Corporate taxes
More money
New York State collected almost $7.3 billion in Article 9-A corporation franchise taxes in fiscal year 2023. This was an increase of nearly $1.5 billion from the prior fiscal year.
| Fiscal year | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| Corporation franchise tax collections (in millions of dollars) | $3,391.84 | $3,771.83 | $3,879.66 | $5,793.20 | $7,260.83 |
Effective tax reform
New York State’s corporate tax reform was implemented in 2015 to ease the compliance burden on businesses operating in the state. The number of corporations and their franchise tax liabilities have grown since.
| Tax liability year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|---|
| Number of taxpayers | 281,374 | 284,605 | 293,302 | 302,909 | 311,233 | 311,147 |
| Liability (in millions of dollars) | $3,238.5 | $2,836.5 | $2,710.4 | $4,037.5 | $4,052.0 | $4,127.9 |
Corporation franchise tax distribution
The corporation franchise tax burden is primarily carried by less than 1% of taxpayers. Their share of the total tax has risen from 65% to almost 74%. More than 80% of corporation franchise taxpayers pay less than $1,000 in tax.
| Tax year | Tax amount | Number of taxpayers | Percent of total taxpayers | Tax (in millions of dollars) | Percent of total tax |
|---|---|---|---|---|---|
| 2015 | less than or equal to $999 | 219,150 | 77.89% | $33.4 | 1.03% |
| greater than or equal to $1 million | 478 | 0.17% | $2,152.3 | 66.46% | |
| 2016 | less than or equal to $999 | 224,212 | 78.78% | $37.6 | 1.33% |
| greater than or equal to $1 million | 406 | 0.14% | $1,869.5 | 65.91% | |
| 2017 | less than or equal to $999 | 232,406 | 79.24% | $37.1 | 1.37% |
| greater than or equal to $1 million | 394 | 0.13% | $1,757.8 | 64.86% | |
| 2018 | less than or equal to $999 | 240,874 | 79.52% | $37.7 | 0.93% |
| greater than or equal to $1 million | 494 | 0.16% | $2,965.1 | 73.44% | |
| 2019 | less than or equal to $999 | 249,720 | 80.24% | $38.8 | 0.96% |
| greater than or equal to $1 million | 474 | 0.15% | $2,988.5 | 73.75% | |
| 2020 | less than or equal to $999 | 254,532 | 81.80% | $35.2 | 0.85% |
| greater than or equal to $1 million | 484 | 0.16% | $3,052.6 | 73.95% |
Competitive corporate tax rates
New York's top corporate franchise tax rate is the 16th highest corporate rate in the country—and one of the lowest rates in the Northeast.
Top state corporate income tax rates for northeastern states (as of January 1, 2024). From highest to lowest percentage: New Jersey, Maine, Delaware, Vermont, Pennsylvania, Maryland, Massachusetts, Connecticut, New Hampshire, New York, and Rhode Island
Tax year filing and data timing
The combination of filing extensions and fiscal-year filing periods results in a lag between when returns are filed and when complete tax year data are available.
Example: A fiscal year filer with a December 2022–November 2023 liability period would be required to file its return by March 15, 2024. If the entity uses the full one-year extension, the 2022 return would not be submitted to the department until March 15, 2025.
Extensions of time to file
Article 9-A taxpayers are required to file tax returns by the 15th day of the 4th month following the close of the tax year (April 15th for calendar-year filers). In addition, filers may extend the statutory due date for up to one year through the use of one six-month extension and two additional three-month extensions.
