When it comes to Donald Trump‘s taxes, Trump has often proclaimed he is smart for not paying taxes and believes in tax cuts for big and small businesses. Many believe the rich pay fewer taxes than the middle class because of tax loopholes and sophisticated strategies to minimize their tax bill. It’s perhaps for this reason the public may never know what Trump really pays in personal or corporate income taxes, if he pays any at all.
But what if I told you some of the same “tax loopholes” the Trump Organization has secured, are in fact, available to small businesses too? In fact, these programs are not your typical big-company-IRS-deductions but state and local programs put in place to stimulate business growth of every kind and at every level.
In 2003, the Trump Organization was turned down for a 421-a property tax abatement, an exemption from property taxes available for new housing developments with three or more units in New York City. The program was not designed to give multi-million dollar tax breaks to luxury developments, but that didn’t stop the Trump Organization from pursuing and winning a lawsuit for a local 10-year tax abatement worth $119.5 million for the 371-unit condo.
The 421-a property tax exemption program is a local program with low criteria thresholds. The program is not unique to New York, as there are many local property tax exemptions found across the country that encourage real estate development at the smallest level. Florida has a Brownfield Redevelopment Bonus; Michigan has an Obsolete Property Rehabilitation Act; and Pennsylvania has a Local Economic Revitalization Tax Assistance Act.
In 2011 and 2012, the Trump Organization was successfully awarded $3.6 million from the Industrial Commercial Incentive Program/ Industrial and Commercial Abatement Program. Similar to the 421-a, the program provides property tax abatements for periods up to 25 years. The program is structured to incentivize industrial projects throughout the entire city and stimulate economic development by offering “as-of-right” to all businesses no matter the size.
Alicia Glen, New York City’s deputy mayor for housing and economic development said, “Donald Trump is probably worse than any other developer in his relentless pursuit of every single dime of taxpayer subsidies he can get his paws on.” [ NY Times]
Similar to the Trump Organizations, small companies too can take advantage of state and local tax abatements. What’s stopping you from being relentless and securing local tax programs that are available to you too “as-of-right?”
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.