If you want to start and run a New York limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for New York LLCs.
Unlike most other states, New York does not require LLCs to file an annual report. However, New York does require many LLCs to pay an annual fee (see below).
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. In most states, LLCs themselves do not pay income taxes, only their members do.
New York, however, imposes an annual filing fee on both typical single-member LLCs (with the default tax status of disregarded entity) and typical multi-member LLCs (with the default tax status of partnership). The amount of the filing fee varies depending on your LLC's gross income sourced from New York in the immediately preceding tax year. Some LLCs, such as those without any income, gain, loss, or deduction from New York do not need to pay the fee. The fee can range from $25 to $4,500. The fee is paid to the Department of Taxation and Finance (DTF; often just called the Tax Department) using Form IT-204-LL. The form must be filed within 60 days after the last day of your LLC's tax year. For more details, check the DTF website.
In some cases, owners of LLCs choose to have their businesses treated like a corporation for tax purposes (instead of as a partnership or disregarded entity). This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of New York, like almost every other state, directly taxes corporations based (typically) on their income. New York's corporation tax rules are relatively complicated and there are multiple ways that corporations may be taxed. However, in general, if you have elected to have your LLC taxed as a corporation, your LLC will need to pay some kind of tax to the state. For more details, check Nolo’s article, 50-State Guide to Business Income Tax, or the DTF website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, New York employers also must pay taxes to the state.
First, you'll need to withhold and pay employee income taxes to the DTF. Begin by registering your business with the Department of Labor (DOL) either online or on paper (Form NYS-100). Once you've registered, you'll need to file withholding taxes on a periodic basis (the frequency depends in part on how much payroll you have). Use Form NYS-1 to file your payments. For more information, check the DOL website.
In addition, you'll probably need to register to pay state unemployment insurance (UI) taxes . These taxes are handed through the Unemployment Insurance Division of the DOL. You can register for these taxes online or by filing Form NYS-100. Then, on a quarterly basis, you'll need to file Form NYS-45. For more information, check theUnemployment Insurance Division website.
If your LLC will sell goods to customers in New York, you will need to collect and pay sales tax. This means you'll have to register as a sales tax vendor with the DTF and then make periodic sales tax payments for goods sold. You can register using Form DTF-17 or online at the NYS License Center website. After you've registered, you'll be sent a sales tax certificate of authority for each business location. Then, each year or quarter (depending on the amount of sales you make), you'll have to file Form ST-101 or ST-100 with the DTF. For more information, check the DTF website.
If you will be doing business in states other than New York, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in New York, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.