Selling a business in New York: what the state takes (2026)
New York’s top individual income tax rate is 10.9%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 10.9%
- Top New York income tax rate (2026)
- $2,575,000
- State tax on a $25M long-term gain
- 34.1%
- Combined federal and state rate on $25M
- 5 of 51
- Rank by total tax on $25M (1 = highest)
How New York taxes a business sale
- Income tax
- Top rate 10.9%: Over $25,000,000 (single); 9.65% over $1,077,550 and 10.3% over $5,000,000. Benefit recapture taxes all taxable income at the top rate reached: fully at 9.65% once AGI exceeds $1,127,550, at 10.3% once AGI exceeds $5,050,000, and at 10.9% once AGI exceeds $25,000,000..
- Long-term capital gains
- Capital gains are taxed as ordinary income. Because of the supplemental tax (benefit recapture), a seller with a $10M gain pays 10.3% on all taxable income, and one with AGI over $25M pays 10.9% on all of it. The $25M example sits exactly at the threshold and is taxed at 10.3%; any other income on top would move the whole amount to 10.9%.
- Entity-level taxes
- New York and New York City offer elective pass-through entity taxes; New York City does not recognize S corporation status, so S corps doing business in the city are subject to city corporate tax.
- Local taxes
- New York City residents pay city income tax on the gain at a top rate of 3.876% over $50,000 (single), with no preference for capital gains. Yonkers residents pay a surcharge of 16.75% of net state tax (about 1.8 percentage points at the 10.9% state rate).
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| New York tax | $1,030,000 | $2,575,000 | $5,450,000 |
| Total tax | $3,410,000 | $8,525,000 | $17,350,000 |
| Effective combined rate | 34.10% | 34.10% | 34.70% |
| Net proceeds after tax | $6,590,000 | $16,475,000 | $32,650,000 |
| Extra tax versus Texas | $1,030,000 | $2,575,000 | $5,450,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- New York tax
- $2,575,000
- Taxable gain at 10.3%
- $2,575,000
- Total tax
- $8,525,000
- Effective rate on the gain
- 34.10%
- Net proceeds after tax
- $16,475,000
Not included: New York City residents pay up to 3.876% on top, about $969,000 on this gain.
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
- Connecticut30.8% combined, $17.30M net
- Massachusetts32.6% combined, $16.84M net
- New Jersey34.5% combined, $16.36M net
- Pennsylvania26.9% combined, $18.28M net
- Vermont32.4% combined, $16.89M net
Common comparisons
- California37.1% combined, $15.72M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
New York figures are for tax year 2026. 2026 schedule from Tax Law 601(c)(1)(B)(vii) (tax years 2026-2027) and supplemental tax 601(d-5); NYC rates from Tax Law 1304 and the 2025 IT-201-I (no 2026 change found). The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1NY Tax Law 601 (rate schedules 2026-2027 and supplemental tax d-5), revision 2025-07-11
- 2NY Tax Law 1304 (NYC resident base rates), revision 2026-06-12
- 3NYS DTF IT-201-I (2025) instructions: NYC tax rate schedule and Yonkers 16.75% rate
- 4NYS DTF NYS-50-T-NYC withholding tables effective Jan 1-Dec 31, 2026
- 5Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 (as of Feb 11, 2026). Secondary source
Data last updated October 26, 2026.
Cite this research
You may quote and republish figures from this page with attribution and a link to the source.
Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): New York,” 2026, https://laurent.capital/research/seller-tax-map/new-yorkLink (HTML)
<a href="https://laurent.capital/research/seller-tax-map/new-york">The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): New York</a> (Laurent Capital)Planning a sale and weighing the tax cost?
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