The New York City comptroller recommends creating tax credits and eliminating the liquor license tax to support small businesses struggling because of the COVID-19 pandemic.
“At least 2,800 small businesses closed permanently between March 1st and July 10th, including 1,289 restaurants and 844 retail establishments, marking a permanent loss of jobs, wages, and wealth,” according to the comptroller's August 5 report.
The report proposes providing refundable business income tax credits to small, independent, and locally owned businesses with annual revenues below $5 million. The credits would allow the businesses to reconfigure their spaces and set up other measures to safely reopen during the pandemic.
The report slams the federal Paycheck Protection Program, saying it was supposed to support small businesses but that “the program arrived too late, included too many restrictions, was ill-suited for small and urban businesses, and was poorly implemented.”
"Given that only 12 percent of New York City businesses and sole-proprietors have received a [Paycheck Protection Program] loan, it is clear that a huge number have not taken advantage of this program," according to the report. It recommends creating an outreach team to help small businesses prepare paperwork for the program.
The comptroller also calls for eliminating the city’s annual 25 percent tax on beer, wine, and liquor license fees and urges the state to speed up the issuance of new liquor licenses and to continue to ease and expand liquor regulations.
The report also suggests providing tax credits to entrepreneurs if they are in retail corridors with vacancy rates above a particular threshold. The credits would apply to either the commercial rent tax in Manhattan or the real property tax.
According to the report, retail vacancy rates were already high in the city before the pandemic and will continue to increase because of it.
“As detailed in Retail Vacancy in New York City, a September 2019 report by the NYC Comptroller’s Office, vacant retail space more than doubled over the last decade, rising to 11.8 million square feet in 2017, up from 5.6 million square feet before the Great Recession,” the report states.