The Top 10 New York Tax Highlights of 2015 -

This past year turned out to be another eventful one in New York taxation. We continue our tradition and present our list of the Top 10 New York tax highlights of 2015.

1. New York City enacts corporate tax reform legislation. Belatedly but prudently, New York City substantially conformed its corporate tax to the New York State corporate tax reform legislation. Effective for tax years beginning on or after January 1, 2015, a new Subchapter 3-A tax is now imposed on both bank and non-bank C corporations. 2015–2016 New York State Budget (S. 4610A, A.6721A and S. 2009B, A. 3009B). The new law adopts market-based sourcing and imposes mandatory water’s edge unitary combined reporting but, unlike the State tax, does not include an economic nexus provision. The City chose to retain the general corporation tax (“GCT”) solely to apply to S corporations, while the City conducted a study on how all pass-through entities (S corporations, LLCs and partnerships) should be taxed. As of this writing, the results of the City’s study have not been published, but it does not appear that the City will propose any pass-through entity legislation in the upcoming legislative session, which means the GCT will remain on the books for at least another year for S corporations.