Tax expenditures are state and local government revenue losses resulting from special tax provisions, such as exemptions, deductions, credits, and abatements, that reduce the tax liability of specific taxpayers or activities. This page covers CBC’s work on economic development incentives, housing tax programs, property tax assessment caps, business tax credits, and the evaluation of tax expenditure effectiveness.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The State could limit the residential energy sales tax exemption only to zero emission fuels and renewable energy sources to better support CLCPA goals.
The State could lower, or gradually eliminate, the sales tax exemptions on fossil fuel-based residential energy sources.
The State could consider providing financial support to low-income households to enable them to afford switching to clean heating sources while eliminating fossil fuel exemptions.
The State could consider eliminating exemptions for fossil-fuel based energy used for non-residential purposes, such as research and development.
The State could explore tailoring tax credit programs to create incentives to incorporate renewable energy into program projects.
Investment tax credits could exclude heating systems that rely on fossil fuels.
Key Data
As of October 2020, New York State has allocated $7.8 billion in tax incentives to the film and television industry since 2004, with the credit now capped at $420 million annually through 2025.
As of September 2020, New York State provides more than $800 million in annual tax exemptions that reduce the cost of consuming fossil fuels, which encourages the production of greenhouse gas emissions.
In fiscal year 2019, New York City's total tax expenditures were $6,853 million, with housing programs accounting for the largest share at $3,830 million (as of October 2019).
A proposal to extend the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers was estimated to have a fiscal impact of $140 million (as of April 2019).
Economic development tax expenditures in New York City grew from $1.6 billion in 2012 to $2.1 billion in 2016, highlighting the need for greater scrutiny and evaluation (as of September 2016).
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
New York State has allocated $7.8 billion in tax incentives to the film and television industry since 2004, yet research suggests these credits fail to generate meaningful employment gains and often subsidize projects that would have filmed in the state regardless. Given the state's $9 billion budget gap, the program should be eliminated or significantly reduced to prioritize more effective use of public resources.
Recommendations related to Tax Expenditures
The State should eliminate the film tax credit because it has not produced enough value for New Yorkers.
The State should stop awarding from future year allocations to ensure that a cap effectively limits the increase in state liability each year.
The State should stop spreading claims over 3 years to reduce the extended distance between job creation and state financial impact.
The State should decrease the credit substantially to 10 percent of qualified costs and eliminate the annual cap to reduce the cost of the program.
The State should further decrease the share of expenses that can be claimed in New York City to push production to areas of the state with a greater need for economic development.
Key Data
$7.8 billion
— Total tax incentives allocated to the film and television industry since 2004.
$420 million
— The annual cap on the film tax credit through 2025.
9.7 percent
— The unemployment rate in New York State at the time of the report.
$9 billion
— The size of the state budget gap at the time of the report.
10 percent
— The proposed reduced credit percentage for qualified costs.
$12 million and $15 million
— The annual amount collected by Saturday Night Live between 2015 and 2018.
New York State provides over $800 million in annual tax exemptions that reduce the cost of consuming fossil fuels, which undermines the state's climate goals. The state should reform these tax expenditures and spending programs to incentivize renewable energy and align fiscal policy with the Climate Leadership and Community Protection Act.
Recommendations related to Tax Expenditures
The State could limit the residential energy sales tax exemption only to zero emission fuels and renewable energy sources to better support CLCPA goals.
The State could lower, or gradually eliminate, the sales tax exemptions on fossil fuel-based residential energy sources.
The State could consider providing financial support to low-income households to enable them to afford switching to clean heating sources while eliminating fossil fuel exemptions.
The State could consider eliminating exemptions for fossil-fuel based energy used for non-residential purposes, such as research and development.
The State could explore tailoring tax credit programs to create incentives to incorporate renewable energy into program projects.
Investment tax credits could exclude heating systems that rely on fossil fuels.
Key Data
$800 million
— Annual tax exemptions provided by New York State that reduce the cost of consuming fossil fuels.
$369 million
— Fiscal impact of a partial repeal of the sales tax on residential energy, leaving exemptions for electricity, wood, and renewables.
