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New York State Tax Updates

For the latest news and updates on New York state and local tax

May 2, 2020

New York State Budget Bill Highlights

New York’s budget bill decouples from the CARES Act’s increase to the limitation on the business interest deduction, according to IRC § 163 (j)(10)(A)(i). Also, any references in New York’s personal income tax laws to the IRC will not include changes made to the IRC after March 1, 2020, for taxable years beginning before 2022. Highlights of the bill include the following:

Personal income tax
For New York City, the current personal income tax rates are extended through 2022, thereby delaying the income tax changes to taxable years beginning after 2023.

Sales and Use tax
Approximately 40 or so counties and three cities (i.e., Oswego, Yonkers, and New Rochelle) are allowed to impose additional sales and use taxes until November 2023.

The law extends the sales and use tax exemption to November 30, 2016, for certain purchases and services associated with the World Trade Center and Battery Park areas.

Real property tax
For the fiscal year 2021special assessing units, which are cities, cannot increase the current base proportion of more than 5%. For special assessing units, which are not cities, cannot increase the current base proportion in the 2020 assessment roll to more than 1%.

For additional information, refer here.

NY Provides Guidance to Tax Professionals Amidst Pandemic

A newsletter was recently issued by The New York Department of Taxation and Finance reminding tax professionals of the information on its website to provide relief during the COVID-19 pandemic. This information includes the extension of the income tax filing and payment due date to July 15, 2020, for individuals, fiduciaries, and corporations. Tax professionals should also have clients contact the Department if they cannot make their regularly scheduled tax payments due to COVID-19. The Department reminds tax professionals that the monthly sales tax return is due on May 20, 2020. For additional information, go to the Q&A section here.

April 2, 2020

Announcement from NYC Department of Finance on Deadlines

The NYC Department of Finance (“Department”) wants businesses to comply with the regular filing due date, as a Finance Memorandum was issued stating that the NYC Unincorporated Business Income Tax Returns and Estimated Tax Payments remain due April 15, 2020. However, extensions will still be accepted for those businesses that need more time in light of recent events. In addition, an abatement of penalties will be under the discretion of the NYC Commissioner, who plans to use his authority liberally, but interest remains statutory.

Likewise, the same holds true for the General Corporation Tax due from S-corporations, which were due March 16, 2020, and Business Income taxes due from C-corporations and Banks, which are due April 15, 2020. Returns and estimated income tax voucher payments are due when required by law, with a liberal abatement of penalties, and an accrual of statutory interest. While the Department did not provide for a blanket extension to a specified date (i.e., NYS extended to July 15th), the Department does plan on approving extension requests. Although the Department is complying with the statutory requirements for filing, the Department does want to give taxpayers flexibility, as seeking legislation during this emergency would have been too difficult.

March  21, 2020

New York State Extends Income Tax Filing Deadline

New York state’s income tax filing deadline is being moved to July 15 to comply with the federal government’s decision to push back the traditional filing date due to the coronavirus outbreak.

More on Taxes and the Coronavirus Pandemic.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.

November 2019

Technical Memorandum issued by the Department of Taxation and Finance

Pursuant to the enactment of the 2019-2020 Budget Bill, the Department of Taxation and Finance issued a technical memorandum discussing the sales tax collection requirements for marketplace providers. The memorandum reflects an increase in the sales threshold amount from $300,000 to $500,000, which is retroactive to June 1, 2019. Taxpayers affected by this change must register with the Department at least 20 days before beginning business in the state. This memorandum supersedes TSB-M-19(2)S issued on May 31, 2019. (New York Technical Service Bureau Memorandum No. TSB-M-19(2.1)S, 17/10/2019.)

