![]() Second, it is principally engaged in qualifying activities ( e.g., manufacturing, processing or assembling) (the “principally engaged” test).Ī taxpayer-or, in the case of a combined report, a combined group-that does not satisfy the principally engaged test may still be a qualified New York manufacturer if the taxpayer or the combined group employs during the taxable year at least 2,500 employees in manufacturing in New York, and has property in the state used in manufacturing, the adjusted basis of which for federal income tax purposes at the close of the taxable year is at least $100 million. ![]() First, it has property in New York that is described in section 210-B.1 of the Tax Law ( i.e., property that is eligible for the investment tax credit), and either (1) the adjusted basis of such property for federal income tax purposes at the close of the taxable year is at least $1 million, or (2) all of its real and personal property is located in New York. Under the original corporate tax reform provisions enacted in 2014, a “qualified New York manufacturer” is a manufacturer (either a single taxpayer or a combined group) that meets two qualifications. This post is the third in a series analyzing the New York Budget Bill, and discusses changes to the tax rates and to the qualified New York manufacturer provisions.Įffective for tax years beginning on or after January 1, 2014, qualified New York manufacturers are subject to a 0 percent business income tax rate and to beneficial rates for purposes of the tax on business capital and the fixed dollar minimum tax. The technical corrections are effective on the same date as last year’s corporate income tax reform, which was generally effective for tax years beginning on or after January 1, 2015. ![]() The Budget Bill’s technical corrections to last year’s corporate income tax reform include changes to the economic nexus, tax base and income classification, tax rate (including clarifications to rules applicable to certain taxpayers, such as qualified New York manufacturers), apportionment, combined reporting, net operating loss and tax credit provisions. The New York Legislature has passed bills related to the 2015–2016 budget (S2009-B/A3009-B and S4610-A/A6721-A, collectively referred to herein as the “Budget Bill”) containing several significant “technical corrections” to the New York State corporate income tax reform enacted in 2014, along with sales tax provisions and amendments to reform New York City’s General Corporation Tax. ![]()
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