New York — Corporate Income / Franchise Tax

New York imposes Article 9-A franchise tax on every domestic or foreign corporation that exercises its corporate franchise, does business, employs capital, owns or leases property, maintains an office, or derives receipts from activity in New York State.

Source: N.Y. Tax Law § 209(1)(a)

## Economic nexus threshold

A foreign corporation is deemed to be deriving receipts from activity in New York State — and thus subject to tax — if it has receipts within New York of $1 million or more in the taxable year. "Receipts" means the receipts subject to the apportionment rules in Tax Law § 210-A, and "receipts within this state" means receipts included in the numerator of the apportionment factor under § 210-A.

Source: N.Y. Tax Law § 209(1)(b)

The $1 million threshold is subject to inflation adjustment. The commissioner adjusts receipt thresholds if the consumer price index (CPI-U) has changed by 10% or more since January 1, 2015, or since the last adjustment. Adjusted thresholds are rounded to the nearest $1,000 and apply to tax periods beginning after the adjustment.

Source: N.Y. Tax Law § 209(1)(e)

## Credit card nexus

A corporation is also doing business in New York if: (i) it has issued credit cards to 1,000 or more customers with a New York mailing address as of the last day of its taxable year; (ii) it has merchant contracts covering 1,000 or more New York locations to which it remitted credit card payments during the taxable year; or (iii) the sum of credit card customers plus merchant contract locations equals 1,000 or more. "Credit card" includes bank, credit, travel, and entertainment cards.

Source: N.Y. Tax Law § 209(1)(c)

## Unitary group aggregation

When determining whether a unitary group meets the deriving receipts threshold, the group aggregates only receipts from member corporations conducting a unitary business that meet the ownership requirements under Tax Law § 210-C and have at least $10,000 of New York receipts (for tax years beginning on or after January 1, 2015, and before January 1, 2022), $11,000 (for tax years beginning on or after January 1, 2022, and before January 1, 2024), or $12,000 (for tax years beginning on or after January 1, 2024, and before January 1, 2027). If the total New York receipts of the unitary group meet or exceed the deriving receipts threshold, all members meeting the applicable dollar thresholds are taxable.

Source: Deriving receipts for Article 9-A tax and MTA surcharge

## Partnership nexus

If a partnership is doing business, employing capital, owning or leasing property, maintaining an office, or deriving receipts from activity in New York, any corporation that is a general partner in the partnership is subject to Article 9-A tax. A corporation that is a limited partner in a partnership (other than a portfolio investment partnership) doing business in New York is also subject to tax.

Source: N.Y. Tax Law § 209(1)(f)

## Public Law 86-272 protection

A corporation with New York receipts that meet or exceed the economic nexus threshold but is protected by Public Law 86-272 is not required to file an Article 9-A tax return. Public Law 86-272 protects corporations whose only in-state activities are the solicitation of orders for sales of tangible personal property that are approved and filled from outside the state.

Source: Corporate Tax Reform FAQs

New York imposes Article 9-A franchise tax on general business corporations using a three-base system. The corporation pays the highest of: (1) the business income base, (2) the business capital base, or (3) the fixed dollar minimum tax.

Source: N.Y. Tax Law § 210(1)

## Business income base

The business income base equals federal taxable income, modified for New York-specific adjustments, minus investment income and other exempt income, apportioned to New York State.

Standard rate: 6.5%. For taxable years beginning on or after January 1, 2016, the standard tax rate on the business income base is 6.5% of the taxpayer's apportioned business income base.

Temporary higher rate: 7.25% (sunsets January 1, 2027). For taxable years beginning on or after January 1, 2021 and before January 1, 2027, taxpayers with a business income base exceeding $5 million are taxed at 7.25% of the business income base. Corporations with a business income base of $5 million or less remain subject to the 6.5% rate. For taxable years beginning on or after January 1, 2027, the 7.25% rate sunsets and all general business corporations are taxed at the 6.5% rate regardless of income level, unless the Legislature extends or modifies the higher rate before the sunset date.

