Section 11-501
§ 11-501 Meaning of terms. (a) General. Unless a different meaning is
clearly required, any term used in this chapter shall have the same
meaning as when used in a comparable context in the laws of the United
States relating to federal income taxes, and any reference in this
chapter to the laws of the United States shall mean the provisions of
the internal revenue code of nineteen hundred fifty-four, and amendments
thereto, and other provisions of the laws of the United States relating
to federal income taxes, as the same are included in this chapter as an
appendix or as included by reference to an appendix of another chapter
enacted by the same law as enacts this chapter. (The quotation of the
aforesaid laws of the United States is intended to make them a part of
this chapter and to avoid constitutional uncertainties which might
result if such laws were merely incorporated by reference. The quotation
of a provision of the federal internal revenue code or of any other law
of the United States shall not necessarily mean that it is applicable to
or has relevance to this chapter.)
(b) "State", "this state" or "the state" when used in this chapter
shall mean the state of New York.
(c) "Local income taxes", when used in this chapter shall mean an
income tax imposed by a political subdivision of a state.
(d) " Commissioner of finance" when used in this chapter shall mean
the commissioner of finance of the city.
(e) "Department of finance" when used in this chapter shall mean the
department of finance of the city.
(f) "Tax appeals tribunal" when used in this chapter shall mean the
tax appeals tribunal established by section one hundred sixty-eight of
the charter.
(g) "Unincorporated business entire net income" when used in this
chapter shall mean the excess of the unincorporated business gross
income of an unincorporated business over its unincorporated business
deductions.
(h) "Investment capital" when used in this chapter shall mean
investments of the unincorporated business in stocks, bonds and other
securities, corporate and governmental (excluding governmental stocks,
bonds and other securities the interest or dividends from which are
fully exempt from tax under this chapter, other than any such
governmental stock, bond or other security which is sold or otherwise
disposed of during the taxable year in a transaction which results in a
gain or loss which is included in computing unincorporated business
entire net income for the taxable year), not held for sale to customers
in the regular course of business, provided, however, that in the
discretion of the commissioner of finance, there shall be deducted from
investment capital any liabilities of the unincorporated business which
are directly or indirectly attributable to investment capital.
(i) "Investment income" when used in this chapter shall mean income,
gains and losses from investment capital, to the extent included in
computing unincorporated business entire net income, less, in the
discretion of the commissioner of finance, any deductions allowable in
computing unincorporated business entire net income which are directly
or indirectly attributable to investment capital or investment income,
provided, however, that in no case shall investment income exceed
unincorporated business entire net income.
(j) "Business capital" when used in this chapter shall mean all assets
of the unincorporated business other than investment capital, less
liabilities of the unincorporated business not deducted from investment
capital, except that cash on hand and on deposit shall be treated as
investment capital or as business capital as the taxpayer may elect.
(k) "Business income" when used in this chapter shall mean
unincorporated business entire net income minus investment income.
(l) "Dealer" when used in this chapter shall mean an individual or
unincorporated entity that (A) holds or disposes of property that is
stock in trade of the taxpayer, inventory or is otherwise held for sale
to customers in the ordinary course of the taxpayer's trade or business,
or (B) regularly offers to enter into, assume, offset, assign or
otherwise terminate positions in property with customers in the ordinary
course of the taxpayer's trade or business, provided, however, an
individual or unincorporated entity shall not be treated as a dealer
based solely on such individual's or entity's ownership of an interest
in an entity that is a dealer, and provided, further, that an
unincorporated entity shall not be treated as a dealer based solely on
the ownership by a dealer of an interest in that unincorporated entity.
(m) "Unincorporated entity" when used in this chapter shall include an
entity classified as a partnership for federal income tax purposes
regardless of whether the entity is formed as a corporation, joint-stock
company, joint-stock association, body corporate or body politic or
whether the entity is organized under a federal or state statute, or
under a statute of a federally recognized Indian tribe, or under a
statute of a country other than the United States that describes or
refers to the entity as incorporated.
