When Do I Have to Pay New York City’s Business Corporation Tax? - Evolved, LLC

When Do I Have to Pay New York City’s Business Corporation Tax? New Economic Nexus Introduced in 2022 Affects Corporations with Property, Payroll or Sales in the City.

In 2022, New York State enacted a law that aligns certain provisions of the New York City Administrative Code with New York State Tax Law. One important aspect of the law is a ‘bright-line’ economic nexus standard for corporations with activities in New York City, which affects their obligation to pay New York City’s Business Corporation Tax (BCT).

Specifically, the bill applies a ‘bright-line’ nexus standard for the tax year beginning on January 1, 2022. This means that companies above certain thresholds for property, payroll or sales are required to file an income tax return and pay tax.

• Corporations deriving receipts of $1 million or more from New York City sources, or deriving receipts totaling $10,000 or more for a unitary group that has combined receipts totaling $1 million or more in a taxable year will be subject to the BCT.
• Unitary groups which have a location, or at least ten customers or both in NYC with receipts that meet the $1 million threshold are also subject to the tax.
• In addition, if a partnership is doing business, employing capital, owning or leasing property in the City, or maintaining an office in the City, or deriving receipts from activity in the City, any corporate partners of the partnership will be subject to the BCT.

Article by Zaid Butt, Director