The rules where you work $17
A first 30 days checklist, everyday forms, licenses, workers’ comp and taxes for New York, with a yearly calendar. Instant PDF download.
Buy the packet: $17Digital product, all sales final. Informational only, not legal, financial, tax or business advice.
What New York expects from a new trade business
New York has two things most states don't: an LLC publication requirement that puts a newspaper bill on top of the filing, and a sales tax split where a repair job is taxed and a capital improvement isn't. Comp starts with your first employee, and construction law presumes the people working for you are employees. Single-family lien deadlines are half the normal time.
New York City's license, and a contract law for the whole state
General contracting and remodeling licenses are local in New York. New York City requires a Home Improvement Contractor license from the Department of Consumer and Worker Protection for construction, repair or remodeling on residential land or buildings. The application asks for comp proof or an exemption certificate, plus Trust Fund enrollment or a $20,000 bond. Nassau County licenses home remodeling, and the court rules also name Suffolk, Westchester, Rockland and Putnam. Elsewhere, call the county and town before you bid. In those places, if you sue a consumer over licensed work, your complaint has to state your license, or the customer can move to dismiss.
Statewide, General Business Law Article 36-A applies once your home improvement contracts total over $1,500 in 12 months, on any contract over $500. It must be in writing, signed by everyone, with a copy signed by you to the owner before any work. It needs your name, address, phone and license number if any, dates, the work, materials and price, a progress payment schedule, the bold lien notice, the escrow notice, and the owner's right to cancel until midnight of the third business day. Disclose your property or casualty policy before work starts.
Payments taken before completion go in a New York bank escrow account within 5 business days, unless you post a bond or letter of credit. Missing escrow or a written contract can cost the greater of $250 per violation or 5% of the price, up to $2,500 per contract. A construction attorney can draft you one form.
Source: NYC DCWP, Home Improvement Contractor License Checklist · N.Y. General Business Law 770 · N.Y. General Business Law 771 · N.Y. General Business Law 773 · N.Y. Lien Law 71-a (escrow) · N.Y. CPLR 3015 (license pleading) · Nassau County, Home Improvement Licensing
Who to call: an attorney near you
Presumed an employee until you prove otherwise
An employer in New York is anyone with one or more people in employment. That includes part-timers, borrowed and leased workers, family and volunteers.
Construction has a harder test. Under the Construction Industry Fair Play Act, a worker is presumed your employee unless you can prove all three: free from your direction, doing work outside your usual business, and running an independent business. A separate business entity has to meet twelve criteria on its own. Calling employees independent contractors, or paying them off the books, is against the law.
With no employees you can skip it as a sole proprietor, or as an LLC, LLP or partnership. So can a one- or two-person corporation where those people own all the stock and hold all the offices. But the state warns that many owner-only businesses are being required to buy a policy just to work for a general contractor. So ask a GC before you bid. An insurance agent who writes contractors can price it.
Source: NY WCB, Is Coverage Required? · NY DOL, Construction Industry Fair Play Act · N.Y. Workers' Compensation Law 2
Who to call: an insurance agent near you
Getting paid: 8 months, or 4 on a single-family home
New York has no notice before filing on a private job. Your clock runs from your last item of work or materials:
- File a notice of lien with the county clerk within 8 months. On a single-family home it's 4 months. For retainage, it's 90 days after the retainage was due to be released.
- Public jobs: file within 30 days after completion and acceptance.
- Serve the owner between 5 days before and 30 days after filing.
- Mail a certified copy in that same window to whoever hired you or contracted with you, and to the main contractor if a sub hired you (Lien Law 11-b).
- File proof of service with the clerk within 35 days after filing, or the lien ends.
- A lien lasts 1 year. Sue to foreclose and file a notice of pendency in that year, or extend it. On a single-family home you can only extend by court order, not through the clerk.
A sub's lien is capped at what's earned and unpaid on the contract when the lien is filed. A payment made early to get around the lien law doesn't beat a sub's lien, but until you serve, an owner who doesn't know of the lien is protected for good-faith payments.
Job money is trust money, home improvement payments included. It's held for your subs, suppliers and workers. Divert it and let a trust claim go unpaid 31 days, and it can be larceny. A construction attorney can tell you whether a unit in a developer's subdivision counts as single-family.
Source: N.Y. Lien Law 10 · N.Y. Lien Law 11 · N.Y. Lien Law 11-b · N.Y. Lien Law 17 · N.Y. Lien Law 4 · N.Y. Lien Law 7 · N.Y. Lien Law 12 (public improvements) · N.Y. Lien Law 70 (trust funds) · N.Y. Lien Law 71 · N.Y. Lien Law 75 · N.Y. Lien Law 79-a
Who to call: an attorney near you
Capital improvement or repair: that's the whole game
New York splits your jobs in two. Either way, as a general rule you pay tax to your supplier on materials.
- Capital improvement: adds real value or life, becomes part of the property, and is meant to be permanent. A deck, a water heater, kitchen cabinets. Build the material tax into your price. You don't collect tax from the customer when you hold a properly completed Form ST-124. Keep it, and hand a copy to your subs.
- Repair, maintenance or installation service: fixing a broken step, replacing a thermostat, painting existing cabinets. That work is taxable, so you collect. The state rate is 4%, and local rates go on top.
Replacement flooring is the trap. Carpet, pad, linoleum and vinyl count as a capital improvement only as the first finished floor in new construction, a new addition or a total reconstruction.
A vendor has to register at least 20 days before starting, and taxable work may make you one, so ask. You generally can't use a resale certificate for building materials. A tenant's work can flip the answer too, if the lease says the space goes back to how it was. Keep records at least 3 years. Publication 862 dates to 2001, so check your item with the Tax Department. A CPA who works with contractors can walk you through it.
Source: NY Publication 862 · N.Y. Tax Law 1101 (capital improvement, flooring) · N.Y. Tax Law 1105 (taxable services, 4% rate) · N.Y. Tax Law 1134 (registration)
Who to call: a CPA or tax pro near you
The $200 LLC with a newspaper bill on top
Filing with the Department of State costs $200. Then comes what's unusual: publication. You run notice in two newspapers your county clerk designates for 6 consecutive weeks, then file a $50 Certificate of Publication within 120 days. Newspaper charges are on top and vary by county, so get quotes from the designated papers before you file. Failing to do it suspends your authority to do business.
After that, a biennial statement is $9, due in the calendar month you formed. LLCs with New York income also owe an annual filing fee, so ask the Tax Department or your CPA what yours is.
Personal income tax is graduated, topping out at 10.9%. S-corp timing is a numbers question for a CPA who works with contractors.
Source: NY Form IT-201 Instructions (rate schedules) · N.Y. LLC Law 1101 (fees) · N.Y. LLC Law 206 (publication) · N.Y. LLC Law 301 (biennial statement)
Who to call: a CPA or tax pro near you
Education, not legal or tax advice. Rules change. Confirm anything here with a licensed pro in New York before you rely on it. Last updated November 2026.