A levy imposed by New York City and New York State on the earnings of unincorporated businesses operating within their jurisdictions. This encompasses sole proprietorships, partnerships, and limited liability companies that have elected to be treated as partnerships for tax purposes. The tax is calculated based on the net profits of the business after certain deductions and credits are applied. For example, a freelance consultant operating as a sole proprietor in New York City would be subject to this tax on their business income.
This revenue source plays a significant role in funding municipal and state services, contributing to infrastructure development, public safety initiatives, and social programs. Historically, this tax has been a mainstay of the state and city’s fiscal structure, reflecting the economic activity of the numerous small businesses and self-employed individuals within the area. Its existence influences business decisions, impacting profitability and potentially driving business location choices.
