-
A
single receipts factor will replace the current three-factor formula
allocation. The new allocation formula will be phased in over a ten year period beginning in 2009.
-
Certain receipts from the services of registered brokers and dealers of securities and commodities must now be sourced using the customer’s mailing address.
-
The filing of a combined return is now mandatory where
there are substantial intercorporate transactions among the related
corporations, regardless of the transfer prices charged in the transactions.
Additionally, a “captive” regulated investment company or a “captive” real
estate investment trust must now be included in a combined corporate tax return with a related New York City taxpayer where the greater than 50 percent ownership test is satisfied.
-
The $300 fixed minimum tax that applied to all taxpayers
has been replaced with a graduated minimum tax based on receipts. The
minimum tax ranges from $25 to $5,000 based on the taxpayer’s annual receipts allocated to New York City.
-
The maximum amount that can be owed under the alternative tax measured by business and investment capital has been increased from $350,000 to $1,000,000.
-
Taxpayers will be required to add back to their entire net
income the amount of any “Metropolitan Commuter Transportation Mobility Tax” (payroll tax) deducted for federal income tax purposes.
-
Certain companies owned by bank holding companies may no
longer rely on “grandfathered” filing status provided in the Gramm Leach
Bliley transitional provisions and must now file a bank corporation tax return instead of a general corporation tax return.
-
A
new tax “biotechnology credit” is now provided for certain expenses incurred by a taxpayer that is a “Qualified Emerging Technology Company”.
-
New York City now has the authority to adopt rules that require electronic filing of tax returns.
-
The interest rate on underpayments has been increased from
the federal short term rate plus five percent to the federal short-term rate
plus seven percent. Also the default rate for underpayments has been increased from six percent to seven and one half percent.
-
Certain taxpayers and tax preparers who file using tax
software may be required to file electronically and could be subject to civil
penalties for failure to do so. The civil penalties for deficiencies due to fraud have been increased and a new false and fraudulent penalty has been added.
-
Provisions detailing crimes applicable to the tax have been redefined to conform to recent New York State revisions.
Who is Subject to
This Tax?
Except for certain exemptions, the
General Corporation Tax is imposed on all domestic and foreign corporations that
are engaged in any of the following four activities in New York City during
their calendar or fiscal year:
-
Doing business;
-
Employing capital;
-
Owning or leasing property, in a corporate
or organized capacity; or
- Maintaining an office.
New York City does not recognize federal or New York
State "S Corporation" elections. S Corporations are subject to this tax.
Furthermore, beginning in 1996, an association or publicly traded partnership
that is taxable as a corporation for federal income
tax purposes is treated as a corporation for the
purpose of this tax.
If a corporation is not subject
to the tax, but it has an officer, employee,
agent, or other representative within the five boroughs, it must nevertheless file Form NYC-245,
the Activities Report for Corporations.
Who is Exempt
from the Tax?
The instructions to Forms NYC-3L and 4S explain in detail what types of
corporations are exempt from the General Corporation Tax:
- Dormant corporations, which at no time during the
taxable year engaged in any activity or held title to real property located in
New York City;
- Corporations subject to the New York City Banking
Corporation Tax or Utility Tax, except vendors of utility services which are
subject to the General Corporation Tax;
- Corporations organized exclusively for the purpose of
holding title to property as described in Sections 501(c)(2) or (25) of the
Internal Revenue Code;
- Insurance Corporations;
- Nonstock not-for-profit companies that have been
granted an exemption by the New York City Department of Finance; and
- Limited profit housing and housing development fund
companies organized and operating under articles 2 and 11, respectively, of
the Private Housing Finance Law.
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Tax Forms and Filing Information
2009 Forms & Publications
Forms & Publications Archive
Filing
Information
Filing Deadlines
- Annual returns and tax payments must be postmarked no
later than March 15th of the following year, if the corporation chooses an
accounting period that is based on the calendar year.
- A corporation that uses an accounting period other
than the calendar year (e.g., a fiscal year) must file a return on the 15th
day of the third month after the close of its fiscal year.
