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September222022

NYS Enacts Amendments to the NYC Pass-Through Entity Tax and NYC Business Taxes

BERDON STATE & LOCAL TAX TEAM

9.22.22 | Client Alert

New York City PTET (NYC PTET)

Eligible taxpayers can now elect to pay the NYC PTET for 2022. The election is due March 15, 2023. Previously, the NYC PTET was scheduled to take effect for tax years starting on or after January 1, 2023. Making a New York State 2022 PTET election (by September 15, 2022) is a prerequisite for the 2022 NYC PTET election. To learn more about the NYC PTET, see NYS 2022-2023 Budget Covers A Broad Field: Expanded NY PTET, New NYC PTET, Extended Brownfield Credits, Middle Class Tax Cut, Small Business Relief, & More.

$1,000,000 Economic Nexus Standard For New York City Business Corporation Tax (BCT)

For tax years beginning on or after January 1, 2022, corporations deriving receipts from activity in the City are subject to a bright line nexus standard for BCT purposes. Specifically, corporations with $1,000,000 or more in receipts from New York City sources now have nexus for BCT purposes. Corporate partners will have BCT nexus based on the partnership(s) meeting the $1,000,000 New York City receipts threshold. Unitary group members with at least $10,000 in receipts from New York City sources will have nexus if all the unitary group members have at least $10,000 in New York City source receipts and collectively meet the $1,000,000 threshold.

Exclusion from City Business Taxes of Certain COVID-Related Grants

Retroactive to tax years beginning in 2021, New York State COVID-19 Small Business Recovery Grants and New York City Small Business Resilience Grants will be excluded from New York City Business Taxes to conform to the State exclusion.

If you have questions, contact Wayne K. Berkowitz at 212.331.7465 | wberkowitz@berdonllp.com or Richard Goldstein at 212.331.7557 | rgoldstein@berdonllp.com or reach out to your Berdon tax advisor.

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