With a gross domestic product (GDP) of $2 trillion in 2023, the state of New York makes up about 7.9% of the US economy. This makes the Empire State a promising place for aspiring entrepreneurs. But to succeed as a business owner, you should be aware of your company’s state and local tax obligations as well—so keep reading!
What business taxes do you pay in New York State?
The state taxes your business is responsible for depend on factors such as your business structure, income, employer status, industry, and business activities.
You need to know about income taxes, sales taxes, employer taxes, industry-specific taxes, local taxes, and more (like annual filing fees). Keep reading for more information on all of this, including due dates and how to file.
New York State personal income tax
In the state of New York, pass-through entities such as sole proprietorships, partnerships, and limited liability companies (LLCs) typically don’t pay taxes on their income. The tax obligation for these businesses is passed on to their business owners, who pay the taxes on their personal returns at the state’s individual tax rates.
The New York state income tax rate ranges from 4% to 10.9% in 2024.
How to file and pay
Personal income tax returns (Form IT-201 for residents in the state and Form IT-203 for nonresidents or part-year residents) are due on April 15.
Tax returns can be filed electronically via tax software or by an authorized tax preparer. Taxpayers with an adjusted gross income of $79,000 or below may also be eligible for free e-filing through an approved Free File software provider. If you prefer to file a paper return, send your tax documents to the appropriate mailing address provided by the Department of Taxation and Finance.
Pass-through entities with an estimated tax liability of $300 or more must make quarterly estimated tax payments as well. Tax payments must be submitted by the 15th of April, June, September, and January. Submit estimated tax payments through your New York Online Services account, an approved tax software provider, or by mail. Those who want to pay by mail should send Form IT-2105 along with their payment to the address below:
NYS Estimated Income Tax, Processing Center
PO Box 4122
Binghamton, NY 13902-4122
For more information on New York State’s individual income tax, visit the Department of Taxation and Finance website.
New York State partnership tax return
Although partnerships (and LLCs that elect to be taxed as a partnership) typically don’t pay income taxes themselves, they must file a New York tax return if at least one partner is a resident of the state or if the business receives any income from New York sources.
Partnerships may also be required to pay taxes on each nonresident partner’s share of the company’s net income.
How to file and pay
Partnership tax returns (Form IT-204) are due by the 15th day of the third month after the end of the fiscal year. If your business follows the calendar year, your filing deadline is March 15.
The state of New York mandates that most partnerships file their tax returns electronically through their Online Services account or an approved e-file tax software. Any tax payments should also be submitted electronically.
Learn more about New York’s partnership tax guidelines by visiting the state’s Department of Taxation and Finance website.
New York State annual filing fee
Instead of the franchise tax that corporations in New York are subject to (more on this later), most partnerships, LLCs, and limited liability partnerships (LLPs) with income from New York sources pay an annual filing fee.
This fee is determined by the company’s gross income. LLCs and LLPs can expect to pay anywhere between $25 for New York State income below $100,000 up to a maximum of $4,500. However, if your LLC or LLP didn’t have any income from New York sources in the previous tax year, your annual filing fee is $25.
Details on the New York annual filing fee amount by business entity and income can be found in the instructions for the annual filing fee tax form.
How to file and pay
File Form IT-204-LL with the Department of Taxation and Finance to pay the annual filing fee. This tax form is due by the 15th day of the third month following the end of the fiscal year (or March 15 for calendar year filers). Companies subject to the annual filing fee must file the tax form through their tax professional or with approved e-file software.
Find more information on the New York State annual filing fee by going to the Department of Taxation and Finance website.
New York State pass-through entity tax
The New York pass-through entity tax (PTET) allows eligible partnerships, New York S corporations (those that elect to be taxed as an S corporation in the state), and LLCs taxed as a partnership or New York S corporation to be treated as an entity for tax purposes. Partners and shareholders of electing entities don’t pay income taxes on their personal returns, and they may qualify for a PTET credit as well.
