Proposed New York Tax Reform
- Nov 18, 2013 | Gail Cole
Governor Andrew Cuomo (D) of New York wants to “simplify New York’s antiquated and unnecessarily onerous tax code, and to ease the tax burden on families and businesses statewide.” To that end, the New York State Tax Reform and Fairness Commission was tasked with eliminating tax loopholes, promoting administration efficiency and enhancing tax collection and enforcement. The Commission’s final report was presented to the governor on November 14, 2013.
The Commission presented the following five revenue-neutral reform packages for consideration:
- “Modernize the sales tax while funding low- and middle-income tax relief and overall real property tax relief.” In other words, change the current sales tax exemption structure.
- Modify the estate tax so that 73% of New Yorkers would not be required to pay it.
- “Reform the State's corporate and bank franchise taxes for the first time in decades to better reflect how businesses operate in a 21st century economy….Business tax credits should be annually evaluated in a transparent way to ascertain their effectiveness.”
- Make property tax administration “fairer and more equitable for local governments, businesses and homeowners.”
- “Simplify the administration of taxes to ease compliance for businesses and individuals in New York. The Commission asserts that many aspects of the tax code are unnecessarily burdensome, antiquated, or ripe for reform.” The example of temporary, seasonal vendors is provided: why should Christmas tree vendors “have to file sales tax returns on the same quarterly schedule as other retailers?”
The report notes that “sales tax revenue has grown much more slowly than New York’s economy. While sales tax collections are increasing over time, these increases mask underlying weaknesses in the tax that have diminished its role as a revenue producer for the State.” It points to the narrow sales tax base, the complexities of the sales tax system, and the inefficiencies of exempting necessities. In addition, it notes that some of New York’s sales tax exemptions “create an uneven playing field among competing businesses.”
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