In addition to US federal taxes, businesses must file and pay the franchise tax on general business corporations if:

• You are a domestic corporation (incorporated in New York State); or
• You are a foreign corporation (incorporated outside New York State) that does business, employs capital, owns or leases property, maintains an office, or derives receipts from activity, in New York State; or
• You are a foreign corporation that is a general partner in a partnership that does business, employs capital, owns or leases property, maintains and office, or derives receipts from activity, in New York State; or
• You are a foreign corporation that is a limited partner in a partnership that does business, employs capital, owns or leases property, maintains an office, or derives receipts from activity, in New York State and you are engaged directly or indirectly, in the participation or in the domination or control of all or any portion of the business activities or affairs of the partnership.

When considering the last 2 bullets above, an LLC or LLP that is treated as a partnership for federal income tax purposes will be treated as a partnership for New York State tax purposes. Corporations engaged in a unitary business with another corporation(s) should see Form CT-3-A-I, page 4, “Who must file a combined return” for information concerning the combined return filing requirements.

Calculating the tax:

Highest tax based on:

• Business income
• Business capital
• Fixed dollar minimum tax MTA surcharge
• Metropolitan Transit Authority (MTA surcharge) if applicable

Tax Credits

• You may qualify to claim certain tax credits to reduce your New York State tax liability.

Paying Estimated Tax

If your corporation reasonably expects to owe more than $1,000 in franchise tax after credits, you must file estimated tax forms (Form CT-400, Estimated Tax for Corporations) and make quarterly payments of all estimated tax due. Most general business corporations are mandated to e-file the estimated tax.

• Use Corporation Tax Web File to submit Form CT-400. You will need to first create an Online Services account or
• Use tax preparation approved software to submit Form CT-400 or
• File paper Form CT-400.

When to File your Tax Return

• If your due date falls on a Saturday, Sunday, or legal holiday, you may file your return on or before the next business day.

How to File and Pay

• Most general business corporations are mandated to e-file returns. See e-file and e-pay requirements for certain filers for details.
• Most general business corporations file Form CT-3, General Business Corporation Franchise Tax Return.
• General business corporations that file on a combined basis with related corporations file Form CT-3-A, General Business Corporation Combined Franchise Tax Return.
• If you do business in the Metropolitan Commuter Transportation District (MCTD), you may be subject to the MTA surcharge. Corporations subject to the MTA surcharge must also file Form CT-3M, General Business Corporation MTA Surcharge Return.

If you cannot meet the filing deadline

If you cannot meet the filing deadline, you may request a six-month extension of time by filing Form CT-5, Request for Six-Month Extension to File, and paying your properly estimated franchise tax and MTA surcharge on or before the due date of the return. Most general business corporations are mandated to e-file the extension.

• Use Corporation Tax Web File to submit Form CT-5. You will need to first create an Online Services account or
• Use tax preparation approved software to submit Form CT-5.

Sources

• New York State Department of Taxation and Finance website