New York Business Taxes at a Glance
New York taxes income at more than one level. A resident of New York City pays state income tax and city income tax. A business in the city may owe state corporate tax and a separate city business tax. Employers in the New York City region may owe a payroll-based transit tax on top of withholding. Residency, remote work, and multistate income make the picture more complex. BOMCAS helps clients understand each layer and file it correctly.
Personal Income Tax at the State and Local Level
New York State taxes residents on all of their income and nonresidents on income from New York sources, using graduated rates. Two local income taxes are collected on the state return:
- New York City personal income tax applies to city residents. Nonresidents who only work in the city do not pay it.
- Yonkers imposes a resident income tax surcharge and an earnings tax on nonresidents who work there.
Because the city and Yonkers taxes are calculated on the state return, residency in each place has to be determined separately, and part-year moves need careful allocation.
Residency: Domicile and Statutory Residence
New York can treat you as a resident in two ways. The first is domicile: your permanent home, the place you intend to return to. The second is statutory residence. A person domiciled elsewhere can be taxed as a New York resident if they maintain a permanent place of abode in the state and spend more than 183 days there during the year.
Statutory residency is fact-based and record-heavy. A day partly spent in New York generally counts as a New York day. People who keep a Manhattan apartment while living in Connecticut, New Jersey, or Florida are at the center of many audits. We help clients build day logs and records during the year, not after a notice arrives, and prepare the resident, nonresident, or part-year returns that fit.
Remote Work and the Convenience Rule
Nonresidents who work for a New York employer can owe New York tax on days worked from home outside the state. Under the convenience-of-the-employer rule, those days are generally treated as New York workdays unless the work was done out of state because the employer required it rather than for the employee's convenience. This affects remote workers in other states and can create double-tax questions with their home state. We review allocation schedules and help claim the credits available in the home state.
Business Taxes in New York State
C corporations doing business in New York generally file the corporate franchise tax return, which uses a single receipts factor with customer-based sourcing for many receipts. S corporations file a state return and pay a fixed-dollar minimum tax. LLCs and partnerships with New York income may owe an annual filing fee.
New York also offers an elective pass-through entity tax (PTET). Partnerships and S corporations can elect to pay state tax at the entity level, and owners receive a credit. The election has to be made each year by a set deadline, and the decision depends on the owners' residency and federal position. We model the election before the deadline and track the estimated payments that follow.
New York City Business Taxes
New York City adds its own business taxes, administered by the NYC Department of Finance:
- Business Corporation Tax for C corporations
- General Corporation Tax for S corporations, which the city does not treat as pass-through entities
- Unincorporated Business Tax on partnerships, LLCs, and sole proprietors carrying on business in the city
The Unincorporated Business Tax applies to self-employed professionals and consultants with city activity, which surprises many new business owners. New York City also has its own optional PTET, available to certain entities with city resident owners. We prepare the city returns alongside the state returns from the same books.
The MCTMT
The Metropolitan Commuter Transportation Mobility Tax applies to employers and self-employed individuals in the Metropolitan Commuter Transportation District, which covers New York City and nearby counties. Employers pay it based on payroll expense in the district, and self-employed individuals pay it on net earnings from the district. It has thresholds and rates that differ by zone. We include it in payroll and individual tax work so it is not missed.
Sales and Use Tax
New York sales tax combines a state rate with county and city rates, and businesses must get a Certificate of Authority from the Department of Taxation and Finance before making taxable sales. Taxable items include tangible goods and a list of services, such as certain information services, protective services, and building maintenance. Some clothing and footwear are taxed differently depending on the locality.
We register businesses, prepare quarterly or monthly returns, file the right local jurisdiction codes, and review exemption and resale documents.
Payroll in New York
New York employers withhold state income tax and, where applicable, New York City and Yonkers taxes. Other required programs include:
- Unemployment insurance with the Department of Labor
- Disability benefits coverage, with permitted employee contributions
- Paid Family Leave, funded by employee payroll deductions
- The MCTMT, where it applies
Remote and hybrid employees add another layer. Withholding depends on where employees live and work, and on the convenience rule. We set up payroll to handle these rules and reconcile quarterly filings to the general ledger.
Estate Tax
New York has its own estate tax with an exclusion amount separate from the federal one. Estates that exceed it by more than a small margin can lose the benefit of the exclusion entirely. Executors and families planning ahead should review the Department's current exclusion amount and plan with their legal advisers.
Accounting for New York Businesses
Professional services, finance, real estate, media, and hospitality firms make up much of our New York work. Each needs books that separate revenue and payroll by location, support state and city apportionment, and track sales tax by jurisdiction. We provide monthly bookkeeping, reconciliations, and year-end financial statements set up for these filings.
How We Work With New York Clients
Executives tracking New York days, consultants subject to the Unincorporated Business Tax, and owners deciding on state and city PTET elections can contact BOMCAS for a remote review ahead of key deadlines. Over time, this section will hold pages for specific New York cities and services. You can return to the BOMCAS home page or see our United States services. This page summarizes New York rules and is not a residency or tax determination for your situation.
Talk to BOMCAS About Your New York Taxes
Have a question about your New York filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.