Is your business a “qualified New York manufacturer” that’s subject to the state’s 0% business income tax rate? As part of the Budget Bill of 2015, the New York State legislature made technical corrections to the corporate income tax reform that was enacted in 2014. Inside SALT, a website that provides in-depth coverage of state and local tax (SALT) issues, explains these changes. Whether you’re a single taxpayer or a combined group, you’ll want to make sure you understand what “qualified New York manufacturer” means.
For starters, a qualified manufacturer must own property that’s eligible for the investment tax credit as described in section 210-B.1 of the New York Tax Law. That’s not all, however. The manufacturer must also meet either of two conditions. Either all of the manufacturer’s real and personal property must be located in New York State, or the adjusted basis of such property for federal income tax purposes at the close of the taxable year must be at least $1 million.
Then there’s the “principally engaged” test. Under the corporate tax reform of 2014, this referred to qualifying activities such as manufacturing, processing, or assembling. Under the technical corrections of the Budget Bill of 2015, a single taxpayer or combined group may still be a qualified New York manufacturer if the taxpayer or group employs at least 2,500 workers in manufacturing in New York State, and has $100 million in property in New York State under Tax Law section 210-B.1(b)(i)(A).
There are other technical corrections in the 2015 Budget Bill, too. Inside SALT is a great place to read about them, but make sure to consult your attorney if you have questions about your status as a “qualified New York manufacturer”.
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2 thoughts on “Tax Rates and Qualified New York Manufacturers”
What makes a company a “qualified New York manufacturer”?
Thank you for your comment. According to Inside SALT, the source we cited in our blog entry, this is the definition of a “qualified New York manufacturer”.
Under the original corporate tax reform provisions enacted in 2014, a “qualified New York manufacturer” is a manufacturer (either a single taxpayer or a combined group) that meets two qualifications. First, it has property in New York that is described in section 210-B.1 of the Tax Law (i.e., property that is eligible for the investment tax credit), and either (1) the adjusted basis of such property for federal income tax purposes at the close of the taxable year is at least $1 million, or (2) all of its real and personal property is located in New York. Second, it is principally engaged in qualifying activities (e.g., manufacturing, processing or assembling) (the “principally engaged” test).
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