Ahead of this Wednesday's State of the State address, Gov. Andrew Cuomo has laid out details of a proposal to change key elements of New York's tax regime. He made the announcement surrounded by many of the key players who've been lobbying for tax relief for business.
Cuomo said 2014 is the fourth year in a row that his administration has reached out to the business community encouraging them to "give New York a second look."
Among the measures is a plan to eliminate corporate tax on upstate manufacturers, and a cut in the corporate income tax rate statewide to 6.5 percent, a rate last seen in 1968.
A press release from the governor's office laid out additional details. The plans are based on the recommendations of the Pataki/McCall New York State Tax Relief Commission Report.
Cut Business Taxes and Treat Businesses More Fairly
New York’s corporate franchise tax is largely outdated and its complexity results in lengthy and complex audit processes that take businesses years to resolve. To streamline the tax structure and provide relief for businesses, Governor Cuomo recommends that the State merge the bank tax into the corporate franchise tax and lowering the rate to 6.5 percent – the lowest rate since 1968. These changes will modernize the corporate tax structure to reflect a 21st Century financial services sector, simplify compliance and eliminate disincentives for financial firms to invest and grow jobs in New York. When fully implemented, the proposal will provide $346 million annually in tax relief to New York businesses.
Real Property Tax Credit for Manufacturers
Lowering the cost of doing business for manufacturing firms will make New York a more attractive place for firms to locate their operations and will create jobs Upstate and in the New York City region. To grow existing manufacturers and attract new manufacturing businesses, Governor Cuomo proposes that the State create a refundable credit against corporate and personal income taxes that would be equal to 20 percent of a firm’s annual real property taxes. This credit would provide $136 million in tax relief to the manufacturing sector.
Eliminate Tax Rate on Upstate Manufacturers
To encourage the growth of manufacturing Upstate, Governor Cuomo recommends that the State eliminate the corporate income tax rate for Upstate manufacturers. This proposal would provide an additional $25 million in tax relief for Upstate businesses and complement the proposal to reduce property taxes on manufacturers.