On January 21, 2014, Governor Andrew Cuomo announced his executive budget for 2014-2015. Included in the budget are a number of tax reforms geared towards accomplishing the policy goals also outlined in the budget announcement, among them simplifying the tax code and reducing rates and assessments. Manufacturers are the recipients of a few of these reduced assessments. The budget provides for a 20% credit on property taxes paid by manufacturers who own property, and “upstate manufacturers” have their tax rate on income eliminated entirely, from a previous rate of 5.9%. Similarly, the 18-a temporary assessment on utilities has been eliminated for industrial customers, three years in advance of its scheduled expiration date.
The budget announcement also covered several tax reforms relating to real property taxes. Qualifying homeowners will be eligible for a two-year freeze on property taxes in jurisdictions that are within the 2% property tax cap. Further, the budget creates a tax credit to be taken against personal income tax to provide income-based real property tax relief. Qualifying renters of real property will also be eligible for a personal income tax credit. Finally, the budget increases the exclusion threshold for the estate tax and reduces the top rate from 16 to 10% over four years. The announcement also touts the lowering of the tax rate on net income from 7.1 to 6.5%, calling it the lowest rate since 1968.
The budget now heads to the Legislature, which will hold budget hearings to negotiate passing a budget before the start of the new fiscal year on April 1, 2014.
For more information on the budget, the Governor’s summary is available at: http://www.governor.ny.gov/press/01212014-cuomo-budget-statement.
TECHNICAL INFORMATION CONTACT:
Jeremiah T. Lynch