Over half of the corporate franchise taxpayers file by the statutory deadline, but those entities make up less than 10% of the total tax. Meanwhile, more than 60% of the overall Article 9-A tax comes from the less than 2% of taxpayers that use either a nine-month or one-year extension.
| Extension status | Percent of taxpayers | Percent of total tax |
|---|---|---|
| No extension | 58.8% | 8.02% |
| Six-month extension | 39.7% | 28.53% |
| Nine-month extension | 1.4% | 50.54% |
| One-year extension | 0.1% | 12.91% |
| Total | 100.0% | 100.00% |
Tax years: Calendar year vs. fiscal year
Corporate franchise taxpayers file either on a calendar year (January–December) or a fiscal year (the liability period begins in a month other than January). Two-thirds of Article 9-A taxpayers use a calendar year, reporting over 70% of the total Article 9-A liability.
| Liability period begin month | Number of taxpayers | Percent of taxpayers | Tax ($) | Percent of total tax |
|---|---|---|---|---|
| January | 205,246 | 65.96% | 2,953,626,057 | 71.55% |
| February | 7,752 | 2.49% | 215,404,360 | 5.22% |
| March | 8,564 | 2.75% | 19,606,537 | 0.47% |
| April | 12,043 | 3.87% | 172,021,512 | 4.17% |
| May | 8,535 | 2.74% | 32,839,370 | 0.80% |
| June | 8,984 | 2.89% | 43,405,711 | 1.05% |
| July | 13,582 | 4.37% | 195,910,753 | 4.75% |
| August | 8,774 | 2.82% | 63,807,174 | 1.55% |
| September | 8,972 | 2.88% | 40,800,342 | 0.99% |
| October | 12,527 | 4.03% | 237,759,940 | 5.76% |
| November | 8,758 | 2.81% | 106,836,509 | 2.59% |
| December | 7,410 | 2.38% | 45,848,833 | 1.11% |
| 2020 tax year total | 311,147 | 100.00% | 4,127,867,098 | 100.00% |
Article 9-A taxpayers by tax base
Article 9-A filers are subject to the highest of three bases—business income base, business capital base, or the fixed dollar minimum tax based on New York receipts.
While almost three-quarters of Article 9-A filers pay on the fixed dollar minimum base, over 95% of the tax comes from the income base.
| Tax base | Number of taxpayers | Percent of taxpayers | Tax ($) | Percent of total tax |
|---|---|---|---|---|
| Entire net income | 58,021 | 18.6% | 3,944,057,062 | 95.5% |
| Fixed dollar minimum | 227,538 | 73.1% | 83,178,134 | 2.0% |
| Capital | 25,588 | 8.2% | 100,631,902 | 2.4% |
| Total | 311,147 | 100.0% | 4,127,867,098 | 100.0% |
Article 9-A New York receipts by type
Article 9-A taxpayers reported more than $20 trillion dollars across more than 50 different types of enumerated receipts, with more than $1 trillion of that amount sourced to New York State in 2020.
Types of New York Receipts for tax year 2020. Sales of tangible personal property: 39.5%; rentals of real and tangible personal property: 3.7%; all other receipts: 2.6%; receipts from other services/activities not specified: 43.6%; financial receipts: 10.6%.
S corporations
Over 450,000 S corporations are required to pay an entity-level franchise tax under Article 9-A, ranging from $19 to $4,500 depending on the type of business and the amount of New York receipts. Shareholders of New York S corporations report the flow-through income from these corporations on their personal income tax returns.
| Tax year | Count | Article 9-A franchise tax liability (in millions of dollars) |
|---|---|---|
| 2015 | 421,107 | $126.8 |
| 2016 | 427,341 | $123.3 |
| 2017 | 435,409 | $126.8 |
| 2018 | 443,855 | $138.5 |
| 2019 | 450,685 | $129.9 |
| 2020 | 450,926 | $120.1 |
Other corporate tax collections
Approximately 1,400 utility, telecommunications, and transportation companies and 1,300 insurance companies also pay corporate franchise taxes.
| Fiscal year | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| Article 9 tax collections | $805.06 | $832.63 | $715.15 | $735.75 | $720.21 |
| Insurance tax collections | $1,489.60 | $1,918.50 | $1,799.30 | $1,991.20 | $2,157.00 |