Skip to main content

Corporate Tax Reform

The 2014-15 New York State Budget enacted on March 31, 2014, contained the most significant reform of New York State’s corporate tax system since the 1940s. (Part A of Chapter 59 of the Laws of 2014). The changes are generally effective for tax years beginning on or after January 1, 2015. The new structure:

  • modernizes and streamlines the tax code,
  • creates clarity and certainty, and
  • addresses the most common areas of dispute between taxpayers and the Tax Department.

The reform plan also included tax cuts that brought the corporate tax rate to the lowest level since the late 1960s.

The 2015-16 and 2016-17 New York State Budgets contained technical and clarifying amendments to the corporate tax reform statute enacted in 2014. (Part T of Chapter 59 of the Laws of 2015 and Part P of Chapter 60 of the Laws of 2016). These technical and clarifying amendments are effective for tax years beginning on or after January 1, 2015.

Bank tax and corporate franchise tax have been merged

Prior to reform, New York taxed banks and other financial institutions under separate tax articles. This structure failed to accommodate dramatic changes in the financial services industry that allowed banks and other financial institutions to offer services that were essentially the same. As a result, taxpayers engaged in similar activities were subject to different tax rules. Separate articles also provided opportunities to exploit the differences between the two tax articles. Merging the Bank Tax with the Corporate Franchise Tax reflects the modern landscape of New York’s leading industry.

Easier to do business in New York State

The reforms also eliminate impediments to locating or expanding a business in New York State. These new rules recognize the shift to a service and knowledge-based economy by adopting a comprehensive market state tax sourcing approach. This will encourage companies to capitalize on New York’s highly educated and creative workforce and robust technology infrastructure without increasing their tax burden.

Adopted regulations

On December 27, 2023, the Notice of Adoption for the corporate tax reform regulations was published in the State Register. The adopted regulation includes changes to the insurance tax regulations that are needed for rules covering tax credits and combined reporting.

For the full text of the adopted regulation, see the Adopted Regulation.

For the related SAPA documentation, see 2023 adoptions.

Additional information

For more information on the changes included in the corporate tax reform legislation see:

The 2015-16 New York State Budget generally conformed the New York City tax law to the recently reformed New York State corporate franchise tax. For more information, see New York City Corporate Tax Reform.

Sign up for our Subscription Service for email updates about corporate tax.