The Real Deal New York

New City Council bill could exempt 1,000 more mom-and-pop shops from rent tax

Commercial rent tax should be nixed entirely, says Keith Powers
January 24, 2019 05:00PM

Keith Powers and retail stores

A little over a year after City Council passed a bill to exempt 2,000 businesses from the commercial rent tax, a new bill is now on the table that would scale back the levy even more.

Councilmember Keith Powers introduced a bill on Thursday to exempt small businesses paying up to $750,000 in annual rent from the tax, which applies to businesses of a certain size operating between Murray and 96th Streets in Manhattan, and amounts to about 4 percent of annual rent.

“If you repeal this tax for small businesses, you will put another month’s rent in their pocket,” Powers said.

Powers’ predecessor as councilmember for District 4, Dan Garodnick, was behind the previous bill which raised the tax threshold from $250,000 to $500,000. The councilman’s office estimates that raising the threshold to $750,000 could exempt another 1,300 companies.

Though Powers argues that the tax should eventually be removed altogether, scaling it back gradually could be a way to assist struggling businesses without cutting off an important source of revenue for the city.

The commercial rent tax provides hundreds of millions of dollars for the city’s general fund each year. It is unclear whether the new bill has the support of Speaker Corey Johnson or the de Blasio administration. [Crain’s] — Kevin Sun