State Taxes at a Glance – New York
| Type of Tax | 2023 |
|---|
| Individual Rates | 4.00% to 10.90% |
| Corporate / Business Tax Rates | 6.50% to 7.25%* |
| Gross Receipts Tax | None |
| Sales Tax | 8.52% (average) |
| Property Taxes | 1.38% as a percentage of primary home |
| Estate or Inheritance Tax | Estate Tax |
State Income Taxes in New York
The state of New York does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale, with eight tax brackets. They range from 4.00% to 10.90%. The highest bracket of 10.90% starts for income greater than $25 million.
New York is one of only two (2) states that have a “tax benefit recapture”. This is where the top tax rate of 10.90% is applied to all your income if it exceeds the top tax bracket (the other state is Connecticut).
Local Income Taxes in New York
Local income tax – depending on the jurisdiction you live or work in, you may be subject to an additional Local Income tax. The average local income tax rate is 1.49% of your adjusted gross income. The four (4) jurisdiction that have additional local tax are:
- New York City (this includes all 5 boroughs) – 3.08% to 3.88%
- Metro Transport Authority – 0.11% to 0.34%
- Port Authority Employees of the NY-NJ Waterfront – 1.70%
- Yonkers – 16.75% of whatever your State Income Tax is. Yonkers is the only jurisdiction that assess a non-resident tax, which is 0.50%.
State Business Taxes in New York – Corporations
The state of New York does have a business income tax (commonly referred to as a Franchise Tax), however it its calculation is not straight forward. There are three (3) tax bases in New York – Business Income tax, Business Capital Tax, and Fixed Dollar Minimum Tax. New York Corporations must calculate all three and pay the highest one. Below are the three (3) tax bases:
Business Income Tax – Your tax rate is based on the type of business you have and your income.
- General businesses – 6.50% to 7.25% (based on income)*
- Qualified NY Manufacturers – 0.00% (exempt from tax)
- Qualified Emerging Technology Companies – 4.875%
Business Capital Tax – In addition to a business tax on C Corporations, there is also a Capital Stock Tax called the Business Capital tax. The tax is 0.1875% on Capital Assets less than liabilities attributed to assets. Qualified Emerging Technology Companies and NY Qualified Manufacturers are exempt.
Fixed Dollar Minimum (FDM) Tax – the FDM tax is a Gross Margins Tax. It based on which FDM tax bracket your Gross Receipts falls under. The tax is between $25 to $200,000. QETCs and Manufacturers have smaller tax rates.
State Business Taxes in New York – LLCs, LLPs, etc.
C Corporations and S Corporations and subject to the NY Franchise Tax. However, other flow-thru entities, such as LLCs, LLPs, or partnerships in NY are not required to pay a Franchise Tax, however they are subject to a State Filing Fee (like California’s LLC Fee). It is based on the Gross Receipts of the entity.
- LLCs and LLPs Filing Fee – ranges between $25 and $4,500
- Partnership Filing Fee – ranges between $500 and $4,500
Learn more about the Annual Filing Fees at the NY Department of Taxation website – here.
Sales Taxes and Property Taxes in New York
Sales Taxes – like many states, New York has multiple sales tax rates. One at the state level and another at the local level. The state rate is 4.00% the average local rate is 4.52% (total average rate for New York Sales Tax is 8.52%).
Property Taxes in New York – the average property tax rate for residential property in the state of New York is 1.38%, which is a high property tax as far as a percent of a taxpayer’s main home.
Estate Taxes in New York
The state of New York has an estate tax that ranges between 3.06% and 16.00%. The first $6,580,000 of the estate is exempt from tax.
New York DMV fees
New York’s annual DMV fees are based on weight, and not the value of the vehicle. Therefore, they are not deductible on your Federal Tax Return. If you would like to learn more about New York’s DMV fees, here is a link.
New York Domicile
If you maintain a permanent place of abode for over 183 days combined with a permanent place of abode you are considered a New York resident.
New York Tax on Social Security Benefits
New York does not assess state income tax on social security benefits.
Payroll Taxes in New York
Payroll (Unemployment Insurance) taxes are paid by business on the behalf of their employees to fund unemployment insurance to the state. It consists of multiple factors. Below is an outline of the most common ones in New York –
- Wage Base – New York’s wage base is $12,300
- New Employers – UI Contribution Tax is 3.125% for all new employers.
- Re-Employment Service Fund – Employers must also fund the RSF 0.075% flat tax for all wages paid to their employees for training.
- UI Rates – range from 1.30% to 9.10%
New York Business Entities – LLCs
New York has an inexpensive cost of opening an LLC. Here are some important facts:
- New York’s LLC fee is bi-annual, at $9 every two years.
- When you register with the state, you pay a one time fee of $200
- Secretary of State of New York – click here
New York Tax Contact Phone Numbers
Important phone numbers for the New York Department of Taxation:
- Website: www.tax.ny.gov
- Phone# for Individuals – (518) 457-5181
- Phone# for Businesses – (518) 485-6027