Source: N.Y. Tax Law § 210(1)(a)

Qualified New York manufacturers and QETCs: 0% rate. Qualified New York manufacturers and qualified emerging technology companies (QETCs) are taxed at a 0% rate on the business income base and are subject only to the fixed dollar minimum tax. A "qualified New York manufacturer" is a taxpayer principally engaged in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing. The generation and distribution of electricity, the distribution of natural gas, and the production of steam associated with electricity generation are not qualifying activities.

Source: N.Y. Tax Law § 210(1)(a)(vi)

## Business capital base

The business capital base is the corporation's total business capital apportioned to New York State, after deducting short-term and long-term liabilities attributable to assets.

General rate: 0.1875% (temporary, sunsets January 1, 2027). General business taxpayers are taxed at a rate of 0.1875% on apportioned business capital, with a statutory cap of $5 million on the resulting tax. This capital base tax was originally scheduled to phase out in tax year 2021, but has been temporarily extended through tax years beginning before January 1, 2027. For taxable years beginning on or after January 1, 2027, the capital base rate decreases to 0% under current law, effectively eliminating the capital base alternative unless the Legislature extends the rate before the sunset date.

Source: N.Y. Tax Law § 210(1)(b)(1)

Exempt taxpayers: 0% rate. Qualified New York manufacturers, qualified emerging technology companies, cooperative housing corporations, and small business taxpayers are exempt from the capital base tax (0% rate) for tax years beginning on or after January 1, 2021.

Source: N.Y. Tax Law § 210(1)(b)

## Fixed dollar minimum tax

The fixed dollar minimum tax is determined by the corporation's New York receipts. For general business corporations, the amounts range from $25 (receipts not over $100,000) to $200,000 (receipts over $1 billion). These amounts are set by statute and do not sunset.

Source: N.Y. Tax Law § 210(1)(d)

New York S corporations pay only the fixed dollar minimum tax, ranging from $25 to $4,500 depending on New York receipts. Non-captive REITs and RICs have reduced fixed dollar minimums ranging from $25 to $500.

Source: N.Y. Tax Law § 210(1)(d)

## MTA surcharge

Corporations doing business in the Metropolitan Commuter Transportation District (MCTD) must also pay a metropolitan transportation business tax surcharge equal to 30% of the Article 9-A tax apportioned to the MCTD. The MCTD includes New York City (five boroughs) plus Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties. The MTA surcharge is imposed in addition to the Article 9-A tax computed under the three-base system. For example, a corporation with $10 million of apportioned business income base and 100% of its income apportioned to the MCTD would pay an Article 9-A tax of $725,000 (at the 7.25% rate for tax years 2021–2026) plus an MTA surcharge of $217,500 (30% of $725,000), for a combined liability of $942,500 before credits.

Source: N.Y. Tax Law § 209-B

The MTA surcharge does not apply to New York S corporations.

Source: Article 9-A franchise tax on S corporations

New York apportions business income and business capital to the state using a single-factor apportionment formula based on receipts. The apportionment factor is a fraction. The numerator equals receipts, net income, net gains, and other items sourced to New York under the detailed rules in Tax Law § 210-A. The denominator equals the same items from everywhere. This single-receipts-factor methodology became effective for tax years beginning on or after January 1, 2015, and replaced the traditional three-factor formula that weighted property, payroll, and sales equally.

Source: N.Y. Tax Law § 210-A(1)

New York Article 9-A franchise tax computes the business income base starting with federal taxable income. Corporations make New York-specific additions and subtractions to federal taxable income to arrive at "entire net income" under Tax Law § 208(9). Business income is then determined by subtracting investment income and other exempt income from entire net income.

Common additions include interest expenses related to exempt income, depreciation adjustments, and income excluded from federal gross income under treaty provisions. Common subtractions include interest on U.S. government obligations, refunds of New York taxes, and dividends from certain subsidiary corporations. The modifications align New York's tax base with state policy and constitutional requirements.

Source: N.Y. Tax Law § 208(9) Source: Glossary — Department of Taxation and Finance

New York Article 9-A franchise tax returns are due annually on or before April 15 for calendar-year filers with taxable years beginning on or after January 1, 2016. Corporations reporting on the basis of a fiscal year must file on or before the 15th day of the fourth month after the close of their fiscal year.

