Changes include adding an income threshold to ensure help reaches those who need it most
Mayor De Blasio signed a bill on Friday, December 22, 2017 that will give some small businesses in Manhattan a break from the city’s much-derided commercial rent tax.
Effective July 1, 2018, the threshold for Manhattan’s CRT for businesses with income up to $5 million will increase from $250,000 to $500,000 annual rent. Furthermore, with the benefit provided on a sliding scale for businesses with income between $5 million and $10 million or paying $500,000 to $550,000 in rent – some small businesses (including non-retail businesses) along SoHo Broadway stand to benefit.
In total, the move reduces taxes for 2,700 small businesses, including 1,800 that will no longer pay the tax at all. Under this move, the average business owner will receive between $11,300 and $13,000 in annual tax relief. This represents the first change to the CRT since 2001 and specifically targets Manhattan’s mom-and-pop shops and small businesses with 99 percent of the benefit going to businesses with only one or two taxable locations. The bill was voted on early in the day on 12/22/17 by the City Council and was signed by the Mayor.
Currently, the CRT is paid by commercial tenants below 96th Street and above Murray Street in Manhattan who pay $250,000 or more in annual rent. The effective tax rate is 3.9 percent and has, for years, imposed an additional operating expense on small businesses, regardless of their income. This change in tax policy is an effort to alleviate that strain and help New York City’s small businesses thrive. The total cost to the City is $36.8 million in Fiscal Year 2019.
This effort has received strong community support from elected officials representing Manhattan at the federal, state and local level, as well as various commercial and real estate organizations including the Partnership for NYC, the Citizens Budget Commission and the Manhattan Chamber of Commerce.
Read more about the small businesses in SoHo Broadway & Manhattan that will benefit.
Wondering what businesses are here on SoHo Broadway and who lives in our community? Learn more about the SoHo Broadway Community HERE.