Tax Break Could Benefit Small Businesses

The city’s small business owners could save millions if Albany legislators approve a tax break that has won overwhelming support from the City Council. The bill would create a tax credit for shareholders of small businesses, known as S-corporations, to offset the double taxation owners face at the state and city levels. It would cut the personal income tax of shareholders by $35 million and create an additional savings of $18 million during the current fiscal year. Up to 100,000 business owners could be eligible for the credit and 25,000 small businesses could be eligible for other savings, created by changes in the way tax liabilities would be computed. Mayor Bloomberg proposed the tax credit in January, as part of a larger tax cut package.