An automatic six-month extension of time to file is available if the corporation files an extension application in the form prescribed by the commissioner and pays the properly estimated tax on or before the original due date. The extension applies only to the filing deadline, not to the payment deadline. Tax or estimated tax must be paid by the original due date to avoid interest and penalties.

Source: N.Y. Tax Law § 211(1)

When the New York Department of Taxation and Finance examines a corporate franchise tax return filed under Article 9-A and determines that a deficiency exists, it may mail a notice of deficiency to the taxpayer under N.Y. Tax Law § 1081(a). The Department is also authorized to estimate a corporation's tax liability and mail a notice of deficiency if the corporation fails to file a required return. The notice must be mailed by certified or registered mail to the taxpayer's last known address in or out of state.

Statutory 90-day protest period. A taxpayer that receives a notice of deficiency has 90 days from the date the notice is mailed to file a petition with the Division of Tax Appeals contesting the proposed assessment (N.Y. Tax Law § 1089(b)). This 90-day deadline is jurisdictional—missing it converts the notice into a final assessment that the Division of Tax Appeals cannot review on the merits. The deadline is extended to 150 days if the notice is addressed to a person outside the United States.

Required petition contents and filing location. The petition must be filed with the Division of Tax Appeals (not the Department of Taxation and Finance that issued the notice). Under 20 NYCRR 3000.3(b), a properly filed petition must include: (1) the name and contact information of the taxpayer; (2) a statement of the taxpayer's position; (3) identification of each notice being protested, including the notice number and date; and (4) a legible copy of the notice of deficiency. The petition must state in clear and concise terms each error the petitioner alleges the Department made. Petitions may be filed online through the Division of Tax Appeals' electronic filing system, by mail to the Division of Tax Appeals at Agency Building 1, Empire State Plaza, Albany, NY 12223, or by hand delivery.

Consequence of filing a petition. Once a petition is timely filed with the Division of Tax Appeals, the Department is prohibited from assessing or collecting the deficiency until the Division's decision becomes final (N.Y. Tax Law § 1081(c)). The Division of Tax Appeals is an independent forum within the Executive Department; it is separate from the Department of Taxation and Finance's audit function. Alternatively, a taxpayer may request an informal conciliation conference with the Bureau of Conciliation and Mediation Services (BCMS) within the same 90-day period. If a BCMS conciliation order is issued, the taxpayer then has 90 days from the date of that order to file a petition with the Division of Tax Appeals if the matter is not resolved at conciliation.

Exception for mathematical or clerical errors. If the notice is issued solely for a mathematical or clerical error on the return (including an overstatement of estimated tax paid), the Department may assess the additional tax immediately without issuing a formal notice of deficiency, and the taxpayer has no right to petition the Division of Tax Appeals under § 1089(b) for that type of assessment (N.Y. Tax Law § 1081(d)).

Source: N.Y. Tax Law § 1081 Source: N.Y. Tax Law § 1089

New York corporate franchise tax disputes follow a multi-tier administrative and judicial review structure. Taxpayers have two initial protest routes, followed by sequential tribunal and court review.

Step 1: Bureau of Conciliation and Mediation Services (optional). Within 90 days of receiving a notice of deficiency or notice of determination, a taxpayer may file a Request for Conciliation Conference (Form CMS-1) with the Bureau of Conciliation and Mediation Services (BCMS), an independent bureau within the Department of Taxation and Finance that reports directly to the Commissioner. A BCMS conference is informal, typically conducted by telephone, and is designed to resolve disputes without the formality and cost of a Division of Tax Appeals hearing. If the matter is not settled, BCMS issues a Conciliation Order. A taxpayer then has 90 days from the date of the Conciliation Order to file a petition with the Division of Tax Appeals.

