If you're a foreign corporation (a business incorporated outside New York State), you must pay a license fee for the privilege of exercising your corporate franchise or carrying on business in New York State. This fee is in addition to the annual franchise tax and is payable only once, unless your capital share structure changed or the amount of your capital stock employed in New York State increased since the last license fee return was filed.
Some changes in capital share structure include:
- stock split
- issuance of authorized stock
- change of par value to no-par value stock
- change of no-par value stock to par value stock
Exemption from the license fee
You're exempt from the license fee if you're:
- a banking corporation as defined in Article 32, section 1452(a), paragraphs 1 through 8;
- an insurance corporation;
- a limited liability company (LLC);
- a limited liability partnership (LLP); or
- a publicly traded partnership taxed as a corporation under the Internal Revenue Code.
How and when to file
Pay the license fee by filing Form CT-240, Foreign Corporation License Fee Return:
- with your first franchise tax return, within 2½ months after the end of your fiscal or calendar year, and
- whenever you make a change in the capital share structure of the corporation, or
- whenever the amount of capital stock employed in New York State has increased since the last license fee return was filed.
License fee rates
The license fee rate is five cents on each share of no-par value stock, and 1/20 of 1% of the value of par value stock. The minimum license fee is $10.
For additional information on the license fee, see Form CT-240 Instructions.