Business Owners! Compliance with Laws & Regulations has Become a Full-Time Job
{1: 40 minutes to read} With so many new laws and regulations being enacted in recent months and years, it is not 
unusual for business owners to be unaware of or overlook those that have been in effect for several years. Often such laws and regulations relate specifically to a particular industry or the locations where the business is situated or conducts business.
Recently, a few of my clients were dumbfounded when they found out that New York City has a commercial rent tax that has been in effect for several years. Any tenant of commercial property in Manhattan south of the center line of 96th Street, with limited exception, is required to pay Commercial Rent Tax (CRT) if the “gross taxable rent” they pay per year exceeds $250,000. The CRT starts at 6% but is subject to a 35% reduction, thus yielding a 3.9% effective tax rate. Included within gross taxable rent is any amounts that a landlord is required to pay but the tenant pays, such as property taxes.
Interesting Fact: If a tenant pays $25,000 per month or $300,000 per year in gross taxable rent, the Commercial Rent Tax is approx. $11,700, or almost an additional $1,000 per month.
There are several other details to New York City’s commercial rent tax law that business owners leasing space in this area must be aware of, however, such details are beyond the scope of this article.
The Commercial Rent Tax in Manhattan is just one of numerous municipal, county and local laws that clients, their accountants and attorneys may not be aware of. Clients should select attorneys and accountants who are not only familiar with general laws and regulations but who are particular to your industry and geographic location.
If you have questions about the specific laws and regulations applicable to your business, contact Levine Law, LLC at (516) 921-6700.
Harlan Levine
Tel. (516) 921-6700
[email protected]
