NYC-WTC_000195490

NYC 9/11 Public Portal Document

I base rent exemption for tenants located in Manhattan south of 96th Street to $40,000 in 1997, and allowed a

I Ikii sliding scale of Credit for base rents ranging between $40,000 and $59,999, and completely eliminated the commercial rent tax in the rest of the City. However, legislation passed in 1995 accelerated the effective date of these changes to September 1, 1995. The 1995 legislation further allowed tenants to reduce rent subject to 'ilj the tax by 15 percent for the tax period March 1, 1996 to May 31, 1996, and by 25 percent for tax years beginning on or after June 1, 1996, bringing the effective tax rate down to 5.1 percent as of March 1, 1998 and to 4.5 percent as of Jupe 1,1998.

For tax years beginning on or after June 1, 1997, tenants iwith annual base rents of less than $100,000 were made exempt from tax, and a sliding scale of credit was allowed for base rents ranging between $100,000 andi$14O,0OO. From September 1, 1998, tenants were allowed to reduce their base rent subject to tax by 35 percent, bringing the effective tax rate further down to 3.9 percent.

Effective December 1, 2000, the base rent exemption was further increased to $150,000 with a sliding it'.' /scale of credit up to $ 190,000. The estimated cost of this increase is $8 million in 2001. li Under the Commercial Revitalization Program, qualifying teiiants in the lower Manhattan abatement zone are eligible for a three- or five-year special reduction to their commercial rent tax liability. The tax reduction period is determined by the number of employees the tenant employs, the length of the initial lease term and the lease execution date. । jif Forecast: The 2001 commercial rent tax revenue forecast has been decreased $8 million to $355 million, groivth of 3.2 percent over 2000. The 2002 commercial rent tax revenue forecast has been decreased $18 minion to $364 million, growth of 2.5 percent over 2001. These forecast changes result from the part-year and full-year costs of the recently enacted increase in the base rent exemption. Before the impact of this and earlier tax reductions, revenue is forecast to grow 3.2 percent in 2001 and 2.5 percent in 2002 on continued high occupancy and firm asking rents.

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NYC-WTC_000195539