Historically, New York City ("NYC") has had a commercial rent tax (“CRT”) imposed on tenants who occupy commercial space in Manhattan, below 96th Street and above Murray Street, who pay $250,000 or more in annual “NYC CRT Rent.”* The effective tax rate was 3.9%.
Intro 799-B (LL254) and Intro 882 (LL121) provide, effective June 1, 2018 (originally July 1, 2018), the following:
The commercial rent tax has been a heavy burden, and often an overlooked burden, for many NYC businesses. This reform should provide much-welcomed relief for a number of small businesses operating in Manhattan.
*”NYC CRT Rent” is the amount paid for the use of premisesand includes payments that must be made by the tenant for the landlord for real estate taxes, water rents or charges, sewer rents or any other expenses, including insurance NYC CRT Rent does not include expenses for improving, repairing, or maintaining the premises.
**“Total income” means the amount reported on the tenant’s prior-year federal income tax; gross receipts minus cost of goods plus dividends, interest, gross rents, gross royalties, capital gain net income, net gain or loss from the sale of business property, net farm profit or loss, ordinary income or loss from other partnerships, estates or trusts or other income or loss.