Step 2: Division of Tax Appeals hearing. Alternatively, a taxpayer may skip BCMS and file a petition directly with the Division of Tax Appeals within 90 days of the notice of deficiency (or 90 days from a Conciliation Order if the taxpayer first went through BCMS). The Division of Tax Appeals is established under N.Y. Tax Law Article 40 (§§ 2000–2022) and is an independent adjudicatory body separate from the Department of Taxation and Finance. Petitions are assigned to an Administrative Law Judge (ALJ), who conducts a formal hearing and issues a written determination. The ALJ determination is subject to the rules of evidence and procedure set forth in 20 NYCRR Part 3000. Hearings typically occur in Albany or New York City, though telephonic or videoconference hearings are available. The ALJ's determination must be issued within six months of the conclusion of the hearing or submission of briefs.

Step 3: Tax Appeals Tribunal. Either party may file an exception to an ALJ determination with the Tax Appeals Tribunal within 30 days of the determination (N.Y. Tax Law § 2006(7)). The Tribunal is a three-member body appointed by the Governor; it reviews the ALJ determination on the record and issues a written decision. The Tribunal may affirm, reverse, or modify the ALJ's determination. The Tribunal decision is the final agency determination.

Step 4: Appellate Division (judicial review). A party aggrieved by a Tribunal decision may seek judicial review by commencing a proceeding under Article 78 of the New York Civil Practice Law and Rules (CPLR) in the Appellate Division of the Supreme Court within four months of the Tribunal decision (N.Y. Tax Law § 2016). The Appellate Division reviews the administrative record for errors of law or whether the Tribunal's determination was arbitrary and capricious or unsupported by substantial evidence. No new evidence is taken.

Step 5: Court of Appeals. A party may seek leave to appeal from the Appellate Division to the New York Court of Appeals, the state's highest court, under CPLR § 5602. Leave to appeal is discretionary and typically granted only when the case involves a substantial constitutional question or an issue of general public importance.

The Division of Tax Appeals has jurisdiction only over notices that give a right to a hearing under Tax Law Article 40 (N.Y. Tax Law § 2008). It does not have jurisdiction over notices of mathematical or clerical error adjustments, certain federal change assessments made by notice and demand, or informal communications that do not constitute a statutory notice.

Source: N.Y. Tax Law § 2006 Source: N.Y. Tax Law § 2008 Source: N.Y. Tax Law § 2016 Source: N.Y. Tax Law § 1089

New York imposes distinct statutes of limitations on the Department's authority to assess additional corporate franchise tax and on a taxpayer's right to claim a refund.

General three-year assessment limitation. Under N.Y. Tax Law § 1083(a), the Department of Taxation and Finance must assess any deficiency in corporate franchise tax imposed under Article 9-A within three years after the return was filed. If a return is filed before its due date, it is deemed filed on the due date for purposes of measuring the three-year period. If no return is filed, the Department may assess at any time. The three-year period applies to returns filed for tax years under Articles 9-A (general business corporations), 9 (utility and transportation corporations), and related corporate taxes.

Extended limitation for substantial omissions. If a taxpayer omits from its New York entire net income an amount exceeding 25% of the amount of New York entire net income stated in the return, the Department may assess within six years after the return was filed (N.Y. Tax Law § 1083(c)(2)). This extended period applies only to omissions of income properly includible in the tax base, not to errors in apportionment, allocation, or legal interpretation of includible items.

Federal change reporting and extended assessment period. If the IRS makes a change, correction, or other adjustment to a corporation's federal taxable income, the corporation must report that change to the Department of Taxation and Finance within 90 days of the final federal determination under N.Y. Tax Law § 211(3). If the taxpayer timely reports the federal change, the Department may assess within two years from the date the report or amended return was filed (N.Y. Tax Law § 1083(c)(3)). If the taxpayer fails to report the federal change within 90 days, the Department may assess at any time, and the three-year general limitation does not apply.

No statute of limitations in cases of fraud or willful failure to file. The three-year and six-year limitations do not apply if a false or fraudulent return is filed with intent to evade tax, or if no return is filed (N.Y. Tax Law § 1083(c)(1)). In such cases, the Department may assess at any time.

