|Contact:||Sunny Mindel / Michael Anton||(212) 788-2958|
Currently, commercial tenants south of 96th Street in Manhattan are subject to the Commercial Rent Tax if they pay over $100,000 in annual rent. This legislation will remove a significant number of commercial tenants from the tax rolls by applying the Commercial Rent Tax only to tenants who pay $150,000 or more in annual rent. In addition, the bill will grant a partial tax credit to tenants with annual rents between $150,000 and $190,000.
The Commercial Rent Tax has long been viewed as a disincentive to doing business in the City. Over the course of my Administration, we have taken a series of actions that have eased the burden imposed by the tax. For example, Commercial tenants north of 96th Street in Manhattan and in the other boroughs of the City are now completely exempt from the tax. We have also lowered the tax's effective rate from 6 percent to 3.9 percent in the areas where it is still imposed. These measures have reduced the number of tenants subject to the tax by more than 85 percent and have saved the City's commercial tenants hundreds of millions of dollars annually.
By signing this bill, we take another step toward the complete elimination of the Commercial Rent Tax. The increased rent-exemption level provided by this legislation will drop an additional 3,000 businesses from the Commercial Rent Tax rolls, saving taxpayers approximately $84 million from Fiscal 2001 to Fiscal 2005.
For decades, the high taxes imposed on businesses in New York City crippled our ability to compete with other areas and depressed our economic growth. One of my Administration's principal aims has been to reduce the unfair and excessive taxes that stifled job creation and drove businesses out of the five boroughs. This bill's significant additional reductions in the Commercial Rent Tax continue our reform efforts and will help the City's economy remain vibrant well into the future.
For the reasons previously stated, I will now sign the bill.