promise of ten years of tax freedom under START-UP NY, or “SUNY Tax-free Areas to Revitalize and Transform Upstate NY,” is only available to a narrow range of businesses. Only high-tech businesses, venture capital, and investment businesses in New York can get tax benefits under the plan. Retail, wholesale, hospitality, law firms, medical practices, and energy producers, on the other hand, are among many other industries not eligible for tax breaks.

In a press release, Cuomo expressed how this initiative will help jump-start economic activity throughout the state, targeting Upstate New York specifically, by creating partnerships with New York’s state university system– largely its SUNY system. Having startups settle on vacant property owned by the state’s universities is to attract “high-tech and other start-ups, venture capital, new business and investments from across the world” with easy access to these higher education institutions’ “industry experts and advanced research laboratories.” These businesses will operate completely tax-free for 10 years.

To pass the startup purity test, you must be a new business, from out-of-state and relocating to New York; or expanding with a new line of business as an existing New York State company. Empire State Development, the agency running the program, has yet to clearly define what constitutes a “new” business regarding a business’s age. Gerardo Russo from Empire State Development told Watchdog Wire that new startups are “companies that produce net new jobs.” However, START-UP NY states that there is no minimum requirement for the number of net new jobs that must be created, but all participating businesses must create jobs to receive the program’s benefits.

If your startup does pass the eligibility test, not only does the business enjoy complete tax freedom, but each and every employee of that business receives that same privilege. That means those employees get to take more of their pay home with them than employees from native existing New York businesses that reside outside of these tax-free zones.

“Local businesses will lose workers to these businesses moving into tax-free zones,” E.J. McMahon, President of the free-market Empire Center, told Watchdog Wire. “They will be able to poach workers from outside the tax-free zone.”

To shield local businesses from harmful or “unfair” competition, START-UP NY explainsthat the “law requires that no business be allowed to locate if they are found to be in competition with existing local businesses. Instead, START-UP NY businesses will mean new direct spending and resident taxes (sales and property) for local economies, while also boosting local home values through homeownership demand.”  However, McMahon still contends that such tax breaks are a “counter-productive model.”

The program is slated to run until the end of 2020. Businesses can begin applying for tax breaks in late 2013. The program will formally begin at the start of 2014.