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Basic Information for Employers |
Corporate Franchise Tax - General Business Corporation Permits and Licenses Assistance
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Basic Information for Employers
If you hire anyone to help you operate your new business in New York State, you take on certain tax responsibilities. The following is a summary of your tax duties as an employer, the forms you will be using, and their purpose.
Withholding Tax and Wage Reports
One of your chief tax duties as an employer is to withhold New York State income taxes (as well as federal income taxes) from the wages of your employees and to report and pay the taxes withheld. Withholding Tax Tables, Methods and Instructions, IT-2100 Booklet, explains how to do this. Use it to figure out how much New York State (and City of New York or City of Yonkers, if applicable) income taxes to withhold from your employees. Remember, if the Tax Law requires you to withhold income taxes, you have to pay these taxes whether you withhold them or not.
If any new employee wants to claim New York State withholding allowances or exemptions that are different than those claimed on their federal Form W-4, have the employees fill out Form IT-2104, Employee’s Withholding allowance Certificate.
Use Form IT-2101, Return of Tax Withheld, to remit taxes withheld. How often you have to file this form with the Tax Department depends on the amount of taxes you withhold. The filing frequency may rang from four times a month to once a year.
You must also file Form WRS-2, Employer’s Quarterly Report of Wages Paid to Each Employee, four times a year.
New York State requires employers/payers who meet...[indecipherable]
- an employer /payer with 250 or more employees/payees in New York State during the calendar year for which Form W-2/IT-2102 must be filed
- an employer/payer required to file 250 or more Forms W2-P/IT-2102-P or Forms W-2G/IT-2102-G for a calendar year
- an employer/payer filing Form W-2, W-2P or W-2G on magnetic media for federal tax whether or not required to do so.
Note: Starting with the 1991 tax year, Form W-2P will be combined with Form 1099-R and numbered as Form 1099R. Substitute Form 1099-R for Form W-2P only for retirement pay, annuities and pensions.
In addition, an employer/payer may elect to file Forms W-2/IT 2102, W-2P/IT-2102-P or W-2G/IT-2102-G on magnetic media. Both diskette and tape filing are available, and New York State encourages all filers to use magnetic media.
Information on magnetic media filing can be found in Publication 73, Magnetic Media Reporting of Withholding Tax Information.
On or before February 28, you have to file Form IT-2103, Reconciliation of Tax Withheld, and the state copy of your employees’ wage and tax statements and adjust any difference between the total tax withheld and the total tax paid during the previous year.
Federal Circular E and New York State IT-2100 Booklet will tell you what records to keep. These records must be kept for four years and must be available for the Tax Department to check at any time over a four-year period.
Unemployment Insurance
If you have gross payroll of $300 or more in a calendar quarter of business, you are subject to the New York State Unemployment Insurance Law and must register with the New York State Department of Labor. To register, contact the Department of Labor by calling (518) 457-2730 and request Form IA-100. Complete the form, make a copy for your records, and send your completed form to:
Liability and Determination Section
New York State Department of Labor
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Upon registration, you will be provided with an information guide explaining an employer’s rights and responsibilities under the Unemployment Insurance Law. Liable employers must pay contributions on the first $7000 of earnings paid to each employee during the calendar year. The New York State Department of Labor will send you the appropriate form to use to report these contributions.
Worker’s Compensation and Disability Benefits
As a new employer you should be aware of your obligations regarding the disability benefits and worker’s compensation insurance required for your employees. Information about these benefits and the forms needed to apply for them are available through private insurance carriers or by contacting your local office of the State Insurance Fund.
Employment Verification System
Employers must maintain records that show they have reviewed documents which identify each employee and show that each employee is eligible to work in the United States. Have each employee complete form I-9 and retain these forms for your records. Forms are available from the U.S. Immigration and Naturalization Service.
Miscellaneous Taxes That May Apply to You
If you become a distributor or noncommercial importer of alcoholic beverages in New York, you will have to pay the excise tax due on the sale or use of these beverages. The tax applies to any beverage that contains 1/2 of 1 percent or more of alcohol by volume. (This does not apply to sale of alcoholic beverages made to consumers by retailers such as liquor stores and grocery stores.)
