New York Corporate Tax - Guide for international expansion

Starting a business in New York? Understanding the state's corporate tax structure is crucial for your company's financial planning and compliance. New York has one of the more complex corporate tax systems in the US, with multiple tax types and varying rates depending on your business structure and income levels.

Whether you're launching a startup in Manhattan or expanding your operations to Buffalo, Rochester, or anywhere else in New York State, getting to grips with New York's corporate tax requirements will help you make informed decisions and avoid costly penalties. Wise Business can help streamline your financial operations with multi-currency accounts and competitive exchange rates, making it easier to manage your business finances across borders.

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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

New York Corporate tax rate in 2025

New York has a graduated corporate income tax, with rates ranging from 6.5% to 7.25%.¹ This rate applies to the corporation's entire net income allocated to New York. Additionally, corporations may be subject to the Alternative Minimum Tax (AMT) at a rate of 1.5% if it results in a higher tax liability than the standard rate.

New York also has a 4% state sales tax rate and an average combined state and local sales tax rate of 8.53%, for businesses operating in these areas.¹

The state requires corporations to pay the higher of the corporate franchise tax or a fixed dollar minimum tax, which ranges from $25 to $200,000 depending on the corporation's New York receipts. For corporations with receipts over $1 million, the minimum tax is $1,500, increasing progressively with higher receipt levels.²

S corporations in New York are subject to a fixed dollar minimum fee ranging from $25 to $4,500, based on their New York receipts. They're also subject to a tax on certain built-in gains and passive investment income under specific circumstances.³

Limited Liability Companies (LLCs) face an annual filing fee ranging from $25 to $4,500, depending on their New York receipts, plus a potential additional fee based on the number of member.⁴

How to pay corporate tax in New York

New York requires most corporations to file and pay their taxes electronically through the state's online filing system. The Department of Taxation and Finance provides several electronic payment options, including direct debit, credit card payments, and electronic funds transfer.⁵

Corporate franchise tax returns are due by the 15th day of the third month following the close of the tax year.⁶ For calendar year corporations, this means returns are due by March 15th. Corporations can request an automatic six-month extension, but any tax owed must still be paid by the original due date to avoid penalties and interest.⁶

New York imposes penalties for late filing and late payment. The late filing penalty is 5% of the tax due for each month or part of a month the return is late, up to a maximum of 25%.³ Late payment penalties start at 0.5% per month of the unpaid tax, also capping at 25%. Interest is charged on both unpaid taxes and penalties at rates that are adjusted quarterly.³

Let's consider a corporation with annual revenue of $1.5 million and a profit margin of 10%, resulting in taxable income of $150,000. At New York's standard corporate tax rate of 6.5%, the tax owed would be:

$150,000 × 6.5% = $9,750

If this corporation operates in the MCTD area, it would also owe the 30% surcharge:

$9,750 × 30% = $2,925

Total tax liability: $9,750 + $2,925 = $12,675

If the corporation files its return 30 days late, it would face a late filing penalty of:

$12,675 × 5% = $633.75

Plus monthly interest charges on the unpaid amount.

For businesses expanding into New York, having the right financial infrastructure is essential. Wise Business offers USD accounts that can help you manage local payments, including tax obligations, supplier payments, and employee salaries. With competitive exchange rates and transparent fees, Wise Business makes it easier to handle your New York operations while maintaining financial efficiency across your global business activities.

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Tax Compliance in New York

Some helpful tips to keep your company fully compliant with New York tax regulations are:

• Complete corporate tax registration: After incorporation, register with the Department of Taxation and Finance for sales tax, employer withholding, corporate franchise taxes, and excise taxes. Most entities also need a Federal Employer Identification Number (EIN), the primary identifier for tax filings, payroll, and banking.⁷
• Understand corporate tax meaning: Corporate taxes apply to business profits and are distinct from personal income taxes. Working with a professional corporate tax service or corporate tax lawyers can help clarify obligations and ensure accurate filings.
• File Biennial Statements: All corporations and LLCs must file a Biennial Statement with the Department of State every two years in their anniversary month.⁸ This updates company details such as name and address. Failure to file can cause loss of good standing, administrative dissolution, or revocation of business rights.

International Expansion to New York

New York offers one of the most dynamic environments for international expansion. State GDP reached $2.284 trillion in 2024, ranking third in the U.S. behind California and Texas. Its median household income of $82 095 surpasses the national average, giving businesses access to a strong consumer base.^{9 10}

As the financial and cultural capital of the world, New York hosts Wall Street, the United Nations, and 52 Fortune 500 companies.¹¹ It’s also a major export hub. In 2023, more than 32,000 companies exported goods from New York. Small and medium-sized enterprises made up 93% of those exporters and generated over half of the state’s export volume.¹²

New York also delivers a skilled workforce. It ranks #1 in the Northeast for STEM graduates, #2 in the U.S. for scientists and engineers, and #3 for high-tech employment.¹³ This ensures access to talent across finance, technology, life sciences, and creative industries.

From a tax standpoint, New York offers competitive incentives. Qualified manufacturers benefit from a 0% corporate income tax rate, placing the state among the best corporate tax rates in the world.¹⁴ Given the shifting corporate tax regulations, it’s wise to engage corporate tax consultants for corporate tax accounting and compliance.

Here’s a streamlined setup roadmap:

1. Draft your business plan.
2. Choose a unique business name.
3. Secure funding.
4. Select a legal structure and appoint a registered agent.
5. Register with the New York Secretary of State.
6. Obtain licenses and permits.

Set up tax registration and a business bank account. See Wise’s guide onhow to open a U.S. business bank account as a non-resident.

