New York has a franchise tax that applies to:
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.
Your first franchise taxes are due:
Your first return covers the period from when your corporation began its first tax year through the end of that tax year.
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.
The business income base equals federal taxable income apportioned to New York State with some adjustments. The default tax rate is 6.5%, though rates vary based on business type and size:
The business capital base is the total business capital apportioned to New York State after deductions. Business capital is taxed at 0.1875%, with a cap of $5,000,000 for general business taxpayers ($350,000 cap for qualified New York manufacturers and QETCs).
The fixed dollar minimum tax is determined by the corporation's New York State receipts. These amounts are lower for qualified New York manufacturers and qualified emerging technology companies.
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. The MCTD includes New York City (Manhattan, Bronx, Brooklyn, Queens, Staten Island) and the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.
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.
New York's franchise tax calculation requires detailed financial information and is typically handled by an accountant through the state's e-filing system.
While Discern does not file New York franchise taxes directly, Discern can provide registered agent services, file your Secretary of State reports, notify you when tax obligations are due, and help you track compliance across all your entities.
Book a demo to see how Discern streamlines your ongoing compliance obligations.
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