New York State Executive Chamber | Governor Eliot Spitzer

Press Releases | Speeches | Executive Orders | Proclamations

ENACTED BUDGET CUTS BUSINESS TAXES

Governor Eliot Spitzer said today that the enacted state budget provides $150 million worth of targeted business tax relief in the form of a rate cut for all corporations, banks and insurance companies, and targeted relief for manufacturers and high technology companies.  These changes will benefit thousands of companies across industries and across all regions of New York State.

The tax cut for manufacturers reduces two critical rates.  First, the overall tax on manufacturing income is lowered to from 7.5 percent to 6.5 percent.  Second, the alternative minimum tax, which has a disproportionate impact on manufacturers, is lowered from 2.5 percent to 1.5 percent.  The value of this reduction is $75 million.

The general corporation tax is a broad based reduction for all corporations and high technology companies from 7.5 percent to 7.1 percent. 

The tax relief was financed by eliminating four tax loopholes.  Because of this change, small and large companies will now pay a consistent lower effective rate. 

Eliminating the tax loopholes is valued at $450 million and will prevent companies from using complicated tax strategies to shelter income from New York State taxation by shifting income out of the state by avoiding “combined reporting of income” or by using Real Estate Investment Trusts (REITs) to artificially lower their New York taxes, among other strategies.  These strategies were not available to smaller companies.