A distributor is “any person who imports or causes to be imported into this state any alcoholic beverages which are or will be offered for sale or used for any commercial purpose; any purchaser of warehouse receipts for alcoholic beverages stored in a warehouse in this state who causes such beverages to be removed from such warehouse; and any person who produces, distills, manufactures ,brews, compounds, mixes or ferments any alcoholic beverages within this state for sale...” A noncommercial importer is any person other than a distributor who imports or causes to be imported any alcoholic beverages into New York State. Before you can manufacture and distribute any alcoholic beverages for wholesale or retail sales, you will have to get certain permits and licenses issued by the State Liquor Authority of New York and the Federal Bureau of Alcohol, Tobacco and Firearms. For application forms and additional information, contact these offices.
If you qualify as a distributor of alcoholic beverages in New York, you will also have to register with the Tax Department by completing the following forms: TP-128.1, Application for Registration as a distributor of Beer and similar Ferments Malt Beverages and/or TP-128.2, Application for Registration as Distributor of Wines, Liquors, and All Distilled or Rectified Spirits and TP-229, Financial Statement of Distributor of Liquors, Alcohol, Wines or Beer.
You may also have to file a Form TP-344.2, Bond of Distributor, either before or after you register. The amount of the surety bond will be determined by the Tax Department.
Once you register, the Tax Department will send you tax returns to file each month. Along with your returns, you will have to send payment for all required excise taxes. In New York City, there is an additional tax on distributors and noncommercial importers of beer and alcoholic beverages containing more than 24% alcohol by volume. If your new business will be operating there, you will have to submit the city taxes due along with the state taxes.
As a distributor or noncommercial importer, you will also have to keep complete and accurate records of all purchases, sales statements and alcoholic beverage related information. These records must be kept for at least three years.
Petroleum Products Business Taxes
If you deal in motor fuel, diesel motor fuel or residual petroleum products, you may have to register your business under Articles 12-A and/or Article 13-A
Motor fuel includes gasoline, propane, aviation gas, benzol or other products except kerosene and crude oil, suitable for use in the operation of a motor vehicle.
Diesel motor fuel includes kerosene, crude oil, fuel oil or other middle distillate and motor fuel suitable for use in operating a diesel engine.
Residual petroleum products includes topped crude of refinery operations including No.5 and No. 6 fuel oil, bunker C and No. 4 diesel fuel not suitable for use in the operation of a motor vehicle engine.
Registration
You must register as a motor fuel distributor if you:
· import, cause to be imported, motor fuel for use, sale or distribution within this state
· produce or refine motor fuel within this state
You must register as an importing transporter or a terminal operator if you:
· import motor fuel into New York State by barge, pipeline, automotive fuel carriers or railroads for use, distribution, storage or sale in this state.
· maintain or control a motor fuel storage facility with a capacity of at least 50, 000 gallons
You must register as a distributor of diesel fuel into this state:
· import, or cause to be imported, diesel motor fuel into this state
· produce, refine, manufacture or compound diesel motor fuel in this state
· sell diesel motor fuel other than at a retail directly into the fuel tank of a motor vehicle
· blend fuel oil with kerosene or a celane improver to make it more suitable to operate a motor vehicle diesel engine
Note: The method of taxing diesel motor fuel has changed: the excise tax is now imposed on the first sale or use of diesel motor fuel that is not exempt from tax. Exemptions include sales or use in farming, sales to consumers for heating use, sales of unenhanced diesel motor fuel for use in production and sales of kero-jet fuel to airlines.
You may register as a distributor of kero-jet fuel only if you are a fixed base operator engaging in the retail sale of kero-jet fuel (J-4) directly into jet airplanes from a fixed and permanent place at an airport in this state.
You must register as an aviation fuel business if you are an airline or other business that imports kero-jet fuel into New York State in the fuel tanks of your aircraft and are not currently registered under Article 12-A of the Tax Law as a distributor of diesel motor fuel or kero-jet fuel only.
