New York Article 9-A, decoded
New York's corporate franchise tax computes three different taxes and charges whichever is highest. For most small and mid-size companies the answer is either the business income base or the fixed dollar minimum: here is how each works and what else a New York corporation owes.
Who is subject
A corporation, including an out-of-state corporation, is taxable in New York if it does business, employs capital, owns or leases property, or maintains an office in the state. Since 2015 New York also applies economic nexus: New York receipts of $1,283,000 or more in a tax year are enough on their own (the threshold is indexed every five years). One employee working in New York generally creates nexus too. LLCs taxed as partnerships aren't subject to Article 9-A; they pay a separate annual filing fee instead.
The three computations on Form CT-3
- Business income base — New York–apportioned business income at 6.5%, or 7.25% for corporations with business income over $5 million under the temporary higher rate. Qualified manufacturers and emerging technology companies have reduced rates.
- Capital base: a small rate on apportioned business capital, capped. Small businesses and qualified manufacturers pay 0% on this base, so it rarely wins for startups.
- Fixed dollar minimum: a flat amount set by New York receipts, from $25 to $200,000.
New York apportions using a single receipts factor with customer-based sourcing: broadly, the share of your receipts from New York customers.
| New York receipts | C-corp minimum | S-corp minimum |
| Not more than $100,000 | $25 | $25 |
| $100,001 – $250,000 | $75 | $50 |
| $250,001 – $500,000 | $175 | $175 |
| $500,001 – $1,000,000 | $500 | $300 |
| $1,000,001 – $5,000,000 | $1,500 | $1,000 |
| $5,000,001 – $25,000,000 | $3,500 | $3,000 |
| $25,000,001 – $50,000,000 | $5,000 | $4,500 |
| $50,000,001 – $100,000,000 | $10,000 | $4,500 |
| $100M – $250M | $20,000 | $4,500 |
| $250M – $500M | $50,000 | $4,500 |
| $500M – $1B | $100,000 | $4,500 |
| Over $1B | $200,000 | $4,500 |
From the Form CT-3 and CT-3-S instructions. S-corps pay the fixed dollar minimum only; they don't owe the business income or capital base taxes.
Deadlines
- C-corporations: Form CT-3 by April 15 for calendar years (the 15th day of the 4th month after year-end), with an automatic six-month extension available on Form CT-5.
- S-corporations: Form CT-3-S by March 15.
- Corporations with more than $1,000 of prior-year tax make a mandatory first installment of estimated tax with the return, and quarterly estimates after that.
The MTA surcharge and New York City
Corporations doing business in the Metropolitan Commuter Transportation District, New York City and seven surrounding counties, also owe the MTA surcharge, computed on the portion of their franchise tax attributable to the district and filed on Form CT-3-M. Separately, New York City imposes its own business corporation tax (and an unincorporated business tax on LLCs and partnerships), filed with the city's Department of Finance. A Manhattan-based startup can owe state tax, the MTA surcharge, and city tax on the same income.
Worked example
A Delaware C-corp with $1,500,000 of New York receipts and a $200,000 loss has economic nexus (over $1.283M) and no business income, so it pays the fixed dollar minimum of $1,500. The same company with $300,000 of New York-apportioned profit pays 6.5% = $19,500, since that exceeds the minimum, plus the MTA surcharge if it operates in the district. Remote hiring in New York triggers registration just as it does in California; test your setup in the nexus checker, model the minimum in the states explorer, and compare New York vs Delaware.
Sources
- N.Y. Tax Law §§ 209–210 (Article 9-A), 209-B (MTA surcharge)
- Form CT-3 and CT-3-S instructions; Form CT-3-M