Section 11-502
§ 11-502 Unincorporated business defined. (a) General. An
unincorporated business means any trade, business, profession or
occupation conducted, engaged in or being liquidated by an individual or
unincorporated entity, including a partnership, a fiduciary, a
corporation in liquidation or an unincorporated entity that has made the
election permitted under paragraph (b) of subdivision one of section
11-602 of this title (but only for the period during which such election
is in effect), but not including any entity subject to tax under chapter
six of this title and not including any entity doing an insurance
business as a member of the New York insurance exchange described in
paragraph one of subsection (b) of section six thousand two hundred one
of the insurance law. Unincorporated businesses subject to tax under a
local law of the city imposing a tax on utilities shall not be subject
to tax under this chapter; provided, however, that unincorporated
businesses, other than (1) utility businesses subject to the supervision
of the state department of public service and (2) for taxable years
beginning on or after August first, two thousand two, utilities as
defined in subdivision six of section 11-1101 of this title, which are
subject to tax under a local law of the city imposing a tax on vendors
of utility services shall be subject to tax under this chapter on that
percentage of their entire net income allocable to the city under
section 11-508 of this chapter which their receipts other than those
taxable under such local law taxing vendors of utility services is of
their total receipts. If an individual or an unincorporated entity
carries on wholly or partly in the city two or more unincorporated
businesses, all such businesses shall be treated as one unincorporated
business for the purposes of this chapter. For purposes of this chapter,
an unincorporated entity shall be treated as carrying on any trade,
business, profession or occupation carried on in whole or in part in the
city by any other unincorporated entity in which the first
unincorporated entity owns an interest, and the ownership by an
unincorporated entity of an interest in another unincorporated entity
that is not carrying on any trade, business, profession, or occupation
in whole or in part in the city shall not be deemed the conduct of an
unincorporated business by the first unincorporated entity.
Notwithstanding anything to the contrary in the preceding sentence, for
taxable years beginning on or after August first, two thousand two, an
unincorporated business that is a partner in a partnership subject to
tax under a local law of the city imposing a tax on utilities, as
defined in subdivision six of section 11-1101 of this title, shall not
be considered to be carrying on the trade, business, profession or
occupation carried on by such partnership.
(b) Services as employee. The performance of services by an individual
as an employee or as an officer or director of a corporation, society,
association, or political entity, or as a fiduciary, shall not be deemed
an unincorporated business, unless such services constitute part of a
business regularly carried on by such individual.
(c) Purchase and sale for own account. (1) Definitions. (A) Property.
For purposes of this subdivision, property shall mean real and personal
property, including but not limited to, property qualifying as
investment capital within the meaning of subdivision (h) of section
11-501 of this chapter, other stocks, notes, bonds, debentures, or other
evidences of indebtedness, interest rate, currency, or equity notional
principal contracts, foreign currencies, interests in, or derivative
financial instruments (including options, forward or futures contracts,
short positions, and similar financial instruments) in any property
described above, and any commodity traded on or subject to the rules of
a board of trade or commodity exchange, provided, however, property
shall not include: (i) debt instruments issued by the taxpayer; (ii)
accounts receivable held by a factor; (iii) property held as stock in
trade, inventory or otherwise held for sale to customers in the ordinary
course of the taxpayer's trade or business; (iv) debt instruments
acquired in the ordinary course of the taxpayer's trade or business for
funds loaned, services rendered or for the sale, rental or other
transfer of property by the taxpayer; (v) interests in unincorporated
entities; or (vi) positions in property described above entered into,
assumed, offset, assigned or terminated by a dealer with respect to such
positions in property.
(B) Investor. For purposes of this subdivision, a taxpayer shall be
treated as acquiring, holding or disposing of an interest in an
unincorporated entity as an investor if: (i) the unincorporated entity
meets the requirements of subparagraph (B) of paragraph four of this
subdivision and the taxpayer does not receive a distributive share of
such entity's income, gain, loss, deduction, credit and basis from a
business carried on in whole or in part in the city that is materially
greater than its distributive share of any other item of income, gain,
loss deduction, credit or basis of such entity; or (ii) with respect to
any other unincorporated entity, the taxpayer is neither a general
partner nor authorized under the entity's governing instrument to manage
or participate in, nor managing, nor participating in, the day-to-day
business of the unincorporated entity.
