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New York State Franchise Tax Rate Changes for 2014 and Beyond

Part of the sweeping corporate franchise tax changes New York Governor Andrew Cuomo signed recently impacted the tax rates.  This article will illustrate the rate changes that were impacted.

Type of New York Businesses
New York Article 9-A designates three classes of corporations for tax rate purposes: 

  • Qualified New York Manufacturers (Mfr) – This definition is based on two alternative sets of criteria.  The first set requires the taxpayer to be “principally engaged” in “manufacturing”, having property eligible for the New York investment tax credit with a federal adjusted basis of $1 million or more at the end of the tax year.  The second alternative is to have at least 2,500 employees in manufacturing in New York and have property in New York used in manufacturing where the federal adjusted basis is at least $100 million.
  • Qualified Emerging Technology Companies (QETC) – These are companies located in New York meeting one of two criteria: 1) A company whose primary products or services are classified as “emerging technologies” and whose total annual product sales are $10 million or less, or 2) A company with R&D activities in New York whose ratio of R&D funds to net sales equals or exceeds the average ratio for all surveyed companies classified, as determined by the National Science Foundation in the most recent published results from its survey or any comparable successor survey as determined by the New York State Department of Taxation and Finance whose total annual product sales are $10 million or less.
  • All other businesses

Rate Changes
New York currently taxes businesses on the highest of their business income, business capital, subsidiary business capital, minimum taxable income, or fixed minimum tax. See table below.

How Can We Help? 
Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of multi-state and local tax compliance and consulting for large US and global corporations.  We use that experience to your advantage.  Contact us and we can provide a customized cost-effective solution to meet your company’s needs.  For further information on Allyn Tax services, please contact: tax@allynintl.com.

 

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