9/5/2023 0 Comments New yorkbased ttv capitalFour years after the New York legislature passed corporate tax reform and three years after the new laws went into effect, these two amendments are proving to be a big deal.Ī. The two amendments to New York’s franchise tax that we target in this article-a new standard for economic nexus and a new apportionment regime for service businesses-caught the attention of businesses across the globe. In short, it is easy to target out-of-staters because their ability to retaliate is limited. Out-of-state businesses and individuals targeted by tax reform and the residency audit program usually do not vote or hold local office in New York they (or their employees or agents) might not spend a meaningful amount of time or directly invest capital in New York. New York’s residency audit program is one example of this. Over the last thirty or so years, an obvious state tax policy driver has been the desire to have out-of-state businesses and persons bear an expanding portion of total tax revenue. This article explores two of the most significant and farthest-reaching amendments in detail: New York’s new economic nexus standard for corporate taxpayers and New York’s new market-based sourcing regime for service and other select receipts. In this regard, the New York State Department of Taxation and Finance (the “Tax Department”) has worked hard to produce return instructions, draft regulations, and other guidance on the new laws, and practitioners have written numerous articles and commentary regarding the new laws. (The Administrative Code of New York City was subsequently amended to adopt many, but not all, of the same revisions for city corporate tax purposes.) Even though the law is nearly four years old, both tax practitioners and tax administrators continue to struggle to provide form to the framework the new law created. 1, 2015, was groundbreaking in numerous ways. New York’s corporate franchise tax reform, which passed in 2014 and became effective Jan.
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