Offering a preview of his Wednesday State of the State address, Gov. Andrew M. Cuomo Monday proposed a legislative package that would provide more than $2 billion in tax relief to New York businesses and residents.
For the business sector, the governor is proposing to merge the bank tax into the corporate franchise tax and reduce that tax on corporations to 6.5 percent, the lowest rate in 46 years, at an estimated savings of $346 million annually for businesses.
For manufacturers, Cuomo proposed a refundable credit against corporate and personal income taxes equal to 20 percent of a company”™s annual real property taxes. The credit would provide $136 million in tax relief to the sector and stimulate growth among manufacturers currently operating in the state while attracting new businesses to upstate regions and metropolitan New York, the governor said.
The governor further proposed to eliminate the corporate income tax rate for upstate manufacturers, saving an additional $25 million in tax payments for those businesses.
Cuomo wants legislators to immediately eliminate the 2 percent temporary utility assessment levied on commercial utility bills for industries and accelerate the assessment”™s phase-out for other customers. The measure would have businesses and residents $600 million on energy bills over the next three years, he said.
For residents, the governor proposed state tax rebates to homeowners to freeze their property tax levels for two years. The first-year rebates would be available only to residents of a taxing jurisdiction that stays within the state”™s 2 percent property tax cap. In the second year, rebates would be provided only to homeowners in a municipality that stays within the cap on annual property tax increases and also agrees to implement a shared services or administrative consolidation plan.
Cuomo said the rebate program, when fully implemented, would provide nearly $1 billion in relief with an average benefit of about $350 for nearly 2.8 million homeowners. The current average residential property tax bill statewide is $5,040, the highest in the nation, he said.
Legislators also will be asked to approve a property tax “circuit breaker” measure for low- and middle-income taxpayers that would provide refundable tax credits when those taxpayers”™ real property tax rate relative to income exceeds their income tax rate. Households earning up to $200,000 and within municipalities that adhere to the 2 percent property tax cap would be eligible for the benefit.
The governor”™s proposal also calls for more than $400 million in refundable personal income tax credits for 2.6 million renters with annual incomes below $100,000 and reforms to the New York estate tax that would exempt nearly 90 percent of all estates from the tax.
Cuomo said the tax relief measures would be funded by an expected $2 billion state budget surplus.
Heather C. Briccetti, president and CEO of The Business Council of New York State Inc., in a statement called the proposal “big news for the state’s economy, especially upstate, as this package will provide broad-based business tax relief and support key business sectors across New York. The importance of the tax relief component for manufacturers cannot be overstated. The loss of manufacturing jobs is one of the main reasons the upstate economy has struggled. This is an important step in the right direction for upstate, and New York as a whole.”
