With the 2026—2027 New York State (NYS) Budget nearly two-months past due, the New York legislature on May 27, 2026, approved the tax budget bill (A.10009-C and S.9009-C, hereafter, Budget Bill). The Budget Bill will next be sent to the governor, who is expected to sign it soon.

Notable tax provisions in the Budget Bill would:

• Extend NYS corporate franchise tax rates
• Retroactively decouple from select provisions of the One Big Beautiful Bill Act (Public Law 119-21 or OBBBA ), including the treatment of research and experimental costs, for NYS and NYC business and personal income taxes
• Provide interest and penalty relief for underpayments associated with decoupling from retroactive provisions of the OBBBA
• Modify the vendor registration program for sales and use tax purposes
• Impose a pied-à-terre surcharge on New York City (NYC) residential properties that do not serve as primary residences

Tax changes that were considered during the budget process, but that are not part of the Budget Bill, include proposals that would have:

• Increased income taxes on high-wage earners and large corporations
• Modified the elective pass-through entity tax
• Increased NYC business and individual income taxes
• Decoupled NYS and/or NYC from the OBBBA's changes related to qualified small business stock under IRC Section 1202 and qualified opportunity zone exclusions under IRC Section 1400Z-2
• Extended the sales tax Dodd-Frank provisions
• Imposed a new digital asset mining excise tax

A Tax Alert will be issued on the final, enacted legislation.