You must register as a residual petroleum products business if you are a petroleum business selling residual petroleum products in New York State or importing it for sale or use.
TP-128.3 Application for Registration/License as a Distributor of Motor Fuel, Importing Transporter or Terminal Operator - Include a certified, unqualified financial statement with your application.
TP-600 Application for Registration as a Distributor of Diesel Motor Fuel or as a Retailer of Heating Oil Only or as a Distributor of Kero-jet Fuel Only
TP-115 Application for Registration as an Aviation Fuel Business or a Residual Petroleum Products Business
FT-953 Bond of Distributor - If you are a motor fuel distributor or a distributor of diesel motor fuel, you may have to file this form before registration. The amount of any security bond will be determined by the tax department.
FT-941 Terminal Operator’s Monthly Report of diesel Motor Fuel and Motor Fuel Inventory - If you are registered as a terminal operator or if you store diesel motor fuel or motor fuel at facilities with a total storage capacity of 50,000 gallons or more (excluding a facility at which fuel is stored only for retail or personal use)
FT-942 Diesel Motor Fuel and Motor Fuel Transporters Monthly Report - If you are registered as an importing transporter or if you transport diesel motor fuel or motor fuel into or out of this state.
Once you are registered, the Tax Department will send you monthly or quarterly tax returns to file.
For additional information on the diesel motor fuel taxes, see Publication 100, Notice of New Legislation Pertaining to Diesel Motor Fuel (including heating oil) effective 9-1-88 and Notice N-89-54 concerning tax law amendments allowing registration of fixed bas operators as distributors of kero-jet fuel only.
Highway Use Tax
Any motor vehicle having a gross weight., alone or in combination wit another motor vehicle, of more that 18,000 pounds is subject to the highway use taxes (truck mileage tax and fuel use tax). For purposes of the highway use taxes, a motor vehicle includes any truck, tractor or other self-propelled device and any trailer, semitrailer or other non-self-propelled device transporting automotive fuel.
Automotive fuel is diesel motor fuel (kerosene, kero-jet fuel, heating fuel #2, crude oil and other fuels commonly used in diesel) and motor fuel (gasoline, aviation gas, benzol and other than diesel engines).
If you or your business operates motor vehicles on New York’s public highways, these vehicles will be subject to a truck mileage tax. This tax is based on the gross or combination weight of the vehicle (loaded or unloaded) and the number of miles it travels over the highways of this state. If you become a carrier, you will have to pay this tax.
An additional highway use tax is based on the amount of motor fuel or diesel motor fuel certain vehicles use as they travel within New York State. This fuel use tax must also be accounted for by the carrier.
A credit is allowed against the fuel use tax for any motor fuel or diesel motor fuel purchased in New York State.
All omnibuses having a seating capacity of more than seven persons (not including the driver) that are used in the interstate or foreign transportation of passengers are subject to the fuel use tax only.
these motor vehicles, trucks, tractors, omnibuses or other self-propelled devices and any trailers, semitrailers, or other non-self-propelled devices transporting automotive fuel must have a proper permit and sticker before they may operate on New York State highways. If you are a carrier or an owner of these vehicles, you must apply for a permit and stickers for each vehicle by completing Form TMT-1, Application for Highway Use and/or Automotive Fuel Carrier Permits.
A fee of $15 for each self-propelled device and $5 for each trailer, semitrailer or other attached device that transports automotive fuel must be submitted with this application.
Once you have received a highway use permit and sticker for each of your motor vehicles, the Tax Department will send you monthly or quarterly tax returns to file.
A fee of $15 for each self-propelled device and $5 for each trailer, semitrailer or other attached device that transports automotive fuel must be submitted with this application.
Once you have received a highway use permit and sticker for each of your motor vehicles, the Tax Department will send you monthly or quarterly tax returns to file.
The following motor vehicles are not subject to the highway use tax:
· vehicles engaged exclusively in the transportation of United States mail under contract;
· vehicles operated by the United States Government;
· vehicles operated by any state and New York State and its counties, cities, towns and villages;
· vehicles operated by a volunteer fire company or department;
· vehicles owned and operated by farmers if used exclusively to transport their own agricultural commodities and products that were originally grown or raised on their farm, land or orchard; or to transport supplies to their farm or farm products from a farm contiguous or adjacent to their own.
