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• The four different tax bases for calculating corporate tax are
reduced to three as of FY 2015 (eliminating the corporate AMT
base) and further reduced to two over time (eliminating the
capital stock base).
• The corporate net income tax rate is reduced from 7.1 percent to
6.5 percent, the lowest level since 1968.
• The duplicative bank tax system is merged into the better-
developed corporate tax system.
• The estate tax is recoupled over time to the higher federal
threshold, exempting many small businesses from hefty taxes
upon the death of their owners. The generation-skipping transfer
tax is repealed.
• Net operating losses are restructured to reduce uncertainty for
taxpayers, NOL carrybacks are extended to three years, and the
$10,000 cap is removed. NOL carryforwards remain twenty
years, similar to federal law.
• The individual add-on Minimum Tax is repealed.
• If the changes enacted by the bill were in full effect for the most
recent version of the State Business Tax Climate Index, New
York’s corporate tax system would have ranked 4th best of the
fifty states instead of 25th best.
New York Corporate Tax Overhaul
Broadens Bases, Lowers Rates, and
By Joseph Henchman
Vice President, Legal & State Projects
On March 31, New York Governor Andrew Cuomo (D) signed into law the FY
2014-2015 state budget, which includes major reforms to the state’s corporate
income tax system and estate tax.1 The bill contains a number of provisions
to reduce business tax complexity and burdens, with two tax practitioners
describing it as “the most significant revisions to the [corporate income] tax
since its enactment in 1944.”2 The bill includes broad-based changes that affect
most businesses as well as targeted incentives for particular business types.
While some of the targeted credits and programs deserve criticism, the broad-
based changes to the corporate tax are impressive and will greatly reduce
complexities and bur