Navigating Impact of New York Corporate Tax Overhaul: New Apportionment and Reporting Rules

In recent years, New York enacted and implemented a major corporate tax reform bill. The bill represented a significant overhaul of the rules for taxing the income of C corporations and may have implications for sourcing income to New York by nonresident shareholders of S corporations. The reform went into effect for 2015 and has a multi-year implementation period. Corporations doing business in the state of New York need to understand the changes under the corporate tax overhaul.

The key features of the broad-based changes to New York’s corporate tax structure are: adoption of economic nexus jurisdictional rules activated if a corporation has receipts of $1 million or more in a tax year from New York activities; substitution of a unitary combined reporting regime for the existing combined reporting rules; and expansion of the single receipts factor apportionment formula generally based on market-based sourcing to all receipts, particularly receipts from services and intangibles.

New York City’s corporate tax provisions were also recently changed, but there remains some significant areas of misalignment between the State and City rules. Unless and until there is conformity, differences between state and city tax treatment will create a filing and administrative burden for businesses that must compute their overall state and city liability under these two different tax regimes.

Listen as the panel provides a practical guide to the latest developments in New York State’s ongoing corporate tax reform initiative, discussing changes upcoming in 2017, and offering useful tools for navigating apportionment and reporting requirements.

1. Major 2014-2015 New York corporate income tax changes for out-of-state businesses
   1. Expansion of the single receipts factor apportionment formula
   2. Substitution of a unitary combined reporting regime for the existing combined reporting rules
   3. Adoption of economic nexus jurisdictional rules
   4. Repealing the bank franchise tax, bringing all corporations under the corporate franchise tax
2. The 2015 legislation amendments: corporate franchise tax and other taxes
   1. Investment capital
   2. Investment income
   3. Qualified financial instrument
   4. Other changes
3. Specific examples

The panel will review these and other key issues:

• Assessing the Act’s impact on state income tax reporting procedures
• Evaluating the Act’s changes involving: economic nexus thresholds, market-based sourcing apportionment rules, corporate partner nexus reporting, and unitary combined reporting provisions
• Identifying and reconciling differences between state and city tax treatment in New York City and the state of New York

Learning Objectives

After completing this course, you will be able to:

• Discern the Act’s impact on state income tax reporting procedures
• Ascertain the Act’s changes involving economic nexus thresholds
• Recognize market-based sourcing apportionment rules
• Determine corporate partner nexus reporting
• Identify unitary combined reporting provisions

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex state and multi-state income and sales tax forms and schedules; supervisory authority over other preparers/accountants. Knowledge and understanding of New York business tax reporting, single receipts factor apportionment, unitary combined reporting, and economic nexus jurisdiction; Familiarity with the New York corporate income tax changes for out-of-state business.

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