New Bill Would Double Tax Breaks for Startups
HUNTS POINT — When Bronxite Miguel Sanchez, 33, launched his animation and design firm three years ago, he estimates he spent more than $30,000 on computers, software, staff and services.
Riverdale resident Mandi Susman, 43, had to keep her full-time job at the Metropolitan Museum of Art last year to offset the $22,000 she spent getting her online marketing consultancy off the ground.
And Alexandria Ocasio-Cortez, 22, has shelled out $1,000 since April simply to rent space while she researches her business idea — a children’s book publishing company devoted to telling positive stories set in The Bronx.
All three Bronx entrepreneurs support a bill, sponsored by West Virginia Sen. John Rockefeller and co-sponsored by New York Sen. Kirsten Gillibrand, that would double the tax deductions for new business start-up costs, bringing it from $5,000 to $10,000.
“You don’t really make a profit in your first year,” Ocasio-Cortez said Monday at the Sunshine Bronx Business Incubator in Hunts Point. “To get taxed on top of that is a real whammy.”
Gillibrand and several Bronx elected officials met at the new incubator to tout the Small Business Start-Up Support Art, which includes proposed deductions that would cover any expenses a company incurs before it opens for business. Gillibrand said that bill, and a similar one proposed in the House, enjoy bipartisan support.
She added that the tax breaks would particularly benefit start-ups in New York’s burgeoning tech sector.
“The growing high-tech industry is the future of our economy,” Gillibrand said Monday, “and we need to help make sure it starts right here in The Bronx.”
New businesses often face a flood of initial expenses related to market research, consulting, incorporation, training, marketing, equipment and employees.
Bronx Borough President Ruben Diaz Jr. said The Bronx is filled with promising entrepreneurs, but many are thwarted by the high upfront costs of launching a business.
“The intellectual capital is here,” Diaz said. “But the question becomes, 'Where do I get the money to begin?'”
Diaz said the bill would help ease those costs, adding that his office’s economic development arm funded or assisted about 1,000 Bronx businesses last year.
Some startups try to reduce their initial expenses by renting space at facilities like Sunshine Bronx, which became the borough’s first city-subsidized business incubator when it opened in Hunts Point’s immense BankNote building in January.
About 40 startups currently pay from $195 to $275 per person each month to work at the site, which provides mentoring and technical support in addition to workspace, according to co-founder Cheni Yerushalmi.
While The Bronx is far removed from Manhattan’s “Silicon Alley” tech hub, Yerushalmi and others said the borough offers a key advantage — affordability.
Miguel Sanchez said his digital animation company, Mass Ideation, for instance, pays $1,000 for four desks in Sunshine Bronx, compared to the $1,500 it previously spent for two desks at a shared office space in Manhattan.
“It saves you a lot of money,” said Yerushalmi.