Statute of limitations on refund claims. A claim for refund or credit of overpaid corporate franchise tax must be filed within three years from the time the return was filed or two years from the time the tax was paid, whichever period expires later (N.Y. Tax Law § 1087(a)). If no return was filed, the claim must be filed within two years from the time the tax was paid. For purposes of measuring the three-year period, a return filed before the due date is deemed filed on the due date. An extension of time to file a return does not extend the three-year refund claim period—the period runs from the date the return is actually filed, subject to the deemed-filed-on-due-date rule.

Refund claims for reported federal changes. If a federal change results in an overpayment of New York corporate franchise tax, the taxpayer may file a claim for refund within two years from the date the taxpayer files a report or amended return reporting the federal change to the Department, even if the general three-year/two-year refund period has expired (N.Y. Tax Law § 1087(f)).

Suspension during appeals. After the Department mails a notice of deficiency, the running of the assessment statute is suspended for the period during which the Department is prohibited from making an assessment due to a pending Division of Tax Appeals proceeding (N.Y. Tax Law § 1083(e)). The suspension continues until the Division of Tax Appeals decision becomes final.

Source: N.Y. Tax Law § 1083 Source: N.Y. Tax Law § 1087 Source: N.Y. Tax Law § 211

New York offers both a Voluntary Disclosure and Compliance Program for taxpayers seeking to come into compliance with unreported or underreported tax liabilities, and an advisory opinion process for advance rulings on specific tax questions.

Voluntary Disclosure and Compliance Program (VDCP). The New York Department of Taxation and Finance administers a Voluntary Disclosure and Compliance Program that allows eligible taxpayers to voluntarily report and pay previously unreported or underreported corporate franchise tax liabilities in exchange for potential penalty relief and a limited look-back period. The program is codified at N.Y. Tax Law § 171-a. To qualify, a taxpayer must: (1) not be under audit or criminal investigation by the Department for the tax type and periods covered by the disclosure; (2) not have been previously contacted by the Department regarding a liability for the tax type and periods at issue; and (3) submit a complete and accurate disclosure application before the Department initiates an enforcement action.

Anonymous filing and initial contact. New York's VDCP permits anonymous initial contact through a representative (such as an attorney or CPA). The representative may inquire whether the Department has an open audit or investigation for the taxpayer before revealing the taxpayer's identity. Once the Department confirms eligibility, the taxpayer must come forward and file complete returns and make full payment or enter into a payment plan.

Look-back period. Under the VDCP, the standard look-back period is generally three years for corporate franchise tax (matching the general statute of limitations under § 1083), though the Department retains discretion to limit the look-back to a shorter period if the taxpayer demonstrates reasonable cause for non-filing or underreporting during earlier years. For taxpayers that failed to file any returns, the Department may require filing for all open years for which the general statute of limitations has not expired.

Penalty waiver. Taxpayers accepted into the VDCP are typically granted a waiver of penalties (civil fraud penalties, negligence penalties, and late-filing/late-payment penalties) for the covered periods, provided the disclosure is complete and accurate and the taxpayer pays the tax and statutory interest in full or pursuant to an approved payment plan. Interest is not waived; it accrues under the standard rates set forth in N.Y. Tax Law § 1096.

Advisory opinion and ruling request process. New York corporations may request a formal advisory opinion from the Department of Taxation and Finance regarding the application of the corporate franchise tax to a specific set of facts under N.Y. Tax Law § 171(twenty-fourth). The request must: (1) describe the facts in detail, including the identity of the corporation, the nature of its business, and the specific transaction or arrangement at issue; (2) state the specific question on which a ruling is requested; and (3) include any relevant documents. The Department may decline to issue an advisory opinion if the issue is already subject to an ongoing audit, if the question is hypothetical, or if the identical issue is currently before the Division of Tax Appeals or a court. Advisory opinions issued by the Department are binding on the Department with respect to the taxpayer that requested the opinion, provided the facts as presented are accurate and complete. Advisory opinions are published (with identifying information redacted) and are available on the Department's website at tax.ny.gov.

Unable to confirm as of 2026-05-28 the current application form number or online submission portal for VDCP applications; practitioners should contact the Department's Voluntary Disclosure Unit directly. The Department's general corporate tax guidance line is (518) 485-6027.

Source: N.Y. Tax Law § 171-a Source: N.Y. Tax Law § 171