NYC Proposed Tax Code Changes Would Affect Businesses Large And Small

A proposal by the Mayor of New York City to change the City's corporate tax structure would, for the first time, tax certain businesses that have no physical presence in New York City but that do business in the City or with City residents. If adopted, the changes would take effect retroactively as of January 1, 2015. 

Under the proposal, some companies with $1 million in receipts from sales to New York City customers will be deemed to have an "economic nexus" with New York City and will be subject to New York City business income taxes for the first time. This economic nexus approach will allow the City to subject a business to tax even if it has no physical presence.  Similar taxing power was adopted by New York State last year, but there remain questions as to whether such taxation is permissible under the U.S. Constitution.