Questions

Relocating business from California to New York City. Makes sense?

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Relocating business from California to New York City. Makes sense?

oscarmorasu
I have a small (one person) IT consulting business (S Corporation) in Southern California. I'm considering moving to New York City for personal resons.
During my research I found out there's a General Corporation Tax (GCT), which is 8.85% of the company's net income. Is that correct? In contrast here in California there's only a fee of 800 dollars/year for corporations.
That means I'll have to increase my rates by at least by 8.85% to cover the GCT, on top of the adjustment due to the higher cost of living in NYC, which is about 20%.
I ran the numbers and they don't add up; The rate goes through the roof.
Am I missing something? How do small consulting businesses survive in NYC?
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    robo_dev

    I would assume that you can charge higher rates in NYC, especially if your client is part of the financial services or banking industry.

    Keep in mind that if your customer is a bank, investment firm, or even show business firm which deals in the hundreds of millions of dollars, paying an IT consultant top dollar is a no-brainer for them.

    I would suspect that the cost of living in NYC is a lot more than 20% greater than Southern California, but not sure if you mean to live 'IN' the city, or just within commuting distance.

    The big variable is if you need to drive to goto NYC-based clients, then the cost of parking and insurance would be a lot higher.

    Personally, I would think it would make more sense to join an established consulting firm with established clients in NY, vs starting in a new place with no clients.

  • +
    0 Votes
    robo_dev

    I would assume that you can charge higher rates in NYC, especially if your client is part of the financial services or banking industry.

    Keep in mind that if your customer is a bank, investment firm, or even show business firm which deals in the hundreds of millions of dollars, paying an IT consultant top dollar is a no-brainer for them.

    I would suspect that the cost of living in NYC is a lot more than 20% greater than Southern California, but not sure if you mean to live 'IN' the city, or just within commuting distance.

    The big variable is if you need to drive to goto NYC-based clients, then the cost of parking and insurance would be a lot higher.

    Personally, I would think it would make more sense to join an established consulting firm with established clients in NY, vs starting in a new place with no clients.