Hi Celeste! The NYC Unincorporated Business Tax (UBT) applies to trades, professions, and certain occupations of an individual, partnership, limited liability company, fiduciary, association, estate or trust. The business can be active or in the process of being liquidated. Filing a UBT return is required by an individual or unincorporated entity that has gross receipts greater than $95,000. A 4% tax rate is charged for taxable income allocated to NYC.
The NYC Department of Finance lists the following as exempt from UBT:
Who is Exempt from this Tax?
- Performing services as an employee is not subject to UBT.
- A person or entity, other than a dealer, who is only engaged in the purchase, holding, and sale of property for their own personal account (e.g. a person who owns and rents a two-family house); and
- An owner, lessee, or fiduciary who is engaged in holding, leasing, or managing real property for their own account.
- Entities engaged primarily with qualifying investment activities are partially exempt from UBT on the income.
- Associations and publicly traded partnerships treated as corporations for Federal income tax purposes; and “S Corps.” are subject to the General Corporation Tax.
For more information on the Unincorporated Business Tax, I recommend you visit the following websites:
NYC Dept. of Finance UBT website
Current Unincorporated Business Tax (UBT) Forms
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