Franchise Tax

New York Franchise Tax Information

New York has a franchise tax that applies to:

  1. Domestic (New York) corporations
  2. Foreign corporations that do business in New York State themselves or are General or Limited Partners in Partnerships that do business in New York State

The General Business Corporation Franchise Tax Return is a relatively complicated tax filing that is typically filed by a tax accountant alongside the New York Corporate Income Tax return. Most general business corporations are mandated to e-file the estimated tax.

New York has a Q&A on their website about the Franchise Tax.

When New York franchise tax is due

April 15th - if on a Calendar Year

Within 3.5 months after end of reporting period if on a Fiscal Year

How to calculate New York franchise tax

The tax is calculated as the highest of three methods (NY refers to them as “bases”): Business income, Business capital, and Fixed dollar minimum tax. Each base has its own tax rate or threshold associated with it. The tax filing document has rows to help your accountant calculate tax due.

Business Income

The business income base equals federal taxable income apportioned to New York State with some adjustments.

Business Capital

The business capital base is the total business capital apportioned to New York State after deductions. Business Capital is limited to $5,000,000 for general business taxpayers.

Fixed dollar minimum tax

The fixed dollar minimum tax is determined by the corporation's New York State receipts. 

MTA surcharge

Corporations that do business in the Metropolitan Commuter Transportation District and owe estimated franchise tax must also pay an estimated MTA surcharge and file Form CT-3-M.

How to pay New York franchise taxes

Corporations that expect to owe more than $1,000 in franchise tax after credits must file estimated tax forms (Form CT-400, Estimated Tax for Corporations) and make quarterly payments of estimated tax due. Most Corporations will e-File, either on their own or via their tax provider.

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