New York City Mayor Proposes Business Tax Reform
On January 12, 2015 New York City Mayor Bill de Blasio announced proposals to reform the City’s corporate tax structure to achieve consistency with the New York State law changes which were passed in the State budget last year.
Highlights of the Mayor’s proposals (all of which would be retroactive to January 1, 2015) include:
- Merging of the bank tax into the NYC Corporate Franchise tax for large corporations
- Adoption of market-based sourcing for allocation of corporate revenue
- Retention of the alternative tax base on capital (with an increase of the cap to $10 million)
- Adoption of a unitary combined reporting requirement for commonly owned businesses
- Provide tax relief to small businesses and manufacturers with a lower tax rate
New York City in announcing the plan stated “conformity between city and state tax systems would allow companies to keep one set of records for both and bring tax computation consistency that’s critical to facilitating joint audits and preventing major administrative burdens for both taxpayers and the city.” The proposals are designed to be revenue-neutral for the City’s budget.
Any changes to the New York City corporate tax structure must be voted on and passed by the State legislature. The proposals outlined by the Mayor will likely be included in the Governor’s executive budget release which will be the starting point for debate in Albany on these provisions.
It should be noted that the Mayor’s proposal did not include any modifications to the current NYC Unincorporated Business Tax.
Marcum will keep you updated on the status of these important proposed changes to New York City taxes. For further information on how these changes may impact your business please contact your Marcum tax professional.