United States

New York City: Mayor Announces Plans to Conform to State Tax Reform Changes

Jan 19, 2015
From KPMG TaxWatch

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Last year, major corporate and bank tax reform was enacted in New York State. Effective for tax years beginning on or after January 1, 2015, the Article 32 bank franchise tax has been repealed and corporate and bank taxpayers are subject to a substantially revised Article 9-A corporate franchise tax. The new 9-A tax includes economic nexus provisions, tax base changes, revised customer-based sourcing rules, and more traditional combined reporting. Many other changes were made to state’s tax rate structure.

Recently, New York City Mayor Bill de Blasio announced the City will revise its tax laws to generally conform to the state reform enacted last year, including the merger of the corporate franchise and banking taxes and the move to more traditional combined reporting. To ensure that the core changes are revenue neutral, there may be some provisions that are delayed or not adopted, such as rate reductions or the capital tax phase-out. The mayor is purportedly seeking to include conforming legislation within the Governor’s Executive budget, as opposed to standalone City legislation. It is expected that the City changes will be enacted retroactively to January 1, 2015, which is when most of the New York State reform legislation was effective. Please stay tuned to TWIST for further updates on New York City’s tax reform efforts.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.