Despite positive tax treatment for New York’s manufacturers in recent years, manufacturing firms report that optimism is slipping according to the Federal Reserve Bank of New York’s July 2017 Empire State Manufacturing Survey.
Although qualified manufacturers in New York pay no income tax under reforms adopted in the 2014 state budget, manufacturers still face a host of challenges including high labor and energy costs in the state. They also contend with high property taxes. The 2014 package recognized this competitive disadvantage to operating in other states and included a 20 percent property tax credit for manufacturers. But property taxes on the homes of plant managers and workers also can prove to be a challenge in attracting a qualified workforce. The outlook for the manufacturing industry has taken these factors into consideration in surveys, so what accounts for lessened confidence in the most recent survey?
One reason optimism has slipped is uncertainty about federal tax reform. Manufacturers in the US continue to be held back and struggle to compete under a high tax system with significant regulatory compliance burdens. Most manufacturers pay an effective tax rate of more than 30 percent, and rates for small manufacturing businesses can be even higher.
With the most recent comprehensive tax reform having been passed in 1986, business advocates argue that it’s time the tax code is updated. NFIB President and CEO Juanita Duggan recognized this historic opportunity to adopt a fair and reasonable pro-growth policies in a letter to House Ways and Means Committee Chairman Kevin Brady (R-TX). President and CEO Duggan stated that small business owners expect comprehensive tax reform this year and that it must feature parity for businesses of every size.
“Tax reform has the potential to have an enormously positive impact on small businesses; it is their top priority in 2017,” said NFIB President and CEO Juanita Duggan in the letter to Chairman Brady.
NFIB is involved in the dialogue, representing the interests of small business owners across the country, and we are monitoring the debate between the White House and lawmakers on Capitol Hill.
Mike Durant
State Director
NFIB/New York
Please join in the fight and send an email to lawmakers to let them know
Tax Reform Starts with Small Business.
