Tax Alert: New York City Tax Changes Adopted
7/28/2009
The New York State legislature has approved a multitude of New York City (NYC) tax changes involving sales tax, general corporation tax, unincorporated business tax as well as the administration of NYC taxes. A summary of the major changes follows.
- Effective August 1, 2009, the NYC sales tax rate increases from 4% to 4.5% thus the total sales tax to be charged in NYC will increase from 8.375% to 8.875%.
- The NYC sales tax exemption for clothing items priced at $110 or more is repealed effective August 1, 2009.
- For both general corporation tax (GCT) and unincorporated business tax (UBT), a single sales factor will be phased in through 2017.
- Corporations with substantial intercorporate transactions will be required to file a combined report under the GCT.
- The GCT fixed dollar minimum tax, currently $300, will range from $25 to $5,000 based on NYC receipts for tax years after 2008.
- A voluntary disclosure and compliance program is established for NYC taxes for taxpayers that are neither under audit nor criminal investigation.
- The Commissioner of Finance has been authorized to require tax preparers that prepare more than 100 tax returns annually to file tax returns electronically.
- Before the Department of State will file a certificate of dissolution for a corporation, the NYC Department of Finance must issue a consent for dissolution after determining that all fees and taxes have been paid.
- Interest rates on underpayments and various penalty provisions have been significantly increased.
Please contact Neil Becourtney, Partner, or your J.H. Cohn professional at 877-704-3500 with any questions.
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