Closing a Business in New York State [ Must Know ] Tax Tips

Just because your business stopped operating does not mean that your business is closed in the eyes of  New York State.

Without taking the necessary step to close your business , the New York State Department of Taxation and Finance may consider your business “open.” 

As such, failing to file the necessary documents to close your New York State business may subject you to ongoing filing requirements as well as penalties and fees.

Should you require assistance with:

1. closing a business in New York State ;
2.  federal (IRS) or New York State tax issues;

The first step is contact us to discuss the specifics of your tax matter. We can assist you regardless of location.

Here are some issues that you will need to address to properly close your New York business:

IRS or NYS Tax Problem? 7 [ Must Know ] FAQs

Experienced IRS & NY tax attorney Charles Rosselli gives you valuable tips and strategies so that you do not get taxing advantage of by the IRS, NY Tax Department or a so-called tax resolution firm. 

Was Your Business Incorporated?

If your business was incorporated, final income tax returns for the business will need to be filed.

Corporations created in NY must pay taxes to NYS in exchange for the opportunity to do business in New York State.

Regardless if the business is deriving revenue, fees are due to NYS until the business is formally dissolved.

Once the corporation is formally dissolved, then the obligation to file returns and pay taxes and fees to NYS ends.

Hence, why it is necessary and important to properly close your business.

If you have an issue with filing back tax returns for your business, contact experienced New York NY tax attorney Charles Rosselli prior to filing any tax returns.

We can properly advise you how to protect yourself from possible criminal exposure and reduce any associated penalties.

Did Your NY Business Have Employees?

If so, you will likely have to file a final quarterly combined withholding, wage reporting, and unemployment insurance return ( NYS-45) and indicate that your business ceased paying wages or that you sold or transferred your business if that was the case.

Closing a business in New York State will require that your final NYS-45 be filed.

NYS Sales Tax Filing Requirements

If your NY business stopped business operations,  you must file a final sales tax return. 

A final sales tax return must be filed within 20 days after you cease business operations or the sale, transfer, or change occurs.

Closing a Business in New York State 

There are several reasons why you may not be able to close your business.

In order to close your NY corporation, you will need to get consent from the New York Tax Department.

The NYS Tax Department will check for two things:

1. Did the business file all the necessary tax returns?
2. Does the business owe back taxes? 

Have you done all the necessary compliance that was discussed above ( tax filings, etc.)?

The second common reason that your business may be unable to close is because your business has outstanding NYS  tax liabilities ( sales tax, withholding, and possibly income).

The New York State Department of Taxation and Finance will  require that the tax liabilities of the business be resolved prior to closing a business in New York State.

Options to resolve a NYS tax liability may involve properly structuring a payment arrangement for the payment of the past due taxes or possibly or possibly an Offer in Compromise to reduce the tax liabilities, associated penalties, and interest.

Usually, the New York State Department of Taxation and Finance will not entertain resolving a tax liability  for either you or your business until all of the tax filing requirements have been met.

The third, but not as common reason, that you may not be able to close your NY business is either you or your business are under investigation for possible tax fraud. 

Help with Closing a NY Business

Properly closing a business in New York State  is important to protect yourself from the ongoing tax filing requirements and the associated penalties that may be imposed by the NYS Tax Department if you fail to file the necessary tax returns.

Should you require assistance with:

1. closing a business in New York State
2. filing necessary tax returns for the business or you personally
3.  federal (IRS) or New York State tax issues