Over the past three years, business owners have had to absorb onerous mandates such as new fast food wage orders, higher minimum wages, and a paid family leave policy. These policies come on top of other regulatory burdens and high tax rates that make our state less competitive than other states. Annually, the Tax Foundation ranks states in respect to their business tax climates and it comes as no surprise that last year New York ranked 48th out of 50 states. Corporate tax, individual income tax, sales tax, unemployment insurance tax and property tax are all considered in this ranking. Property taxes and individual income taxes led the way at 47th and 48th respectively.
Small businesses are vital to our state and local economy. We must do better addressing the challenges they face. In the Assembly, my conference has put together a viable plan to help small businesses. We have introduced the Small Business Full Employment Act. This legislation would lower taxes, offer regulatory amnesty to businesses, and reduce regulations.
If enacted, the legislation would among other things:
• Provide a 15% personal income tax exemption for businesses with fewer than 100 employees.
• Reduce the corporate franchise tax rate (from 6.5% to 2.5%).
• Provide employee retention tax benefits for those with less than 100 employees. If businesses retain workers, they would receive a tax credit—between $1,000 and $5,000 depending on how many are employed. The tax credit would count against what is owed in personal income and/or corporate franchise taxes.
• Provide tax credits for each new job created for businesses with fewer than 100 employees.
• Establish a regulatory amnesty program to allow small business to remedy violations within 6 months to avoid financial penalties.
• Provide a tuition assistance tax credit. Sometimes employers choose to send employees for additional training at a college. Those who do would receive a tax credit of up to $5,000 annually.
• Prohibit new unfunded mandates and require any new law to indicate their fiscal impact on local governments. Considering that property taxes are one of the biggest expenses for small businesses, lawmakers should be fully aware of the fiscal impacts new laws will have on localities.
The legislation also would create a division of regulatory review and economic growth. This division would require state agencies to provide economic impact statements on any proposed regulations effecting small businesses and would have the authority to approve or reject state agencies’ proposed regulations. The division would also prepare a comprehensive study to measure and report the cost of regulations to business throughout the state of New York. The division would provide small business owners with a point of contact if they need help sorting through regulatory burdens or excessive fines levied by other state agencies. In addition, this legislation would also expand the legislative Administrative Regulations Review Commission and authorize such Commission to review proposed legislation and advise the legislature if the bills being put forward are detrimental to the economy.
The facts are before us—between low national rankings and U.S. Census indicating an outward migration and the recent development of Amazon deciding not to bring 25,000 jobs to New York City. Our state needs a new approach. Helping our businesses maintain employment and incentivize them to invest in their employees will help the entire economy. Our state can do more and the legislature and the Governor should use this session as an opportunity to prove New York can be a friend to small business.
If you have any questions or comments regarding this or any other state issue, please contact me. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at [email protected] or by calling (315) 598-5185. You can also friend me, Assemblyman Barclay, on Facebook.