Small businesses in NYC will receive a commercial rent tax break.
NEW YORK CITY—Small businesses in New York City will get a break in commercial rent taxes. Effective July 1, 2018, the threshold for Manhattan's commercial rent tax will increase.
For the tax to kick in, the minimum amount of annual rent paid will go up from $250,000 to $500,000, for businesses with an income up to $5 million.
The benefit also will apply on a sliding scale for businesses with income between $5 million to $10 million or paying $500,000 to $550,000 in rent. The city projects a reduction of taxes for 2,700 small businesses, including 1,800 businesses that will no longer pay tax at all. Under this measure, the average business owner will receive between $11,300 and $13,000 in annual tax relief.
This is the first change in commercial rent tax since 2001 and it specifically focuses on Manhattan's mom-and-pop businesses. Ninety-nine percent of the benefits will go to businesses with only one or two taxable locations. The bill was passed by the City Council on November 30, and Mayor Bill de Blasio intends to sign it in a couple of weeks.
“Small businesses are the lifeblood of this city,” says the mayor. “That's why we designed the bill to ensure that they're the ones we're helping.”
Gregg Bishop, commissioner of the NYC Department of Small Business Service, refers to the 230,000 small businesses across the borough as the driving force behind the local economy. He says the tax reform will go a long way in helping these shops survive.
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Betsy Kim
Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
