Council Member Keith Powers introduces measure to relieve businesses of paying commercial rent tax during COVID-19 State of Emergency
New York, NY, July 28, 2020 — City Council Member Keith Powers today introduced legislation to temporarily repeal the commercial rent tax in full for businesses for the remainder of the COVID-19 State of Emergency.
The commercial rent tax is an effective rate of 3.9% of businesses’ annual rent charged only to businesses south of 96th Street in Manhattan. This bill would help approximately 5,500 Manhattan businesses with an annual base rent of less than $1 million that are currently paying the tax.
“This is money back in the hands of small business owners,” said City Council Member Keith Powers. “Right now, New York City is experiencing a state of emergency and our response to help businesses recover must be commensurate. Relieving payment of the commercial rent tax at this time is a tangible benefit for businesses.”
Small businesses have experienced the devastating impact of COVID-19, unable to sustain operations and make ends meet. According to a recent article in THE CITY, a restaurant on East 14th Street in Manhattan, The Nugget Spot, made as much money during one month of the pandemic than they had previously on a single weeknight.
“The commercial rent tax has historically penalized mom and pops south of 96th Street just for occupying a brick-and-mortar space. For the small businesses desperately fighting to secure any form of financial relief they can to make it out of this crisis in one piece, the urgency to re-evaluate this tax has never been more dire.” said City Council Member Margaret S. Chin. “While we appreciate the City’s efforts to roll out small business grants and outdoor dining, these are only the first steps. A temporary repeal of the CRT during this public health emergency will provide relief to even more struggling brick-and-mortars in the red. I’m proud to join Council Member Powers and Manhattan Borough President Brewer on this legislation and look forward to continuing our work together to re-think the CRT.”
“The COVID pandemic has devastated small businesses in our city, and without relief far too many will fail,” said Manhattan Borough President Gale A. Brewer. “The Commercial Rent Tax is one place where the City can provide that relief, and this bill will do exactly that: zero out the CRT for businesses with less than $1 million per year in rent until the state of emergency is over.”
“The COVID-19 crisis has financially devastated local restaurants and bars, and because these small businesses pay big Manhattan rents, too many are still forced to pay the expensive commercial rent tax,” said NYC Hospitality Alliance Executive Director Andrew Rigie. “If there was ever a time to alleviate this tax burden on our beloved businesses now is the time. We thank Council Member Powers for introducing this impactful legislation during this pandemic.
“This is a critical measure right now,” said Jessica Walker, President and CEO of the Manhattan Chamber of Commerce. “Businesses in Manhattan are suffering from the ‘double whammy’ of closed office buildings and reduced tourism which means there is very little foot traffic to shop in their stores. For some, a temporary suspension of their Commercial Rent Tax could provide a meaningful boost to keep their operations going until we get to the other side of this pandemic.”
This week, Council Member Powers released a report outlining further action for small businesses’ recovery and employee aid, “Open for Business: Saving Our Small Businesses Post-COVID.”
In 2019, he introduced legislation to provide relief for up to 1,300 businesses from the Commercial Rent Tax, in the form of expanded exemptions and sliding-scale tax credits. Manhattan businesses south of 96th Street that pay $500,000 or more in rent are currently required to pay a Commercial Rent Tax. This puts businesses in Manhattan on unequal footing with competing businesses located in Downtown Brooklyn, Williamsburg, Long Island City, and more.
##