The $212 billion state budget includes a mechanism meant to aid small businesses in New York who could face a form of double taxation due to the $10,000 cap on state and local tax deductions.
The measure, backed by state Senator John Brooks, creates a pass through entity tax that would restore federal deductibility to income taxes paid in New York for corporations and partnerships.
For small businesses that are eligible, an "election to be taxed" under the provisions of new law must be made by October 15.
The measure comes as many small businesses — especially in the leisure and hospitality industries — have struggled during the last 12 months of the COVID-19 pandemic.