Corporation tax
More money
New York State collected more than $8 billion in corporation taxes in 2021. This is an increase of $1.4 billion from 2020.
| Calendar year | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Corporation tax collections (in millions of dollars) | $4,914.90 | $5,191.50 | $6,323.40 | $6,577.50 | $8,047.50 |
Effective tax reform
New York State’s corporate tax reform was implemented in 2015 to ease the compliance burden on businesses operating in the state. The number of corporations and tax liability has grown steadily since.
| Tax liability year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 (preliminary) |
|---|---|---|---|---|---|---|
| Number of taxpayers | 281,374 | 284,605 | 293,302 | 302,909 | 311,233 | 308,465 |
| Liability (in millions of dollars) | $3,238.5 | $2,836.5 | $2,710.4 | $4,037.5 | $4,052.0 | $3,496.8 |
Corporation franchise tax
The corporate tax burden is primarily carried by less than 1% of taxpayers. Their share of the total tax has risen from 65% to almost 74%. More than 80% of corporation taxpayers pay less than $1,000 in tax.
| Tax year | Tax amount | Number of taxpayers | Percent of total taxpayers | Tax in millions | Percent of total tax |
|---|---|---|---|---|---|
| 2015 | less than or equal to $999 | 219,150 | 77.89% | 33.4 | 1.03% |
| greater than or equal to $1 million | 478 | 0.17% | 2,152.3 | 66.46% | |
| 2016 | less than or equal to $999 | 224,212 | 78.78% | 37.6 | 1.33% |
| greater than or equal to $1 million | 406 | 0.14% | 1,869.5 | 65.91% | |
| 2017 | less than or equal to $999 | 232,406 | 79.24% | 37.1 | 1.37% |
| greater than or equal to $1 million | 394 | 0.13% | 1,757.8 | 64.86% | |
| 2018 | less than or equal to $999 | 240,874 | 79.52% | 37.7 | 0.93% |
| greater than or equal to $1 million | 494 | 0.16% | 2,965.1 | 73.44% | |
| 2019 | less than or equal to $999 | 249,720 | 80.24% | 38.8 | 0.96% |
| greater than or equal to $1 million | 474 | 0.15% | 2,988.5 | 73.75% | |
| 2020 (preliminary) | less than or equal to $999 | 252,343 | 81.81% | 34.8 | 1.00% |
| greater than or equal to $1 million | 433 | 0.14% | 2,446.1 | 69.95% |
Insurance tax
Roughly 1,300 insurance taxpayers remit approximately $2 billion annually through the state’s insurance tax.
More corporate taxes
1,400 utility, telecommunications, and transportation companies pay $730 million annually under the state’s corporation tax.
Competitive tax rates
New York State has the 16th highest corporate tax rate in the country—and one of the lowest rates in the Northeast.
Top state corporate income tax returns for northeastern states (as of January 1, 2023). From highest to lowest percentage: NJ, PA, MA, DE, VT, MD< MA, CT, NH, NY, RI
| State | Top Rate | Bracket |
|---|---|---|
| New Jersey (e) | 11.50% | $1,000,000 |
| Minnesota | 9.80% | $0 |
| Illinois. (d) | 9.50% | $0 |
| Alaska | 9.40% | $222,000 |
| Pennsylvania | 8.99% | $0 |
| Maine | 8.93% | $3,500,000 |
| California | 8.84% | $0 |
| Delaware (b) | 8.70% | $0 |
| Vermont | 8.50% | $25,000 |
| Iowa | 8.40% | $100,000 |
| Maryland | 8.25% | $0 |
| Washington, D.C. | 8.25% | $0 |
| Massachusetts | 8.00% | $0 |
| Wisconsin | 7.90% | $0 |
| Oregon (b) | 7.60% | $1,000,000 |
| Connecticut (a) | 7.50% | $0 |
| Louisiana | 7.50% | $150,000 |
| New Hampshire | 7.50% | $0 |
| Nebraska | 7.25% | $100,000 |
| New York | 7.25% | $5,000,000 |
| Kansas | 7.00% | $50,000 |
| Rhode Island | 7.00% | $0 |
| Montana | 6.75% | $0 |
| Alabama | 6.50% | $0 |
