Guide to New York Business Taxes


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    This document provides you with some basic information about New York State
    Business Taxes, the different types of businesses, and an overview of the filings for
    New York Businesses.

    We outline the procedures to follow and the forms to file in New York State,
    excluding New York City Tax forms and filings.

    1. If you are starting a new business
    2. If you are purchasing an existing business or assets from an existing business

    Further information may be found on the state’s website:

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First, you will need to determine which type of business you will operate in New York State.
The following list illustrates the types of businesses that exist in New York State:
1. Sole Proprietorship
2. Partnership
3. Limited Liability Company
4. Limited Liability Partnership
5. Corporation
6. S-Corporation

More information can be found at
Publication 20, New York State Tax Guide for New Businesses

1. A Sole Proprietorship is a business that is owned and operated by one person. Sole
   proprietors must report their business income and expenses, annually, on their federal and
   New York state personal income tax returns. For the Federal income tax return, this activity
   is reported on Schedule C of Form 1040. For New York State residents, the Sole
   Proprietorship annual income and expenditures are reported on Form IT-201; nonresidents
   must report this activity on Form IT-203. If you expect to owe New York state, New York
   City, or Yonkers income tax when you file your personal income tax return, you may be
   required to make estimated tax payments during the year.
   1. Publication 94, Should You Be Paying Estimated Tax?
   2. Form IT-2105, Estimated Income Tax Payment Voucher for Individuals

2. A Partnership exists when two or more persons join together to carry on a trade or business.
   For both federal and New York state income tax purposes, the term “partnership” includes a
   syndicate, group, pool, joint venture, or other unincorporated organization that is carrying on
   a trade or business. For New York state tax purposes, partnerships report their income on
   Form IT-204, Partnership Return, but do not pay any state income tax.

3. A Limited Liability Company (LLC) is required to file Form IT-204, unless it elects to file as
   an S-Corporation. If so, it is subject to an annual filing fee and must also file Form IT-204-
   LL (Limited Liability Company / Limited Liability Partnership Filing Fee Payment Form).
   An LLC is an unincorporated organization of one or more members, each having limited
   liability for the contractual and other liabilities of the business, formed for any lawful
   business purpose under the Limited Liability Company Law of New York state.

4. A Limited Liability Partnership (LLP) is a partnership that provides professional services and
   has registered as a Limited Liability Partnership under Article 8-B of the Partnership Law of
   New York State. For New York State tax purposes, A Limited Liability Company (LLC) is
   required to file Form IT-204, is subject to an annual filing fee. and must also file Form IT-
   204-LL (Limited Liability Company / Limited Liability Partnership Filing Fee Payment

5. A Corporation is a legal entity created by filing a Certificate or Articles of Incorporation with
   the state of New York and has a legal existence separate and distinct from its owners
   (shareholders). A domestic corporation is a corporation incorporated by or under the laws

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    of New York state. A domestic corporation may be formed by filing a Certificate of
    Incorporation with the New York State Department of State, under section 402 of the
    Business Corporation Law. A foreign corporation is a corporation incorporated under the
    laws of another state (other than New York) or foreign country. Foreign corporations that
    want to be authorized to do business in the state of New York must be authorized by the New
    York State Department of State. For more information visit:
    A Corporation must file a corporate tax return annually and pay both federal and state
    corporation taxes based on the profits and/or activity of the business.

6. An S-Corporation is a Corporation that elects to file as a Small Business. Under the Internal
   Revenue Code (IRC), certain corporations may elect, for federal income tax purposes, to be S
   corporations. The federal election is made by filing federal Form 2553, Election by a Small
   Business Corporation, with the IRS. If the federal election is approved, the shareholders of
   the S Corporation are taxed based on the S Corporation’s Profits/Losses for the year. An S
   Corporation must file an annual Form CT-3-S and is subject to the New York State franchise
   tax on general business corporations (Article 9-A).

    All New York State Businesses should first apply for a Federal Tax Identification Number
    using Form SS-4. This form can be found at

Record-keeping should be kept regardless of the type of business you choose. Most businesses
elect to keep their books on a calendar year, as this coincides with the reporting guidelines for
Individual Income Tax Return reporting. The most common types of record-keeping are:

1. Cash method.
   In the cash method, revenues are recognized when a deposit is made into the business
   account. Expenses are recognized when they are paid out.
2. Accrual method.
   In the accrual method, both revenues and expenses are recognized at the time they are
   incurred, regardless of whether or not deposits have been made or bills have been paid.

In general, filings for all types of business are as follows:
1. Corporate or self-employed returns, filed annually.
2. Estimated tax payments, filed quarterly.
3. Wage reporting returns, filed quarterly.
4. Metropolitan commuter tax returns, filed quarterly.
5. Sales tax returns, beverage returns, fuel use tax returns,
    and other related returns, as applicable.

Listed below are a few examples of the Business Type Tax Forms and Deadlines that are used by
most businesses, regardless of the type of business:

    Business Type                             Form Number                   Due Date
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    1. Sales Tax Return                     Form ST-100                  20th day of March,
                                                                         June, Sept., Dec.

    2. Payroll Tax Returns                  Form NYS-45                  Last day of the month
                                                                         Apr., July, Oct., Jan.

    3. Metropolitan Commuter Tax            Form MTA                     Last day of the month
                                                                         Apr., July, Oct., Jan.

The guidelines and forms listed above do not necessarily apply to every business, and some
forms may not be included that would be pertinent to specific businesses. It is suggested,
therefore, that you adapt this guideline to your particular business.
Further information may be found at:
Publication 20, New York State Tax Guide for New Businesses.

© Copyright 2011 Docstoc Inc.                                                       4
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