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(a) Requirement of declaration. (Administrative Code § 11-511(a)).
(1) Every unincorporated business shall make a declaration of estimated unincorporated business tax for each taxable year if: (i) for taxable years beginning after 1986 but before 1996, its unincorporated business taxable income can reasonably be expected to exceed $15,000; (ii) for taxable years beginning in 1996, its unincorporated business taxable income can reasonably be expected to exceed $20,000; and (iii) for taxable years beginning after 1996, its estimated unincorporated business tax can reasonably be expected to exceed $1,000 for the taxable year. The declaration must cover a calendar year accounting period, or a full fiscal year if the taxpayer files its unincorporated business tax return on a fiscal year basis, unless a declaration for a short period is required by 19 RCNY § 28-15(k).
(2) If the unincorporated business is carried on by an individual, an estate or a trust, any declaration required by paragraph (1) of this subdivision (a) shall be made on form NYC-5UBTI.
(3) If the unincorporated business is carried on by a partnership, joint venture or other similar unincorporated entity, any declaration required by paragraph (1) of this subdivision (a) shall be made on form NYC-5UB.
(b) Contents of declaration. For the purpose of making the declaration, the amount of the unincorporated business taxable income which the business can reasonably be expected to receive or accrue, depending upon the method of accounting upon which the unincorporated business taxable income is computed, or, for taxable years beginning after 1996, the amount of the estimated tax, shall be determined upon the basis of the facts and circumstances existing at the time prescribed for the filing of the declaration as well as those facts and circumstances reasonably to be anticipated for the taxable year.
(c) Definition of estimated tax. (Administrative Code, § 11-511(b)). For purposes of this section the terms "estimated tax" and "estimated unincorporated business tax" mean the amount which the unincorporated business estimates to be its tax for the taxable year under Chapter 5 of Title 11 of the Administrative Code, less the amount which it estimates to be credits, if any, allowable under 19 RCNY § 28-03(c), other than the credit relating to stock transfer tax allowable under 19 RCNY § 28-03(c)(2). These terms, as used in this section do not include the personal income tax imposed by Chapter 17 of Title 11 of the Administrative Code or the earnings tax imposed by Chapter 19 of Title 11 of the Administrative Code.
(d) Time for filing declaration of estimated unincorporated business tax for calendar year. (Administrative Code § 11-511(c)). A declaration of estimated unincorporated business tax for a calendar year shall be made on or before April 15 of such calendar year (except in cases referred to in 19 RCNY § 28-15(e)). If, however, the requirements necessitating the filing of a declaration are first met, in the case of a business on a calendar year basis, after April 1 but before June 2 of the calendar year, the declaration must be filed on or before June 15 of the taxable year; if such requirements are first met after June 1 and before September 2, the declaration must be filed on or before September 15 of the taxable year; and if such requirements are first met after September 1, the declaration must be filed on or before January 15 of the succeeding calendar year.
(e) Time for filing declaration by an unincorporated business having estimated unincorporated business income from farming. (Administrative Code, § 11-511(d)(1)).
(1) An unincorporated business which has an estimated unincorporated business taxable income from farming (including oyster farming) which is at least two-thirds of its total estimated unincorporated business taxable income for the taxable year may file its declaration for the taxable year by the date specified below, in lieu of the time prescribed in 19 RCNY § 28-15(d) and (j):
(i) if on a calendar year basis, on or before the 15th day of January of the succeeding calendar year, or
(ii) if on a fiscal year basis, on or before the 15th day of the month immediately following the close of the taxable year, or
(iii) in the case of a short taxable year, on or before the 15th day of the month immediately following the close of such taxable year.
(2) Income is attributable to farming if obtained from the cultivation of the soil, the raising or harvesting of any agricultural or horticultural commodities, or the raising of livestock, bees or poultry. The requisite percentage of unincorporated business income must be derived from the operation of stock, dairy, poultry, fruit or truck farming or from a plantation, ranch, nursery or orchard. If an unincorporated business receives, for the use of its land, income in the form of a share of the crops produced thereon, such income is from farming.
(f) Time for filing declaration by an unincorporated business having estimated unincorporated business tax of $40 or less for taxable year. (Administrative Code, § 11-511(d)(2)).
(1) For taxable years beginning before 1997, an unincorporated business which has an estimated unincorporated business tax of $40 or less may file its declaration for the taxable year as follows:
(i) if on a calendar year basis, on or before the 15th day of January of the succeeding calendar year, or
(ii) if on a fiscal year basis, on or before the 15th day of the month immediately following the close of such taxable year.
(iii) in the case of a short taxable year, on or before the 15th day of the month immediately following the close of such taxable year.
(2) Alternatively, if on or before
(i) February 15 of the succeeding calendar year, or
(ii) the 15th day of the second month immediately following the close of the taxable year, if a fiscal other than a calendar year, or
(iii) the 15th day of the second month immediately following the close of a short taxable year, an unincorporated business files its return for the taxable year and pays therewith the full amount of the tax shown to be due thereon, such return shall be considered as its declaration if the tax shown on the return is $40 or less.
(g) Amendments to declaration. (Administrative Code, § 11-511(e)). In making a declaration of estimated unincorporated business tax, the taxpayer is required to take into account the then existing facts and circumstances as well as those reasonably to be anticipated relating to prospective unincorporated business gross income, deductions, exemptions and credits for the taxable year. Amended or revised declarations may be made in any case in which the taxpayer estimates that the unincorporated business gross income, deductions, exemptions or credits will differ from the corresponding amounts reflected in the previous declaration. The amended declaration should be made on Part II of Notice of Estimated Tax Payment Due, Form NYC-B100, mailed to the taxpayer or, if such form is not received or if no installment payments are due on the prior declaration, on form NYC-5UBTI (or form NYC-5UB in the case of a partnership) marked "Amended." No refund will be issued due to the filing of an amended declaration, as consideration will be given to a refund only in connection with a completed unincorporated business tax return filed by the taxpayer for the taxable year covered by the declaration (and amended declaration).
