Relates to taxation of unincorporated businesses

Title of bill

An act to amend the administrative code of the city of New York, in relation to the taxation of unincorporated businesses

Summary of provisions

Section one of the bill would amend Section 11-514 of the Administrative Code to require that an unincorporated business income tax return be made and filed, and the balance of any tax shown on the face of such return that was not previously paid as installments of estimated tax be paid, on or before the fifteenth day of the fourth month following the close of a taxable year; except that an unincorporated business classified as a partnership for federal income tax purposes must, for taxable years beginning on or after January 1, 2016, make and file such return and pay such balance on or before the fifteenth day of the third month following the close of a taxable year. Section one would also make the due date of a final return of a decedent for a fractional part of a year, the fifteenth day of the fourth month following the close of the twelve-month period that began with the first day of such fractional part of the year.

Section two would deem any tax prepaid by a taxpayer to have been paid on the fifteenth day of the fourth month following the close of the taxable year for which such prepaid amount constitutes a credit or payment; except, in the case of a taxpayer classified as a partnership for federal income tax purposes and for taxable years beginning on or after January 1, 2016, such prepaid tax would be deemed paid on the fifteenth day of the third month following the close of the taxable year for which such prepaid amount constitutes a credit or payment.

Section three would make the bill effective immediately.

Reasons for support

Under current law, for taxable years beginning on or after January 1, 2016, the City of New York require's all unincorporated businesses, whether a partnership or sole proprietor, to make and file a tax return, and pay the unpaid balance of any tax shown on the face of such return, on or before the fifteenth day of the third month following the close of the taxable year for which the tax return and tax are due. Although this deadline, which is March 15 for calendar year taxpayers, is consistent with the new federal and New York State tax filing deadlines with respect to partnerships, it is not consistent for sole proprietors.

This bill would amend the City's deadlines to provide for consistency between local tax deadlines and federal and state tax deadlines for sole proprietors that do business in the City, easing the filing burden on these taxpayers. Partnerships would still be required to file and pay by the fifteenth day of the third month following the close of the taxable year for which a tax return and tax are due, consistent with their federal and state tax deadlines, but all other unincorporated businesses would be required to file returns with and pay taxes to the City by the fifteenth day of the fourth month following the close of the taxable year for which a tax return and tax are due. Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.