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Gov. Andrew M. Cuomo’s (D) plan to create a new payroll tax could run into trouble in the Republican-controlled state Senate.
Senate Majority Leader John J. Flanagan (R) told reporters Feb. 13 that it’s unlikely the Legislature could approve a new payroll tax in time for the April 1 start of the state’s fiscal year.
Flanagan said he needed to see more details on Cuomo’s plan, but “my visceral reaction is I think all of our colleagues are opposed to that,” referring to Republican senators’ position on the proposed payroll tax.
Cuomo will need the support of Senate Republicans if his plan stands a chance of passage.
Flanagan’s comments come one day after Cuomo released more details on a plan to mitigate the impact of the 2017 federal tax act’s ( Pub. L. No. 115-97) limit on state and local tax deductions. The primary ideas are a new payroll tax and creation of two charitable funds. He also plans to sue the federal government. Additional details, including actual bill language, are expected Feb. 15.
Flanagan gave his remarks during a press conference to announce a $1.1 billion proposed tax cut package aimed largely at reducing income and property taxes for small businesses.
The plan also would extend the state’s 0 percent corporate income tax rate to all manufacturers, regardless of how they’re organized. Under current law, only manufacturers organized as C corporations are eligible for the zero percent rate.
Flanagan said manufacturers would save an estimated $90 million.
The tax plan, which hasn’t been drafted in legislation, will serve as the basis for Senate Republicans to negotiate a budget deal with Cuomo and Assembly Speaker Carl E. Heastie (D).
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