(h) Time for filing amended declarations. (Administrative Code, § 11-511(e)). An amended declaration of estimated unincorporated business tax may be filed during any interval between installment dates prescribed for the taxable year. However, no amended declaration may be filed until after the due date of the original declaration and only one amended declaration may be filed during each interval between installment dates.
(i) Return as declaration or amendment. (Administrative Code, § 11-511(f)).
(1) If an unincorporated business files its unincorporated business tax return for the calendar year on or before February 15 of the succeeding calendar year, or if the taxpayer is on a fiscal year basis, the date corresponding thereto, and pays therewith the full amount of tax shown to be due on the return, then
(i) if the declaration is not required to be filed during the taxable year, but is required to be filed on or before January 15 of the succeeding year (or the date corresponding thereto in the case of a fiscal year), such return shall be considered as such declaration; or
(ii) if a declaration was filed during the taxable year, such return shall be considered as the amendment of the declaration permitted to be filed on or before January 15 of the succeeding year (or the date corresponding thereto in the case of a fiscal year), if the tax shown on the return is greater than the estimated tax shown in the declaration.
(2) The filing of a declaration or amended declaration or the payment of the last installment of estimated tax on January 15, or the filing of an unincorporated business tax return by February 15 (or the dates corresponding thereto in the case of a fiscal year) will not relieve the taxpayer of the additional charge for underpayment of installments if he failed to pay estimated unincorporated business tax which was due earlier in the taxable year.
(j) Fiscal years. (Administrative Code, § 11-511(g)).
(1) The provisions of this section and 19 RCNY § 28-16 shall apply to a taxable year other than a calendar year by the substitution of the corresponding fiscal year month for calendar year months referred to in this section.
(2) In the case of a business on a fiscal year basis (except in cases referred to in 19 RCNY § 28-15(e)), the declaration must be filed on or before the 15th day of the fourth month of the taxable year. If, however, the requirements prescribed for filing a declaration are first met after the first day of the fourth month, but before the second day of the sixth month, the declaration must be filed on or before the 15th day of the sixth month of the taxable year; such requirements are first met after the first day of the sixth month, but before the second day of the ninth month, the declaration must be filed on or before the 15th day of the ninth month of the taxable year; and if such requirements are first met after the first day of ninth month, the declaration must be filed on or before the 15th day of the first month of the succeeding fiscal year. Thus, if the business has a fiscal year ending on June 30, 1984, its declaration for such fiscal year must be filed on or before October 15, 1983. If, however, as a further example, the requirements for filing are met after October 1, 1983 and prior to December 2, 1983, the declaration need not be filed until December 15, 1983.
(k) Short taxable year. (Administrative Code, § 11-511(h)).
(1) No declaration may be made for a period of more than 12 months. If an unincorporated business is required to make a declaration of estimated unincorporated business tax pursuant to 19 RCNY § 28-15(a), and a short taxable year is involved, a separate declaration for such fractional part of the year is required, except as noted in paragraph (2) of this subdivision (k) below. For the purpose of determining whether the anticipated unincorporated business taxable income for a short taxable year, resulting from a change of accounting period, necessitates the filing of a declaration, the anticipated unincorporated business taxable income is computed on the basis of the short taxable year for which a return is to be made in accordance with the applicable rules for determination of unincorporated business taxable income as set forth in 19 RCNY § 28-18(a).
(2) No declaration is required if the short taxable year is:
(i) A period of less than four months, or
(ii) A period of at least four months, but less than six months, and the requirements of 19 RCNY § 28-15(a) are first met after the day of the fourth month, or
(iii) A period of at least six months, but less than nine months, and the requirements of 19 RCNY § 28-15(a) are first met after the first day of the sixth month, or
(iv) A period of nine months or more, and the requirements of 19 RCNY § 28-15(a) are first met after the first day of the ninth month.
(l) Time for filing declaration of estimated unincorporated business tax for a short taxable year. (Administrative Code, § 11-511(h)). In the case of a short taxable year, the declaration shall be filed (except in cases referred to in 19 RCNY § 28-15(k)(2)) on or before the 15th day of the fourth month of such taxable year. If the requirements for filing are first met after the first day of the fourth month, but before the second day of the sixth month, the declaration must be filed on or before the 15th day of the sixth month. If such requirements are first met after the first day of the sixth month, but before the second day of the ninth month, the declaration must be filed on or before the 15th day of the ninth month. If, however, the period for which the declaration is filed is
(1) at least four months, but less than six months, or
(2) at least six months, but less than nine months, and the requirements are not met until after the first day of the fourth month, or
(3) is for nine months or more, and such requirements are not met until after the first day of the sixth month, the declaration may be filed on or before the 15th day of the succeeding taxable year.
(m) Declaration of unincorporated business under a disability. (Administrative Code, § 11-511(i)). The declaration of estimated tax for an unincorporated business which is unable to make a declaration by reason of a disability shall be made and filed by the committee, fiduciary or other person charged with the care of the property of such unincorporated business (other than a receiver in possession of only a part of such property), or by his duly authorized agent.
(a) General. (Administrative Code, § 11-512(a)). The amount of estimated unincorporated business tax due as shown on a declaration of estimated unincorporated business tax (Form NYC-5UBTI or Form NYC-5UB) may be paid in installments or, at the election of the taxpayer, may be paid in full at the time of filing the declaration. If the estimated tax is paid in installments, the first installment payment must accompany the declaration. In the case of a declaration for a calendar year, the initial installment payment and the subsequent installment payments required are as follows:
Date of filing declaration | Dates of installment payments |
(1) On or before April 15 | In four equal installments – first at time of filing declaration (on or before April 15), second on or before June 15, third on or before September 15, and fourth on or before January 15 of the succeeding taxable year. |
(2) After April 15 and before June 16, if not required to be filed on or before April 15 | In three equal installments – first at time of filing declaration, second on or before September 15, and third on or before January 15 of the succeeding taxable year. |
(3) After June 15 and before September 16,if not required to be filed on or before June 15 | In two equal installments – first at time of filing declaration, and second on or before January 15 of the succeeding taxable year. |
(4) After September 15, if not required to be filed on or before September 15 | In full at time of filing declaration. |
(5) If a declaration is filed after the time prescribed in 19 RCNY § 28-15(d), or within any extension of time or after the expiration of any extension of time, then paragraphs (2), (3) and (4) of this subdivision (a) shall not apply, and there shall be paid at the time of filing all installments of estimated unincorporated business tax which would have been payable at or before such time if the declaration had been filed at the time prescribed in 19 RCNY § 28-15(d). The remaining installments shall be paid at the time and in the amounts in which they would have been payable if the declaration had been filed at the time prescribed in 19 RCNY § 28-15(d). Thus, for example, B, required to file a declaration of estimated unincorporated business tax on or before April 15, 1983, files the declaration for 1983 on September 18, 1983. In such case, at the time of filing the declaration, B was delinquent in the payment of three installments of the estimated unincorporated business tax for the taxable year 1983. Hence, upon filing the declaration of September 18, 1983, three-fourths of the estimated tax shown thereon must be paid.