For additional information about the highway use tax, See publication 538, Important Information for New Carriers, Highway Use Tax (Article 21).
If you do not have a permit for a vehicle and an emergency requires the immediate use of our vehicle in New York State, you can get an emergency permit by calling toll free one of the various permit services listed below. You emergency permit will automatically be converted to a permanent permit.
A single trip permit is available and valid for a 72-hour period. This permit may not be used by trucks or trailers hauling automotive fuel. You can get a single trip permit immediately by wire from any of the permit services listed below. If you request a single trip permit by mail from the Tax Department, you must submit Form TMT-1.17, Application for 72-hour Trip Permit, 30 days before the 72-hour trip period. The fee is $25. A carrier using a single trip permit is exempt from filing returns and paying fuel use or truck mileage taxes for the period of the permit for that particular motor vehicle.
· Finds-NET:
1-800-527-6702 (In United States)
· ComChek
1-800-327-8747 (In United State)
· Transceiver
1-800-833-3652 (In United States)
1-800-364-4822 (In Canada)
· Trans-Com
1-800-848-9100 (In United States)
1-614-895-1415 (In Canada)
· Xero-Fax
1-800-342-3684 (In United States)
1-800-833-3762 (In Canada)
· C.C.I.C.
1-800-233-5588 (In United States)
1-800-363-1954 (In Canada)
· Peranicon
1-800-361-2218 (In Canada)
· Custom Permit Service
1-800-669-5014 (In United States)
If you are a beverage manufacturer, distributor or dealer and qualify as a container sale initiator, you may be liable for the beverage container tax of two cents on each non-refillable container of carbonated soft drink, mineral water or soda water sold.
A container sale initiator is:
- A manufacturer doing business within New York State with New York State, who bottles, cans or packages beverages in non-refillable containers, imports filled non-refillable containers or sells beverages packaged in non-refillable beverage containers directly to consumers;
- A distributor doing business within New York State who purchases non-refillable beverage containers, from anyone other than a container sale initiator and sells them to beverage dealers, to persons who sell to dealers, to other distributors or to consumers;
-A dealer who sells beverages to consumers in non-refillable containers that were not purchased from a registered container sale initiator;
Manufacturers, distributors, and dealers who qualify as container sale initiators must register with the Tax Department by completing Form MT-102, Application for Registration as a Container Sale Initiator.
Registered container sale initiators are required to file Form MT-255, Beverage Container Tax Return, quarterly, for periods ending on the last day of February, May, August and November of each year. Returns must be filed within 20 days. A return must be filed even if no taxes are due.
Container sale initiators are not required to pay the container tax on sales of refillable beverage containers or on sales of beverages packaged in non-refillable containers exported from New York State.
Corporate Franchise Tax -General Business Corporation
Corporations must file a franchise tax return and pay a franchise tax for all or any part of each calendar or fiscal year during which they exercise their corporate franchise. Generally, a corporation having a tax period of 10 to 12 months must pay a fixed dollar minimum tax of at least $325 (for periods of 7 to 9 months, $243.75; for less than 7 months, $162.50). The fixed dollar minimum may be higher based on the taxpayer’s gross payroll, average assets and gross receipts.
The tax is imposed on all domestic corporations (those that are incorporated by or under the laws of New York State) regardless of whether they do business, employ capital, own or lease property, maintain an office, or engage in any activity. All foreign business corporations (those organized by or under the laws of another state or country) that are involved in any of these activities in New York State are also subject to the franchise tax.
In reporting the annual franchise tax, your corporation will have to file either Form CT-3, Corporation Franchise Tax Return (long form) or Form CT-4, Corporation Franchise Tax Return (short form). Your return must be postmarked on or before March 15 of each year if your corporation chooses to use a reporting period based on the calendar year. A corporation that uses a reporting period other than the calendar year (fiscal reporting) must file a report 2 1/2 months after the end of the annual reporting period. If your corporation can reasonably expect its tax for the year to exceed $1,000, you must complete and file Form CT-400, Declaration of Estimated Tax, and pay the estimated tax with your declaration or in installments.
