The Real Deal New York

Price reduction in aisle three: Supermarkets ask NYC to rid them of commercial rent tax

Tax puts 3.9% surcharge on rents of $250K or more for businesses below 96th Street
November 13, 2017 03:40PM

Mayor Bill de Blasio (Credit: Getty Images)

Supermarket owners want the city to abolish the commercial rent tax for their industry, arguing that it is hurting their growth.

The grocers are asking Mayor Bill de Blasio and the City Council to remove the tax for them, which puts a 3.9 percent surcharge on businesses below 96th Street where rents are $250,000 or higher, according to the New York Post.

A total of 132 supermarkets pay the tax, and officials say it increases their operating costs by $5 million each year.

Although the move has the support of Manhattan Borough President Gale Brewer, it has also been criticized for narrowly targeting supermarkets as opposed to including other small businesses.

Earlier this fall, the heads of New York City’s five chambers of commerce asked de Blasio to lower the number of businesses that pay the commercial rent tax, but a spokesman for the mayor said the administration did not feel it was the right time to act on it.

Like most brick-and-mortar businesses, grocery stores have started facing increased competition from online outlets, and Amazon’s purchase of Whole Foods earlier this year sent shockwaves throughout the industry. A CoStar report from earlier this year found that sales of food and groceries at retail stores across the country had gone flat as consumers shifted from making big weekly trips to smaller more frequent stops.  [NYP]Eddie Small