Chamber Urges Albany to Ease the Commercial Rent Tax on Storefronts
November 6, 2026
A new Independent Budget Office analysis finds that exempting Manhattan shops and restaurants from the Commercial Rent Tax would save each one thousands of dollars a year, at a cost of just 3.3% of what the tax raises.
The New York City Independent Budget Office (IBO) studied a proposal to exempt retail and food service locations paying up to $1 million in annual rent from the Commercial Rent Tax (CRT). It found the change would cost the City $31.1 million, or 3.3% of the $931 million the tax raised in tax year 2025. The relief would reach 2,071 storefront locations in Manhattan below 96th Street.
Storefronts are carrying more costs than ever
In May, the Chamber's State of NYC Small Business index gave cost pressures a D−, the lowest grade of any category it tracks.
Those figures are for New York-area service businesses. New York City inflation ran at 3.4% in 2025, against 2.7% nationally. Those pressures have only grown since the report came out. Fuel and energy prices driven up by the war with Iran now raise the cost of deliveries, of utilities, and of the goods on the shelf. Customers have come back, but margins have not.
New York City is now the only place in the United States that taxes businesses for the rent they pay. This relief would cost the City $31 million out of a $931 million tax, and it would put thousands of dollars a year back into each of these shops and restaurants. That money goes to staff, to inventory, and to keeping the lights on. This is a modest, responsible investment in the storefronts New Yorkers count on.
Jessica Walker
President and CEO, Manhattan Chamber of Commerce
Retail needs the help most
Since early 2020, the number of retail storefronts in the CRT zone has barely grown, while food service has expanded.
“Storefront owners can't control what they pay for fuel, insurance or energy,” Walker added. “The City can control this tax. Lowering it is one of the fastest ways to help businesses open, stay open, and fill empty storefronts.”
What the Chamber is asking for
The Chamber thanks Manhattan Borough President Brad Hoylman-Sigal for requesting the IBO's analysis and for his long leadership on this issue, and State Senator Erik Bottcher for carrying the legislation. We urge the Legislature and the Governor to pass it in the 2027 session.
Senator Liz Krueger's bill would give the IBO access to business tax data so it can measure how policies like this one affect investment and jobs. Good decisions about small business start with good data.
Read the analysis: NYC Independent Budget Office, “Exploring a Proposed Expansion to the Commercial Rent Tax Exemption” (Nov. 6, 2026)
About the Manhattan Chamber of Commerce: The Manhattan Chamber of Commerce represents roughly 125,000 Manhattan businesses, from neighborhood storefronts to the borough's largest employers.