In the last few years, the State of New York has attempted to make major reforms to the state’s corporate income tax system. In the spring of 2014, Governor Cuomo signed into law the state’s annual budget which contained many provisions that some experts have said are the most significant in the state since the corporate tax was first enacted in 1944. Many of the new provisions attempt to reduce business tax complexity, while another important change was the simple reduction of the corporate tax rate for New York businesses, thus diminishing their tax burden.
The 2014-15 New York State Budget, enacted in March of 2014, contained significant changes to New York’s corporate tax system. The 2015-16 New York State Budget, enacted in April of 2015, contain amendments to the 2014-15 Budget. These amendments make technical clarifications for tax years beginning on or after January 1, 2015.
Thus, starting in tax year 2016, the tax rate on a corporation’s “entire net income,” which is that amount of net income allocated and apportioned to New York State, is 6.5%, reduced from 7.1%. The rate of 6.5% is the corporate tax’s lowest level since 1968. For a qualifying small business, this rate was available a year earlier in 2015. The “entire net income” of a QETC (qualified emerging technology company) is 5.5% for 2016 and 2017, and then drops to 4.875% in 2018. From 2015 forward, qualified New York Manufacturers (QNYM’s) will not pay any income tax in New York state.
If you are a business owner in the New York or the Tri-State area and have any taxation questions, especially those about the applicable tax rate is on your entire net income derived from the state of New York, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com for a FREE consultation. Call 212-490-0704.
