Small businesses make up 98 percent of the businesses across the state with Central New York being home to over 19,000 of them. I understand how important local businesses are to New York State, providing jobs for our family, friends and neighbors, and that’s why our budget proposal will include tax cuts for small businesses, incentivize investment and help spur job creation.
Businesses with corporate tax filer status and an income of $290,000 or less would see their income tax rate decrease from 6.5 percent to 4 percent under the Assembly’s proposal. Personal income tax filers would be able to deduct up to 15 percent of their income from their adjusted gross income (AGI) before the personal income tax rate is applied. Current law only allows these businesses — which include sole proprietors, many small-scale farmers and partnerships — a 5 percent deduction. These tax cuts are essential and will provide much-needed relief to over 1 million small businesses across the state.
In order to encourage the businesses that already call New York state home to expand and invest further in our communities, as well as attract new businesses, our proposal will also revamp the Excelsior Jobs Program. This program offers tax credits as an incentive for businesses to grow their workforce and make capital investments. We lowered the thresholds for the tax credits by 50 percent so more businesses can take advantage of this valuable program. In addition, the research and development tax credit available through the program would be doubled, from 3 to 6 percent.
In our communities, companies conducting research and development are pushing boundaries and leading the way in today’s ever-evolving world and can bring more jobs and greater economic expansion to Central New York. The assembly budget proposal would substantially increase the research and development tax credit — from 7 percent to 14 percent for personal income tax filers and from 5 percent to 10 percent for corporate tax filers.
With these measures, small businesses will see their tax rates drop and have greater access to tax credits. We must do what we can to help these vital businesses grow and prosper so that Central New York can thrive. This budget proposal is a significant first step, but I’ll continue working toward a final state budget that keeps New York open for business.