$177 million
— Fiscal impact of repealing the Petroleum Business Tax (PBT) on residential heating.
$85 million
— Fiscal impact of repealing the sales tax exemption on automotive fuel receipts exceeding two dollars per gallon.
$211 million
— Current program cost of the sales tax exemption for property sold to contractors for capital improvements or repairs for exempt organizations.
$161 million
— Current program cost of the Excelsior Jobs Program Investment Tax Credit.
New York City's total tax expenditures reached $6,853 million in fiscal year 2019, with housing programs accounting for the largest share at $3,830 million. Economic development programs and other tax expenditures comprised the remaining $3,023 million of these foregone revenues.
Key Data
$6,853
— Total New York City tax expenditures in fiscal year 2019, in millions.
$3,830
— Portion of fiscal year 2019 tax expenditures allocated to housing programs, in millions.
$2,045
— Portion of fiscal year 2019 tax expenditures allocated to economic development programs, in millions.
$978
— Portion of fiscal year 2019 tax expenditures allocated to other programs, in millions.
The 2019 Economic Development Scorecard tracks 69 legislative bills aimed at fostering economic growth through various tax incentives, grants, and loan programs. These proposed measures include significant fiscal commitments, such as $275 million for small business property tax exemptions and $140 million for corporate franchise tax relief for manufacturers.
Key Data
$140 Million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$30 Million
— Fiscal impact of increasing the Farm Workforce Retention Credit per eligible farm employee.
$275 Million
— Fiscal impact of making real property owned by small businesses eligible for the STAR property tax exemption.
$10 Million
— Fiscal impact of establishing the GrowNY pilot program for economic gardening.
$8.25 Million
— Fiscal impact of establishing the Capital Investment Jobs Retention Program.
$1 Million
— Fiscal impact of establishing the Transitional Green Development Program.
$3.2 billion -- how much New York City spent on economic development in 2016, including tax expenditures, operating costs, and capital spending. NYCEDC President and CEO James Patchett joins the podcast to discuss the City's development strategy, tax breaks, NYC Ferry and the BQX project.
$67 billion is the amount of state and local taxes New York State residents deduct from their federal tax returns each year. Known as SALT, this deduction is the topic of intense debate in Washington. Congressional leadership proposes to eliminate or cap SALT in order to offset the cost of…
New York State's tax expenditure reporting includes various economic development programs and tax breaks, such as those for START-UP New York companies. These notes clarify the specific inclusions and methodologies used to calculate the financial benefits and revenue losses associated with these state-level tax policies.
Key Data
$56,561
— Companies reported receiving this amount in tax benefits under the START-UP New York program in 2014.
$1.2 million
— Companies reported receiving this amount in tax benefits under the START-UP New York program in 2015.
New York City's economic development tax expenditures have grown significantly, rising from $1.6 billion in 2012 to $2.1 billion in 2016. Implementing a regular, rigorous evaluation process for these programs is essential to ensure they effectively drive business investment rather than simply subsidizing activities that would occur regardless.
Recommendations related to Tax Expenditures
The city should support the proposed legislation to create a regular evaluation process for economic development tax expenditures.
There is a need for more scrutiny of all tax expenditures as well as clearer standards for discretionary tax abatements.
The city should pursue the establishment of a similar evaluation process for other tax expenditures, such as property tax abatements intended to induce construction of housing.
The city should use evaluation results to inform the Council’s oversight and advocacy at the State and local level when evaluation identifies changes that would improve the effectiveness and efficiency of tax expenditure programs or indicates programs are ineffective and should be terminated.
Key Data
$1.6 billion
— Total economic development tax expenditures in 2012.
$2.1 billion
— Total economic development tax expenditures in 2016.
$2.8 billion
— Total tax expenditures identified by the City Council Taskforce on Economic Development Tax Expenditures.
New York City's property tax system is riddled with inequities, including assessment caps and phase-ins that create disparate effective tax rates across different property types. Reforming the system to address these issues could involve revaluing properties, eliminating caps, and consolidating tax classes to ensure a more equitable distribution of the tax burden.
