For Release — Tuesday, March 22, 2005
URGES STATE LEGISLATORS TO ENACT 'SINGLE-SALES FACTOR'
TAX REFORM TO MAKE THE COMPANY MORE ATTRACTIVE FOR JOB CREATION
ALBANY—The Business Council is urging the state Legislature to approve the so-called “single-sales factor” tax reform, legislation that would benefit businesses that have made significant
commitments to New York State by investing in jobs and facilities.
“Single-sales factor” apportionment would make New York a more attractive state for both the location and retention capital investments and jobs, since its eliminates what is in effect a tax penalty for having a significant in-state physical presence, said Daniel B. Walsh, president/CEO of The Business Council.
The state Senate has approved this reform as part of its budget proposal. The Governor proposed a version of single-sales factor apportionment in his Executive Budget proposal. The Business Council is urging the Assembly to agree to this important reform measure during the ongoing Conference Committee process.
“The legislature needs to act on broad tax policy reforms, not just targeted programs,” Walsh said. “This legislation would benefit key regional economic sectors, including the financial services and media sectors which are so important to New York City’s economy, and to the manufacturing sector, which remains the foundation of Upstate regional economies.”
“This is a very attractive reform for businesses looking to expand in New York State,” said Philip Teel, sector vice president for Northrop Grumman Corporation in Bethpage, Long Island, and chairman of The Business Council’s Board of Directors.
Northrop Grumman has added nearly 1,000 new engineering and professional jobs on Long Island over three years, and it continues to expand. “This reform assures that businesses that are adding jobs, or making investments in New York do not get a tax penalty for their efforts.”
“This legislation helps make New York more competitive for the financial services industry, which makes this issue especially important for the downstate economy,” added Walsh. He noted that Connecticut and Massachusetts, which are competing with New York for the expansion and retention of financial services jobs, have already adopted similar tax reform legislation.
“This is a valuable reform for our business,” said Greg M. Harden, president and CEO of Harden Furniture, which employees nearly 500 New Yorkers in McConnellsville, Oneida County. “New York manufacturers are working hard to succeed in an increasingly competitive world market. Tax reform, workers comp reform, health care policy reform are all critical to the future of upstate manufacturers.”
Under single sales factor apportionment, Article 9-A corporate franchise taxpayers would base their New York State tax liability on their share of sales made to in-state entities, rather than a consideration of in-state capital, employment and sales. In short, businesses with significant investments in New York, and whose in-state share of capital and jobs exceed their in-state share of sales, will have reduced tax liability. Likewise, a business that increases their investment or employment in the state will no longer be hit with increased state tax liability because of those in-state investments.
“We appreciate the leadership of Senator Bruno, Senator Skelos and their colleagues in advancing this reform legislation, and for Assemblyman Morelle’s efforts in carrying this legislation,” Walsh said.”We look forward to working with Speaker Silver on finalizing this important economic policy measure as part of the current budget negotiations.”