Here are the basics of New York Business Taxes applicable to small businesses doing business in New York. Please
New York sole proprietorships do not pay any corporation franchise taxes or filing fees. The sole proprietor shall, only, pay state and federal personal income tax individually.
New York partnerships are considered “pass-through” businesses where the income passes to individuals. New York partnerships do not pay federal or state income taxes, but are subject to state filing fees, which are calculated based on gross income. The effective maximum tax in New York is $4,500.
New York limited liability companies can be classified as a partnership, a corporation or as a “disregarded” entity. New York limited liability companies that classify as a corporation pay corporation franchise tax under the same rules as traditional corporations. New York limited liability companies that classify as a partnership follow the same filing fee scheme as New York partnerships.
New York S corporations are traditional corporations which allow income to pass through the company to its owner, so long as certain conditions are met. Despite this, New York still requires New York S Corporations to pay a corporation franchise taxes.
New York C corporations have a multitude of options in taxation. New York C corporations can choose a simple calculation that usually results in paying approximately 7% of net income. New York small businesses with net income less than $290,000 usually get a slightly discounted rate. New York C corporations can also calculate taxable income based on its business and investment capital less liabilities, or can choose to pay based upon gross receipts. Consult with a qualified New York tax attorney to decide which method is best for your New York C corporation’s needs.
No matter which business model or method your New York small business has chosen, you should always consult an experienced New York tax attorney to determine the best corporate structure for your needs.