If a due date falls on a Saturday, Sunday or a legal
holiday, the filing must be made by the next business day.
Automatic
Extension
Businesses that are subject to GCT may
obtain an automatic six-month extension by filing Form NYC-6. This extension is
granted as long as the extension form is filed before the original due date for
the return and the tax was properly estimated and paid. The extension
application will be denied if the properly estimated amount of tax is not paid
with the extension application (or before).
Additional
Extensions
A business with a valid six-month
extension may request up to two additional 3-month extensions by filing Form
NYC-6.1. A separate form must be filed for each 3-month extension requested.
Estimated
Tax
If the corporation can reasonably expect its
tax to exceed $1,000 for the taxable year, it must file Form NYC-400
(Declaration of Estimated Tax) and pay the estimated tax. Estimated tax can also
be paid in installments. A payment of 25 percent of the tax liability for the
preceding year is required as the first installment of estimated tax for the
current year.
Properly estimated tax must be either 1) not less than
90 percent of the tax that is finally determined, or 2) not less than the tax
for the preceding taxable year.
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Dissolution
Requirement
Under Section 1003 of the Business Corporation Law, as of
October 1, 2009, Tax Clearance must be obtained from the NYC Department of
Finance (Finance) when dissolving corporations that have done business in and
incurred tax liability to the City of New York. Corporations must complete
the Request For Dissolution and mail to Finance. Finance will send a
Dissolution Consent to the address provided on the Request. The Dissolution
Consent must be attached to Certificates of Dissolution that are filed with the
New York State Secretary of State.
Request For
Dissolution
If you are filing a Request for Dissolution on behalf of
a corporation, you will need to obtain and submit a signed and dated Power of
Attorney with your request.
Power of Attorney For
Businesses
Tax
Rates
General Corporation Tax is computed by four
different methods and is imposed at whichever method produces the largest amount
of tax.
- Entire net income base = 8.85% of “net income
allocated to New York City"; OR
- Total Capital base = .15% of business and investment
capital allocated to New York City (for cooperative housing corporations that rate is .04%), not to exceed
$350,000 for tax years in or before 2008, or, $1,000,000 for
tax years beginning in or after 2009; OR
- Alternative tax base = 8.85% of 18.75% of net
income plus the amount of salaries or other compensation paid to any person, including an officer, who
at any time during the taxable year owned more than five
percent of the taxpayer’s issued capital stock. OR
- For tax years beginning in or before 2008 a minimum
tax of $300. If a return is filed for a period of less than one year, the tax
is still $300. It cannot be prorated. For tax years beginning in or
after 2009, the minimum tax is based on a corporation’s New York City receipts
computed as follows:
If New York City receipts are:
|
Fixed dollar minimum tax is:
|
Not more than $100,000
|
$25
|
More than $100,000
but not over
$250,000
|
$75
|
More than $250,000
but not over
$500,000
|
$175
|
More than $500,000
but not over
$1,000,000
|
$500
|
More than $1,000,000
but not over
$5,000,000
|
$1,500
|
More than $5,000,000
but not over
$25,000,000
|
$3,500
|
Over $25,000,000
|
$5,000
|
A corporation’s “New York City
receipts” are the same as its New York City receipts for purposes of
computing its business allocation percentage. For tax years
beginning on or after January 1, 2009: If a return is filed for a period
of less than one year, the minimum tax may be reduced. |
In addition to the tax calculated under the highest of
the four methods, a tax on subsidiary capital is also payable. The subsidiary
tax is at the rate of .075 percent of subsidiary capital allocated to New York
City.
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Legal Authority
Title
11, Chapter 6 (Subchapter 2) Administrative Code Enabling Act: Chapter 772 of the
Laws of 1966
Contact
Us
Email
Write to us:
NYC Department of
Finance
Correspondence Unit
66
John Street, 3rd Floor
New York, NY 10038-3735
Additional
Information
Related links: Refunds, Finance Guidance
