Tax Insight

New York final budget includes OBBBA conformity revisions, sales tax reregistration and amnesty, “pied-à-terre tax”

Insight
9 minute read
June 03, 2026

What happened?

New York has enacted budget revenue legislation extending the state’s temporary top corporate tax rate by three years and amending conformity to P.L. 119-21, or the One Big Beautiful Bill Act (OBBBA), particularly with respect to IRC Sections 168(n) and 174/174A (and for New York City, with respect to Section 163(j)). The legislation also includes a vendor sales tax reregistration program and limited amnesty, as well as a novel New York City tax on certain high-value residential property that does not serve as a primary residence.

The budget is also notable for what it did not include. The legislation did not increase tax rates for the personal income tax, unincorporated business tax, or corporate tax (other than extending the state top rate), reduce the state or city pass-through entity tax (PTET) credit, or impose a tax on home sales paid in cash. The bill also did not include an extension to the deadline for making the annual PTET election.

[S. 9009C, enacted 5/28/2026]

Why is it relevant?

The budget’s federal conformity provisions for both state and city purposes will impact many taxpayers’ 2025 tax year compliance. The final budget notably included interest and penalty relief for taxpayers affected by this retroactive conformity legislation. Taxpayers subject to sales tax reregistration may be able to take advantage of amnesty covering penalties and one-half interest for certain final liabilities. The “pied-a-terre tax” introduces uncertainty for New York property tax determinations, including what may be deemed a “primary residence” and valuation issues for covered properties.

Actions to consider

Businesses should consider the potential impact of New York’s federal conformity changes and modeling the impact for 2025 tax year compliance and 2026 estimated tax payments. Vendors should review New York sales tax registrations, filing histories, and outstanding liabilities to determine whether the reregistration program or limited amnesty may apply. Owners and investors in high-value New York City residential property should analyze whether the pied-a-terre tax could apply and monitor forthcoming guidance on primary residence and valuation issues.