Get your tax IDs in New York

An EIN, if you need one, takes minutes online. New York’s own registrations run through New York Business Express, which covers the sales tax Certificate of Authority if you sell taxable goods or services and the employer accounts once you hire. There is no general state business license to add.

What’s different in New York

• Register for sales tax early. A seller of taxable goods or services applies for a Certificate of Authority at least 20 days before beginning business, and the rule while you wait is strict: no taxable sales until the certificate arrives.
• Hiring brings three kinds of coverage. Workers’ compensation from the first employee, disability and Paid Family Leave once someone has worked 30 days in a calendar year, and unemployment insurance from the quarter in which wages reach $300.
• New York City taxes businesses again. The unincorporated business tax applies to sole proprietors, partnerships and LLCs doing business in New York City at 4%, with a full credit when the tax is $3,400 or less. Corporations pay a separate city corporation tax.

Do this

1. Get an EIN from the IRS if you need one. The IRS requires one if you have employees and for partnerships, corporations, nonprofits and most LLCs, and the Department of Labor requires a federal EIN before registering as an employer. It’s free and, if approved, issued immediately online. Form your LLC or corporation first. Don’t pay a website to apply for you.
2. Create a NY.gov Business account on New York Business Express. The sales tax registration and the employer registration both run through it. An Individual NY.gov account doesn’t open it; it has to be a Business account. Filing returns later takes a Tax Department Business Online Services account, which you add from the same login.
3. Apply for a Certificate of Authority if you sell taxable goods or services. Every seller of taxable property or services registers with the New York State Department of Taxation and Finance through Business Express before beginning business, including sellers who work from home, sell as a temporary vendor or sell once a year. Apply at least 20 days before you open, and display the certificate at your place of business. One rule applies while you wait: no taxable sales until the certificate arrives. Not sure whether your sales are taxable? Tax Bulletin Do I Need to Register for Sales Tax? walks through it.
4. Look up your combined rate. The state rate is 4%, plus the local rate for your county or city, for combined rates of 7% to 8.875%. Sales in New York City and in Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester counties add 0.375% for the Metropolitan Commuter Transportation District, which brings New York City to 8.875%. Publication 718 lists every jurisdiction’s rate.
5. Know your sales tax filing schedule. A new registrant is a quarterly filer unless it qualifies for annual filing. Quarterly returns are due the 20th of the month after each quarter ends: June 20, September 20, December 20 and March 20, and a return is required even with no sales. Stay compliant has the thresholds that move you to monthly or annual filing.
6. Register as an employer when you hire. Register with the New York State Department of Labor through Business Express or on Form NYS-100; one registration covers unemployment insurance, withholding and wage reporting. A general business employer is liable for unemployment insurance from the first day of the calendar quarter in which wages reach the threshold, and the threshold is $300. After that you file Form NYS-45 every quarter and pay withholding on Form NYS-1 after any payroll that brings accumulated withholding to $700 or more. Display the Notice to Employees poster.
7. Get the insurance coverage. Workers’ compensation is required from the first employee; the New York State Workers' Compensation Board lists the exceptions, including that coverage is not required for a sole proprietor with no employees and not required for a corporation owned and run by one or two people with no other workers. Disability and Paid Family Leave coverage is required once an employee has worked 30 days in a calendar year, and the policy must be in place within four weeks after a new employee's 30th day of work.
8. Set up each new hire. On Form I-9, the employee completes Section 1 by their first day of work, and you complete Section 2 within three business days of the start date (by the first day if the job lasts less than three business days). New York uses Form IT-2104 for state and local withholding. Report every new hire within 20 calendar days of the hiring date.

What your business pays the state

Sole proprietors, partners and LLC members

Business income goes on your personal return. Personal income tax uses graduated rates, higher at higher incomes, from 3.9% to 10.9%. An LLC or LLP taxed as a partnership or disregarded entity also pays the annual filing fee on Form IT-204-LL, covered in Stay compliant. In New York City, add the unincorporated business tax below.

Corporations

Franchise tax is the highest of three bases: business income, business capital or the fixed dollar minimum. The business income rate for a general business corporation is 6.5%; 7.25% applies to a business income base over $5,000,000 for tax years beginning in 2021 through 2029, and the statute returns the rate to 6.5% after that. Qualified New York manufacturers and qualified emerging technology companies have their own lower rates. The fixed dollar minimum is set by New York State receipts and starts at $25, so a corporation owes something even with no profit. A corporation doing business in New York City and Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess and Westchester counties also pays the MTA surcharge. A federal S corporation files Form CT-6 to be a New York S corporation and then pays the fixed dollar minimum tax, based on New York receipts; without that election it is taxed as a C corporation for New York purposes. Entity vs. tax election explains the two elections.

New York City

Sole proprietors, partnerships and LLCs with income allocated to the city file the unincorporated business tax at 4%, with a full credit when the tax is $3,400 or less. Corporations file the city’s business corporation tax; a federal S corporation is exempt from it and files the general corporation tax instead.

What you get back

• EIN: a nine-digit federal tax ID, shown on screen when approved. Print the confirmation letter.
• Certificate of Authority: mailed by the Tax Department. Display it at your place of business, and make no taxable sales until it arrives.
• Employer accounts: one registration with the Department of Labor and the Tax Department, covering unemployment insurance, withholding and wage reporting, plus the Notice to Employees poster to display.

Not hiring or selling taxable goods yet? Your EIN and the state return for your structure above may be all there is for now.