Welcome to TaxRAPP 2008

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Welcome to TaxRAPP 2008 Powered By Docstoc
					Why is the flow-through entity issue
    unique in New York City?

 • NYC has a unique UBT structure
 • We have a local personal income tax
 • We do not recognize S corporations
          Partnership Issues

•   A Partnership is a flow through entity
•   Aggregate Theory v. Entity Theory
•   Other interesting issues worth clarifying
     Freelancers Union




   Sole Proprietors & the
Unincorporated Business Tax
         Freelancers Union

History of the UBT
 • UBT enacted in 1966 to capture revenue from
 businesses structured to sidestep corporate taxes.

 • Tax unintentionally captured additional segment of
 the workforce: independent workers.
         Freelancers Union

Most UBT filers don’t owe tax
 • Of 106,000 sole proprietor UBT filers, only 21% paid
 tax (accounting for only 13% of total UBT revenues.)

 • The City of NY incurred expenses to process 83,000
 sole proprietor UBT returns (79% of those filed) w/ $0 in
 receipts.

 • Due to complex nature of this tax and fears of non-
 compliance, filers paid tax professionals to prepare their
 UBT returns.
          Freelancers Union

Economic Development
 • Independent workers account for 2/3 of NYC’s job base
 growth since 1975.
 • Need to nurture and sustain this vital part of the
 workforce.
 • Middle class is struggling more than ever—time to
 refocus UBT on its original target: high-income
 partnerships.
        Freelancers Union

Recommendations:
Short term:
  • Exempt sole proprietors who earn less than
  $150,000/yr from filing for UBT

Long term:
  • Exempt sole proprietors from filing & paying
  the UBT

				
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