Tax Parity Changes Game for New York Growth
Randy Wolken, President & CEO
This week the NYS Assembly’s One-House Budget Proposal included tax parity for manufacturers in New York State. This was a landmark achievement for MACNY and manufacturers throughout the state. It would phase in a zero percent tax rate over three years for manufacturers organized as S-corps, proprietorships, LLCs, or “pass-through entities.” For the first time, these manufacturers would be treated the same as large manufacturers. This would make New York State one of the most competitive places to retain or locate a manufacturing company anywhere in the country.
We are now calling on the State Legislature and Governor to include this tax parity in the final state budget, due on April 1st. This legislation will provide tax relief to New York’s small-to-medium-sized manufacturers that continue to recover from the pandemic. Also, it will put them on a level playing field with manufacturing companies in other states with no or low income tax rates and large C-corp manufacturers already located here in New York. A change in the small-to-medium manufacturers’ tax rates would move the tax climate for manufacturers from worst to first. That kind of change would be monumental.
In 2014, a zero percent corporate franchise tax rate was enacted for manufacturers organized as C-corps. Unfortunately, this tax cut accounted for only 25% of manufacturing companies in New York State. While it provided significant help to those manufacturers, it left 75% of manufacturers still paying one of the highest tax rates in the nation. Finally, this inadequacy would be remedied.
We are grateful to the State Assembly for including this critical language in its One-House Budget and Assemblyman Al Stirpe, who sponsored the original Assembly bill. Please reach out to thank Assemblyman Stirpe for his long-standing support of this vital legislation. If passed into law, it would be the most significant advancement of New York State manufacturing in the last few decades.
Now more than ever, we need to reach out to our legislators and the Governor to call upon them to support existing manufacturers and attract future manufacturers to our state. With reshoring opportunities abounding and future investment in many advanced manufacturing sectors available, now is the time to act. Click here to quickly and electronically send a letter to our state officials in support of tax parity for all manufacturers.
This kind of opportunity comes once in a generation. The pandemic and its recession have reset the table for our state and country to regain its manufacturing focus. Let’s not miss this moment. Doing so could be one of our state’s greatest regrets.