(b) Estimated tax payments by an unincorporated business having estimated unincorporated business income from farming or total estimated unincorporated business tax of $40 or less. Where an unincorporated business defers the filing of a declaration of estimated unincorporated business tax to January 15 of the succeeding taxable year as provided in 19 RCNY § 28-15(e) and (f), the estimated tax due shall be paid in full at the time of filing such declaration.
(c) Amendments of declaration. (Administrative Code, § 11-512(b)). If any amendment of a declaration is filed, the remaining installments, if any, shall be ratably increased or decreased (as the case may be) to reflect any increase or decrease in the estimated tax by reason of such amendment, and if any amendment is made after September 15 of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.
(d) Short taxable years. (Administrative Code, § 11-512(c)). In the case of a short taxable year of an unincorporated business for which a declaration is required to be filed, the estimated unincorporated business tax may be paid in equal installments, one at the time of filing the declaration, one on the 15th day of the sixth month of the taxable year and another on the 15th day of the ninth month of such year (unless the short taxable year closed prior to such sixth or ninth month, in which case the respective installment will be eliminated and the remaining installments increased proportionately) and on the 15th day of the first month of the succeeding taxable year. For example, if the short taxable year is the period of 10 months from January 1, 1983 to October 31, 1983, and the declaration is required to be filed on or before April 15, 1983, the estimated tax is payable in four equal installments, one on the date of filing the declaration, and one each on June 15, September 15 and November 15, 1983. If, in such a case, the declaration is required to be filed after April 15 but on or before June 15, the tax will be payable in three equal installments, one on the date of filing the declaration, and one each on September 15 and November 15, 1983.
(e) Fiscal years. (Administrative Code, § 11-512(d)). In the case of an unincorporated business on a fiscal year basis, the dates prescribed for payments of the estimated unincorporated business tax shall be the 15th day of the fourth month, the 15th day of the sixth month, the 15th day of the ninth month of the taxable year, and the 15th day of the first month of the succeeding taxable year. For example, if an unincorporated business, having a fiscal year ending on June 30, 1983, first meets the requirements for filing a declaration on January 15, 1983 (i.e., the seventh month) and the declaration is filed on or before March 15, 1983, (i.e., the ninth month), the tax may be paid in two equal installments, one at the time of filing of such declaration and the other on or before July 15, 1983 (i.e., the first month of the succeeding taxable year).
(f) Installments paid in advance. (Administrative Code, § 11-512(e)). At the election of the taxpayer, any installment of estimated unincorporated business tax may be paid prior to the date prescribed for its payment.
(g) Application of installment payments. The payment of any installment of estimated unincorporated business tax (including the amount of any overpayment on a return for a preceding taxable year which the taxpayer elects to have applied in payment of estimated tax due for the succeeding taxable year) shall be considered payment on account for the taxable year for which the declaration is made. An election to credit an overpayment to estimated unincorporated business tax for the succeeding year cannot be changed after the date prescribed for filing the unincorporated business tax return.
(a) Accounting periods. (Administrative Code, § 11-513(a)). The taxable year for which the unincorporated business taxable income is to be computed and for which an unincorporated business tax return is to be made shall be the same as the taxpayer's taxable year for Federal income tax purposes. The taxable year under Chapter 5 of Title 11 of the Administrative Code will accordingly be the accounting period covered by the taxpayer's Federal income tax return whether such period be a calendar year, a properly established fiscal year, a taxable period consisting of 52 or 53 weeks, or an accounting period of less than 12 months permitted or required under the Federal Internal Revenue Code. If a taxpayer does not have a taxable year for Federal income tax purposes, the unincorporated business taxable income shall be computed and the return shall be made for the calendar year, unless the Commissioner of Finance authorizes the use of some different accounting period.
(b) Accounting methods. (Administrative Code, § 11-513(b)).
(1) The accounting method or basis on which the unincorporated business taxable income is to be computed shall be the same as the taxpayer's method of accounting for Federal income tax purposes. In addition to the overall basis of accounting (such as cash basis or accrual basis), the term "method of accounting" means the accounting treatment accorded particular items of income or deduction, such as installment sales, long-term contracts, depreciation, research and development costs, etc. The accounting method used for Federal income tax purposes shall also be applied to items of gross income and deduction derived from or connected with the unincorporated business which are includible in the unincorporated business tax return, but which are not required to be reported in the taxpayer's Federal income tax return.
(2) In the absence of an accounting method for Federal income tax purposes, the unincorporated business taxable income shall be computed in accordance with the method regularly employed in keeping the books of the taxpayer, if such method clearly reflects income. If the books of such a taxpayer do not clearly reflect income, or if no books are kept, the computation of the unincorporated business taxable income shall be made in such manner as, in the opinion of the Commissioner of Finance, does clearly reflect the income.
(c) Change of accounting period. (Administrative Code, § 11-513(c)(1)).