(2) An individual or other unincorporated entity, except a dealer as
defined in subdivision (1) of section 11-501 of this chapter, shall not
be deemed engaged in an unincorporated business solely by reason of (A)
the purchase, holding and sale for his, her or its own account of
property, as defined in paragraph one of this subdivision, or the entry
into, assumption, offset, assignment, or other termination of a position
in any property so defined, or both, (B) the acquisition, holding or
disposition, other than in the ordinary course of a trade or business,
of interests in unincorporated entities engaged solely in activities
described in subparagraph (A), (B) or (C) of this paragraph, or (C) any
combination of the activities described in subparagraphs (A) and (B) of
this paragraph and any other activity not otherwise constituting the
conduct of an unincorporated business subject to the tax imposed by this
chapter, but this paragraph shall not apply if the unincorporated entity
is taxable as a corporation for federal income tax purposes.
(3) Notwithstanding anything to the contrary, the receipt by an
individual or other unincorporated entity of twenty-five thousand
dollars or less of gross receipts during the taxable year (determined
without regard to any deductions) from an unincorporated business wholly
or partly carried on within the city by such individual or
unincorporated entity shall not cause such individual or other
unincorporated entity to be treated as not engaged solely in the
activities described in subparagraph (A), (B) or (C) of paragraph two of
this subdivision.
(4) (A) If a taxpayer that is an unincorporated entity is primarily
engaged in (i) activities described in subparagraph (A), (B) or (C) of
paragraph two of this subdivision, or (ii) the acquisition, holding or
disposition, other than in the ordinary course of a trade or business,
of interests as an investor in unincorporated entities carrying on any
unincorporated business in whole or in part in the city, or both, the
activities described in subparagraph (A), (B), or (C) of paragraph two
of this subdivision carried on by the taxpayer or by any unincorporated
entity primarily engaged in the activities described in clause (i) or
(ii) of this subparagraph in which the taxpayer owns an interest shall
not be deemed an unincorporated business carried on by the taxpayer.
(B) For purposes of subparagraph (A) of this paragraph, an
unincorporated entity will be treated as primarily engaged in activities
described in clause (i) or (ii) of subparagraph (A) of this paragraph,
or both, if at least ninety percent of the value of its total assets is
represented by assets described in subparagraph (C) of this paragraph.
(C) For purposes of subparagraph (B) of this paragraph, assets
described in this subparagraph include:
(i) property as defined in paragraph one of this subdivision;
(ii) interests in unincorporated entities not carrying on any
unincorporated business in whole or in part in the city; and
(iii) interests in unincorporated entities carrying on an
unincorporated business in whole or in part in the city held by the
taxpayer as an investor, as defined in paragraph one of this
subdivision.
(D) For purposes of determining whether a taxpayer meets the
requirements of subparagraph (B) of this paragraph, the value of assets
described in subparagraph (C) of this paragraph shall be the average
monthly gross value of the assets of the taxpayer. For purposes of this
paragraph, the value of assets of the taxpayer that consist of real
property or marketable securities shall be the fair market value thereof
and the value of assets other than real property or marketable
securities shall be the value thereof shown on the books and records of
the taxpayer in accordance with generally accepted accounting
principles. In case it shall appear to the commissioner of finance that
the use of gross value in determining whether the requirements of
subparagraph (B) of this paragraph are met, improperly or inaccurately
reflects the taxpayer's primary activities, the commissioner of finance
is authorized in his or her discretion and in such manner as he or she
may determine, to reduce the gross value of the taxpayer's assets by
liabilities attributable thereto or to eliminate assets, so as to
properly and accurately reflect the taxpayer's primary activities.
