March 8, 2017

Assembly Budget Proposal to Include Tax Cuts for Small Businesses and Greater Incentives for Excelsior Jobs Program

Assembly Speaker Carl Heastie and Assemblymembers Herman Farrell Jr., Fred W. Thiele, Jr. and Robin Schimminger today announced the Assembly's 2017-18 SFY Budget, which will be announced next week, would provide meaningful tax incentives for small businesses as well as businesses that conduct research and development in New York State. The proposal also focuses on enhancing the currently underutilized Excelsior Jobs Program by expanding program eligibility.

"Small businesses make up 97 percent of all businesses in New York State and employ more than a third of the private sector workforce," said Speaker Heastie. "By supporting New York's small businesses and those that are dedicated to growth in our state, we are investing in employment opportunities that are fundamental to the success and livelihood of New York's families. We are putting families first."

"The Assembly Majority's budget proposal would offer quick and certain relief to New York businesses and in turn, bring more employment opportunities to New Yorkers," said Assemblymember Farrell, chair of the Committee on Ways and Means. "With so much still up in the air in Washington, the Assembly must lead the charge to create the solutions New York needs now."

Tax Cuts for Small Businesses

Under the Assembly spending plan, the income tax rate for small businesses with an income of $290,000 or less would be reduced to 4 percent from 6.5 percent for corporate tax filers. Personal income tax filers, such as sole proprietors, farmers, partnerships etc. would have the option to deduct 15 percent of their income from their adjusted gross income (AGI) before the personal income tax rate is applied. This deduction is an increase from the currently allowed 5 percent deduction.

A small business is defined as one that employs fewer than 100 individuals. An estimated 1.1 million sole proprietors, farmers and small businesses would benefit from the Assembly proposal.

Double Research and Development Tax Credit

Currently, businesses that are personal income tax filers are allowed a research and development tax credit of 7 percent of qualifying research and development property. Corporate tax filers are allowed a credit of 5 percent for the first $350 million of the investment base, and a 4 percent rate for anything above $350 million. The Assembly's budget proposal would double all the current research and development tax credit percentages.

Double the Cap of Excelsior Research and Development Tax Credit

Under current law, participants in the Excelsior Jobs Program are eligible for a research and development credit. However, the credit is capped at 3 percent of eligible research and development expenditures. The Assembly's proposal would double the cap to 6 percent of research and development expenditure, therefore, allowing businesses to further expand their ability to grow and create jobs.

Increase Participation in Excelsior Jobs Program

The Excelsior Jobs Program offers incentives for businesses to expand in and relocate to New York State by providing tax credits to firms making a substantial commitment to growth through either increased employment or through the investment of capital in a New York facility. In order to receive the tax credits, firms must meet required thresholds for job creation and capital investment. The Assembly's budget proposal would offer greater incentives for relocation and investment in New York by reducing these thresholds for key industries by 50 percent.

"New York State has a wealth of unique resources and a talented pool of individuals eager to contribute to our state's economy," said Assemblymember Schimminger, chair of the Committee on Economic Development, Job Creation, Commerce and Industry. "The Assembly Majority's budget would help businesses more effectively utilize our state's resources to ensure a healthy economy and a strong workforce."

"This spending plan helps lift a burden off of small business owners and will reinforce to entrepreneurs that New York is a great place to launch their business endeavor," said Assemblymember Thiele, chair of the Committee on Small Businesses. "A small business-friendly tax code would encourage the hard work and ingenuity of entrepreneurs that create countless employment opportunities for New Yorkers."