In this Article, we will give you a snapshot of the legal compliance requirement and associated fees required to register Limited Liability Company (LLC) in New York and most importantly, maintain the status of an LLC, especially as a small business e-commerce start up.
In the United States, LLCs are registered on the state level, therefore you can register an LLC in any of the 50 States in the United States, including Washington DC.
You can check out our the best states in the US to register your LLC as a small business e-commerce start-up, if you want to pay less State fees, less State imposed taxes and do less periodic paperwork in order to maintain your LLC.
In this Article, our focus is on New York LLC. What cost should you expect to pay when you register an New York LLC? What periodic filings requirements are imposed on New York LLCs? What State taxes are levied on e-commerce small business start ups in New York and what are the tax rates? What business permits are required to be obtained by e-commerce businesses in New York, what’s the cost of these permits and are there any renewal requirements?
This Article presents you a snapshot, so you know what fees and legal compliance requirements to expect if you want to register an LLC for your e-commerce small business start up in New York, operate with the required licenses and maintain your LLC status.
Business registration and compliance on New Mexico
LLC Registration cost; the state fee for registering an LLC in New York is $205. You can register your LLC with Bizee Business registration and compliance on New Mexico
LLC registration Publishing requirement; Yes
You have to publish your New York LLC with a newspaper that is located in the same city or same county as your LLC (based on your LLC’s Initial Designated Office)
Only newspapers designated by the county clerk can be used. You’ll need to contact the relevant clerk. The New York State Unified Court System Court Locator, is a helpful tool for finding the right contact info.
Note that, New York LLC newspaper publication is more expensive in some counties compared to others. For example LLC newspaper publishing in Manhattan (New York County) is typically the most expensive, which can cost around $1,400 to pay a service provider to do it – and they usually do it cheaper than lawyers who also charge for their time.
Albany county is one of the cheapest counties for New York LLC newspaper publications around $150. Ulster county is also cheap, you can expect to spend around $105.
To meet the State of New York LLC newspaper publication requirement at a cheaper rate, you will have to provide an LLC initial designated office address in one of the cheaper New York Counties for newspaper publication ( i.e Albany county, Ulster county etc).
Each County will have a list of approved newspapers publications, you want affordability, choose the newspaper publication with the cheapest rates.
Has the Option to register as an Anonymous LLC; No, LLCs in New York do not have the option to register as an anonymous LLC. Meaning that the business details of the LLC Owners are published on the New York public records. The LLC can still maintain some privacy by using a virtual office address and not the Owners real addresses.
DBA requirement; DBA is required if your LLC is operating under a different name than your LLC registered name. In New York DBA is referred to as a “Assumed name”. Cost of registration is $25, the length of approval is indefinite. You can register for a DBA in New York online or outsource the registration of your New York DBA (if needed) to Bizee.
Annual report filing requirement; yes, New York LLCs have annual report filing requirements. New York LLCs are required to file a Biennial report cost of filling new york Biennial annual report is $9
You can file the New York Biennial returns yourself, you’ll need to visit the e-Statement Filing System page or you can outsource the filling of your annual returns to Bizee for a $99 service charge + the state fee.
You can register your DBA or fill your annual returns directly on the State’s website and only pay the state’s filing fees. Alternatively you can use Bizee a US business filing service to register your DBA and file your annual returns. Bizee charge a service fee of $99 + the state fees. We recommend Bizee for registering your LLC because specifically for LLC registration, Bizee does not charge any service fee. so you pay $0 + the state fees.
Annual Franchise tax filing and compliance in New York
State Franchise tax requirement; The state wants to close loopholes that allow businesses to minimize their taxes, which is why the state imposes four different ways of calculating tax;
- The company’s entire net income
- The company’s minimum taxable income
- The company’s business and investment capital
- A fixed dollar minimum tax
If your LLC elects C-corp status in New York, you’ll pay a corporation franchise tax based on the highest of three tax bases: business income base, business capital base, and fixed dollar minimum. Your business must run the numbers and get a value for all three tax bases, then pay whatever is highest.
New York imposes Franchise tax on corporations that are incorporated in New York, Corporations that are not incorporated in New York but have New York sourced income, Corporations that are part of a limited partnership or a General partnership that has New York sourced income. It is our understanding that New York does not impose Franchise tax on LLCs other than LLCs that has elected to be taxed on C-corporation and LLCs that have members that are Corporations.