Definition of Qualified New York Manufacturer Changes

For tax years beginning on or after January 1, 2018, the definition of a qualified New York manufacturer has been changed to use the New York State adjusted basis rather than the federal adjusted basis when determining whether a manufacturer meets the $1 million or $100 million property thresholds for determining eligibility for the manufacturer’s tax rate reductions and the real property tax credit. A qualified New York manufacturer is a manufacturer (or in the case of a combined report, a combined group) that is principally engaged in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing during the tax year that either has property in New York State of the type described for the investment tax credit that has an adjusted basis for New York State tax purposes of at least $1 million at the end of the tax year, or has all of its real and personal property in New York State. (New York Technical Service Bureau Memorandum No. TSB-M-19(5)C, (6)I, 10/18/2019.)

NYC Releases Changes for Business Tax Filers

The New York City Department of Finance has released a new issue of its Business Tax Practitioner Newsletter, which discusses the Tax Cuts and Jobs Act (TCJA) as it relates to changes for business tax filers including reporting IRC § 965 income, foreign-derived intangible income (FDII), and global intangible low-taxed income (GILTI). In addition, the newly amended Real Property Income and Expense (RPIE) rules were discussed with respect to the increased penalties for owners of income-producing property who fail to file RPIE statements for three consecutive years. The penalty is increased to 5% of the final actual assessed value for the calendar year in which such statement was to be filed. (NYC Dept. of Finance Business Tax Practitioner Newsletter, 10/01/2019, released 10/16/2019.)

October 2019

Imposed Sales Tax on Vapor Products

Effective December 1, 2019, a new 20% supplemental sales tax will apply to retail sales of vapor products in New York, which should be collected by a vapor products dealer. Any business that intends to sell vapor products must be registered as a vapor products dealer before making sales of vapor products. The Tax Department is developing an online registration process. In addition, if a taxpayer has debit blocks on their bank account, even if the taxpayer has already authorized sales tax payments to the Tax Department, the taxpayer must communicate with their bank to authorize their vapor products registration payment.

Corporation Tax Changes in 2019 Budget

This summary highlights the corporation tax changes that were part of the 2019- 2020 New York State budget. Most notably, several tax law provisions were amended, including the contributions to the capital of a corporation, entire net income for stock life insurance companies, and unrelated business taxable income. Additionally, electronic filing and payment mandates have been extended through December 31, 2024, and the tax shelter penalty and reporting requirements have been extended through July 1, 2024.

Tax Credit Budget Legislation Enacted in 2019

The New York Department of Taxation and Finance issued technical memorandum TSB-M-19(4)C, (5)I which discusses the individual income and corporate income tax credit budget legislation enacted in 2019. New credits were added to the law, which include the Central Business District Toll credit, Employer-Provided Child Care credit, and the Recovery Tax credit. The Empire State Commercial Production credit and Employee Training Incentive Tax credit provisions were amended. In addition, the Empire State Film Production and Empire State Film Post-Production Tax credit as well as the Workers with Disability Tax credit were extended to 2024 and 2022, respectively.

Updates by City

New York City

Aprl 2, 2020

Small Businesses with Fewer than 5 Employees Can Apply for a Grant to Cover 40% of their Payroll Expenses for 2 Months

NYC Employee Retention Grant Program
The City is offering small businesses with fewer than 5 employees a grant to cover 40% of payroll costs for two months to help retain employees.
Eligibility Criteria for the NYC Employee Retention Grant Program
Businesses, including non-profits, must:

  • Be located within the five boroughs of New York City
  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
  • Employ 1-4 employees in total across all locations
  • Have been in operation for at least 6 months
  • Have no outstanding tax liens or legal judgements

NYC Small Business Continuity Loan Fund
Businesses with less than 100 employees and at least a 25% drop in sales caused by COVID-19 will qualify for loans of up to $75,000, with no interest.
Eligibility Criteria for the NYC Small Business Continuity Loan Fund
Businesses must:

  • Be located within the five boroughs of New York City
  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
  • Employ 99 employees or fewer in total across all locations
  • Demonstrate ability to repay the loan
  • Have no outstanding tax liens or legal judgements

Source: https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page

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