Featured News - Current News - Archived News - News Categories

Hochul: Billion-dollar rescue plan for small businesses, new tax relief for millions of middle-class New Yorkers


Wed, Jan 5th 2022 06:40 pm

New tax credit will provide relief to small businesses taking on COVID-related capital expenses

√ Small business lending initiative will provide accessible loans to expanding small businesses

√ Governor will propose legislation permanently allowing sale of to-go drinks in bars & restaurants

Gov. Kathy Hochul on Wednesday announced a new, billion-dollar rescue plan for small businesses as part of the 2022 State of the State.

Her team said, “Small businesses, accounting for 98% of all businesses statewide, are the backbone of New York's economy and, under the governor's plan, the state will be supporting these entities through a variety of initiatives focusing on growing the businesses of the future, helping new businesses struggling to establish themselves and providing tax relief.

“Additionally, to support New York's restaurant industry, a sector that has especially been hit hard by COVID-19, the governor will introduce legislation to permanently allow the sale of to-go drinks for bars and restaurants statewide.”

Hochul said, "New York's comeback depends on the recovery and success of our small businesses. Since the pandemic hit, small business owners have been struggling with unprecedented challenges. New York is here with a simple message: Help is on the way."

A press release noted, “As a former small business owner, Gov. Hochul understands the challenges facing small businesses, even in the best of times. Gov. Hochul is also acutely aware of how the pandemic has tested small businesses throughout New York, and what is needed in this moment to support the recovery of our small businesses.”

To help small businesses at this critical moment, Hochul's billion-dollar rescue plan would include targeted programs strategically designed to respond to small business needs, and to ensure that disadvantaged, minority-owned, and women-owned small businesses prosper throughout the state.

Per Hochul’s team, the billion-dollar rescue plan includes:

√ Funding for Small Businesses of the Future: This initiative would support venture capital and venture debt awards to fast-growing, venture-backed startups that either locate to, or remain and grow in, New York state. This funding would assist emerging small businesses in the innovation sector, including minority- and women-owned companies often overlooked by private-sector venture investments. Through this program, New York state would continue to be the center of innovation and small business growth.

√ The Small Business COVID Capital Investment Tax Credit: This initiative would provide a tax credit to small businesses, which took on COVID-19-related capital expenses, including retrofits, renovations, machinery and equipment related to COVID-19 safety enhancements.

√ Seed Funding for Small Businesses: This initiative would provide flexible grants to early-stage small businesses to help those that recently opened get off the ground, despite the COVID-19 pandemic. Priority would be given to socially and economically disadvantaged small business owners.

√ Small Business Lending Initiative: This initiative would provide reduced interest rates and accessible loans to expanding small businesses. As part of this effort, this initiative would seek to address disparities in the traditional loan market, which oftentimes precludes small businesses, particularly socially and economically disadvantaged small businesses, from accessing loans to grow their businesses or take on larger government contracts.

√ The Excelsior Contracting Opportunities Initiative: This initiative would provide state-backed funding and technical assistance to position small businesses – particularly those which are socially and economically disadvantaged – to secure federally funded contracts related to the $1.2 trillion federal Infrastructure Investment and Jobs Act. This initiative would also include the establishment of an interagency Excelsior Contracting Opportunities Council – including Empire State Development, the State Department of Transportation, the Thruway Authority, the Metropolitan Transportation Authority, and the Port Authority of New York and New Jersey – to identify strategies to encourage greater minority- and women-owned small business participation in forthcoming federally funded infrastructure projects across the state.

√ Permanently Legalize the Sale of To-Go Drinks for Bars and Restaurants: To-go drinks were a critical revenue stream for New York's bars and restaurants during the early part of the pandemic, helping many small businesses across the state pay their rents or mortgages. Hochul would permanently allow for the sale of to-go drinks for off-premises consumption to continue supporting the recovery of bars and restaurants.

Hochul would also provide $100 million in tax relief for 195,000 small businesses by widening eligibility and increasing a tax return adjustment that reduces a small business's gross business income.

New Tax Relief for Thousands of Small Businesses & Millions of Middle-Class New Yorkers

√ $100 million in tax relief for 195,000 small businesses across state

√ Accelerates middle-class tax cut to provide relief for 6.1 million by 2023; new property tax rebate program to deliver additional relief for 2 million low- and middle-income New Yorkers

Hochul announced new efforts to deliver tax relief for thousands of small businesses and millions of middle-class New Yorkers as part of the 2022 State of the State. The plan would provide $100 million in tax relief for 195,000 small businesses through increasing a tax return adjustment to reduce small businesses' gross business income.

