New York Gov. Kathy Hochul (D) has proposed additional income tax and property tax relief for individuals and small businesses amid a surge in COVID-19 cases.
In her January 5 State of the State address, Hochul proposed accelerating a $1.2 billion tax cut so that it is fully phased in beginning in tax year 2023. It was originally scheduled to be fully phased in by 2025.
“That means more than 6 million middle-class taxpayers get more money in their pockets sooner at a time when inflation is robbing them of any gains in income,” Hochul said in her speech.
The tax cut is part of a multiyear plan enacted in 2016 to lower personal income tax rates for middle-income New Yorkers, according to Hochul’s 2022 State of the State book.
The “original timeline did not take into account the economic devastation brought on by the pandemic, and the many people who need help now in the face of rising inflation,” according to the book.
Hochul also proposed a $1 billion middle-income property tax rebate to over 2 million homeowners. Eligible homeowners would obtain their benefit in 2022, with low-income households and seniors receiving higher rebates.
The governor also called for a tax credit for small businesses to help offset the cost of coronavirus-related capital expenses, such as heat lamps and outdoor seating for restaurants. This is part of a new billion-dollar rescue plan to support new and existing small businesses during economic recovery from the pandemic, according to a release.
To provide 195,000 small businesses with $100 million in tax relief, Hochul proposed expanding the tax return adjustment (subtraction modification) that allows sole proprietorships and farm businesses to lower their gross income by an amount equal to 5 percent of their net income. The plan would raise the subtraction modification and widen eligibility to other entities whose in-state sourced income is lower than or equal to $1.5 million.
“These businesses are the economic engines of small towns and big cities alike; they’re what make our communities unique and give them personality,” Hochul said during her speech.
The governor's plan would also create a new permanent refundable tax credit for the overtime hours farmers are paying to help offset increasing costs. It would also increase the investment tax credit for all New York state farms at the end of the year, which would permit farmers “to purchase new equipment that could further automate their farms in response to the declining agriculture workforce.”
Hochul also proposed doubling the farm workforce retention credit and extending the program to 2025. “This will also begin to address the workforce shortage many farms struggle with as well,” she said.
Hochul’s office did not respond to a request for comment by press time.