| Tennessee (b) | 6.50% | $0 |
| West Virginia | 6.50% | $0 |
| Hawaii | 6.40% | $100,000 |
| Michigan | 6.00% | $0 |
| Virginia | 6.00% | $0 |
| New Mexico | 5.90% | $500,000 |
| Idaho | 5.80% | $0 |
| Georgia (c) | 5.75% | $0 |
| Florida | 5.50% | $0 |
| Arkansas | 5.30% | $25,000 |
| Kentucky | 5.00% | $0 |
| Mississippi | 5.00% | $10,000 |
| South Carolina | 5.00% | $0 |
| Arizona | 4.90% | $0 |
| Indiana | 4.90% | $0 |
| Utah | 4.85% | $0 |
| Colorado | 4.55% | $0 |
| North Dakota | 4.31% | $50,000 |
| Missouri | 4.00% | $0 |
| Oklahoma | 4.00% | $0 |
| North Carolina | 2.50% | $0 |
| Nevada | (b) | |
| Ohio | (b) | |
| Texas | (b) | |
| Washington | (b) | |
| South Dakota | None | |
| Wyoming | None | |
| (a) Connecticut has historically charged a 10% surtax on a business’s tax liability if it has gross proceeds of $100 million or more, or if it files as part of a combined unitary group. This surtax expired on January 1. Legislators have extended the surtax in the past and will decide whether to do so again this session. | ||
| (b) Nevada, Ohio, Texas, and Washington do not have a corporate income tax but do have a gross receipts tax with rates not strictly comparable to corporate income tax rates. Delaware, Oregon, and Tennessee have gross receipts taxes in addition to corporate income taxes, as do several states like Pennsylvania, Virginia, and West Virginia, which permit gross receipts taxes at the local (but not state) level. | ||
| (c) Georgia’s corporate income tax rate will revert to 6% on January 1, 2026. | ||
| (d) Illinois’ rate includes two separate corporate income taxes, one at a 7% rate and one at a 2.5% rate. | ||
| (e) In New Jersey, the rates indicated apply to a corporation’s entire net income rather than just income over the threshold. A temporary and retroactive surcharge is in effect from 2020 to 2023, bringing the rate to 11.5% for businesses with income over $1 million. | ||
| Note: In addition to regular income taxes, many states impose other taxes on corporations such as gross receipts taxes and capital stock taxes. Some states also impose an alternative minimum tax and special rates on financial institutions. | ||
| Sources: Tax Foundation; state tax statutes, forms, and instructions; Bloomberg Tax. | ||
Economic development tax credits
The Tax Department administers more than $1.6 billion in tax credits across more than 60 economic development incentives, which help businesses grow, hire, and expand.
Transportation mobility tax
The metropolitan commuter transportation mobility tax (MCTMT) is imposed on certain businesses within the metropolitan commuter transportation district (MCTD) to fund critical transportation infrastructure in the downstate and New York City regions. Approximately 25,000 businesses pay more than $1.5 billion in tax. The number of taxpayers and payments declined in 2020 due to the COVID-19 pandemic, but showed signs of recovery in 2021.
| Payroll range | Rate | Year | Number of taxpayers | Tax due (in millions of dollars) |
|---|---|---|---|---|
Greater than $312,500 and equal to or less than $375,000 |
0.11% | 2019 | 3,184 | $4.4 |
| 2020 | 2,903 | $4.0 | ||
| 2021 | 3,133 | $4.2 | ||
| Greater than $375,000 and equal to or less than $437,500 | 0.23% | 2019 | 2,418 | $10.1 |
| 2020 | 2,258 | $7.4 | ||
| 2021 | 2,483 | $8.0 | ||
| Greater than $437,500 | 0.34% | 2019 | 20,267 | $1,729.8 |
| 2020 | 19,002 | $1,419.7 | ||
| 2021 | 20,641 | $1,522.2 |