(d) Holding, leasing or managing real property. An owner of real
property, a lessee or a fiduciary shall not be deemed engaged in an
unincorporated business solely by reason of holding, leasing or managing
real property. If an owner of real property or lessee or fiduciary
(except a dealer holding real property primarily for sale to customers
in the ordinary course of his or her trade or business) who is holding,
leasing or managing real property is also carrying on an unincorporated
business in whole or in part in the city, whether or not such
unincorporated business is carried on at or is connected with such real
property, such holding, leasing or managing of real property shall not
be deemed an unincorporated business if, and only to the extent that,
such real property is held, leased or managed for the purpose of
producing rental income from such real property or gain upon the sale or
other disposition of such real property. For purposes of this
subdivision, the conduct by such owner, lessee or fiduciary, at such
real property, of a trade, business, profession or occupation,
including, but not limited to, a garage, restaurant, laundry or health
club, shall be deemed to be an incident to the holding, leasing or
managing of such real property, and shall not be deemed the conduct of
an unincorporated business, if such trade, business, profession or
occupation is conducted solely for the benefit of tenants at such real
property, as an incidental service to such tenants, and is not open or
available to the general public, provided, however, if any such owner,
lessee or fiduciary operates a garage, parking lot or other similar
facility at such real property that is open or available to the general
public, the provision by any such owner, lessee or fiduciary of the
service of parking, garaging or storing of motor vehicles on a monthly
or longer term basis shall be deemed to be an incident to the holding,
leasing or managing of such real property, and shall not be deemed the
conduct of an unincorporated business if, and only to the extent that,
such monthly or longer term parking, garaging or storing service is
provided to tenants at such real property as an incidental service to
such tenants. If an owner, lessee or fiduciary holding, leasing or
managing real property operates at such real property a garage, parking
lot or other similar facility that is open or available to the public,
each such owner, lessee or fiduciary shall file, together with and as a
part of the returns required under section 11-514 of this chapter, a
report or schedule for each such garage, parking lot or other similar
facility, or in the discretion of the commissioner, make a separate
entry on such returns, identifying the specific location and address,
license number and licensed capacity of each such garage, parking lot or
other similar facility, and shall include such additional information,
data and other matters relating to the provision of such monthly or
longer term parking, garaging or storing service to tenants as shall be
prescribed by the commissioner of finance. If the separate information
required to be reported by any owner, lessee or fiduciary holding,
leasing or managing real property for any garage, parking lot or other
similar facility at such real property that is open or available to the
public is not contained in the returns required under section 11-514 of
this chapter, or in any amended returns, in any material respect, the
provision of parking, garaging or storing service to tenants at such
real property shall be deemed the conduct of an unincorporated business
and not incident to the holding, leasing or managing of such real
property.
(e) Sales representative. An individual, other than one who maintains
an office or who employs one or more assistants or who otherwise
regularly carries on a business, shall not be deemed engaged in an
unincorporated business solely by reason of selling goods, wares,
merchandise or insurance for more than one enterprise. For purposes of
this subdivision, space utilized solely for the display of merchandise
and/or for the maintenance and storage of records normally used in the
course of business shall not be deemed an office, and the employment of
clerical and secretarial assistance shall not be deemed the employment
of assistants.
(f) Exempt trusts and organizations. A trust or other unincorporated
organization which by reason of its purposes or activities is exempt
from federal income tax shall not be deemed an unincorporated business
(regardless of whether subject to federal income tax on unrelated
business taxable income).
Section 11-503
§ 11-503 Imposition of tax. (a) General. A tax at the rate of four
percent is hereby imposed for each taxable year, beginning with taxable
years ending after January first, nineteen hundred sixty-six, on the
unincorporated business taxable income of every unincorporated business
wholly or partly carried on within the city. This tax shall be in
addition to any other taxes imposed.
(b) Credit against tax. (1) For each taxable year beginning after
nineteen hundred eighty-six but before nineteen hundred ninety-six:
(A) if the tax computed under subdivision (a) of this section is six
hundred dollars or less, a credit shall be allowed for the entire amount
of such tax;
(B) if the tax computed under subdivision (a) of this section exceeds
six hundred dollars but is less than eight hundred dollars, a credit
shall be allowed in the amount determined by multiplying such tax by a
fraction the numerator of which is eight hundred dollars minus the
amount of such tax and the denominator of which is two hundred dollars;
or
(C) if the tax computed under subdivision (a) of this section is eight
hundred dollars or more, no credit shall be allowed.
