Unincorporated Business Tax (UBT)

A tax imposed on every individual or unincorporated entity carrying on a trade, business, or profession – in whole or part – in New York City.

New in 2009:

A full credit is now available for liabilities of $3,400 or less, and a partial credit for liabilities greater than $3,400 and up to $5,400. The effect of this credit is that unincorporated businesses with taxable incomes of $100,000 or less pay no tax and unincorporated businesses with taxable incomes greater than $100,000, and up to $150,000, pay a reduced tax.
An unincorporated business is only required to file a UBT return if its gross income before deductions for cost of goods sold or services performed is more than $95,000.
A single receipts factor will replace the current three-factor formula allocation. The new allocation formula will be phased in over a ten-year period beginning in 2009.
Certain receipts from the services of registered brokers and dealers of securities and commodities must now be sourced using the customer’s mailing address.
A new tax “biotechnology credit” is now provided for certain expenses incurred by a taxpayer that is a “Qualified Emerging Technology Company”.
New York City now has the authority to adopt rules that require electronic filing of tax returns.
The interest rate on underpayments has been increased from the federal short-term rate plus five percent, to the federal short-term rate plus seven percent. Also the default rate for underpayments has been increased from six percent to seven and one half percent.
Certain taxpayers and tax preparers who file using tax software may be required to file electronically and could be subject to civil penalties for failure to do so. The civil penalties for deficiencies due to fraud have been increased and a new false and fraudulent penalty has been added.
Provisions detailing crimes applicable to the tax have been redefined to conform to recent New York State revisions.

Who is Subject to This Tax?
Who is Exempt from this Tax?
Tax Forms & Filing Information
Tax Rates
Legal Authority
Contact Us
Additional Information
Frequently Asked Questions

Who is Subject to This Tax?
The Unincorporated Business Tax (UBT) is imposed on the business income of every unincorporated business that is carried on - wholly or partly - in New York City.

Unincorporated businesses includes trades, businesses, professions, and occupations that are conducted by, engaged in, or in the process of being liquidated by an individual, partnership, limited liability company, fiduciary, association, estate or trust.

If a person carries on two or more unincorporated businesses, all such businesses are treated as one business for the purpose of this tax.

Who is Exempt from this Tax?
By law, the following activities are exempt from the Unincorporated Business Tax:

The performance of services by an individual as an employee. The facts and circumstances of each case determine whether or not an individual performs services as an employee;
A person or entity, other than a dealer, who is only engaged in the purchase, holding, and sale of property for its own account (such as in the case of investment activities); and
A person or entity that is an owner, lessee, or fiduciary, and which is engaged in holding, leasing, or managing real property for its own account.
In addition, unincorporated entities that are engaged primarily in qualifying investment activities are partially exempt from UBT on the income from those activities.
Unincorporated associations and publicly traded partnerships that are treated as corporations for federal income tax purposes are subject to the General Corporation Tax, unless they elected on the 1996 returns to remain subject to the UBT.
"S Corporations" are subject to the General Corporation Tax, not the UBT.

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Tax Forms and Filing Information
2008 Forms & Publications
Forms & Publications Archive

Tax Rates
The tax is imposed for each taxable year at a rate of 4 percent of taxable income that is allocatable to New York City.

Tax Credits
For tax years beginning in or before 2008: A taxpayer whose UBT liability is $1,800 or less is allowed a credit for the full amount of the tax. For tax years beginning in or after 2009: A taxpayer whose UBT liability is $3,400 or less is allowed a credit for the full amount of the tax.

For tax years in or before 2008: Taxpayers with liabilities between $1,800 and $3,200 are allowed a partial credit. For tax years beginning in or after 2009: Taxpayers with liabilities between $3,400 and $5,400 are allowed a partial credit.

Individual New York City residents are allowed to claim a credit against their City personal income tax liability for a portion of the unincorporated business tax payments made by businesses they carry on as sole proprietors. The amount of the credit depends on the City resident's taxable income for personal income tax purposes. Part-year residents receive a partial credit.

A partner in a partnership that is subject to the UBT may claim a credit against its own UBT (or General Corporation Tax or Banking Corporation Tax) liability for a portion of the UBT payments of the partnership, if it is required to include its distributive share from the partnership in its own tax base.

Legal Authority
Title 11, Chapter 5 Administrative Code
Enabling Act: Chapter 772 of the Laws of 1966

Write to us:
NYC Department of Finance
Correspondence Unit
66 John Street, 3rd Floor
New York, NY 10038-3735

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Additional Information
Related link: Refunds