(1) If a taxpayer's taxable year for Federal income tax purposes is changed, the taxable year or accounting period for which the unincorporated business tax return is made shall also be changed at the same time to coincide with the new Federal income tax accounting period or taxable year. Where a taxable year or accounting period of less than 12 months results from a change of accounting period, annualization of the unincorporated business income is not required. In such a case, however, the unincorporated business $5,000 annual exemption must be prorated in the manner prescribed in 19 RCNY § 28-09.
(2) A taxpayer whose accounting period is changed for Federal income tax purposes is not required to apply for or obtain permission to make a similar change with respect to unincorporated business income tax returns required under Chapter 5 of Title 11 of the Administrative Code. In such a case, however, there should be filed with the first return made for the new accounting period under Chapter 5 of Title 11 a copy of the consent of the Commissioner of Internal Revenue to the change for Federal income tax purposes, or if no consent is required, a statement to that effect referring to the particular provisions of the Internal Revenue Code, or regulations thereunder, authorizing the change.
(3) In the case of a taxpayer who has an established accounting period for Federal income tax purposes, no change of accounting period for unincorporated business tax purposes (other than one required by reason of a change of the Federal accounting period as set forth in paragraph (1) of this subdivision (c)) will be permitted.
(4) A taxpayer who has no established accounting period for Federal income tax purposes, but has such a period for New York City unincorporated business income tax purposes, shall not make any change of accounting period without first obtaining the consent of the Commissioner of Finance. An application for permission to make such change shall state the reasons therefor and must be made on or before the last day of the month following the close of the short period for which a return is required to effect the change of accounting period. If the Commissioner of Finance approves the change of accounting period, he will advise the taxpayer as to the effective date of such change and as to any short period returns required as the result thereof.
(d) Change of accounting method. (Administrative Code § 11-513(c)(2)).
(1) If a taxpayer's method of accounting for Federal income tax purposes is changed, the accounting method employed in making the unincorporated business tax return shall also be changed at the same time to the new method permitted or required to be used in the taxpayer's Federal income tax return. Upon a change of accounting method under this paragraph, any adjustments which are determined to be necessary solely by reason of the change in order to prevent amounts from being duplicated or omitted shall (subject to the applicable modifications prescribed by 19 RCNY §§ 28-05 and 28-06) be taken into account to the extent that they are required to be taken into account in determining the taxpayer's gross income and deductions for Federal income tax purposes for the year of the change.
(2) A taxpayer whose method of accounting is changed under the provisions of paragraph (1) of this subdivision (d) is not required to apply for or obtain the permission or consent of the Commissioner of Finance to the change for unincorporated business tax purposes. In such a case, however, there must be filed with the first tax return in which the new accounting method is used a copy of the consent of the Commissioner of Internal Revenue to the change for Federal income tax purposes, together with the statement referred to in paragraph (4) of this subdivision (d), including complete details of any adjustments with respect to items of income or deduction permitted or required to be made as an incident to the change of accounting method for Federal income tax purposes.
(3) A taxpayer who has a method of accounting for Federal income tax purposes will not be permitted to make any change of the accounting method used in the unincorporated business tax return other than one required by reason of a change in the Federal method as set forth in paragraph (1) of this subdivision (d).
(4) A taxpayer who has no accounting method for Federal income tax purposes, but who has a method of accounting which has been accepted or prescribed by the Commissioner of Finance for New York City unincorporated business tax purposes, shall not make any change with respect to such New York City accounting method without obtaining the prior consent of the Commissioner of Finance. An application for permission to change the method of accounting under this paragraph (4) must be made within 90 days after the beginning of the taxable period to which the proposed change will relate. Such application shall be accompanied by a statement specifying the nature of the taxpayer's business, the present method of accounting, the method to which a change is desired, the taxable year in which the change is to be effected, the classes of items to receive different treatment under the new system, and all items which would be duplicated or omitted as a result of the proposed changes. If such a taxpayer later adopts a Federal method of accounting and such method differs from the method used under the New York City unincorporated business tax, the taxpayer must conform the City method of accounting to the Federal. If a taxpayer's method of accounting is changed under this paragraph (4), any adjustments which the Commissioner of Finance determines to be necessary solely by reason of the change in order to prevent amounts from being duplicated or omitted in computing taxable income shall (subject to the applicable modifications prescribed by 19 RCNY §§ 28-05 and 28-06) be taken into account for the year of the change.
(5) For purposes of this section and 19 RCNY § 28-17(e), the term "change of accounting method" includes any change or modification of the manner of, or basis for, determining the amount of, or the time for, the reporting or deducting of any item of unincorporated business gross income or deduction, or the net amount of all such items, which would constitute a change in accounting method for Federal income tax purposes. The term "year of the change," as used in these regulations, means a taxable year for which the taxable income of the taxpayer is computed under a method of accounting different from the one used in the preceding taxable year or accounting period. (For limitations on amount of additional taxes resulting from changes in accounting methods, see: 19 RCNY § 28-17(e).)
(e) Limitations on additional tax resulting from changes in accounting methods. (Administrative Code § 11-513(c)(2) and (3)).
(1) Change other than from accrual to installment method of accounting.
(i) If a taxpayer's method of accounting is changed, other than from an accrual to an installment method, there shall be taken into account in computing unincorporated business taxable income for the taxable year of the change those adjustments which are determined to be necessary to prevent amounts from being duplicated or omitted. The adjustments necessitated by reason of such change in accounting method may result in an amount of unincorporated business tax for the year of the change in excess of the unincorporated business tax which would have been determined had there not been such a change in the method of accounting. In such event, the additional unincorporated business tax for the year of change resulting from such adjustments shall not be greater than if such adjustments were ratably allocated and included for the taxable year of the change and the preceding taxable years, not in excess of two, during which the taxpayer used the method of accounting from which the change was made.
(ii) The taxpayer shall submit a statement with his unincorporated business tax return for the year of the change, setting forth the following information and calculations:
(A) Each adjustment necessitated by the change.
(B) The net amount of the adjustments. This means the consolidation of the adjustments (whether the amounts thereof represent increases or decreases in items of income or deductions) arising with respect to balances in various accounts at the beginning of the taxable year of the change. Where the change in the method of accounting occurs by reason of a Federal change, this net amount shall be the same for unincorporated business tax purposes as it is for Federal income tax purposes, except to the extent of any modifications described in the sections and subdivisions pertaining to such adjustments.
