Governor Hochul Rejects Proposal to Limit New York Business Tax Credit Amid Budget Deficit Concerns
New York City Mayor Zohran Mamdani and City Council Speaker Julie Menin have called on Governor Kathy Hochul to limit the city's pass-through entity tax credit (PTET), which allows business owners to bypass federal limits on state and local tax deductions. The proposal suggests reducing the credit from 100% to 75%, potentially generating nearly $1 billion to help close the city's $5.4 billion two-year deficit. However, Governor Hochul has rejected the proposal, viewing it as a personal income tax increase. Hochul has pledged to assist the city by fully funding the first two years of Mamdani's universal childcare proposal and advocating for a pied-a-terre tax on second homes in New York City valued over $5 million. The PTET credit primarily benefits those earning over $1 million annually, and any changes would require state legislative approval and the governor's signature. 
