Press Release Archives #413-98 - Mayor Giuliani Announces Further Reduction of the Commercial Rent Tax

Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: Tuesday, September 1, 1998

Release #413-98

Contact: Colleen Roche (212) 788-2958
Curt Ritter (212) 788-2971

MAYOR GIULIANI ANNOUNCES FURTHER REDUCTION OF THE COMMERCIAL RENT TAX

Tax Reduced From 4.5% To 3.9% Effective September 1st, 1998

Mayor Rudolph W. Giuliani announced that effective today, September 1st, 1998, the City's Commercial Rent Tax (CRT) will be reduced 13 percent (from 4.5 to 3.9 percent) providing 11,000 businesses which still pay the CRT an average annual savings of $4,400. Joining the Mayor were Deputy Mayor Rudy Washington, Department of Finance Commissioner Fred Cerullo, Director of Operations Adam Barsky and the host of today's press conference, Gary Muhrcke owner of New Balance, New York.

"Today we continue the transformation of New York City to a pro-business, pro-opportunity City, with the further reduction of the Commercial Rent Tax," said Mayor Giuliani. "Effective today, for businesses across Manhattan the current 4.5 percent tax will drop to 3.9 percent - a 13 percent reduction - which will mean an average return of approximately $4,400 to each CRT taxpayer. Since 1995 when we first began Commercial Rent Tax reforms 70,000 businesses have been removed from the City's the tax rolls resulting in $470 million in savings for these businesses. As a result of the CRT reduction announced today, businesses South of 96th Street and with rents above $100,000 will save a total of $50 million. We have provided savings for business throughout the City and given them the opportunity to invest their savings in their business, neighborhoods and in the creation of new jobs.

"Five years ago, New York City's governing philosophy was anti-business and anti-opportunity," the Mayor continued. "Today New York City is known as a City in which government enables and encourages private sector growth and development through intelligent and targeted tax reductions. As this tax cut and this week's tax-free shopping week proves, lowering or eliminating burdensome taxes does not cost the government money - rather it gives people and businesses the opportunity to spend their money on what they need, spurring further economic growth," the Mayor concluded.

The history of commercial rent tax reductions in New York City is as follows:

December, 1984: 6 percent CRT was first created for businesses with a taxable threshold of $11,000
June, 1994: taxable threshold raised to $21,000
June, 1995: taxable threshold raised to $31,000
September, 1995: taxable threshold raised to $40,000
September, 1995: 6 percent CRT completely eliminated in Manhattan north of 96th Street and in the Bronx, Brooklyn, Staten Island and Queens
March, 1996: CRT reduced from 6 percent to 5.1 percent for businesses South of 96th Street and with rents above $40,000.
June, 1996: CRT reduced from 5.1 percent to 4.5 percent
June, 1997: taxable threshold increased from $40,000 to $100,000
September, 1998: CRT reduced from 4.5 percent to 3.9 percent

"Since 1996 our commercial tax has been cut by 50 percent," said New Balance New York owner Gary Muhrcke. "And as a result we are seriously considering expanding our business further. I want to thank the Mayor for his efforts in reducing this burdensome tax and look forward to further reductions."

In partnership with the City Council, the State Legislature and Governor George Pataki, the Giuliani Administration has enacted more tax reductions in the last three years in New York City than were enacted in the prior 18 years combined. By the year 2001, these tax cuts will have saved New Yorkers more than $3.1 billion.

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