Inside the New York Budget Bill Part Four: Nexus


This installment of Inside the New York Budget Bill examines the Budget Bill’s nexus provisions. Although these provisions may have limited impact on current New York taxpayers, they will significantly affect corporations that do not currently pay Franchise Tax but have customers in New York.

The New Economic Nexus Standard -

It is well established under current law that a corporation must have a physical presence in New York to be subject to tax under Article 9-A or Article 32, with just a few exceptions. The Budget Bill proposes to significantly expand the number of corporations that are subject to tax in New York by adopting an economic nexus standard (in addition to the current physical presence nexus standard). For purposes of Article 9-A, a corporation would be subject to tax if it is “deriving receipts from activity in [New York].” As discussed in prior installments, the Budget Bill would repeal Article 32.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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