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Corporate Tax Attorneys

New York State and City recently enacted the most significant and substantial changes to their corporate tax regimes in more than 30 years effective for tax years after January 1, 2015.  Corporations require attorneys with a sophisticated understanding of New York’s tax rules, past, present and future.

Until 2015, most corporations would need to have some type of physical presence in New York to be subject to tax.  Under the new “economic nexus” provisions, however, a corporation with no physical presence but more than $1,000,000 in New York receipts can be subject to New York’s corporate franchise tax.  That economic nexus standard, however, does not apply to New York City’s corporate income taxes.

Until 2015, a corporation sourced most receipts to New York State and New York City based on where the services were performed, or where the receipt was generated, with the exception of receipts from the sale of tangible property and a few other categories of receipts.  Under new market-based sourcing rules, receipts are sourced to New York State and City if the good or service is received there or if the customer receives the benefit of a service in the State or City.

Other noteworthy changes to the corporate tax regime include:

  • Unitary waters edge combined reporting;
  • Elimination of the Article 32 Bank Tax;
  • Elimination of the alternative minimum tax base;
  • Limitations on the taxation of alien (non-U.S.) corporations;
  • New provisions for calculating net operating loss carryovers and for carrying forwarded such losses from years prior to 2015;
  • Elimination of the Issuer’s Allocation Percentage for apportioning investment income;
  • New limitations on the definition of tax-exempt investment income and other exempt income;
  • Zero percent tax rate for qualified NY manufacturers;
  • Different NYC tax regimes for federal C corporations vs. federal S corporations;

The new corporate tax regime in New York offers planning opportunities as well as questions as to how the new laws will be interpreted and applied. Contact Hodgson Russ LLP today for a consultation to discuss your tax situation.