February 8, 2006
Senate announces $3.5 billion small business assistance proposal
The Senate Republican Majority has unveiled a plan that would provide $3.5 billion in relief for the state's small businesses and eliminate the income tax and corporate franchise tax for all manufacturers.
The plan would save manufacturing companies in New York $550 million over five years, the Senate's release said.
"Small businesses face unique hurdles to growth and prosperity including high taxes and red tape, and with this assistance package, we are fighting to help them clear those hurdles so they can grow and put their good ideas to work in New York State," Senator Bruno said.
The Business Council hailed the proposal, and said it continues the Senate's tradition of support for tax relief.
"This tax-relief plan is well-structured, well-targeted, badly needed, and much appreciated by the business community and New York's taxpayers," Business Council President Daniel B. Walsh said.
"New York suffers severe economic harm from the nation's heaviest tax burden, and from the nation's fourth-highest corporate taxes per capita. This plan to ease some of that fiscal strain would help grow jobs and businesses in New York State and, ultimately, help stem New York's population losses."
Property-tax relief: The proposal would expand a previous Senate proposal, REBATE-NY, which would provide direct rebate checks to those who pay school taxes. The Senate plan would also provide rebates on school taxes to small businesses with fewer than 20 employees. The Senate said the average rebate check would be worth $650, with a statewide value of $400 million in property tax relief.
Health insurance: The Senate proposal would also create an income tax credit equal to 43 percent of premiums paid by small businesses for health insurance. This would save New York's small businesses $1.7 billion annually after a 10-year phase-in period, the release said.
The Senate plan would provide additional incentives for small business employers to provide health insurance, the release said. There were no details on what the incentives might include.
Personal income tax on business: The Senate plan would eliminate the supplemental personal income tax on small businesses, which would save businesses an estimate $60 million.
Energy costs: A $350 million refundable tax credit would be offered to eligible small businesses.
"A credit of two cents per Kilowatt Hour would be applied directly to eligible businesses' tax liability, while businesses that do not owe taxes would receive a rebate check," the Senate said. "The benefit level of two cents per kilowatt hour approximates the rate benefit provided under the Power for Jobs program."
Sole proprietors and businesses that receive benefits through Empire Zones or the Power for Jobs programs would not be eligible for the credit.
Red tape: The Senate plan also includes a series of proposal designed to eliminate or streamline red tape for small businesses.
The Senate also said it plans to hold legislative forums around the state to review regulatory burdens on small businesses.
"A comprehensive review of existing fees, permits and registrations will be conducted to determine which of these burdens are necessary," the press release said.