Elmira, N.Y.1—State Senator Tom O’Mara (R,C,I-Big Flats) Tuesday
announced that he is sponsoring legislation to further reduce the tax
burdens imposed on small businesses and farmers, as well as to
substantially increase the recently enacted Farm Workforce Retention
Credit.
“Studies continue to recognize New York as the state with the highest tax
burden in the nation. It remains an unfair and unreasonable burden on
individual taxpayers, families, farmers, employers and workers. Even with
the tax cuts we successfully achieved as part of the current state budget,
we have to keep taking tax relief actions like these for our farmers, small
business owners and every other taxpayer. This legislation in particular
provides for an even greater, twenty-percent exemption of business income
for farmers,” said O’Mara, a member of the Senate Agriculture Committee.
O’Mara voiced strong concerns over the higher minimum wage approved as part
of the 2016-17 state budget and continually pointed to the negative and
potentially devastating impact the higher wage will have on New York State
farms, small businesses, school districts, not-for-profits, human services
providers and others. Legislation O’Mara sponsors (S2120) would expand the current Personal
Income Tax (PIT) exemptions for small businesses and farms originally
advanced by the Senate in 2014. Under current law, to qualify for the PIT
exemptions, businesses must be a sole proprietor or farm (regardless of how
the business is structured, sole proprietor, LLC, etc.), have less than
$250,000 in net business income, and employ at least one employee. The
current exemption is equal to five percent of net income in 2016 and
beyond.
Under O’Mara’s legislation, the PIT exemption would increase from 5 percent
to 20 percent for farm income beginning on or after January 1, 2017. The
legislation would also increase the PIT exemption from 5 percent to 15
percent for small businesses, eliminate the employee qualification, raise
the income eligibility threshold from $250,000 to $500,000, and expand
small business eligibility to include any business that files under the PIT
(regardless of how the business is structured, sole proprietor, LLC, etc.)
The legislation also reduces the Corporate Franchise Tax business income
rate for small businesses from 6.5 percent to 2.5 percent. It would
increase the threshold for corporations to be considered as small
corporations from $290,000 to $400,000 and allow businesses with incomes
between $400,000 and $500,000 to have a blended rate between 6.5 percent
and 2.5 percent.
Legislation (S2905) O’Mara co-sponsors would significantly increase the
Farm Workforce Retention Credit approved as part of the 2016-17 state
budget that allows eligible farm employers to claim a refundable tax credit
for each farm employee that is employed for 500 or more hours each year.
Under the legislation, the phased-in tax credit would double to $500 per
eligible farm employee in 2017, $600 in 2018, $800 in 2019, $1,000 in 2020,
and $1,200 in 2021.
The Senate approved both measures last year, but they did not receive any
Assembly action.