(2) For each taxable year beginning in nineteen hundred ninety-six:
(A) if the tax computed under subdivision (a) of this section is eight
hundred dollars or less, a credit shall be allowed for the entire amount
of such tax;
(B) if the tax computed under subdivision (a) of this section exceeds
eight hundred dollars but is less than one thousand dollars, a credit
shall be allowed in the amount determined by multiplying such tax by a
fraction the numerator of which is one thousand dollars minus the amount
of such tax and the denominator of which is two hundred dollars; or
(C) if the tax computed under subdivision (a) of this section is one
thousand dollars or more, no credit shall be allowed.
(3) For each taxable year beginning after nineteen hundred ninety-six
but before two thousand nine:
(A) if the tax computed under subdivision (a) of this section is one
thousand eight hundred dollars or less, a credit shall be allowed for
the entire amount of such tax;
(B) if the tax computed under subdivision (a) of this section exceeds
one thousand eight hundred dollars but is less than three thousand two
hundred dollars, a credit shall be allowed in the amount determined by
multiplying such tax by a fraction the numerator of which is three
thousand two hundred dollars minus the amount of such tax and the
denominator of which is one thousand four hundred dollars; or
(C) if the tax computed under subdivision (a) of this section is three
thousand two hundred dollars or more, no credit shall be allowed.
(3-a) For each taxable year beginning after two thousand eight:
(A) if the tax computed under subdivision (a) of this section is three
thousand four hundred dollars or less, a credit shall be allowed for the
entire amount of such tax;
(B) if the tax computed under subdivision (a) of this section exceeds
three thousand four hundred dollars but is less than five thousand four
hundred dollars, a credit shall be allowed in the amount determined by
multiplying such tax by a fraction the numerator of which is five
thousand four hundred dollars minus the amount of such tax and the
denominator of which is two thousand dollars; or
(C) if the tax computed under subdivision (a) of this section is five
thousand four hundred dollars or more, no credit shall be allowed.
(4) If separate partnerships, joint ventures or other unincorporated
entities have substantially the same partners or members, each of such
partners or members has substantially the same interest in each of such
partnerships, joint ventures or other unincorporated entities, and such
partnerships, joint ventures or other unincorporated entities are
engaged in substantially the same business or businesses or in
substantially related businesses, all of such partnerships, joint
ventures or other unincorporated entities shall be treated as one
unincorporated business for purposes of this subdivision. The preceding
sentence shall not be construed to limit or affect the meaning or
application of any other provision of this chapter.
(5) Notwithstanding anything to the contrary, the credit allowable
under this subdivision shall be taken prior to any other credit allowed
by this section.
(c) Credit relating to stock transfer tax. (1) In addition to any
other credit permitted under this section, a taxpayer shall be allowed a
credit, to be credited or refunded in the manner hereinafter provided in
this subdivision, against the tax imposed by this chapter after the
allowance of any other credit under this section. The amount of such
credit shall be fifty percent of the tax incurred in market making
transactions under the provisions of article twelve of the tax law on
such transactions subject to such tax occurring on and after August
first, nineteen hundred seventy-six and paid by such taxpayer (except
when such tax shall have been paid pursuant to section two hundred
seventy-nine-a of the tax law).
(2) For purposes of this subdivision:
(a) the term "taxpayer" shall mean any unincorporated business subject
to tax under this chapter registered with the United States securities
and exchange commission in accordance with subsection (b) of section
fifteen of the securities exchange act of nineteen hundred thirty-four,
as amended, and acting as a dealer in a transaction described in
subparagraph (b) of this paragraph, and
(b) the term "market making transaction" shall mean any transaction
involving a sale (including a short sale) by a dealer of shares or
certificates subject to the tax imposed by article twelve of the tax
law, provided such shares or certificates are sold:
(i) as stock in trade or inventory or as property held for sale in the
ordinary course of such dealer's trade or business (including transfers
which are part of an underwriting),
(ii) in (a) a bona fide arbitrage transaction; (b) a bona fide hedge
transaction involving a long or short position in any equity security
and a long or short position in a security entitling the holder to
acquire or sell such equity security; or (c) a risk arbitrage
transaction in connection with a merger, acquisition, tender offer,
recapitalization, reorganization, or similar transaction, or
(iii) to offset a transaction made in error.
