The Business Council strongly supports the business tax reform plan initiated by Senate Majority Leader Joseph Bruno, which will reduce state-imposed business costs by $1.3 billion a year when fully implemented, the Council said in a memo filed in support of the legislation.
“Too many of New York's young people are voting with their feet and leaving our state because they do not believe that Upstate communities will provide sufficient employment prospects and desired careers," the memo said. The proposed legislation would reduce business costs, and encourage investment in new plants and equipment, which is "the most effective strategy for job retention and growth."
The memo outlines the proposed savings in the legislation S.1456.
The legislation seeks to alleviate the above-average tax burden documented in the Public Policy Institute's recent report, Benchmark New York, by eliminating the income tax and the corporate franchise tax on the sate's manufacturers, the memo said. This move would result in $550 million in savings for those New York employers.
Tax relief for the state's manufacturing sector is critically necessary, the memo argued. “Moreover, the legislation's relief targeted towards small businesses will assist that sector to build New York's economy and to ensure that individuals with good ideas and a good work ethic are afforded every opportunity to succeed in New York."
The legislation would reduce corporate franchise tax rates from 7.5 to 6.85 percent, saving businesses $150 million, the memo said.
The memo also praised the portion of the package targeted at New York's agriculture sector.
“The legislation would eliminate the alternative minimum tax for farms and make the investment tax credit refundable.” explained Richard Schwarz, the Council's director of government and fiscal affairs. The Senate Majority estimates this will save the state's farmers $2 million.
The legislation would also:
- Expand incentives for technology companies that
do research and development in New York to manufacture
in the state.
- Eliminate multiple tax calculations
for small businesses that must calculate both personal
and corporate franchise tax. The Senate Majority estimates
this would save small businesses $20 million.
- Expand
the state's online permit and licensing
program to cover all state agencies, departments and
authorities that require permits, registrations and
fees. The plan would also allow businesses to file any
ongoing fees, registration filings or assessments as
part of the businesses tax filing.
- Provide a
sales tax exemption for businesses located in academic
incubator facilities.
- Eliminate the petroleum business tax on non-residential heating fuel, saving small businesses $7 million per year.
The text of the Council's memo is available online at www.bcnys.org/inside/legmemos/2007/s1456rs.htm.