New York Gov. Andrew Cuomo is proposing nearly $300 million in small business tax cuts as one of his top priorities in 2016.
The Democratic governor’s plan calls for a two-pronged tax reduction that would impact more than 1 million businesses across the state.
The current corporate income tax rate for small businesses would be reduced from 6.5 to 4 percent, with the size of the cut dependent on the company’s net income. The cut would give small businesses a tax advantage over larger businesses — a benefit they used to enjoy until lawmakers voted to lower taxes for bigger businesses to the same level.
For small business owners that pay the personal income tax rate, Cuomo is proposing to increase and expand a tax break that now goes to sole proprietorships and farms. The break allows eligible businesses to subtract 5 percent of their income for tax purposes; Cuomo would increase that to 15 percent and expand the break to cover more small businesses.
Cuomo will detail the proposals on Jan. 13 during his annual State of the State address that lays out the governor’s priorities for the year. The Legislature will begin the 2016 session on Wednesday.
On Tuesday morning, Cuomo told an audience in Long Island that tax cuts are an essential part of his plan to improve the economy and are made possible by careful cuts in state spending.
“We said we were going to cut spending,” he said. “We said we were going to stop the tax increase that happened year after year. Because we spent less, we could tax less.”