Small business owners in Manhattan already face an excessive number of hurdles between themselves and building and maintaining successful businesses. A proposed tax cut is aimed at relieving some of the pressure those small business owners face.
New York’s City Council is proposing a cut to the commercial-rent tax that applies to business owners who rent their space in Manhattan from Chambers Street to 96th Street. Business owners in that area are required to pay a 3.9 percent tax on the rent they pay. Given the price of rent in this area, this tax can have a substantial impact on the overall tax burden these business owners face.
What Is The Proposed Cut?
The proposed cut would eliminate the tax on businesses which are paying less than $500,000 in annual rent. Currently, that limit is set at $250,000. The elimination of this tax for those additional business owners would benefit 40 percent of the businesses in that part of the city.
Allowing those business owners to hold on to a higher percentage of their income could help grow the development of small businesses there. While there was strong growth in retail employment between 2006 and 2015, the last two years have seen a decline of almost 10,000 retail jobs in the city.
Retail jobs are an important part of the economy and rises or losses in their numbers are a strong indicator about the local economy overall. Currently, the idea to cut this tax has not been included in Mayor Bill de Blasio’s proposed budget. A majority of Council members are pushing to have this cut included.
If this cut is included in next year’s budget, business owners will face a chance to keep more of what they earned.