Recently signed legislation extends existing New York City corporate and personal income tax rates and delays the implementation of new, lower rates.
The existing tax rates for the New York City personal income tax rate are extended for an additional three years, and, subsequently, the lower rates are delayed for three years. The rates had been scheduled to drop effective for taxable years before 2012, but will now drop effective for taxable years before 2015.
The bill extends the authority of the city to impose the city minimum personal income tax at 2.85% for an additional three years (for taxable years beginning before 2015). The rate was scheduled to fall to 2.5% beginning in 2012.
The legislation authorizes New York City to impose the additional personal income tax surcharge on the New York City taxable income of city residents, estates and trusts for an additional three years at the rate of 14% of the city personal income tax (for taxable years beginning before 2015) and extends New York City’s authority to reduce the additional tax by local law for taxable years beginning before 2015.
The current New York City general corporation tax rate is also extended. The current tax rate is the greater of 8.85% on income, 1.5 mills on business and investment capital, 8.85% of 15% of income plus the amount of salaries and other compensation paid to any person who at any time during the taxable year owned more than 5% of the taxpayer’s capital stock or a minimum tax based on the amount of New York City receipts. There is also a 0.75 mill tax on subsidiary capital. On January 1, 2012, the rates were scheduled to drop to 6.7%, 1 mill, 6.7% and $25, respectively, and 0.5 mill on subsidiary capital. The amendments will continue the current rates until December 31, 2014.
Separate stories discuss cigarette tax (TAXDAY, 2011/07/25, S.12) and sales and use tax (TAXDAY, 2011/07/25, S.14) changes contained in the legislation.
Ch. 209 (S.B. 5527), Laws 2011, effective July 20, 2011, applicable as noted