Provided, however, that, except as to subclause (c) of clause (ii) of
subparagraph (b) of this paragraph, the term "market making transaction"
shall not include any sale of shares or certificates identified in such
dealer's records as a security held for investment within the meaning of
section twelve hundred thirty-six of the internal revenue code.
(3) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded in accordance with the provisions of section 11-526
of this chapter, except as otherwise provided in subdivision (g) of
sections 11-512 and 11-514 of this chapter; provided, however, that the
provisions of this chapter notwithstanding, the amount to be refunded
pursuant to this subdivision shall not be paid prior to the first day of
the eighth month following the close of the taxable year, and the
provisions of subdivision (c) of section 11-528 of this chapter
notwithstanding, interest shall be allowed and paid on the overpayment
of the credit under this subdivision from the first day of the eleventh
month following the close of the taxable year, or three months after a
claim for the credit or refund provided for in this subdivision has been
filed, whichever is later.
(4) Provided, however, that the credit provided under this subdivision
shall be allowed only to the extent that the amount of credit allowable
with respect to market making transactions under the provisions of this
subdivision (determined without regard to the provisions of this
paragraph) exceeds fifty percent of all rebates (provided for under the
provisions of section two hundred eighty-a of article twelve of the tax
law) allowed for such taxes incurred in the same market making
transactions with respect to which the credit is determined. No credit
shall be allowed under this subdivision with respect to any tax incurred
in market making transactions occurring on or after October first,
nineteen hundred eighty-one.
(d) Credit relating to certain sales and compensating use taxes. (1)
In addition to the credits allowed by subdivisions (b) and (c) of this
section, a taxpayer shall be allowed a credit against the tax imposed by
this chapter to be credited or refunded in the manner hereinafter
provided in this section. The amount of such credit shall be the excess
of (A) the amount of sales and compensating use taxes imposed by section
eleven hundred seven of the tax law during the taxpayer's taxable year
which became legally due on or after and was paid on or after July
first, nineteen hundred seventy-seven, less any credit or refund of such
taxes, with respect to the purchase or use by the taxpayer of machinery
or equipment for use or consumption directly and predominantly in the
production of tangible personal property, gas, electricity,
refrigeration or steam for sale, by manufacturing, processing,
generating, assembling, refining, mining or extracting, or telephone
central office equipment or station apparatus or comparable telegraph
equipment for use directly and predominantly in receiving at destination
or initiating and switching telephone or telegraph communication, but
not including parts with a useful life of one year or less or tools or
supplies used in connection with such machinery, equipment or apparatus
over (B) the amount of any credit for such sales and compensating use
taxes allowed or allowable against the taxes imposed by subchapter two
of chapter eleven of this title, for any periods embraced within the
taxable year of the taxpayer under this chapter.
(2) The credit allowed under this section for any taxable year shall
be deemed to be an overpayment of tax by the taxpayer to be credited or
refunded, without interest, in accordance with the provisions of section
11-526 of this chapter.
(3) Where the taxpayer receives a refund or credit of any tax imposed
under section eleven hundred seven of the tax law for which the taxpayer
had claimed a credit under the provisions of this section in a prior
taxable year, the amount of such tax refund or credit shall be added to
the tax imposed by this section, and such amount shall be subtracted in
computing unincorporated business taxable income for the taxable year.
(e) Credit relating to the annual increase in certain payments to a
landlord by a taxpayer relocating industrial and commercial employment
opportunities.
(1) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
chapter to be credited or refunded, without interest, in the manner
hereinafter provided in this section.
