Here are a few recent changes to various New York City (“NYC”) taxes:
NYC has amended its business income taxes to apportion income to NYC based on a single sales factor. The change will be phased in over 10 years beginning in 2009. When fully phased in, this will be consistent with the New York State apportionment rule.
- Beginning in 2009, combined NYC general corporation tax returns are required where there are substantial inter-company transactions among related corporations, even if those transactions are at arm's length. The $300 dollar minimum tax is being replaced with a graduated minimum tax (from $25 to $5,000) based on the corporation's gross receipts allocable to NYC. The maximum tax on capital has been increased from $350,000 to $1,000,000.
- Additional NYC tax credits eliminate any NYC unincorporated business tax on unincorporated businesses with taxable income under $100,000 and reduce the tax on those businesses with taxable income under $150,000.
- The NYC sales tax rate was increased to 4.5%, bringing the total sales tax rate in NYC to 8.875%.
- Finally, a REMINDER that the first New York Metropolitan Commuter Transport Mobility Tax payment is due on November 2, 2009. Earlier this year, New York adopted the Metropolitan Commuter Transportation Mobility Tax, which imposes a 0.34% tax on an employer's payroll for employees whose services are allocated to the Metropolitan Commuter Transportation District (consisting of NYC, and Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess and Westchester counties). The tax also applies to an individual's self-employment income that is allocable to these areas. The first payment of such tax is due on November 2, 2009, with respect to the first threequarters of 2009, and the balance is due on February 1, 2010. A partnership is required to make the payment (with respect to partnership income) on behalf of any nonresident partner unless the payment is $300 or less, the partner is included in the partnership's group filing, or the partner submits to the partnership a Form MTA-405-E, Certificate of Exemption from Partnership Estimated Metropolitan Commuter Transportation Mobility Tax paid on Behalf of Nonresident Individual Partners (not yet available) certifying that the partner is paying the tax individually.