Selling a business in New York.
Masswell advises New York owners on confidential sales of trades, manufacturing, distribution and professional services businesses — including the bulk-sale notice that must be filed before closing and the licensing rules that tie many trades businesses to an individual master.
- Tax on the gain
- Taxed as ordinary income, with top state rates up to 10.9%; New York City residents also pay city tax.
- Before closing
- The buyer files Form AU-196.10 at least 10 days before paying or taking possession.
- Trade licenses
- In NYC, a master plumber must own a controlling interest and a master electrician must be an officer.
- Non-competes
- Sale-of-business covenants are enforced if reasonable; a 2026 Senate ban (excluding sellers) did not become law.
What buyers see in New York.
New York’s housing stock is old and its cooling equipment is dated — only about 29% of homes have central air, versus 61% using individual units — pointing to years of replacement and heat-pump conversion work. In New York City, Local Law 97 emissions limits for large buildings tighten in 2030, driving mechanical and electrical upgrades.
Private equity is active: in February 2026, a Blackstone-backed HVAC services platform acquired a New York contractor to expand across New York and New Jersey.
Industries we advise in New York:
How a sale is taxed in New York
- New York has no preferential rate for capital gains. Top state rates are 9.65% above $2,155,350, 10.3% on income from $5 million to $25 million and 10.9% above $25 million — and the high-income surcharge now runs through 2032.
- New York City residents pay city income tax on top of state tax.
- The pass-through entity tax (PTET) election is made annually by March 15; NYC has its own PTET. Coordinate elections with the year you expect to close.
Tax clearance and successor liability
- Bulk sale notice: the buyer files Form AU-196.10 with the Tax Department at least 10 days before paying for or taking possession of the business assets, whichever comes first.
- Within five business days the Department either releases the buyer (Form AU-197.1) or issues a Notice of Claim (AU-196.2), in which case the buyer must escrow the price. The Department states any tax due within 90 days.
- The seller gives buyers Form TP-153 and files a final sales tax return within 20 days after operations end. A buyer who skips these steps can be liable for the seller’s unpaid sales and use tax.
When a trades business changes hands
- New York City plumbing: for a corporation, the licensed master plumber must own at least a 51% controlling interest.
- New York City electrical: the master electrician must be listed as an officer, and moving the license to a new entity requires Electrical Board approval.
- Outside the city, most trade licensing is set by each municipality. Either way, a buyer who isn’t licensed will need the master licensee to stay involved — a central point in deal structure.
Seller non-competes in New York
New York has no non-compete statute. Courts enforce covenants given by a seller in a sale of business if they are reasonable in time and area and no broader than needed to protect the goodwill purchased. In June 2026 the Senate passed a broad ban that would have excluded sellers of at least a 15% stake, but the Assembly did not vote on it.
We prepare your business, run a confidential, competitive process with qualified buyers, and work alongside your New York CPA and attorney on the tax, licensing and closing steps above.
Our ProcessKnow where you stand before you talk to a buyer.
Get an instant value range for your business, or see how ready it is for a sale across the five areas buyers evaluate.
Selling a business in New York: FAQ
What is Form AU-196.10?
It is New York’s notification of a sale or transfer of business assets in bulk. The buyer must file it at least 10 days before paying for or taking possession of the assets. Without it, the buyer can become liable for the seller’s unpaid sales tax.
How is the sale of a business taxed in New York?
Gains are taxed as ordinary income, with top state rates of 9.65% to 10.9% depending on income, plus New York City tax for city residents. Timing, structure and PTET elections can change the result.
Can I sell my NYC plumbing or electrical business to an unlicensed buyer?
Only with planning. In New York City, a master plumber must own a controlling interest and a master electrician must be an officer of the business. Deals often keep the licensed owner involved, or add a licensed partner, through a transition.
Are seller non-competes enforceable in New York?
Yes, if reasonable. New York courts give sale-of-business covenants more latitude than employee non-competes. Pending legislation to ban most non-competes has excluded sellers of a significant stake.
What is my New York business worth?
Most owner-led businesses we see are valued at roughly 3x–4x EBITDA below $1 million of EBITDA, 4x–7x between $1 million and $5 million, and 6x–9x above $5 million. Try our business value estimator for a quick range.
Sources
- NYS Tax Department — bulk sales
- NYS Tax Department — PTET
- Anchin — FY2026 New York budget
- NYC Buildings — master plumber license instructions
- NYC Buildings — changes to electrical license
- NYC Buildings — Local Law 97
- U.S. EIA — air conditioning by state (2020)
Last reviewed October 2026. This page is general information, not tax, legal or investment advice; rules change and depend on your facts. Confirm the details with your CPA and attorney before a sale. The principals of Masswell Capital Advisors are licensed investment banking agents, registered with Burch & Company, Inc. Services involving securities shall be performed by Burch & Company.
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