(C) The unincorporated business tax for the taxable year of the change with the net amount of adjustments included in the computation of unincorporated business taxable income.
(D) The unincorporated business tax for the taxable year of the change computed as if the net amount of such adjustments were not included in the computation of unincorporated business taxable income.
(E) The additional unincorporated business tax, if any, incurred solely by reason of the net amount of adjustments included in unincorporated business taxable income, computed by subtracting item (D) from item (C).
(F) The allocation of the net amount of adjustments (item (B)) to the taxable year of the change and the preceding taxable year or years, not in excess of two, during which the taxpayer used the method of accounting from which the change is made. The amount to be allocated to each such year is determined by dividing the net amount of adjustments into as many equal parts as there are taxable years involved (either two taxable years or three taxable years, including the taxable year of the change).
(G) The unincorporated business taxable income for the year of the change and for the preceding year or two years, as the case may be, computed both (a) without any amount of the net adjustments, and (b) with the addition of the appropriate share of the net adjustments as determined under item (F).
(H) The additional unincorporated business tax which would result for each of the above taxable years chosen in item (F) by the addition to the unincorporated business taxable income in each such year of the appropriate share of the net adjustments.
(I) The total amount of such additional tax for the years involved.
(iii) If the amount described in item (I) exceeds the amount described in item (E), the taxpayer shall compute his unincorporated business tax for the year of the change without a ratable allocation of the net adjustments to any preceding year or years. If the amount described in item (E) exceeds the amount described in item (I), the amount of such excess shall be subtracted from the City unincorporated business tax for the year of the change as determined under item (C). The resulting sum is the amount of New York City unincorporated business tax due for the taxable year of the change.
Example: Assume that the taxpayer is an individual proprietor who used the cash method in 1981 and 1982, but changed to an accrual basis for 1983. In 1981 and 1982, he had unincorporated business taxable income of $16,000 and $7,000, respectively, figured on a cash basis. In 1983 he had unincorporated business taxable income of $11,000 figured on an accrual basis. The unincorporated business taxable income for each of the years 1981, 1982 and 1983 was arrived at as follows:
1981 | 1982 | 1983 | |
Unincorporated business gross income pursuant to 19 RCNY § 28-05 | $36,000 | $28,000 | $30,000 |
Less unincorporated business deductions pursuant to 19 RCNY § 28-06 | $10,000 | $13,000 | $10,000 |
$26,000 | $15,000 | $20,000 | |
Less deduction for personal services pursuant to 19 RCNY § 28-08 | $5,000 | $3,000 | $4,000 |
Less $5,000 exemption pursuant to 19 RCNY § 28-09 | $5,000 | $5,000 | $5,000 |
$10,000 | $8,000 | $9,000 | |
Unincorporated business taxable income | $16,000 | $7,000 | $11,000 |
Unincorporated business tax | $640 | $280 | $440 |
Assume further that the taxpayer's books at the beginning of 1983 included the following accounts: accounts receivable $15,000; accounts payable $8,000; inventory $5,000. The amount of unincorporated business taxable income due for the taxable year of the change is computed in the following manner: Subject to the amount of any modifications required under these regulations, the unincorporated business taxable income for the year of the change, including the net amount of adjustments (see: items (ii)(A) and (ii)(B) of this subdivision (e)), would be $22,000, computed as follows:
$20,000 | ||
(a) Adjustments: | ||
Add: Items not previously reported as income: Accounts receivable 1/1/83 | $15,000 | |
Items previously deducted but constituting marketable business assets: Inventory 1/1/83 | 5,000 | |
Total to be added | $20,000 | |
Subtract: Items not previously deducted: Accounts payable 1/1/83 | $8,000 | |
(b) Net amount of adjustments (increase) | $12,000 | |
$32,000 | ||
Subtract: Allowance for personal services under 19 RCNY § 28-08 | $5,000 | |
Exemption under 19 RCNY § 28-09 | $5,000 | $10,000 |
(c) Unincorporated business taxable income after adjustments | $22,000 | |
The net additional tax for the year of the change described in item (ii)(E) of this paragraph (1) is computed as follows: | ||
(d) Tax due on unincorporated business taxable income for the year of change, including the net amount of adjustments ($22,000) | $880 | |
(e) Tax due on unincorporated business taxable income for taxable year of change, excluding above adjustments ($11,000) | $440 | |
(f) Net additional tax due | $440 | |
Since the taxpayer used the cash method for the two years preceding the change-over year, the adjustments for 1983 determined to be necessary solely by reason of the change, amount to $12,000. The taxpayer may reduce the tax on the increase by allocating the $12,000 as follows: $4,000 to 1981, $4,000 to 1982, and $4,000 to 1983 (see: items (ii)(F) to (H) of this paragraph (1)). The net tax due for the year of change is then computed in the following manner:
1981 | 1982 | 1983 | |
$26,000 | $15,000 | $20,000 | |
Add: Net adjustments | $4,000 | $4,000 | $4,000 |
$30,000 | $19,000 | $24,000 | |
Subtract: Allowance for personal services pursuant to 19 RCNY § 28-09 | $5,000 | $3,800 | $4,800 |
Subtract: $5,000 exemption pursuant to § 28-09 | $5,000 | $5,000 | $5,000 |
Total Subtractions | $10,000 | $8,800 | $9,800 |
Unincorporated business taxable income after adjustments | $20,000 | $10,200 | $14,200 |
Unincorporated business tax after adjustments | $800 | $408 | $568 |
Unincorporated business tax before adjustments | $640 | $280 | $440 |
Increase in tax due to adjustments | $160 | $128 | $128 |
Total increase in tax attributable to adjustments ($160 and $128 and $128) | $416 | ||
Net additional tax determined at item (f) above | $440 | ||
Excess | $24 | ||
Total tax determined at item (d) above | $880 | ||
Less excess shown above | $24 | ||
Net tax due for year of change | $856 | ||
(2) Change from accrual to installment method of accounting.