Incorporation of Business in New York

Start by filing with the New York Department of State, Division of Corporations, to officially register your business. The next steps are:¹⁵

1. Choose a unique business name that does not conflict with existing or reserved names.
2. Appoint a Registered Agent to accept legal documents such as subpoenas, complaints, or summons.
3. Prepare and submit the Certificate of Incorporation, including business purpose, county location, stock structure, and Registered Office.
4. Obtain an Employer Identification Number (EIN) from the IRS.
5. File a Beneficial Ownership Information (BOI) Report with FinCEN (required for most non-U.S. corporations starting March 26, 2025).
6. Draft Corporate Bylaws that act as the internal constitution, setting rules for decision-making, officer duties, and shareholder rights.
7. Meet New York’s publication requirement by publishing incorporation notices in two newspapers for six consecutive weeks and filing affidavits with the Department of State within 120 days.
8. Hold an organisational meeting to adopt bylaws, appoint officers, and conduct initial company business.
9. Open a corporate bank account to separate business finances from personal funds.
10. Register with the New York Department of Taxation and Finance to comply with state requirements, including filing the corporate tax return.

Business Entities in New York:

Common business entities in New York include:⁷

• Business Corporations: Provide limited liability, established governance rules, and an optimal framework for raising equity or pursuing public offerings. They face double taxation on distributed profits, but allow deductions for expenses and benefits.
• Limited Liability Companies (LLCs): Offer liability protection and pass-through taxation, avoiding double taxation. LLCs allow flexible operations through customizable agreements and lighter compliance requirements.
• Professional Corporations (PCs) and Professional LLCs (PLLCs): Required for licensed professions like law, medicine, or architecture. These entities comply with professional regulations while protecting owners from general business liabilities.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires strategic planning and robust compliance systems. Here are key practices that can help international businesses navigate complex tax landscapes effectively.

• Establish comprehensive tax compliance procedures across all operating jurisdictions. This includes maintaining accurate records, understanding local filing requirements, and ensuring timely submissions to avoid penalties. Many countries have implemented stricter reporting requirements and increased penalties for non-compliance, making systematic approaches essential.
• Leverage double taxation treaties to minimise tax burdens on international income. The United States has tax treaties with over 60 countries that can help prevent double taxation and reduce withholding taxes on cross-border transactions. Understanding these agreements and properly claiming treaty benefits can result in significant tax savings.
• Implement transfer pricing documentation and policies that comply with OECD guidelines and local requirements. With increased scrutiny from tax authorities worldwide, maintaining proper documentation of intercompany transactions is crucial for defending pricing decisions and avoiding costly adjustments.
• Stay informed about global tax developments, particularly the OECD's Pillar Two global minimum tax rules, which affect multinational enterprises with annual revenues exceeding €750 million. These rules establish a 15% minimum tax rate and require additional compliance measures for qualifying businesses¹².

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to New York efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.
• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.
• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in New York

Who is liable for corporate tax in New York?

Corporations doing business in New York, deriving income from New York sources, or owning or leasing property in New York are subject to the state's corporate franchise tax. This includes domestic corporations incorporated in New York and foreign corporations conducting business activities within the state. The tax applies regardless of whether the corporation maintains a physical presence in New York, as long as it meets the economic nexus thresholds.

Are there any tax incentives for businesses in New York?

Yes, New York offers several tax incentive programmes to encourage business investment and job creation. The Excelsior Jobs Program provides tax credits for businesses that create new jobs and make significant investments in New York. The START-UP NY programme offers tax-free zones for new and expanding businesses that partner with eligible universities. Additionally, New York provides various industry-specific incentives, including credits for research and development activities, film and television production, and renewable energy projects.

What is the tax treatment of dividends in New York?

Dividends received by New York corporations are generally subject to the same tax treatment as other income, taxed at the standard corporate rate of 6.5%. However, New York allows a dividends received deduction for qualifying dividends from subsidiary corporations, similar to federal tax treatment. The deduction percentage depends on the ownership level in the distributing corporation. Dividends paid by New York corporations to shareholders are not deductible for corporate tax purposes.

What is the process for registering for corporate tax in New York?

Corporations must register with the New York State Department of Taxation and Finance before beginning business operations in the state. This involves filing Form CT-1, Application for Registration and Certificate to Collect Sales Tax. The registration process requires basic corporate information, including federal employer identification number, business activities, and estimated tax liability. Once registered, corporations receive a Certificate of Authority to do business in New York and are assigned a New York State tax identification number.

What are the common pitfalls to avoid regarding corporate tax in New York?

Common mistakes include failing to register for New York corporate tax when economic nexus thresholds are met, incorrectly calculating the allocation of income to New York, and missing estimated tax payment deadlines. Many businesses also overlook the MCTD surcharge when operating in the metropolitan area, leading to underpayment penalties. Another frequent error is failing to maintain proper documentation for transfer pricing or failing to claim available tax credits and deductions. Additionally, businesses often underestimate the complexity of New York's combined reporting requirements for affiliated groups of corporations.

Sources used in this article:

1. Tax Foundation: New York Tax Rankings
2. TaxSlayer Pro: NY Minimum Tax for General Business Corporation
3. NYS Form CT-3-I (2024)
4. NYS Publication 16 on LLCs and Partnerships
5. NYS Tax Payment Portal
6. NYS Tax Calendar for 2025
7. USA Corporate: Incorporating in New York
8. Northwest Registered Agent: NY Annual Report Guide
9. U.S. Census Data: New York Profile
10. U.S. Census Data: United States Profile
11. Workwell Global: Why New York is a Top State for Business
12. USTR: State Benefits for New York
13. ESD: New York's Diverse and Talented Workforce
14. ESD: Why New York State is a Good Choice for Business
15. Northwest Registered Agent: Incorporating in New York

Sources last checked 26/08/2025