The PTET rate ranges from 6.855% to 10.9%. Companies with taxable income over $2 million are assessed an additional flat fee in addition to their PTET rate.
How to file and pay
Eligible partnerships and S corporations that want to make the PTET election must do so on their Online Services account between January 1 and March 15 each year. Note that an S corporation that intends to file as a resident S corporation must certify that all its shareholders are residents of New York State.
The PTET return itself should be submitted through the company’s Online Services account by March 15.
Additionally, every business that makes the PTET election is required to make quarterly estimated tax payment via their Online Services account. These payments are due on March 15, June 15, September 15, and December 15.
You can find further information on the New York pass-through entity tax by going to the Department of Taxation and Finance website.
New York State corporate franchise tax
Corporations that organize or do business in the state of New York must pay a corporate franchise tax (also known as the corporate tax) for the privilege of operating in the state.
New York State requires C corporations to calculate their tax liability three different ways (business income base, business capital base, and fixed dollar minimum) and pay whatever the highest tax amount is. The C corporation tax return lays out the steps corporations should follow to calculate each tax.
On the other hand, S corporations that are recognized as such in New York are taxed at a slightly lower rate than their C corporation counterparts. These businesses pay a fixed dollar minimum tax based on their New York State receipts. Most S corporations pay a minimum tax of $25 for New York gross receipts that don’t exceed $100,000. Tax tables for the S corporation franchise tax are available in the tax return’s instructions.
How to file and pay
Corporate tax returns for S corporations (Form CT-3-S) are due by the 15th day of the third month after the end of the fiscal year (March 15 for calendar year filers). Tax returns for C corporations (Form CT-3) are due by the 15th day of the following month (or April 15 for calendar filers).
Most corporations are required to file their corporate returns electronically via the Department of Taxation and Finance’s Online Services portal.
Corporations with an estimated tax liability of over $1,000 must make quarterly estimated tax payments as well. Make your first estimated tax payment (called the Mandatory First Installment, or MFI) with Form CT-300. This form should be filed electronically via Online Services or an approved software developer. Then, file Form CT-400 electronically to submit the rest of your estimated tax payments. Due dates for your estimated tax payments are available in the instructions for Form CT-400.
Visit the Department of Taxation and Finance website for franchise tax guidelines for C corporations and S corporations.
Sales and use tax
If your business sells tangible physical property or certain taxable services, you may be required to collect sales tax at the point of purchase and pay it to the state of New York. Additionally, companies that purchase tangible personal property or services outside of New York for use within the state may be subject to use tax if the seller doesn’t charge New York sales tax on the transaction.
The state sales and use tax rate is 4%.
A list of the items exempt from the New York sales tax is available in the state’s tax code. Because this list is extensive, you may want to consult with your tax professional to determine whether your business should collect state sales tax.
How to file and pay
If your business must collect New York sales tax, you’ll need to register with the state and receive a Certificate of Authority before you can begin making sales. Register with the Department of Taxation and Finance through the New York Business Express (NYBE) website.
Once you receive your certificate, you’ll be assigned a monthly, quarterly, or yearly filing frequency depending on your estimated tax liability for the year. Registered businesses must file sales tax returns every period via Online Services, even if they collected no taxes during that time.
Review the chart below to get a sense of your sales tax responsibilities based on your filing frequency:
| Filing frequency | Tax threshold | Tax form | Due dates |
| Monthly | $300,000 or more in a quarter (or if you have sold a total of 100,000 gallons or more in petroleum products) | Form ST-809 and Form ST-810 (filed every quarter) | The 20th of the following month |
| Quarterly | Less than $300,000 in the previous quarter (and you haven’t received a notice about filing annually) | Form ST-100 | 20 days after the end of the quarter |
| Annually | $3,000 or less for the year | Form ST-101 | March 20 of the following year |
Go to the New York Department of Taxation and Finance website for further details on the state’s sales and use tax.
