New York Franchise Tax Return Information (OBSOLETE)

Franchise Tax Return Information (OBSOLETE)
Form CT-198.1:10/07:Franchise Tax Return Information,ct1981
CT-198.1

	

New York State Department of Taxation and Finance

	

Franchise Tax Return Information

(10/07)

General information
New York State business corporations (Article 9-A)

Dissolution of domestic business corporation for delinquent taxes

All general business corporations organized under the laws of New York
State are taxable under Tax Law Article 9-A.

Upon recommendation by the Commissioner of Taxation and Finance,
a domestic general business corporation that has failed to file required
franchise tax returns or pay the franchise taxes due for two consecutive
years may be dissolved by proclamation by the Secretary of State. The
dissolution by proclamation procedure is not a substitute for voluntary
dissolution and will result in substantial penalties against the corporation.
Any franchise tax delinquency becomes an automatic lien against any
assets of the corporation, even if it was dissolved by proclamation.

A general business corporation includes all corporations except the following:
	
Taxable under
•	 Banking corporations.....................................	Article 32
•	 Insurance corporations..................................	Article 33
•	 Certain transportation and transmission 	
  corporations............................................... 	Article 9, sections 183 and 184
•	 Certain utilities...............................................	Article 9, sections 186 and 186-A
•	 Farmers and agriculture co-ops.....................	Article 9, section 185
•	 Not-for-profit corporations subject to
	   unrelated business tax...............................	Article 13

Reporting periods
Generally, the tax year for which the franchise tax imposed by Article 9-A is
to be computed, and for which a franchise tax return is to be filed, must be
the same as the taxpayer’s tax year for federal income tax purposes.
The first franchise tax return for a domestic business corporation
(incorporated in New York State) is due from the date of incorporation,
as recorded by the Secretary of State. A franchise tax return for a foreign
business corporation (incorporated outside of New York State) is due
during the period in which it is doing business, owning or leasing property,
or maintaining an office in New York State. Reporting periods may not
exceed a 12-month period. The return must be filed within 2½ months after
the close of the corporation’s tax period. If you are reporting for the calendar
year, your return is due on or before March 15. If your filing date falls on
a Saturday, Sunday, or legal holiday, then you must file your return on or
before the next business day.
Extensions if you cannot meet the filing deadline
If you cannot meet the filing deadline, you may request a six-month
extension of time by filing Form CT-5, Request for Six-Month Extension
to File (for franchise/business taxes, MTA surcharge, or both), and paying
your properly estimated franchise tax and MTA surcharge on or before the
original due date of the return.
You may request up to two additional extensions by filing Form CT-5.1,
Request for Additional Extension of Time to File (for franchise/business
taxes, MTA surcharge, or both). File it on or before the expiration date of the
original extension or previously filed additional extension.
Form CT-3M/4M, General Business Corporation MTA Surcharge Return
Form CT-3M/4M must be filed by any corporation taxable under Article 9-A
that does business, employs capital, owns or leases property, or maintains
an office in the Metropolitan Commuter Transportation District (MCTD). The
MCTD includes the counties of New York, Bronx, Kings, Queens, Richmond,
Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.
Domestic business corporations
A domestic business corporation is generally liable for franchise taxes under
Article 9-A for each fiscal or calendar year, or part thereof, during which it
is incorporated until it is formally dissolved with the Department of State
(www.dos.state.ny.us). However, a domestic business corporation that is
no longer doing business, employing capital, or owning or leasing property
in New York State is exempt from the fixed dollar minimum tax for years
following its final tax year and is no longer required to file a franchise tax
return provided it meets the requirements listed in TSB-M-06(5)C, Certain
Domestic Business Corporations Exempt from the Article 9-A Fixed Dollar
Minimum Tax.
Voluntary dissolution of domestic business corporation
In order to dissolve a domestic corporation, the corporation must receive
consent from the Tax Department. The Tax Department will not consent to
the dissolution of a business corporation unless all of the required New York
State franchise tax returns are filed and its franchise taxes are paid. Also, any
liability for other taxes administered by the Tax Department must be satisfied.

Foreign business corporations
A foreign business corporation is liable for franchise taxes under Article 9-A
during the period in which it is doing business, employing capital, owning or
leasing property, or maintaining an office in New York State.
In addition, a foreign business corporation authorized to do business in
New York State is also liable for payments of its annual maintenance fee
of $300 (Article 9, section 181.2), until such time as it surrenders to the
Department of State its authority to do business, regardless of whether
it is doing business, employing capital, owning or leasing property, or
maintaining an office in the state. If an authorized foreign corporation is
taxable under Article 9-A, the maintenance fee is applied as a credit against
the franchise tax. For more information, see Form CT-245, Maintenance Fee
and Activities Return for a Foreign Corporation Disclaiming Tax Liability.
A foreign business corporation doing business in New York State must also
pay a license fee based on capital stock employed within New York State
(Article 9, section 181.1). For more information, see Form CT-240, Foreign
Corporation License Fee Return.
Surrender of authority of foreign authorized business corporation
A foreign corporation that no longer conducts business activities in New
York State and no longer requires authority to do business in New York State
may surrender authority to do business in this state. The consent of the Tax
Commissioner is required to surrender the authority of a foreign corporation.
Annulment of foreign authorized business corporation for delinquent
taxes
Upon recommendation by the Commissioner of Taxation and Finance,
a foreign corporation authorized to do business in New York State that
has failed to file the required franchise tax returns or pay franchise taxes
and/or maintenance fees for two consecutive years may have its authority
annulled by the Secretary of State. A foreign corporation subject to tax
under Article 9-A, section 209.1, would continue to be liable for franchise tax
returns and franchise taxes even though its authority was annulled.
Call 1 800 327-9688 (Dissolution Unit) if you have questions concerning
dissolution or surrendering authority to do business in New York State.
Subchapter S corporations
Article 9-A, Article 22, and Article 32 permit shareholders of a corporation
that have made an election under Subchapter S of Chapter 1 of the Internal
Revenue Code to make a similar election for New York State purposes.
For detailed information on the New York State election, see Form CT-6-I,
Instructions for Form CT-6.
Corporations required to register for a sales tax Certificate of Authority
To sell tangible personal property or certain taxable services, a corporation
must register for sales tax purposes with the Tax Department and have a
valid Certificate of Authority. A corporation must also register for sales tax
purposes to issue or accept most New York sales tax exemption documents.
For more information on specific sales tax registration requirements, see
Publication 750, A Guide to Sales Tax in New York State.
To obtain a Certificate of Authority to collect sales tax, complete
Form DTF-17, Application to Register for a Sales Tax Certificate of Authority,
or file an online application at www.nys-permits.org.