The plan would also accelerate the implementation of $1.2 billion in New York's existing middle class tax cut for 6 million New Yorkers, which first began to be implemented in 2018, and establish a $1 billion property tax rebate program to put money back into the pockets of more than 2 million New Yorkers who have had to endure rising costs as the pandemic has progressed.

Additionally, the governor would create new – and increase existing – tax credits to support New York's farms and food production overall.

"As we continue to grapple with the impacts of COVID-19, we must ensure we are investing in our state's most valuable resource: its people," Hochul said. "Millions of New Yorkers, particularly small-business owners, middle-class families, and our senior communities, have been hit hard by the economic devastation of the last two years, and they need our help. We must accelerate our recovery by not only reducing the tax burden, but also finding ways to put money back into the pockets of hardworking New Yorkers who support our economy."

From the depths of the COVID-19 economic downturn to today, New York has recovered some 1.2 million jobs. In early December, Hochul announced an initiative to connect New Yorkers to 220,000 jobs, and signed legislation to increase the state's support for recovering small businesses.

New York's economic recovery is not over. The state's unemployment rate is 6.6% – more than 2 points higher than the national rate. Some 71% of small businesses still report negative effects from the pandemic. As of July, earnings remained below prepandemic levels in seven of New York's 13 major job sectors.

Per her team: To accelerate the economic recovery and deliver relief to New Yorkers, Hochul would:

√ Provide $100 Million of Relief for 195,000 Small Businesses: While the pandemic downturn impacted everyone, small businesses suffered especially hard. To boost recovery across the state, Hochul would provide $100 million in tax relief for 195,000 small businesses by widening eligibility and increasing a tax return adjustment that reduces a small business's gross income.

In simple terms, a subtraction modification allows a taxpayer to lower its gross income by an amount equal to a certain percentage of its net business income, before calculating the amount of taxes owed. Current law allows for a 5% subtraction modification for sole proprietorships and farm businesses with incomes of less than $250,000 – benefitting just 5,000 taxpayers each year. The governor will raise this modification and include other entities with New York source gross income of up to $1.5 million, covering some 195,000 small businesses in all – putting more money back in the hands of more hard-working New Yorkers.

√ Accelerate $1.2 Billion in Middle Class Tax Cuts for 6 Million New Yorkers: In 2018, New York began phasing in a middle-class tax cut, and the cut is not currently scheduled to be fully implemented until 2025. To reflect the economic devastation brought on by COVID-19 – and rather than waiting for small, incremental benefits to take effect for middle-class taxpayers – Hochul would accelerate relief for families and start providing the full benefit of the tax cut two years earlier. She would fully phase-in the middle-class tax cut beginning in the 2023 tax year, the earliest time possible. Applying the full effective cut to the 2023 tax year would accelerate two years of tax cuts, providing relief for 6.1 million New Yorkers.

√ Deliver a $1 Billion Property Tax Rebate for More Than 2 Million New Yorkers: With New Yorkers facing the costs of inflation in the supermarket and at the pump, all while still enduring the economic impacts of COVID-19, Hochul would provide much-needed relief through a property tax rebate program that would return tax dollars to middle- and low-income households. More than 2 million New Yorkers would be eligible for the rebate, with low-income households and seniors receiving higher benefits. Under the governor's plan, eligible homeowners would receive their benefit in the fall of 2022, to the tune of $1 billion.

√ Increase Existing Tax Credits and Create a New Credit to Support Food Production: Farm labor is among the fastest-growing costs of agricultural production in New York. To help farms meet this challenge, Hochul would increase an existing workforce tax credit and create a new one, while also expanding an investment tax credit for equipment to complement the workforce and address shortages. This includes:

•Doubling the Farm Workforce Retention Tax Credit: Farm owners and employers are currently eligible to receive a refundable tax credit of a fixed dollar amount per eligible farm employee through 2024. To help farms retain their workers, the state would double the yearly fixed dollar amount per eligible employee and extend the program to 2025.

•Creating a New Overtime Tax Credit: The state would create a permanent refundable tax credit on overtime hours for any size farm in New York to offset increasing costs to farmers.

•Increase the Investment Tax Credit: The investment tax credit has been a powerful tool in the past to stimulate investments in new technology and equipment. New York would increase the existing investment tax credit for all state farms, allowing farmers to purchase new equipment that could further automate their farms in response to the declining agriculture workforce.

Hometown News

View All News