ROCHESTER, N.Y. -- One day after proposing a statewide $15 an hour minimum wage that business groups oppose, Gov. Andrew Cuomo announced he'll propose tax cuts for small businesses worth $298 million a year in his upcoming state budget.
During a speech in Rochester, the governor said the tax cuts will help 1 million small businesses, including 37,000 in Central New York.
Cuomo said the budget he'll unveil Jan. 13 in Albany will include:
Small businesses that pay taxes as personal income taxes, not as corporations, will be permitted to exempt 15 percent of their income for taxable purposes. Currently businesses that file as sole proprietor and farm small businesses can subtract 5 percent of their income from tax calculations. Cuomo's plan would increase the benefit and extend it also to small businesses that file tax returns as members of partnerships, S-corporations, and LLCs provided some of their business income is derived from a business entity with less than $1.5 million in New York gross receipts, and their total business income from these sources is below $250,000.
"We'll give them a 15 percent deduction right off the top," Cuomo said.
In addition, he said he'll propose lowering the income tax rate to 4 percent for small businesses that pay taxes as corporations, beginning in 2017. The small business must have fewer than 100 employees with net income below $390,000 to qualify for the lower rate.
New York's corporate income tax rate was lowered Jan. 1 from 7.1 to 6.5 percent, saving businesses an estimated total of $125 million.
While some business organizations applauded the proposed tax cuts, they said that the cuts won't negate what they expect would be a severe negative impact on businesses if the minimum wage is gradually increased to $15 an hour by 2021.
"We think it's a great step," said Ken Pokalsky, vice president of the Business Council of New York State, referring to the tax cuts.