Council-led drive for tax cuts succeeds as sweeping reductions become lawApril 1998
The drive for competitive taxes accelerates; Governor calls for inclusion of all industries
Governor Pataki has signed into law the major new business tax cuts approved in mid-April by the Legislature, while also vetoing $1.6 billion in proposed spending and borrowing.
This means that New York businesses will see the corporate income tax rate drop from 9 to 7.5 percent, along with other major tax reforms.
"The reduction in the corporate income tax rate is vitally important to all New Yorkers as we work to create jobs," Governor Pataki said. "This marks the largest corporate tax rate reduction in state history and the first rate cut in more than a decade."
The Governor noted that the broad-based rate reduction does not apply to the bank and insurance taxes, and said: "This must be corrected to ensure all competitors in that industry are treated equally and fairly."
The Business Council has asked state leaders to include the banking and insurance industries in the rate reduction to 7.5 percent. Senate Majority Leader Joseph L. Bruno, who initiated the broad-based rate reduction, supports such a move.
The enacted tax reductions will return $743 million a year to taxpayers - including nearly $500 million to businesses - when fully effective.
Including major tax cuts enacted in each of the four previous years, New York's elected leaders have now cut taxes a total of $8.7 billion. Those reductions have hit all three major state taxes - those on personal income, corporations, and sales - along with such factors in New York's competitiveness as the estate tax and the gross receipts tax on utility customers.
The state projects tax revenues of some $40 billion in 2001-2002. Thus the tax reductions enacted from 1994 through this year represent cuts of more than $1 in every $6 Albany would have collected without tax cuts.
Other new tax cuts include: a reduction in the alternative minimum tax from 3.5 to 3.0 percent; extension of the investment tax credit to the securities industry; and a reduction in the truck mileage tax by 25 percent.
"This is a once-in-a-generation improvement in our business tax competitiveness," said Business Council President Daniel B. Walsh. "We salute Senator Bruno, Speaker Silver and their colleagues, as well as Gov. Pataki, for this historic achievement."
April 30, 1998