(Updated for 2026 – generally applicable through 2027 unless tax laws change)
Running a business in Long Island or the five boroughs of New York City comes with unique tax responsibilities. Whether you operate a local service business, an S-Corporation, or own real estate through an LLC or partnership, understanding how New York business taxes work is essential for staying compliant and avoiding costly surprises.
This guide explains the main types of business taxes affecting New York business and real estate owners, how they generally work, and why proactive planning matters—using clear, practical language designed to remain relevant across multiple tax years.
This content is for educational purposes only and does not constitute tax, legal, or financial advice. Tax obligations vary based on entity type, location, and individual circumstances. Rules and rates may change with future legislation.
Serving Business Owners Across Long Island and New York City
This guide is written specifically for business and real estate owners operating in:
- Long Island: Nassau County and Suffolk County
- New York City: Manhattan, Brooklyn, Queens, the Bronx, and Staten Island
While New York tax laws apply statewide, businesses in these areas often face additional local considerations, including New York City taxes, payroll-related surcharges, and county-level property taxes.
Who This Guide Is For (Long Island & NYC Business and Real Estate Owners)
This guide is designed for small business and real estate owners located in Long Island and the five boroughs of New York City.
It is especially helpful if you are:
- An S-Corporation owner in Long Island or NYC
- An LLC considering or already electing S-Corp status
- A real estate owner operating through an LLC or partnership
- A retail, professional service, or local operating business
- A business owner in Manhattan, Brooklyn, Queens, the Bronx, Staten Island, Nassau County, or Suffolk County
This guide focuses on operating businesses and real estate structures, not e-commerce or online marketplace sellers.
Why Understanding Business Taxes Matters in New York
New York has multiple layers of taxation, including federal, state, and sometimes local obligations. Missing or misunderstanding these responsibilities can lead to penalties, interest, audits, or cash-flow issues.
Understanding your tax obligations helps you:
- Budget accurately throughout the year
- Avoid IRS, New York State, and local penalties
- Take advantage of legitimate deductions and credits
- Make informed decisions as your business or real estate portfolio grows
Tax requirements vary based on entity structure, physical location, employees, and activities within New York.
The Main Types of Business Taxes in New York
1. Business Income Tax (Federal, NY State & NYC)
Most New York businesses are subject to income tax, but how the tax is paid depends on the entity structure.
- Sole proprietors and single-member LLCs generally report business income on their personal federal and New York returns
- Partnerships and multi-member LLCs file informational returns, with income passing through to owners
- C-Corporations pay New York State corporate franchise tax at the entity level
- S-Corporations generally pass income through to shareholders but may still owe entity-level taxes, including:
- A New York State fixed dollar minimum tax, based on New York receipts
- A New York City S-Corporation tax, for S-Corps operating in New York City
New York City note:
S-Corporations doing business in New York City may be subject to a separate NYC S-Corporation tax at the entity level, even though income largely passes through to shareholders. This is in addition to any personal income tax paid by the owners.
Important New York note:
Corporations and LLCs may still owe minimum taxes or annual filing fees, even if the business is inactive, until the entity is formally dissolved.
2. Self-Employment Tax
Self-employment tax covers Social Security and Medicare for individuals who work for themselves.
- Applies to sole proprietors, freelancers, and independent contractors
- Generally equals 15.3% of net earnings for federal purposes
- One-half of the self-employment tax is deductible as an adjustment to income
For New York City residents, self-employment income is also subject to NYC personal income tax, making cash-flow planning especially important.
3. Payroll Taxes (Federal, New York State & Local)
New York businesses with employees must comply with multiple payroll tax requirements, including:
- Federal income tax withholding
- Social Security and Medicare (FICA)
- Federal unemployment tax (FUTA)
- New York State unemployment insurance (UI)
- New York Paid Family Leave (PFL) (employee-funded through payroll deduction)
- New York State Disability Benefits Law (DBL)
- MTA Payroll Mobility Tax for employers located in the Metropolitan Commuter Transportation District (MCTD), which includes New York City and surrounding Long Island counties
Payroll compliance is one of the most heavily audited areas for New York businesses.
4. New York Sales Tax (Local Businesses)
New York businesses selling taxable goods or services may be required to register, collect, and remit sales tax.
- New York has a state sales tax base with additional local rates set by counties and cities
- Combined rates vary by jurisdiction, including New York City and Long Island
- Sales tax compliance is closely monitored, and errors may result in penalties or personal liability
2025 update:
Certain short-term rental transactions in New York became subject to sales tax beginning in 2025, depending on the facts and circumstances.
5. Excise and Industry-Specific Taxes
Some New York businesses may be subject to excise or special taxes, including those related to:
- Fuel
- Alcohol and tobacco
- Transportation or regulated services
These taxes are industry-specific and often involve separate registration and reporting requirements.
6. Business Property Taxes in New York
Real estate located in New York is subject to local property taxes.
- Applies to commercial real estate, land, and sometimes equipment or machinery
- Assessed at the county, city, town, or school district level
- Filing deadlines and exemptions vary by jurisdiction
Real estate owners in Long Island and New York City often face different assessment practices and timelines depending on the county or borough.
7. New York Franchise Taxes & Annual Filing Fees
New York imposes different entity-level obligations depending on business structure:
- C-Corporations and S-Corporations are subject to New York State corporate franchise tax
- LLCs and partnerships classified as pass-through entities may owe an annual filing fee, based on New York income
- Many entities owe these amounts even if the business is inactive
New York City may also impose separate business taxes on certain corporations operating within the city.
New York-Specific Considerations for Real Estate Owners
Real estate owners in Long Island and New York City often operate through LLCs or partnerships, especially for rental properties and multi-owner investments.
Key New York considerations include:
- New York-source income rules for in-state property
- Partnership and multi-member LLC reporting requirements
- Allocation of income, expenses, and depreciation among owners
- Local property tax obligations separate from income tax
Non-resident owners of New York real estate may still have New York filing obligations.
Common Business Tax Mistakes to Avoid
- Mixing personal and business finances
- Missing estimated tax payments
- Ignoring New York State or local filing requirements
- Failing to register for withholding when hiring employees
- Assuming inactive entities owe no New York taxes
- Not planning for changes in structure or growth
Avoiding these mistakes early can prevent costly corrections later.
Why Business Tax Planning Matters in New York
Tax planning is not just about filing returns—it’s about preparing for growth in a complex tax environment.
A proactive approach helps:
- Choose and maintain the most tax-efficient structure
- Plan cash flow around New York and local tax obligations
- Reduce compliance risk as laws or operations change
- Support long-term business and real estate growth
How IVY Tax & Business Inc. Supports Long Island & NYC Business Owners
IVY Tax & Business Inc. works with small business and real estate owners across Long Island and the five boroughs of New York City, including Manhattan, Brooklyn, Queens, the Bronx, Staten Island, Nassau County, and Suffolk County.
Our services include:
- Business tax compliance and filings
- S-Corporation tax planning and support
- Real estate tax reporting for LLCs and partnerships
- Payroll and ongoing compliance
- IRS and New York State tax notices and audit support
We focus on accurate reporting, compliance, and long-term relationships as businesses and real estate portfolios grow.
Final Takeaway
Business taxes in Long Island and New York City can feel overwhelming, but understanding the fundamentals puts you in control. With proper organization, timely compliance, and professional guidance when needed, business and real estate owners can reduce risk and focus on growth.
This guide is designed to remain relevant across multiple tax years. Periodic updates are recommended as New York tax laws evolve.