Reduces certain commercial rent taxes for premises occupied by certain retail and food services businesses located in the borough of Manhattan south of the…

• Democratic2

◆ The sponsor's argument

Why Erik Bottcher says this is needed

New York City's restaurant, retail, and recreation businesses were hard- est hit during the pandemic. These sectors lost 169,700 jobs since 2020-41% of all private sector jobs lost in New York City during the pandemic, according to Comptroller DiNapoli. Restaurants in particular laid off 70% of their workforce in March 2020, and the industry has yet to recover to pre-pandemic levels. Retail jobs, too, are down 11% since before the pandemic. New York City currently imposes an effective 3.9% tax on commercial tenants with a base rent $250,000 or more that are located in Manhattan south of 96th Street. Though New York City relaxed that tax burden in 2018 by exempting businesses with income less than $5 million and rents under $500,000 from the Commercial Rent Tax, hundreds of small busi- nesses continue to pay out year after year. As Manhattan rents continue to rise and inflation squeezes the industry's already tight profit margins, New York's restaurants and retailer s are struggling to make ends meet. New York state can ease the burden on these small businesses and recovering industries by exempting them from the commercial rent tax. The original tax was enacted in 1963, and today New York and Florida are the only two jurisdictions to levy a tax on commercial rents. The relief this carveout would deliver to struggling industries is enormous, but the impact on tax revenues would be manageable: food and retail busi- nesses made up just 18.9% of commercial rent taxpayers and 17.6% of commercial rent tax liability in 2022. In 2019, New York restaurants and retailers employed over 600,000 people, paid over $26 billion in wages, and made nearly $82 billion in taxable sales. Granting this relief will allow hundreds of businesses to keep their doors open, lower the burden for New Yorkers looking to start a business, and assist these crucial industries in returning to their pre-pandemic levels of productivity.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.