Bill A11561 quietly extends elevated NYC tax rates for three more years—affecting salon owners' bottom line through 2029.
Most salon and personal care owners in New York City don't realize that a provision buried deep in a recent state bill just extended the city's elevated tax rates for another three years. The change affects how much you'll owe in both business and personal income taxes—and it's worth understanding now, before tax planning for 2025.
Bill A11561, signed into law, extends New York City's elevated business and personal income tax rates through December 31, 2029. Specifically, the extension applies to:
Without this extension, these rates were scheduled to expire on December 31, 2026. Now they'll remain in effect through tax years beginning before 2030—a three-year extension that most salon owners didn't see coming.
If you operate a salon or personal care business in NYC, you likely pay taxes under one of two structures: as a sole proprietor or partnership (paying personal income tax), or as a corporation (paying the general corporation tax). Either way, you're subject to these elevated rates.
The extension means three additional years of higher tax liability than you might have anticipated. This affects:
For salon owners operating as S-corporations or LLCs taxed as corporations, the 8.85% general corporation tax rate applies. For sole proprietors and partners, the personal income tax rates and potential 14% surcharge on certain income brackets are relevant.
The extension takes effect immediately upon the bill's signing and applies to tax years beginning before December 31, 2029. This means the elevated rates will apply to your 2025, 2026, 2027, 2028, and 2029 tax filings.
The provision is found in § 5, Part D of A11561 (pages 7–8).
Review your current tax structure with your accountant or tax advisor. If you haven't already planned for these rates to remain in effect through 2029, now is the time to adjust your financial forecasts and tax strategy accordingly. This is especially important if you were counting on a tax rate reduction in 2027 or beyond.
The extension was part of a broader bill addressing staffing in healthcare facilities, brownfield tax credits, and other provisions—which is why many business owners missed it entirely. But for salon owners in NYC, it's a material change to your tax environment for the next five years.
For detailed guidance specific to your salon's tax situation, consult a New York tax professional or your industry association's business resources.