Business sector gives nod to Cuomo tax plan

Gov. Andrew Cuomo is moving to reduce taxes for small business owners, and local businessmen and tax experts say they approve of the effort.

Cuomo’s plan, which he announced last week, is a two-pronged approach to lowering taxes for small businesses that pay corporate taxes as well as those that pay personal income tax. According to the governor’s office, about 1,091,000 small businesses statewide will benefit from the proposal.

For small businesses that file under the corporate tax code, the governor wants to reduce the net income tax rate from the current 6.5 percent to 4 percent beginning in 2017. A small business is defined as one with fewer than 100 employees that has a net income of $390,000 or less. The lower tax rates, which would vary, with 4 percent as the minimum, would be available to businesses whose net income is below $290,000, the governor’s office said in a news release.

The precise size of the cuts would depend on companies’ income, said Anthony Basile, a Hofstra University professor who specializes in business and taxes. “I think that would be a good thing,” he said of the proposal in general. “It’s very vague. He did not talk about a straight reduction.”

“Two and a half percent is a nice decrease,” said Doug Mills, the treasurer of the Merrick Chamber of Commerce and the owner of the Printing Emporium in Merrick, a print shop with eight employees. “The decrease will potentially allow businesses to expand.”

“One of the problems we have in New York is in competing,” Basile said. “Small businesses get hit with taxes not just at the state level, but at the federal and city level. So any reduction in taxes would be essential to help companies sustain and create jobs.”

Baldwin Chamber of Commerce President Erik Mahler agreed with Basile’s assessment. “Whenever there’s a lower tax rate by the government, it’s beneficial,” Mahler said. “It allows for overall growth, for hiring more employees and an [improved] overall profit margin.”