Syracuse, N.Y. — New York business groups are criticizing a temporary corporate tax rate hike included in the new state budget.
The fiscal 2022 budget agreement reached between lawmakers and Gov. Andrew Cuomo includes a surcharge on the corporate income tax rate, boosting it from 6.5% to 7.25% for three years through 2023 for taxpayers with business income greater than $5 million.
The rate will remain at 6.5% for companies making less than $5 million.
The changes are expected to raise $750 million in fiscal year 2022 and $1 billion in fiscal year 2023.
In addition, the budget imposes a surcharge on high earners through tax year 2027 that sets a top rate of 10.9% for all filers earning more than $25 million. The surcharge will raise $2.8 billion in fiscal year 2022, rising to $3.3 billion in fiscal year 2023.
“The final budget agreement contains a significant increase in the cost of state government, and – given a substantial influx of federal funding — an unnecessary multi-billion-dollar tax increase, including an increase in business taxes,” Heather Briccetti, president and CEO of The Business Council of New York State, said in a statement Wednesday.
“By all accounts, the additional spending and additional tax hikes were driven by legislative demands, going well beyond the Executive Budget’s proposals. While it was encouraging to see the addition of targeted assistance for business sectors most severely hit by COVID shutdowns and state restrictions, we fear the additional spending and taxes will unfortunately hurt New York State more than help in its recovery.”
“While this year’s state budget includes some positive measures, such as support for struggling small businesses, tax relief for middle-class residents and significant funding for local roads and bridges, the inclusion of massive tax hikes and costly mandates poses a serious risk,” said Justin Wilcox, executive director of Upstate United.
“Imposing $4 billion in new taxes will ultimately hurt New York’s recovery efforts. This immense tax burden will drive more New Yorkers out the state; joining the 1.4 million former residents who have fled to other states over the last decade. Embracing a massive tax-and-spend approach over a responsible pro-growth plan is the wrong choice at the wrong time.”
Syracuse-based CenterState CEO also weighed in.
“Among the most significant points of concern is the hike in the corporate tax rate in an effort to drive revenue,” Rob Simpson, president and CEO of CenterState CEO, said in a statement. “Right now businesses across the state are recovering from unprecedented hardships created by the COVID-19 pandemic and raising taxes will place an unnecessary burden on these economic engines.”
Rick Moriarty covers business news and consumer issues. Got a tip, comment or story idea? Contact him anytime: Email | Twitter | Facebook | 315-470-3148