(i) General. If a taxpayer has changed his method of accounting from an accrual to an installment method, any installment payments actually received in the year of change or in subsequent taxable years (such year or years being referred to as "adjustment years"), on account of sales or other dispositions of property made in any taxable year prior to the year of the change (and already accrued in income), are also required to be included in unincorporated business gross income of the year of receipt. Therefore, profits attributable to installment sales which were taxed in the year of sale because the taxpayer was then on the accrual method of accounting would also be taxed in the adjustment years (that is, during the years the installments are actually received) after the change to the installment method of accounting. To avoid such duplication of tax, any additional tax for the adjustment years attributable to the receipt of installment payments properly accrued in a prior year shall be reduced as explained in paragraph (2)(ii) of this subdivision (e), by an amount equal to the portion of tax for the prior year attributable to the prior accrual of income from installment sales included in unincorporated business gross income in the adjustment years.
(ii) Reduction in tax for adjustment year. To give effect to the foregoing, the tax for an adjustment year shall be reduced by the lower of the following amounts:
(A) that proportion of the tax for the prior year (in which the installment sales were reported on the accrual basis) which the amount of installment sales gross profits reportable in the prior year of sale and in the adjustment year bears to the unincorporated business gross income for such prior year of sale;
(B) the excess, if any, of the amount of the tax for the adjustment year on the entire unincorporated business taxable income over the amount of tax for such year computed without regard to the amount of the installment sales gross profits reported in both the prior year of accrual and in the adjustment year. Where previously reported installments received in an adjustment year include installments on sales made in more than one prior year, the reduction allowable with respect to the installments for each prior year shall be computed separately. In such a case, the excess tax calculated under subparagraph (ii)(B) of this paragraph (2), computed with respect to the installments from all prior years, shall be prorated over the several prior years in proportion to the amount of the duplicated installment sales profits attributable to each such prior year.
Example: The computation of the reduction of tax for the adjustment year is illustrated by the following example:
1981 (accrual basis) | 1982 (adjustment year) | 1983 (adjustment year) | |
Gross profit from installment sales (receivable in five installments) | $10,000 | $2,000 (from 1981 sales) $3,000 (from 1982 sales) | $2,000 (from 1981 sales) $3,000 (from 1982 sales) $5,000 (from 1983 sales) |
Other unincorporated business gross income | $86,000 | $41,000 |
$23,000 |
Total unincorporated business gross income | $96,000 | $46,000 | $33,000 |
Unincorporated business deductions under 19 RCNY § 28-06 | $6,000 | $6,000 | $18,000 |
$90,000 | $40,000 | $15,000 | |
$10,000 | $10,000 | $8,000 | |
Unincorporated business taxable income | $80,000 | $30,000 | $7,000 |
Unincorporated business tax | $3,200 | $1,200 | $280 |
Computation of adjustment – 1982:
Tax attributable to 1981 installment payments in 1982 (first adjustment year), the year in which the change was made from the accrual basis to the installment basis:
Tax on 1982 taxable income including gross profit from 1981 sales | $1,200 | |
Tax on taxable income excluding such gross profit: | ||
$40,000 | ||
Less gross profit from 1981 sales accrued in prior year | $2,000 | |
$38,000 | ||
$10,000 | ||
Revised taxable income | $28,000 | |
Tax on revised taxable income | $1,120 | |
Additional tax attributable to prior year installment payments | $80 | |
Tax attributable to prior inclusion in 1981: | $2,000 × $3,200 = $66.67 $96,000 | |
Therefore, the tax for 1982 (first adjustment year) may be reduced by $66.67, the lesser of the two amounts computed above.
Computation of adjustment – 1983:
Tax attributable to 1981 installment payments in 1983 (second adjustment year):
Tax on 1983 taxable income, including gross profit from 1981 sales | $280 | |
Tax on taxable income, excluding such gross profit: | ||
$15,000 | ||
Less gross profit from 1981 sales accrued in a prior year | $2,000 | |
$13,000 | ||
$7,600 | ||
Revised taxable income | $5,400 | |
Tax on revised taxable income | $216 | |
Additional tax attributable to prior year installment payments | $64 | |
Tax attributable to prior inclusion in 1981: | $2,000 × $3,200 = $66.67 $96,000 | |
Therefore, the tax for 1983 (second adjustment year) may be reduced by $64.00, the lesser of the two amounts computed above.
(iii) Statement to be attached to return. A taxpayer who changes from the accrual method to the installment method under this section shall attach a statement to his unincorporated business tax return for each adjustment year. This statement must show
(A) the pertinent facts as to sales in each year preceding the year of change;
(B) the number of remaining taxable years over which it will be necessary to compute adjustments; and
(C) a schedule showing the computation as prescribed in this subdivision (e) of the adjustment for the taxable year.
(a) Returns – filing requirements. (Administrative Code § 11-514(a)). For taxable years beginning after 1986 but before 1997, a return on a form prescribed by the Commissioner of Finance must be made and filed for each taxable year by or for every unincorporated business which is carried on in this City to any extent, and which has either unincorporated business gross income of more than $10,000, computed without deduction for cost of goods sold or services performed and without regard to allocation under 19 RCNY § 28-07, regardless of whether or not it has unincorporated business taxable income, or any amount of unincorporated business taxable income. In addition, for taxable years beginning after 1996, a return on a form prescribed by the Commissioner of Finance must be made and filed for each taxable year by or for every unincorporated business that is carried on in this City to any extent and that has either (1) unincorporated business gross income, computed without deduction for cost of goods sold or services performed and without regard to allocation, of more than $25,000 in the case of a partnership, or more than $75,000 for any other unincorporated business, regardless of whether it has unincorporated business taxable income, or (2) unincorporated business taxable income of more than $15,000 in the case of a partnership, or more than $35,000 for any other unincorporated business. Any return required under this subdivision (a) shall be made by the individual or unincorporated entity who or which was engaged in the conduct or the liquidation of the business, unless such individual is deceased, or unless such individual or entity is under a disability, in which case the return shall be made and filed by the executor or administrator (in the case of a deceased individual), or by any fiduciary or other person charged with the property of the individual or entity, or by a duly authorized agent. The foregoing provision regarding the filing of returns by fiduciaries or agents in the case of death or disability of an individual taxpayer does not relieve the taxpayer or his estate from liability if such fiduciary, agent or other person omits or fails to file any return required under Chapter 5 of Title 11 of the Administrative Code. If an individual or other unincorporated entity is engaged in several distinct business activities, only one return shall be filed. In such a case, however, a separate schedule for each activity should be filed with the return.
