Small business stimulus proposal — sales tax credit


Current situation: 

With many storefronts being forced to shutter due to the novel coronavirus, small businesses and their employees, customers and owners are suffering tremendous economic hardship. Decreased local economic activity means revenue (i.e., sales tax) for local municipalities will be tremendously impacted, too, resulting in unprecedented budget shortfalls for governments. Nonetheless, many essential businesses and entities are still open for business to provide necessary goods and services to the public. The public needs to know how to access these. Similarly, non-essential businesses and entities have been forced to think creatively about how to maintain some semblance of operations. This could mean, for example, dine-in only restaurants transitioning to delivery, doctors transitioning to telemedicine, gyms and dance centers transitioning to virtual training classes or teachers and music schools transitioning to virtual tutoring. To maintain economic activity of these establishments, the public needs to know that these businesses are open for business in new ways. 

Proposal to mitigate economic downturn:

To increase economic activity, tax revenue and the public's awareness of how to access products and services, businesses must market and promote themselves aggressively. To encourage businesses to market themselves — and to lessen the burden of marketing costs — taxing entities should offer a county and/or state sales tax credit to businesses equal to a significant percentage of the business' marketing spend, to be applied to the first $10,000 of a business' marketing spend after April 1, 2020, through the end of the year. Qualifying marketing channels and activities would include advertising in news-producing media, such as newspapers, television/cable and radio. The reimbursement ratio would be equal to 100% if the marketing takes place with a company headquartered in New York. The reimbursement ratio would be equal to 50% if the marketing takes place with a company headquartered outside of New York (e.g., Facebook, Google). The greater reimbursement ratio (100% vs. 50%) for businesses marketing with New York-based companies is to encourage more taxable dollars to remain within the Empire State.

The concept is to help get local commerce back on its feet, inform the public of many businesses' new business models and decrease municipal budget holes. After all, a credit towards some tax revenue is significantly better than no incentive and no tax revenue.

Stuart Richner | President
Richner Communications, Inc. | Richner Printing, LLC


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