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Corporate Taxes in New York and Other States
- New York has a 7.100% flat corporate income tax rate on gross income.
- The federal corporate tax is marginal and bracketed.
- Twenty three states have higher marginal rates than New York.
Taxes in Washington D.C.
- DC corporations report net income on a combined basis.
- Minimum tax is $250 if DC gross receipts are under $1 million.
- The 2022 tax year rate was 8.25%.
- The DC unincorporated business franchise tax applies to businesses with over $12,000 in gross receipts.
Taxation Differences in Various Entities
- In New York City, S corps don’t get special status. They face double taxation and must pay the general corporation tax.
- California LLCs and S corps choosing S corp taxation pay a 1.5% state franchise tax on net income, plus a minimum $800 tax.
Additional Tax Information
- Most NY businesses pay 6.5% of gross business income in corporation tax.
- The NYC sales tax rate is 4.5%, while the NY state rate is 4% with an additional MCTD surcharge of 0.375%, making the total 8.875%.
- Pensions from NY state/local government or the federal government are not taxed in NY.
- The current federal corporate tax rate is 21%. Combined with state taxes, the 2021 average top US rate was 25.8%.
- The NY minimum LLC tax is 6.5% of income after expenses, but it can go as high as 7.25%.
