Who Has to Pay This Tax?
All domestic and foreign corporations in New York City that are:
- Doing business;
- Employing capital;
- Owning or leasing property, in a corporate or organized capacity; or
- Maintaining an office.
New York City does not recognize Federal or New York State "S Corporation" elections. S Corporations are subject to this tax. A taxable association or publicly traded partnership is treated as a corporation for the purpose of this tax.
If a corporation is not subject to the tax, but it has an officer, employee, agent, or other representative within the five boroughs, it must nevertheless file Form NYC-245, the Activities Report for Corporations.
Who is Exempt from the Tax?
The instructions to Forms NYC-3L and NYC-4S explain in detail what types of corporations are exempt from the General Corporation Tax:
- Dormant corporations, which did not engaged in any business activity or held title to real property located in New York City;
- Corporations subject to the New York City Banking Corporation Tax or Utility Tax, except vendors of utility services which are subject to the General Corporation Tax;
- Corporations organized to hold title to property as described in Sections 501(c)(2) or (25) of the Internal Revenue Code;
- Insurance Corporations;
- Nonstock not-for-profit companies that are granted an exemption by the New York City Department of Finance; and
- Limited profit housing and housing development fund companies organized and operating under articles 2 and 11, respectively, of the Private Housing Finance Law.
Forms and Reports
Biotechnology Tax Credit
Tax credit for qualified investors/owners for certain expenses incurred by emerging New York City biotechnology companies.
Businesses that are subject to GCT may get an automatic six-month extension by filing Form NYC-EXT. This extension is given only if the extension form is filed before the original due date for the return and the tax was estimated correctly and paid. The application will be denied if the estimated amount of tax is not correct or if it is not paid before the original due date.
A business with a valid six-month extension may request up to two additional 3-month extensions by filing Form NYC-EXT.1. A separate form must be filed for each 3-month extension requested.
If the corporation can reasonably expect its tax to exceed $1,000 for the taxable year, it must file Form NYC-400 (Declaration of Estimated Tax) and pay the estimated tax. Estimated tax can also be paid in installments. A payment of 25% of the tax liability for the preceding year is required as the first installment of estimated tax for the current year.
Estimated tax must be either:
- Not less than 90% of the tax that is finally determined, or
- Not less than the tax for the previous taxable year.
- Annual returns and tax payments must be postmarked by March 15 of the following year, if the corporation chooses an accounting period that is based on the calendar year.
- A corporation that uses an accounting period other than the calendar year (e.g., a fiscal year) must file a return on the 15 day of the third month after the close of its fiscal year.
If a due date falls on a weekend or a legal holiday, the filing must be made by the next business day.
Under Section 1004 of the Business Corporation Law, as of October 1, 2009, Tax Clearance must be obtained from Finance when dissolving corporations that have done business in and incurred tax liability to the City of New York. You must complete the Request For Dissolution and mail to Finance. Finance will send a Dissolution Consent to the address provided on the Request. The Dissolution Consent must be attached to Certificates of Dissolution that are filed with the New York State Secretary of State.
If you are not an officer of the corporation, and are filing a Request for Dissolution on behalf of a corporation, you will need to obtain and submit a signed and dated Power of Attorney with your request.
Title 11, Chapter 6 (Subchapter 2) Administrative Code Enabling Act: Chapter 772 of the Laws of 1966