(a-1) Simplified return. The Commissioner of Finance may prescribe a form which may be filed voluntarily by a business whose income falls below the amount that would require the filing of a return under the Administrative Code. This filing will constitute the filing of a return pursuant to these rules and § 11-523 of the Administrative Code, which states (subject to the exceptions provided in subdivision (c) of that section) that if a return was filed, unincorporated business tax may be assessed only within three years after the return was filed.
(b) Time for filing. Where the taxable year covered by a return required under Chapter 5 of Title 11 of the Administrative Code is a calendar year, the return must be filed on or before April 15th of the following year. In all other cases where the taxable year is a fiscal year, the return must be filed on or before the 15th day of the fourth month following the close of the fiscal year. For purposes of determining the due date for the filing of a return under this subdivision (b), the term "taxable year" means the accounting period of the individual, fiduciary, partnership or other unincorporated entity for Federal income tax purposes (see: 19 RCNY § 28-17(a)), without regard to whether the business was carried on or was being liquidated during the entire period covered by such taxable year.
Example 1: New businesses. If an individual, fiduciary or other unincorporated entity having a previously established accounting period for Federal income tax purposes begins business during the year, such established accounting period shall be the taxable year for unincorporated business tax purposes. If an individual, fiduciary or other unincorporated entity having no previously established accounting period begins to carry on an unincorporated business, the taxable year for purposes of filing the first unincorporated business tax return shall be the taxable year properly adopted or prescribed for Federal income tax purposes.
Example 2: Business terminated. If the unincorporated business of an individual is terminated and completely liquidated during the year, the unincorporated business tax return for the year of termination shall be a return for the established taxable year for Federal income tax purposes, and shall be filed on or before the 15th day of the fourth month following the close of such year. If the unincorporated business of an estate, trust, partnership or other unincorporated entity is terminated and completely liquidated during the year and such complete termination and liquidation results in an accounting period of less than 12 months for Federal income tax purposes, such period shall be the taxable year for the return for the year of termination for unincorporated business tax purposes, and an unincorporated business income tax return shall be filed on or before the 15th day of the fourth month following the close of such accounting period. In the event the termination of an estate, trust, partnership or other entity for Federal income tax purposes does not, by reason of liquidating activities of the entity, constitute complete termination for unincorporated business tax purposes, any new accounting period resulting from the termination for Federal income tax purposes shall become the taxable year for purposes of filing the unincorporated business tax returns for the year of termination of the entity for Federal income tax purposes and for subsequent taxable years under Chapter 5 of Title 11 of the Administrative Code.
(c) Extension of time for filing returns. (Administrative Code § 11-517).
(1) The Commissioner of Finance may grant reasonable extensions of time for filing returns whenever good cause exists. An application for an extension of time must be made prior to the due date of the return.
(2) An automatic six months extension of time to file for taxpayers required to file form NYC 202 (individuals, estates or trusts) will be granted only on condition that form NYC-62 (Application for Automatic Extension of Time to File for Individuals, Estates or Trusts) is filed and a properly estimated tax is paid on or before the due date of the return for the taxable period for which the extension is requested. Such application must set forth the amount of tax which the taxpayer properly estimates it will be required to pay. An automatic six month extension of time to file for taxpayers required to file form NYC 204 (partnerships) will be granted only on condition that form NYC-64 (Application for Automatic Extension of Time to File for Partnerships) is filed and a properly estimated tax is paid on or before the due date of the return for the taxable period for which the extension is requested. Such application must set forth the amount of tax which the taxpayer properly estimates it will be required to pay. The amount of tax will be deemed to be properly estimated if the tax paid is either:
(i) not less than ninety percent of the tax as finally determined, or
(ii) not less than the tax shown on the taxpayer's return for the preceding taxable year, if such preceding year was a taxable year of 12 months; provided, however, in the case of any taxpayer which had unincorporated business taxable income, or the portion thereof allocated within the City, of one million dollars or more for any taxable year during the three years immediately preceding the taxable year involved, such amount shall be deemed an amount properly estimated only if it meets the conditions of subparagraph (i) of this paragraph. Failure to meet any of the requirements in this paragraph (2) makes the application invalid and any return filed after the due date will be treated as a late filed return.
(3) Except for taxpayers outside the United States, no additional extension for filing a return may be granted beyond the six months specified in paragraph (2) of this subdivision (c). For taxpayers outside the United States, an application for an additional extension may be made in writing before the expiration of the previous extension. The application must include the following information:
(i) the taxpayer's complete name and address,
(ii) the taxpayer's employer identification number or social security number,
(iii) the tax period for which an extension is requested, and
(iv) the reason for requesting the additional extension. If the U.S. Internal Revenue Service has granted a taxpayer who is outside the United States an extension of time to file his Federal income tax return beyond the City's automatic extension period described in paragraph (2) of this subdivision (c), the taxpayer will automatically be entitled to an additional extension of time to file a New York City unincorporated business tax return. This additional extension, to coincide with the Federal extension, will be granted without additional application, as long as a copy of the approved Federal extension is attached to the annual unincorporated business tax return when filed. A partnership is entitled to the automatic additional extension only where the partnership itself has been granted an extension of time to file its Federal partnership return.
(4) An extension of time to file a New York City unincorporated business tax return automatically extends the time for payment of the unincorporated business tax balance due, after the payment of the properly estimated tax, to the same date. Interest, however, must be paid at the rate prescribed by the Commissioner of Finance pursuant to the authority of § 11-537(f) of the Administrative Code on any balance of unincorporated business tax due from the original due date of the unincorporated business tax return (determined without regard to any extensions of time) to the date of payment.
