New Bill Adjusts Rent Tax for Small Businesses

The city recently announced a new bill that makes changes to the Commercial Rent Tax (CRT) aimed at helping the city’s small businesses succeed.

Effective July 1, 2018, the threshold for Manhattan’s CRT for businesses with income up to $5 million will increase from $250,000 to $500,000 annual rent, with the benefit provided on a sliding scale for businesses with income between $5 million and $10 million or paying $500,000 to $550,000 in rent. In total, the move reduces taxes for 2,700 small businesses, including 1,800 that will no longer pay the tax at all. Under this move, the average business owner will receive between $11,300 and $13,000 in annual tax relief.

This represents the first change to the CRT since 2001 and specifically targets Manhattan’s mom-and-pop shops and small businesses with 99 percent of the benefit going to businesses with only one or two taxable locations. This represents the first change to the CRT since 2001 and specifically targets Manhattan’s mom-and-pop shops and small businesses with 99 percent of the benefit going to businesses with only one or two taxable locations. Former Council Member Dan Garodnick actively supported the bill prior to leaving office at the end of 2017.

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