NYC Real Estate Sales Tax
Just on the off chance somebody knows this! I am creating a business plan where I am going to rent a large space, and then dividing the space into smaller retail spaces and subletting those to retails stores. I am going to be charging a base rent and a percentage rent, does anyone know the total sales tax I should be putting into the plan?
[{"id": "f6pqkgx", "text": "I do not think you pay sales tax on rent.  In Florida you do, but not NY.", "replies": [{"id": "f6psp3c", "text": "Appreciate the fast feedback! I did know about Florida, but I was under the impression that New York City in Manhattan has a special rental sales tax?", "replies": [], "depth": 2}], "depth": 1}, {"id": "f6ps4v2", "text": "charge base rent plus 3% escalations. plus you can probably charge a proportionate share of the property taxes above the base year. you can't charge sales tax - that doesn't make any sense.", "replies": [{"id": "f6psz0l", "text": "Thank you for the advice, is 3% a standard number? Just follows inflation?\n\nMy plan was to charge a base rent plus 8% of gross revenue after break even, and as far I as I see, New York City has a sales tax on rent in Manhattan. But I am just confused about if this covers subletting and if this also covers the 8% as well?", "replies": [], "depth": 2}], "depth": 1}, {"id": "f6qhny0", "text": "So the WeWork of retail?!", "replies": [{"id": "f6qlqj0", "text": "Haha beat me to it", "replies": [], "depth": 2}], "depth": 1}, {"id": "f6rgdkq", "text": "Does your business plan depend on you making money off the sublets? Landlords will require in their leases that they get a portion of profits from subletting. I used to work for a Retail RE firm; saw this clause in every lease we had.", "replies": [{"id": "f6snzwn", "text": "Ok that is very interesting. Might that be a negotiating point, i.e, lower rent vs. a percentage of profits?", "replies": [{"id": "f6tcgiq", "text": "You can always ask, but I doubt they\u2019d give it to you. They\u2019re going to get their percentage of profit no matter what, whether it be from you via their lease, or by leasing out to someone else for the whole space instead of leasing to you. There are already spaces doing what you\u2019re talking about, like in Chelsea Market. Maybe ask someone involved with that about how they structure those leases.\nThe main issue with this model is that you\u2019ll be signing a longer term lease than your subleters, so you could be left on the hook for space you can\u2019t pay for since you\u2019re depending on their revenue. Unless they sign for the same length of time as your master lease, you could run into a huge issue.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]