(d) Place for filing returns. (Administrative Code § 11-515). Unincorporated business tax returns must be delivered or mailed to the City of New York, Department of Finance, at the address listed in the instructions for each return.
(e) Payment of tax. The unincorporated business tax is due and payable in full on or before the date prescribed by 19 RCNY § 28-18(b) for the filing of the return of the taxpayer. Where the return of a taxpayer is filed by a fiduciary, agent or other person under 19 RCNY § 28-18(a), such filing does not relieve the taxpayer from liability for any unpaid tax due under Chapter 5 of Title 11 of the Administrative Code, as shown on the return or otherwise determined or assessed.
(f) Last day a Saturday, Sunday or legal holiday. (Administrative Code § 11-531(c)). When the last day prescribed in these regulations for filing a return or paying a tax (including the last day covered by an extension of time) falls on Saturday, Sunday or a legal holiday in the State of New York, the filing of such return or payment of such tax will be considered timely if it is filed or paid on the next succeeding date which is not a Saturday, Sunday or legal holiday.
(g) Mailing of returns. (Administrative Code § 11-531(a)). The provisions of the regulations of the Commissioner of Finance relating to the mailing rules for New York City income and excise taxes apply with respect to unincorporated business tax returns and payments. Generally, those regulations pro vide that if a tax return or payment properly addressed with sufficient postage prepaid is delivered to the Department of Finance by U.S. mail after the due date, the date of the U.S. Postal Service postmark stamped on the envelope will be deemed the date of delivery, provided the postmark date falls on or before the due date. Non-U.S. Postal Service postmarks will also be recognized, provided delivery to the Department of Finance occurs within five days of the postmark date. If the five-day limit is exceeded, the taxpayer must establish that the item was actually deposited in the mail by the due date, that the delay in receipt was due to a delay in the transmission of the mail, and the cause of the delay.
(h) Signing of returns and other documents. (Administrative Code § 11-516).
(1) General. Any return, declaration, statement or other document required to be made pursuant to Chapter 5 of Title 11 of the Administrative Code shall be signed in accordance with instructions prescribed by the Commissioner of Finance. The fact that an individual's name is signed to a return, declaration, statement, or other document, shall be prima facie evidence for all purposes that the return, declaration, statement or other document was actually signed by him.
(2) Partnerships. Any return, statement or other document required of a partnership shall be signed by one or more partners. The fact that a partner's name is signed to a return, statement, or other document, shall be prima facie evidence for all purposes that such partner is authorized to sign on behalf of the partnership.
(3) Certifications. The making or filing of any return, declaration, statement or other document or copy thereof required to be made or filed pursuant to Chapter 5 of Title 11 of the Administrative Code, including a copy of a Federal return, shall constitute a certification by the person making or filing such return, declaration, statement or other document or copy thereof that the statements contained therein are true and that any copy filed is a true copy.
(i) Signing of returns prepared by a person other than the taxpayer. (Administrative Code § 11-516).
(1) If a return required by Chapter 5 of Title 11 of the Administrative Code is prepared for the taxpayer by another person, other than a regular full-time employee of the taxpayer, for a fee or other compensation or as an incident of the performance of other services for which such person received compensation, such person shall sign the return on the line designated "Signature of preparer other than taxpayer," and shall also enter thereon his address and the date when he signs the return. Such signature may be either written, stamped or otherwise legibly imprinted and shall constitute a certificate by such person that, based on all information of which he has any knowledge, the return is correct and the statements contained therein are true.
(3) As used in this subdivision (i), the word "person" includes partnerships and corporations.
(4) This subdivision (i) in no way affects the taxpayer's obligation to sign and certify his return.
(j) Electronic filing and payment. Pursuant to 19 RCNY § 17-03, the Commissioner may authorize the electronic filing of returns, reports, or other forms, and the electronic payment of tax required by this chapter.
(j) Reporting requirements for parking services provided to tenants. Administrative Code § 11-502(d). For taxable years beginning on or after July 1, 1996, an owner, lessee or fiduciary holding, leasing or managing real property and operating a garage or other similar facility at any such property that is open to the public must provide the following information for each such garage or similar facility on a return as required by subdivision (a) of this 19 RCNY § 28-18 in order to treat parking, garaging or motor vehicle storage services provided to tenants at any such property as incidental to the holding, leasing or management of the real property and not part of an unincorporated business. A return must be filed and the following information submitted regardless of whether, taking into account the exclusion of the income from the provision of parking or similar services to tenants, the taxpayer's gross income from all unincorporated businesses carried on in whole or in part in the City would be below that necessitating the filing of a return under subdivision (a) of this 19 RCNY § 28-18. Failure to submit the following information for a garage or similar facility at any such property in any material respect will result in parking, garaging or vehicle storage services rendered to tenants at that property being subject to the tax imposed by Chapter 5 of Title 11 of the Administrative Code. However, inadvertent omissions of information for an insignificant number of tenants or minor inadvertent factual errors will not cause such services to be taxable. The taxpayer must submit with the return required by subdivision (a) of this 19 RCNY § 28-18 a statement for each garage or other similar facility for which an exclusion is claimed pursuant to 19 RCNY § 28-02(h)(2)(iii) containing:
(1) the parking facility name;
(2) the parking facility address;
(3) the license number of the facility, if applicable;
(4) the licensed capacity of the facility, if licensed;
(5) the total number of transactions and amount of receipts for the taxable year from all sales of parking services including prepaid parking services, all parking services provided without charge and all parking services paid for by a person other than the person whose vehicle is parked, garaged or stored (such as a merchant validation of a parking ticket);
(6) the total number of transactions and amount of receipts from sales of monthly or longer term parking services, including a designation of each transaction and receipt as exempt from the eight percent Manhattan parking tax, where applicable; and
(7) the total number of transactions and amount of receipts from sales of monthly or longer term parking services provided to tenants. The taxpayer must maintain records containing the name, address, and license plate number for each tenant and must make such records available to the Department upon request.
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