Bipartisan Bill Restores Tax Fairness for Small Businesses
Small businesses are the lifeblood of New York’s economy. They create jobs, drive local investment, and strengthen communities in every corner of the state. To succeed, especially in today’s complex regulatory environment, these businesses depend on access to affordable, outsourced payroll, HR, and compliance services.
Unfortunately, a technical regulation from the Department of Tax and Finance—subsection 4-1.2(c)—is threatening that support system. It wrongly treats client payroll funds as income for the companies that provide these services, creating millions of dollars in inflated tax obligations. These costs ultimately fall on the backs of mom-and- pop shops, startups, and small nonprofits. And in turn, they jeopardize access to the very services small employers rely on to stay compliant, competitive, and operational.
That’s why we acted decisively to correct the issue. S3330/A3141 passed overwhelmingly with bipartisan support, a clear recognition that this is a smart, targeted fix, not a political issue. The bill restores the original intent of the 2014–15 corporate tax reforms and reaffirms New York’s commitment to fostering small business growth.
Governor Hochul has consistently championed small businesses and local economic development. Signing this bill would be a strong affirmation of that commitment. It would protect the service infrastructure small employers depend on, ensure tax fairness, and preserve jobs and investment in communities across New York.
We urge Governor Hochul to sign S3330/A3141 without delay. Let’s protect the backbone of our economy and ensure New York remains a place where small businesses can thrive.
Jeremy Cooney is the New York State Senator for the 56th District and Jen Lunsford is the New York State Assembly Member for the 135th District
