The Cities Committee in the state Senate passed legislation Apr. 27 that would halt collection of the Commercial Rent Tax from small businesses that pay less than $1 million in rent per year during the pandemic while providing additional relief.
The CRT is only charged to commercial tenants in Manhattan south of 96th street and is 3.9 percent effective tax on rent paid.
The Manhattan Mom & Pop Tax Relief Act (S.1548/A.3070) is sponsored by State Sen. Brad Holyman and Assemblyman Harvey Epstein, both Manhattan Democrats. The bill serves as companion legislation to a bill introduced last year by New York City Council Member Keith Powers (D-Manhattan) that also looked to suspend the CRT during the pandemic.
The Assembly bill is in the Ways and Means Committee. The sponsors of the legislation say the bill would help alleviate the financial burden placed on small business owners who occupy physical locations in Manhattan, at a time when relief is desperately needed.
“It’s unfair that only businesses south of 96th Street are forced to pay the Commercial Rent Tax, so we’re throwing approximately 5,500 small businesses a lifeline with the Manhattan Mom & Pop Tax Relief Act, which suspends the collection of this tax during the pandemic,” Holyman said. “We need to do whatever we can to support Mom & Pop shops who struggled for the last 13 months as our city reopens.”
Nearly 42 percent of New York City’s small businesses closed between Jan. 1, 2020 and Apr. 14, 2021, according to Opportunity Insights, a Harvard-based nonprofit that identifies and provides possible solutions to economic barriers.
Approximately 5,500 Manhattan businesses would benefit from the suspension of the CRT and help alleviate the financial burden small business owners currently face.