On May 3, 2023, New York Governor Kathy Hochul signed A3008/S3008 and A3009/S3009 into law. Among its various tax provisions, legislative highlights include:
CORPORATE TAX RATES
- The legislation maintains the current 7.25% tax rate for three additional years for all tax years ending before January 1, 2027 (previously scheduled to be reduced to 6.5% for tax years beginning January 1, 2024).
- The capital base tax rate of .1875% is extended for three additional years through tax years ending before January 1, 2027. The capital base tax rate was originally scheduled to phase out via a 0% rate for tax years beginning on January 1, 2021 (now delayed until January 1, 2027). The legislation marks the second time that the capital tax has been extended.
- The Metropolitan Transportation Business Tax Surcharge (MTA Surcharge) is now fixed at 30% for tax years beginning on or after January 1, 2024.
CREDITS AND INCENTIVES
The legislation also extends and expands several credits and incentives, including:
- Investment Tax Credit. Modified the Investment Tax Credit for certain farmers and new business owners into a refundable credit for five years and repealed the transferability of the credit.
- Extension and Enhancement of the Film Tax Credit. New York State will raise the film tax credit’s annual cap to $700 million and restore the credit to 30% for qualified expenses.
- Authorization of a NYC biotech tax credit. The Biotechnology Tax Credit allows investors and owners of qualified emerging technology companies (QETCs) focused on biotechnology to claim a tax credit against the General Corporation Tax and Unincorporated Business Tax for amounts paid or incurred for certain facilities, operations, and employee training in New York City. The extension of the credit for a three-year period begins Jan. 1, 2023 and runs through Dec. 31, 2025.
- Childcare Creation and Expansion Tax Credit. Expands the Empire State Child Credit to include children under four years of age.
- Extending COVID-19 Capital Costs Tax Credit Program. The legislation extends the application deadline for the COVID-19 Capital Costs Tax Credit Program from March 31, 2023, to September 30, 2023, to allow small businesses more time to apply for this tax credit.