Monthly Archives: September 2014

Don’t move to Florida yet!

For many of you New Yorkers planning to move to Florida in order to save on New York State estate tax don’t put your houses on the market yet.

Effective April 1, 2014, New York State under the guidance of Governor Cuomo passed legislation with the goal of keeping New York State’s wealthy taxpayer moving from the State. The estate tax law does nothing though for New York’s wealthiest. That is, individuals with estates over $5,340,000.

The law will increase the annual lifetime exemptions from the current New York State amount of $1,000,000 to eventually equal that of the Federal lifetime exemption, currently at $5,340,000 with indexing in the future to keep pace with the Federal exemption. Unfortunately the New York exemption will not be equal with the Federal exemption until January 1, 2019. The exemption increases as follows:

Decedents passing April 1, 2014 through March 31, 2015 $2,062,500
Decedents passing April 1, 2015 through March 31, 2016 $3,125,000
Decedents passing April 1, 2016 through March 31, 2017 $4,187,500
Decedents passing April 1, 2017 through December 31, 2018 $5,250,000

Another problem with the New York law besides being very complicated is that it has a built in cliff. If an estate exceeds the exemption amount between 0 to 5% of the exemption, the tax savings are drastically reduced and altogether disappear for estates that exceed 105% of the exemption then in effect at the date of death.

A distinct feature missing from the New York State law is the concept of portability. Under Federal law, the excess of your lifetime exemption over your taxable estate can generally be applied to your surviving spouse’s taxable estate. This concept is missing from New York law so on larger estates additional estate planning will be necessary.

You will have to plan your gifting early under the new law. Any Federal taxable gift made within a three year window of death will be added back to the estate as though the gift were never made. The rule applies only to gifts made between April 1, 2014 and December 31, 2018 and would not apply during a time the decedent was not a New York State resident.

If you are planning your next big move with the New York State estate tax as a major contributor to your thought process, you now have one more thing to review and consider before you reach your final decision.

– Wayne Martin, Partner, CPA
wmartin@gkgcpa.com

New York State’s $9 Biennial Statement Filing

You apply for financing to for assistance with your business. The bank performs their due diligence and discover your Corporation or LLC is past due in filings with New York State. How can this be? You have filed all your corporate and payroll tax returns in a timely manner. One important filing overlooked was that of the New York State Biennial Statement. A $9 filing fee has prevented you from growing your business.

Section 408 of the New York Business Corporation Law and Section 301(e) of the New York Limited Liability Company Law requires that both domestic and foreign corporations and limited liability companies (LLC) file a Biennial Statement every two years with the New York State Department of State (NYDOS). The two-year filing period begins in the calendar month in which the original Certificate of Incorporation, Articles of Organization or Application for Authority was filed with the NYDOS. Any corporation or LLC that fails to file its Biennial Statement will be reflected as past due in the NYDOS records and could prevent the entity from completing certain business transactions.

Filing the Biennial Statement is simple and inexpensive. NYDOS will send an email notice at the beginning of the calendar month in which the Biennial Statement is due. If an email address has not been provided to NYDOS, a paper notice will be mailed to the address it has on file for your business. Currently, the filing fee is $9.00. The fee can be paid by check or credit card. If you have not received your Biennial Statement, contact the Statement Unit of the New York Department of State’s Division of Corporations, 99 Washington Avenue, Albany, NY 12231-002 to request a copy. You can also contact the Statement Unit by email at corporations@dos.ny.gov or by fax at (518) 486-4680. Your request must include the exact name of the corporation or LLC and its date of formation or authorization.

The Biennial Statement must set forth: (1) the name and business address of its chief executive officer, (2) the street address of its principal executive office and (3) the address to which the New York Secretary of State shall forward copies of process accepted on behalf of the corporation. If the name and address of a business corporation’s chief executive officer and/or the address of the corporation’s principal executive office need to be updated, a Biennial Statement Amendment can be filed. You are required to use the form provided by the New York Department of State to file an amendment. The corporation’s address for service of process may not be amended in a Biennial Statement Amendment. It can only be amended by filing a Certificate of Change or a Certificate of Amendment which are available on the Division’s website.

A corporation or LLC remain active until it is dissolved. A foreign corporation or LLC remains active until it surrenders or terminates it application to do business. A New York State corporation may voluntarily dissolve by filing a Certificate of Dissolution pursuant to Section 1003 of the Business Corporation Law. A New York State LLC should file Articles of Dissolution pursuant to Section 705 of the Limited Liability Company Law. If a foreign corporation or LLC is no longer doing business in New York State but remains active in its home state, it should file a Certificate of Surrender of Authority pursuant to Section 1310 of the Business Corporation Law or Section 806 of the Limited Liability Company Law. If the entity no longer exists in its home state, it should file a Certificate of Termination of Existence pursuant to Section 1311 of the Business Corporation Law or Section 807 of the Limited Liability Company Law.

Don’t let $9 prevent you from expanding your business. For more information on the Biennial Statement filing fee, contact our office.

– Brian Reilly, CPA, Manager
breilly@gkgcpa.com