Perspectives

New York City proposes corporate tax reform

Multistate Tax Alert | January 23, 2015

​On January 12, 2015, New York City Mayor Bill de Blasio proposed major reforms of the New York City corporate tax structure. The proposed reforms were included in Governor Cuomo’s 2015-2016 Executive Budget released on January 21, 2015. If enacted into law, the proposed reforms would bring the New York City General Corporation Tax into substantial conformity with the New York State corporate franchise tax reforms enacted in 2014. This Tax Alert summarizes the more significant proposed law changes.

​Proposed reforms of the New York City corporate tax structure

On January 12, 2015, New York City Mayor Bill de Blasio proposed major reforms of the New York City corporate tax structure. The proposed reforms were included in Governor Cuomo’s 2015-2016 Executive Budget released on January 21, 2015.1 If enacted into law, the proposed reforms would bring the New York City General Corporation Tax into substantial conformity with the New York State corporate franchise tax reforms enacted in 2014.2 However, unlike the State’s enacted corporate reform, the New York City reform proposals do not contain an income tax rate reduction for all corporate taxpayers and do not call for the reduction and ultimate elimination of the alternative tax base on capital. Also, the proposals do not modify New York City’s unincorporated business tax (“UBT”) and do not appear to apply to federal subchapter S corporations or subchapter S subsidiaries, which would continue to be taxed in accordance with the currently-applicable, pre-reform provisions. The reforms, as contained in the proposed draft legislation, are intended to be revenue neutral and, if enacted, are expected to be retroactive to January 1, 2015. In this Tax Alert we summarize the more significant proposed law changes.

1 See Part QQ of the 2015-2016 New York State Executive Budget, Revenue Article VII Legislation, which can be accessed at: https://www.budget.ny.gov/pubs/executive/eBudget1516/fy1516artVIIbills/REVENUEArticleVII.pdf. The 2015-2016 Executive Budget also includes technical changes to New York State corporate franchise tax reforms enacted into law in 2014. A separate Tax Alert will address those proposed changes.
2 Our April 1, 2014 Tax Alert, Sweeping New York State Tax Reforms Enacted, is available here.

New York City proposes corporate tax reform

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The Multistate Tax Alert Archive includes external tax alerts issued by Deloitte Tax LLP's Multistate Tax practice during the last three years. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons. 

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