(A) Where a taxpayer shall have relocated to the city from a location
outside the state, and by such relocation shall have created a minimum
of one hundred industrial or commercial employment opportunities, and
where such taxpayer shall have entered into a written lease for the
relocation premises, the terms of which lease provide for increased
additional payments to the landlord which are based solely and directly
upon any increase or addition in real estate taxes imposed on the leased
premises, the taxpayer upon approval and certification by the industrial
and commercial incentive board as hereinafter provided shall be entitled
to a credit against the tax imposed by this chapter. The amount of such
credit shall be: An amount equal to the annual increased payments
actually made by the taxpayer to the landlord which are solely and
directly attributable to an increase or addition to the real estate tax
imposed upon the leased premises. Such credit shall be allowed only to
the extent that the taxpayer has not otherwise claimed said amount as a
deduction against the tax imposed by this chapter.
The industrial and commercial incentive board in approving and
certifying to the qualifications of the taxpayer to receive the tax
credit provided for herein shall first determine that the applicant has
met the requirements of this section, and further, that the granting of
the tax credit to the applicant is in the "public interest." In
determining that the granting of the tax credit is in the public
interest, the board shall make affirmative findings that: the granting
of the tax credit to the applicant will not effect an undue hardship on
similar taxpayers already located within the city; the existence of this
tax incentive has been instrumental in bringing about the relocation of
the applicant to the city; and the granting of the tax credit will
foster the economic recovery and economic development of the city.
The tax credit, if approved and certified by the industrial and
commercial incentive board, must be utilized annually by the taxpayer
for the length of the term of the lease or for a period not to exceed
ten years from the date of relocation, whichever period is shorter.
(B) Definitions: When used in this section, "Employment opportunity"
means the creation of a full time position of gainful employment for an
industrial or commercial employee and the actual hiring of such employee
for the said position.
"Industrial employee" means one engaged in the manufacture or
assembling of tangible goods or the processing of raw materials.
"Commercial employee" means one engaged in the buying, selling or
otherwise providing of goods or services other than on a retail basis.
"Retail" means the selling or otherwise disposing or furnishing of
tangible goods or services directly to the ultimate user or consumer.
"Full time position" means the hiring of an industrial or commercial
employee in a position of gainful employment where the number of hours
worked by such employee is not less than thirty hours during any given
week.
"Industrial and commercial incentive board" means the board created
pursuant to subchapter two of chapter two of this title.
(2) The credit allowed under this section for any taxable year shall
be deemed to be an overpayment of tax by the taxpayer to be credited or
refunded, without interest, in accordance with the provisions of section
11-526 of this chapter.
(f) Credit relating to certain expenses involved in the cost of
relocating industrial and commercial employment opportunities. (1) In
addition to any other credit allowed by this section, a taxpayer shall
be allowed a credit against the tax imposed by this chapter to be
credited or refunded in the manner hereinafter provided in this section.
The amount of such credit shall be:
(A) A maximum of three hundred dollars for each commercial employment
and a maximum of five hundred dollars for each industrial employment
opportunity relocated to the city from an area outside the state. Such
credit shall be allowed to a taxpayer who relocates a minimum of ten
employment opportunities. The credit shall be allowed against employment
opportunity relocation costs incurred by the taxpayer. Such credit shall
be allowed only to the extent that the taxpayer has not claimed a
deduction for allowable employment opportunity relocation costs. The
credit allowed hereunder may be taken by the taxpayer in whole or in
part in the year in which the employment opportunity is relocated by
such taxpayer or either of the two years succeeding such event;
provided, however, that no credit shall be allowed under this
subdivision to a taxpayer for industrial employment opportunities
relocated to premises (i) that are within an industrial business zone
established pursuant to section 22-626 of this code and (ii) for which a
binding contract to purchase or lease was first entered into by the
taxpayer on or after July first, two thousand five.
The commissioner of finance is empowered to promulgate rules and
regulations and to prescribe the form of application to be used.
(B) Definitions: When used in this section, "Employment Opportunity"
means the creation of a full time position of gainful employment for an
industrial or commercial employee and the actual hiring of such employee
for the said position.
"Industrial Employee" means one engaged in the manufacture or
assembling of tangible goods or the processing of raw materials.
