Assembly Speaker Sheldon Silver and Ways and Means Committee Chair Herman D. Farrell, Jr. today announced passage of bills aimed at stimulating New York City's economy by increasing tax exemptions for small business owners, providing tax incentives for biomedical research and development firms and updating the city's tax code to address flaws that were encouraging businesses to relocate elsewhere.
The Assembly approved legislation yesterday (A.8615/Farrell) that would exempt sole-proprietors earning up to $100,000 annually from the Unincorporated Business Tax credit. Currently, the credit covers independent business owners earning up to $60,000. The measure is anticipated to save city taxpayers $25 million annually.
"We are hopeful that these bills will help small business owners throughout the five boroughs by providing them substantial tax exemptions which help them maintain their bottom line," said Silver (D-Manhattan). "By increasing incentives for biotechnology firms, we will increase New York City's attractiveness for cutting-edge research and development. It was essential to act before the close of this legislative session in order to help the city balance its budget and retain jobs in these difficult times."
"New York City must always find ways to stimulate economic growth and that begins by providing incentives to small business owners," said Farrell (D-Manhattan). "Today's legislative package will provide relief to sole proprietors and freelancers who are so essential to the city's economy while helping us retain the large firms that employ so many New Yorkers."
In an effort to stimulate the growth of biomedical research in New York City the Assembly is expected to pass a bill Wednesday (A.8131/Weprin) approving the authorization of the Biotechnology Tax Credit. Modeled after the State Qualified Emerging Technologies Credit, it would provide incentives to small-scale research and development firms. Under the legislation, which seeks to make New York City a premier location for the biomedical industry, qualifying companies would receive tax credits for expenses related to technology purchases and employee training.
The Assembly also passed legislation yesterday (A.8867/Farrell) adopting tax reforms and closing loopholes aimed at retaining large firms by bringing the city's tax code into closer conformity with that of New York State. Under the bill, the city would adopt a single sales factor apportionment whereby a business's tax liability would be determined by gross revenue receipts only. Currently, businesses in New York City are taxed on a combination of receipts, payroll and property holdings. The new structure would be phased in over a ten-year period.
In order to help New York City maintain a balanced five-year fiscal plan, the Assembly yesterday approved an agreement between the City Council and Mayor Michael Bloomberg for a modest sales tax rate increase. Under the legislation (A.8866/Farrell) the city would be authorized to increase the sales tax rate by 0.5 percentage points, bringing the combined sales tax to 8.875 percent. The bill also approves an agreement to authorize a sales tax on clothing and shoe purchases exceeding $110 and would eliminate the local sales tax exemption on electrical and natural gas transmission and distribution services purchased by energy service companies. Under the legislation, New York City projected to raise $700 million in additional revenues in the upcoming year.
The Assembly yesterday approved legislation (A.8868/Silver) that would permit businesses participating in the Industrial and Commercial Abatement Program to receive the same energy benefits available to companies enrolled in the Energy Cost Savings Program and Lower Manhattan Energy Program.