By Madina Toure
Queens’ business improvement districts praised Mayor Bill de Blasio’s new tax reform proposal for the city’s small businesses and manufacturers.
The reform would integrate the city’s corporate tax system with that of the state, merging the bank tax into a new corporate tax. Firms would no longer have to maintain separate records for state and city tax purposes.
This would prevent major administrative burdens for both the taxpayers and the city and would support the expansion of the city’s tax base. The revenue-neutral reforms would be retroactive to Jan. 1 if approved in Albany.
The de Blasio administration hopes that Gov. Andrew Cuomo will include the proposal in his upcoming 2015-16 state budget proposal, said Amy Spitalnick, a spokeswoman for the mayor.
“We hope that it will be included in the state budget, which is coming up very shortly,” Spitalnick said.
“We support anything that will make it easier for small businesses to operate in New York City that already pay a lot of taxes. Real estate, the healthcare cost, all these things are a burden on small businesses,” said Leslie Ramos, executive director of the 82nd Street Partnership, which covers Jackson Heights and Elmhurst.
The city wants to rule out the first $10,000 of the capital tax base, getting rid of the alternative tax base on capital for more than 90 percent of payers. Affected small businesses would see an average benefit of $2,000 a year as a result.
The proposed reforms also include reducing the tax rate for small manufacturers with less than $10 million in designated net income from 8.85 percent to 4.425 percent, benefitting businesses by an average of nearly $5,300. The city would similarly reduce the tax rate for small non-manufacturers with less than $1 million in net income from 8.85 percent to 6.5 percent, benefiting businesses by an average of almost $800.
De Blasio said the reforms would help modernize and consolidate a corporate tax code that has been unchanged since the 1940s.
“By targeting relief to local small businesses and manufacturers, this will keep jobs here and expand economic opportunity,” he said in a statement. “Together with a broadened tax base and the elimination of burdensome administration, this will mean a simpler, fairer system for all.”
Elizabeth Lusskin, president of the Long Island City Partnership, commended the de Blasio administration for targeting both small businesses and manufacturers.
“I think it’s terrific that the mayor and his team are looking for ways to reduce the cost of doing business for not only small businesses in the city but also particularly local manufacturers, which provide the essential goods and services and good paying jobs that our citywide economy depends on,” she said.
Small businesses would be able to reinvest the money they are saving into their own businesses, said Simone Price, executive director of the Sutphin Boulevard Business Improvement District.
“I think it will impact us in a great way in that a lot of our small business owners are struggling in general, but now that we have the tax cuts , it means they can put their resources in other investments for their small businesses,” Price said.
Rhonda Binda, Jamaica Center Business Improvement District’s new executive director, said the reforms would help the BID’s “small, high quality boutique businesses.”
“For every $100 spent in a local independent retailer, $45 stays in the local economy to keep benefitting the community,” Binda said.
Maria Thomson, executive director of the Woodhaven Business Improvement District, said she hopes the state will pass the tax reform but she anticipates a positive outcome.
“If this brings any monetary relief to them and help them, I’m very happy of the fact that they’re putting in these changes,” Thomson said.
Ramos hopes to see the reforms executed swiftly and wants more information on how they would benefit the businesses.
”We are looking forward for the implementation of the reform as quickly as possible and to get more details on how exactly it will benefit the businesses on annual basis,” Ramos said.
Reach reporter Madina Toure by e-mail at mtour[email protected]local.com or by phone at (718) 260–4566.