Recommendations related to Tax Expenditures
If city officials are concerned with protecting homeowners who do not have sufficient cash incomes to cover comfortably their property taxes, caps on increases in assessments should be means-tested.
The City should eliminate the caps for Class 1 properties and treat co-ops and condos identically to Class 1 properties.
The City should provide special exemptions or property tax 'circuit breakers' to elderly or low-income homeowners to target relief to those with limited cash incomes.
Policymakers should eliminate the caps and phase-in provisions for all properties to address inequities among properties.
The City should assess and tax both categories of property in the same way to eliminate all disparities among homeowners.
Key Data
$4.5 billion
— Estimated revenue foregone due to the cap and phase-in rules in fiscal year 2015.
$1.6 billion
— Lost revenue from assessment caps applied to smaller rental properties.
$21.1 billion
— Estimated baseline property tax levy in fiscal year 2015.
$846 million
— Revenue raised in fiscal year 2015 from the revaluation of condos and co-ops and the application of a 6 percent assessment ratio.
$936 million
— Revenue raised in fiscal year 2015 from the elimination of assessment growth caps on 1-3 family homes.
$2 billion
— Target amount of additional revenue to be raised by the proposed reform options.
New York's state sales tax includes over 150 exemptions totaling more than $9 billion, while state business tax incentives cost $2.6 billion annually. Reforming these tax expenditures by repealing certain sales tax exemptions and tightening eligibility for business tax credits could improve state revenue and economic competitiveness.
Recommendations related to Tax Expenditures
The State should repeal or examine almost $1.8 billion in sales tax exemptions identified by the Commission.
The State should implement reforms to the largest business tax programs, specifically the Investment Tax Credit, the Film Tax Credit, and the Brownfields Tax Credit.
The State should mandate periodic reviews of the costs and benefits of business tax incentive programs, alongside expanded transparency regarding which businesses benefit.
The State should consider lowering the sales tax rate as a simpler alternative to personal income tax offsets.
The Governor should include the Commission's tax reform proposals in the upcoming state budget.
Key Data
$9 billion
— Total value of the more than 150 separate state sales tax exemptions.
$2.6 billion
— Total value of state tax incentives for businesses previously identified.
$1.8 billion
— Value of sales tax exemptions identified by the Commission that should be repealed or examined.
$611 million
— Value of the sales tax exemption for auto trade-ins.
$520 million
— Value of the sales tax exemption for capital improvements to property.
$305 million
— Value of the sales tax exemption for cable TV.
New York faces a massive fiscal gap requiring significant spending reforms rather than tax increases that could hinder economic recovery. The state should eliminate ineffective programs like the Middle-Class STAR rebate and the Empire Zone program while reclassifying mislabeled revenue measures that function as tax increases on residents and businesses.
Recommendations related to Tax Expenditures
The Legislature should reduce the Governor's proposed $5 billion in new revenue measures to no more than $2 billion to avoid discouraging investment and spending.
The State should eliminate the ill-conceived and poorly targeted Middle-Class STAR rebate and reform the Empire Zone program to make it more effective.
The Legislature should require a greater share of health insurance premiums to be paid by current and retired employees to bring contributions in line with other public sector employees.
The Legislature should thoroughly review all large institutions to determine which facilities can be closed or consolidated to save money.
The Legislature should take all possible actions to reduce the size of the State’s workforce to contain growth without damaging core services.
Key Data
$5 billion
— The amount of new revenue measures proposed in the Governor's Executive Budget.
$1.9 billion
— The total amount of revenue increases mis-categorized as spending reductions in the Governor's budget.
$679 million
— The amount of health care savings stemming from assessments on insurance companies that will be passed on to consumers.
$404.0 million
— The projected revenue from a proposed non-dietetic soft drink tax.
$240.0 million
— The projected revenue from a proposed covered lives assessment on insurance companies.
$197.0 million
— The projected revenue from a proposed SUNY/CUNY tuition increase.
No results for your current filters. Manually edit your filters, or
clear the filters.
Share Feedback
Give a star rating, write a comment of at least 10 words, or both.
