Other Revenue Actions: Other new tax actions include the imposition of sales tax on short-term vacation rentals, such as Airbnb, the creation of a regulatory and tax structure for the adult use of cannabis, legalized sports betting and taxes on wagering transactions, and the creation of a new tax credit to support businesses in rehiring workers that were displaced by the Covid-19 pandemic.
Pandemic Recovery And Restart Program: Governor Cuomo’s proposal would utilize four tax credits to help highly impacted small businesses in the accommodation, arts and entertainment, restaurant, and musical and theatrical production industries. The program would establish three new tax credits and increase a fourth one to help businesses in those industries:
1. Small Business Return-To-Work Tax Credit. The credit is $5,000 per employee and up to $50,000. This would help employers hire workers faster than they normally would.
2. Restaurant Return-to-Work Tax Credit. The credit is $5,000 per employee and up to $50,000 per business. Restaurants will receive the credit immediately if they choose.
3. New York City Musical And Theatrical Production Tax Credit. Provides $25 million in tax credits for jumpstarting the industry and supporting tourism activity in New York City.
4. Musical and Theatrical Production Credit. Extended and enhanced for four years.
We will continue to monitor the proposed budget submitted by Governor Cuomo, which is expected to pass no later than March 31, 2022. How much federal aid New York receives will ultimately determine if some of the changes outlined above would be necessary.
Reshma Ghouri, CPA, is a director in the high-net-worth group at Marks Paneth LLP.