New York Senate Republicans will revive a proposal to give a 20 percent tax cut to small businesses to create jobs, Majority Leader Dean Skelos said.
Under the plan, the corporate tax rate for businesses with less than $250,000 in annual revenue would be cut to 5.5 percent from 6.85 percent, a $65 million reduction affecting almost 200,000 entities. It would also give a 10 percent tax credit to about 800,000 similarly sized businesses that have at least one employee and pay personal income taxes. The credit would save businesses $120 million, Republicans say.
“We’re looking to set the tone for the business community that we mean business,” Skelos, a Long Island Republican, said today in a telephone interview. “This will give them the opportunity to start planning and hiring early.”
The tax cut and credits would be phased in as part of the fiscal 2014 budget, which begins next April, he said.
Another piece of the plan would give businesses a tax credit of as much as $5,000 for each new job, as much as $8,000 if the position goes to someone collecting unemployment insurance, or as much as $10,000 if the business hires a returning veteran.
New York, the third-most-populous U.S. state, is facing a $950 million budget gap in 2014, according to Budget Director Robert Megna. The Republicans’ plan would cost about $200 million.
“We will find the money,” Skelos said. “Our focus is on job creation in the state. That has been our focus the last two years, and these tax credits for local businesses will help them grow.”
In December, lawmakers approved a bill backed by Governor Andrew Cuomo, a Democrat, that cut income-tax rates for the middle class and raised them for joint filers earning $2 million or more. Employers in the 12 counties surrounding New York City saw a reduction in the portion of their payroll taxes used to support the Metropolitan Transportation Authority.