Foreign Corporation Maintenance Fee
Every foreign corporation authorized to do business in New York State must pay an annual maintenance fee of $300, which may be claimed as a credit against the franchise tax due under Article 9-A. Full payment of the franchise tax due will satisfy the maintenance fee requirement.
Foreign Corporation License Fee
Every foreign corporation must pay a license fee for the privilege of exercising its corporate franchise or for carrying on its business in New York State.
This fee is in addition to the annual franchise tax and payable only once unless the capital share structure changes or the amount of capital stock employed in New York State has increased since the last license fee report was filed. Some changes in capital share structure are as follows: a) stock split; b) issuance of authorized stock; c) change of par value stock to no par value stock; d) change of no par value stock to par value stock. See Form CT-240, Report of License Fee on Foreign Corporations, for further details.
Other Types of Corporations
Certain types of corporations are not included as general business corporations under Article 9-A, and different specific taxing provisions apply to them. These include banking corporations (Article 32), insurance corporations (Article 33), transportation and transmission corporations (Article 9, section 183/184), foreign omnibus and taxicab corporations (Article 9, section 184), utility companies (Article 9, section 186), farmers and agricultural cooperatives (Article 9, section 185), and nonstock, not-for-profit corporations with unrelated business taxable income (Article 13).
Some small business corporations are exempt from the tax on business and investment capital for their first two taxable years. Certain new corporations that acquire property that is eligible for an investment tax credit may elect to receive a refund of their unused investment tax credit.
Your corporations may qualify for other new business tax credits and benefits. To find out, contact New York State’s Tax Payer Assistance Bureau at 1-800-225-5829.
Business Incentives
Economic Development Zone Program of building materials and expedited permit assistance The Economic Development Zone Program is designed to stimulate growth in New York State’s economically distressed areas.
A major feature of the program is a package of state tax incentives for certified economic development zone businesses. These incentives include a credit on wages paid, a reduction in utility costs, an investment credit on production property acquired, a credit on the purchase of original stock of a venture capital corporation, refund or credit of sales taxes paid for the purchase.
For more general information about the program, contact the New York State Department of Economic Development as (518) 473-6929. For tax information contact New York State’s Taxpayer Assistance Bureau at 1-800-225-5829.
Permits and Licenses Assistance
The New York State Office of Business Permits and Regulatory Assistance provides assistance to any business operating or planning to operate in New York.
The office’s staff of permit coordinators can offer you comprehensive information on all state permits. If you have any concerns about permit or licensing requirements of any state agency, contact the office. Call toll-free 1-800-342-3464; or if are calling from out of state, (518) 474-8275.
Sale and Use Tax
If your new business in New York State sells goods or services to people in this state, you may have to charge, collect and pay New York State sales and use tax. If you sell or deliver goods or perform services in an area that has a local sales tax, you may also have to collect that tax. If you operate your business in the Metropolitan Commuter Transportation District (New York City or Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess or Westchester Counties), you may also have to collect the special 1/4% sales tax.
Remember, you are liable for the payment of these taxes whether you collect them or not.
You have to collect tax on the sale or rental of all goods unless they are specifically exempted by the New York State Sales and Use Tax Law. You have to collect sales tax on the performance or services only if the New York State Tax Law specifically states them. In general, sales and use taxes apply to :
· sales and rentals of tangible personal property to consumers (retail sales)
· consumer’s utility charges
· sales of food and drink in or by restaurants, taverns or other establishments
· admission and amusement charges
· rental of hotel and motel rooms
· dues to social and athletic clubs
· charges foe certain services such as maintenance, installation, storage and repair services
· providing parking, garaging or storing for motor vehicles
· interior decorating and design services
· protective and detective services
· the furnishing or provision of an entertainment service or of an information service which is furnished, provided or delivered by telephony or telegraphy
· a resident’s use of tangible personal property and certain services within New York State purchased at retail where no sales tax was paid and the item purchased was used in New York State.