Aid Bill Targeting Individuals,
Not Ailing Businesses

By: Rosamaria Mancini
Long Island Business News
February 1, 2002

Paul Portnof was not physically harmed by the terrorist attacks on lower Manhattan Sept. 11, but he's suffering financially from them.

He's part owner and manager of a Comfort Inn on W. 35th Street, which went from being booked solid before the disaster to softly vacant afterward. To make matters worse, Portnof believes the federal government is ignoring businesses like his during their period of distress.

"The federal government hasn't given us anything, it wasn't even offered," Portnof said.

Portnof, whose company is based in Old Westbury, was forced to lay off many employees as vacancies soared. When his competitors quickly dropped rates by approximately 50 percent, the Comfort Inn did the same in order to stay competitive. "We are not making a profit, we are just able to pay our bills," he said.

Others agree with Portnof that businesses affected by the World Trade Center disaster have been shortchanged in the tax relief law signed by President George W. Bush last week.

Stephen Breitstone, partner and head of the Tax Group at Meltzer, Lippe, Goldstein & Schlissel, said that Portnof, his client, might not have had to lay off employees if he'd received a break in taxes, as the direct victims did.

"I think Congress should do more for business in the way of easing up on some of the taxing rules so that they can work through their current problems," Breitstone said.

The Victims of Terrorism Tax Relief Act of 2001 specifically outlines what tax breaks the victims of Sept. 11, the Oklahoma City bombing and anthrax victims will receive. But it doesn't do the same for businesses.

For individual victims, the law provides income and estate tax relief as well as the cancellation of certain indebtedness, among other things.

It is an extension of a law dealing with the taxation of military or civilian employees of the United States who have died as a result of terrorist or military activity outside the United States. The new law elevates the new victims to military status with some added provisions.

The president's economic stimulus package, which could provide some tax relief for businesses, has not helped yet either. During his State of the Union address this week, President Bush urged Congress to adopt his stimulus package. The compromise stimulus measure has passed the House of Representatives, but not the Senate.

U.S. Congressman Steve Israel was one of the nine Democrats in Congress to support the president's stimulus package. "Our community was especially hard hit by attacks in September, and Congress and the president need to work together to get the economy back on track," Israel said.

There are some programs to assist businesses, such as the Empire State Development Corporation World Trade Center Recovery Grant Program, which is providing grants to eligible businesses.

The new law still leaves many questions unanswered including how a business would be taxed on a subsidy or grant it receives, Breitstone said.