You can learn more about the New York Franchise tax.
Annual State income tax filing and compliance in New York
State income tax requirement; New York has a graduated individual income tax, with rates ranging from 4.00 percent to 10.90 percent. There are also jurisdictions that collect local income taxes. New York has a 6.50 percent to 7.25 percent corporate income tax rate.
- Who files State income tax; LLCs by default are passed through entities meaning that tax obligation passes through to the individuals who own the LLC. Therefore an LLC with a default tax status pays the individual state income tax. Interestingly, if the individuals behind the LLC are not resident in the state and do not have state source income (a dependent agent in the state), then they are not required to pay “individual State income tax”.
If the LLC owners are resident in the State or have State source income (a dependent agent in the state), then the LLC Owners are required to pay “individual State income tax”.
If the LLC has elected to be taxed as a corporation (C-corp), then the LLC is required to pay “Corporate State income tax”.
- How to file state income tax; You can file your New York State income tax by yourself. You will need to visit the State website. Alternatively, we recommend using the Service of a Certified Public Accountant (CPA), through H&R Block to file your state income tax.
Periodic Sales tax filing and compliance in New York
Sales tax requirement; New York has a 4.00 percent state sales tax rate, a max local sales tax rate of 4.875 percent, and an average combined state and local sales tax rate of 8.52 percent.
- Sales tax nexus; Sales tax nexus is
the state-defined threshold between a Seller and a state, which when reached makes it obligatory for the Seller to register for a Seller permit in the state, charge sales tax to customers in the state and remit the sales tax to the State Government.
Generally, there is the “physical sales tax nexus” and “economic sales tax nexus”.
Physical sales tax nexus is reached when the Seller had physical presence in the state (i.e have an office address, a warehouse etc).
In most States, “economic sales tax nexus” is reached when a Seller makes up to 200 transactions or $100,000 in sales in a State.
It’s important to note that, when you register your LLC in the State of New York (which generally requires that you have a registered business address in New York), you automatically meet the physical sales tax nexus and will be required to obtain a Sales tax permit in New York, charge applicable sales tax rates to customers in New York and remit sales tax to the New York State Government.
Sales tax permit; It costs $0 to register for New York sales tax Certificate of Authority.
Sales tax permits are renewable in New York. The sate randomly selects Sellers and the Sellers a letter informing you then that they have been “selected for renewal”. In New York Sellers cannot apply for renewal until they receive a letter of renewal from the State.
Reseller/Resale Certificate; Businesses who purchase products from their suppliers for the purpose of reselling those products to their customers can make sales tax free purchases from their suppliers if they have a resale certificate.
This means that Resale businesses can get cheaper product prices from their suppliers (that is product prices without sales tax included) which can help these Businesses have a higher profit margin and/or maintain competitive selling prices to their Customers.
Generally, suppliers will charge the sales tax rate applicable in the State where the product is to be delivered unless the business presents to the supplier a Resale Certificate (also called a Reseller Certificate).
The Resale certificate must be valid and acceptable in the state where the product is to be delivered.
Businesses can present any of the below listed Resale certificates to suppliers if they want to make sales tax free purchases for product delivery to a New York address.
Note; Mississippi accepts the use of out-of-State Seller ID.
This means that Resale Businesses seeking to make sales-tax-free purchases to be delivered to a New York address, can use the New York Resale certificate and New York sales permit ID or an out-of-state issued Resale Certificate and out-of-state issued Sales tax permit ID.
The Business just has to present of these to their supplier in order to make sales-tax-free purchases to a New York address.
In New York , A blanket Resale certificate (This means that the resale certificate is kept on file by the Supplier to cover multiple purchase transactions between a specific Supplier and Reseller) do not expire as long as the purchaser is purchasing the same general type of property.
Conclusion
This Article shows you a snapshot of the legal fillings and compliance requirements for LLCs that are registered in New York, specifically for LLCs that want to carry on the business of selling and especially for small e-commerce start up LLCs that are registered in New York.
If you are wondering what might be the best State in the United States to register your small business (especially if you are a reseller or an e-commerce business), we have written this Article, where we go over our most recommended states for registering a business in the United States, if you want to pay less LLC filling and legal compliance fees, if you want less state imposed taxes and if you want to do less periodic legal paperwork required to maintain your LLC status.
