Banking Corporation Tax

Overview

The Banking Corporation Tax in New York City applies to federal S-corporations and their subsidiaries that do banking business in New York City. This tax also applies to S-corporations owned by a bank or its holding company and engaged in banking business.

Exemptions

Some S-corporations do not have to pay this tax. These include:

• Trust companies where 20 or more savings banks own all the stock
• S-corporations that pay the General Corporation Tax
• S-corporations taxed as insurance companies under Article 33 of the New York State Tax Law, except for savings and insurance banks

Tax rates

The tax rate for banking corporations is the highest of these four options:

• 9 percent of the net income allocated to the City

• A tax of 0.1 of a mill for every dollar of taxable assets in New York City

  • Some corporations with a net worth ratio of less than 5 percent, and 33 percent or more of their assets in mortgages, may pay a lower rate.
  • Corporations with net worth certificates under the Fair National Housing Act may not pay this tax.

• 3 percent of alternative net income allocated to the City

• $125 minimum tax