Withholding tax
Employers that do business in New York and employ New York residents or workers who perform services in the state must withhold a portion of each of these employee’s wages and pay it to the Department of Taxation and Finance. These taxes are known as withholding taxes or employment taxes.
The withholding tax rate differs between employees because it’s calculated based on factors like the employee’s withholding allowances and wages, but it ranges from 4% to 7.65%.
How to file and pay
New employers must first register their business with the state via the NYBE website.
All employers file combined returns for withholding, wage reporting, and unemployment insurance (Form NYS-45) each quarter by April 30, July 31, October 31, and January 31.
If you withhold $700 or more in a calendar quarter, you’ll also need to file Form NYS-1 after the end of each payroll period that causes your tax liability to exceed the $700 threshold. More information on when Form NYS-1 is due can be found on the Department of Taxation and Finance website.
Employers should file their returns and make tax payments electronically through their Online Services account.
Visit the Department of Taxation and Finance website for additional information on the New York State withholding tax.
Unemployment insurance tax
Unemployment insurance (UI) taxes fund benefits for eligible workers who leave the company through no fault of their own. In New York, all employers operating in the state that pay $300 or more in wages during a calendar quarter must have unemployment insurance coverage.
Employers pay UI taxes ranging from 2.1% to 9.9% on the first $12,500 of each employee’s wages. New employers are assigned a UI tax rate of 4.1%.
The New York Department of Labor sends UI rate notices to employers each year starting in mid-February, so these rates may be updated in the months to come.
How to file and pay
If you haven’t already, you’ll need to register as an employer through the NYBE website to pay unemployment taxes.
Unemployment wage reports and tax payments are due on a quarterly basis. Because these taxes are filed using the same form as the state’s withholding tax (Form NYS-45), refer to the due dates and filing guidelines outlined in the previous section.
For details on the New York State unemployment tax, visit the Department of Labor website.
Other industry-related and local taxes
On top of the taxes assessed by the state of New York, some cities and counties charge income and sales taxes on businesses within their jurisdictions as well.
For instance, municipalities and school districts can add their own local sales tax to the state sales tax rate. The state imposes a maximum local tax rate of 4.875%, resulting in an average combined state and local sales tax rate of 8.52%. You can find your company’s combined state and local sales tax rate by using the sales tax rate lookup tool provided by the Department of Taxation and Finance.
New York State (as well as some municipalities) levies additional taxes on certain industries, business activities, and products. Below is a list of some of the most common ones:
- Alcoholic beverages
- Authorized combative sports
- Cannabis products
- Cigarettes and tobacco products
- Gasoline and motor fuel
- Hazardous waste
- Highway use
- Petroleum
- Vapor products
- Waste tire management
- Wireless communication
Find additional information on these and other taxes on the New York State Department of Taxation and Finance website.
Keep in mind that the taxes discussed in this section are determined by factors like location, industry, and business activities, so you’ll want to consult your tax advisor or accountant to determine which of these taxes apply specifically to your business. Working with a tax professional will also help ensure your taxes are filed correctly and on time and that your business takes advantage of the tax credits and deductions available to you.
New York State business tax breakdown by business type
To help you determine which New York State taxes your business should pay, we’ve put together a chart breaking down a company’s business tax obligations by type of business.
Remember that pass-through entities don’t pay federal taxes on income themselves—the obligation is passed on to the business owners, who pay the taxes through their personal tax returns.
| Business type | Personal income tax | Partnership tax return | Annual filing fee | Pass-through entity tax | Corporate franchise tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
| C corporation | No | No | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
| S corporation | Yes (pass-through), if not paying the PTET | No | No | Yes, if it makes the PTET election | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| LLC | Yes (pass-through), if not paying the PTET | Depends on how it’s structured | Depends on how it’s structured | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| Partnership | Yes (pass-through), if not paying the PTET | Yes | Yes | Yes, if it makes the PTET election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| Sole proprietorship | Yes (pass-through) | No | No | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
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