Legal Term
NYC commercial tenant build-out allowance tax
Legal Definition
The tax treatment of allowances provided by landlords to commercial tenants in New York City for financing leasehold improvements, where such payments may be classified as taxable income under New York State, New York City, and federal tax laws, often treated as additional rent.
In Plain English
In NYC, when a landlord gives a business money to fix up a rented space, that money is usually taxed as income for the business, increasing their tax bill.
Example in a Contract
Landlord shall provide Tenant with a build-out allowance of $75,000 to be applied towards interior renovations and fixtures. This allowance shall be deemed additional rent and shall be included in Tenant's gross income for all federal, state, and local tax purposes, including NYC business taxes.
This content is for informational purposes only and does not constitute legal advice. Always consult a licensed attorney for legal matters.