"Commercial Employee" means one engaged in the buying, selling or
otherwise providing of goods or services other than on a retail basis.
"Retail" means the selling or otherwise disposing of tangible goods
directly to the ultimate user or consumer.
"Full Time Position" means the hiring of an industrial or commercial
employee in a position of gainful employment where the number of hours
worked by such employee is not less than thirty hours during any given
work week.
"Employment Opportunity Relocation Costs" means the costs incurred by
the taxpayer in moving furniture, files, papers and office equipment
into the city from a location outside the state; the costs incurred by
the taxpayer in the moving from a location outside the state; the costs
of installation of telephones and other communications equipment
required as a result of the relocation to the city from a location
outside the state; the cost incurred in the purchase of office furniture
and fixtures required as a result of the relocation to the city from a
location outside the state; and the cost of renovation of the premises
to be occupied as a result of the relocation provided, however, that
such renovation costs shall be allowable only to the extent that they do
not exceed seventy-five cents per square foot of the total area utilized
by the taxpayer in the occupied premises.
(2) The credit allowed under this section for any taxable year shall
be deemed to be an overpayment of tax by the taxpayer to be credited or
refunded without interest, in accordance with the provisions of section
11-526 of this chapter.
(i) Relocation and employment assistance credit. (1) In addition to
any other credit allowed by this section, a taxpayer that has obtained
the certifications required by chapter six-B of title twenty-two of the
code shall be allowed a credit against the tax imposed by this chapter.
The amount of the credit shall be the amount determined by multiplying
five hundred dollars or, in the case of a taxpayer that has obtained
pursuant to chapter six-B of such title twenty-two a certification of
eligibility dated on or after July first, nineteen hundred ninety-five,
one thousand dollars or, in the case of an eligible business that has
obtained pursuant to chapter six-B of such title twenty-two a
certification of eligibility dated on or after July first, two thousand,
for a relocation to eligible premises located within a revitalization
area defined in subdivision (n) of section 22-621 of the code, three
thousand dollars, by the number of eligible aggregate employment shares
maintained by the taxpayer during the taxable year with respect to
particular premises to which the taxpayer has relocated; provided,
however, with respect to a relocation for which no application for a
certificate of eligibility is submitted prior to July first, two
thousand three, to eligible premises that are not within a
revitalization area, if the date of such relocation as determined
pursuant to subdivision (j) of section 22-621 of the code is before July
first, nineteen hundred ninety-five, the amount to be multiplied by the
number of eligible aggregate employment shares shall be five hundred
dollars, and with respect to a relocation for which no application for a
certificate of eligibility is submitted prior to July first, two
thousand three, to eligible premises that are within a revitalization
area, if the date of such relocation as determined pursuant to
subdivision (j) of such section is before July first, nineteen hundred
ninety-five, the amount to be multiplied by the number of eligible
aggregate employment shares shall be five hundred dollars, and if the
date of such relocation as determined pursuant to subdivision (j) of
such section is on or after July first, nineteen hundred ninety-five,
and before July first, two thousand, one thousand dollars; provided,
however, that no credit shall be allowed for the relocation of any
retail activity or hotel services; provided, further, that no credit
shall be allowed under this subdivision to any taxpayer that has elected
pursuant to subdivision (d) of section 22-622 of the code to take such
credit against a gross receipts tax imposed under chapter eleven of this
title; and provided that in the case of an eligible business that has
obtained pursuant to chapter six-B of such title twenty-two
certifications of eligibility for more than one relocation, the portion
of the total amount of eligible aggregate employment shares to be
multiplied by the dollar amount specified in this paragraph for each
such certification of a relocation shall be the number of total
attributed eligible aggregate employment shares determined with respect
to such relocation pursuant to subdivision (o) of section 22-621 of the
code. For purposes of this subdivision, the terms "eligible aggregate
employment shares," "relocate," "retail activity" and "hotel services"
shall have the meanings ascribed by section 22-621 of the code.
(2) The credit allowed under this subdivision with respect to eligible
aggregate employment shares maintained with respect to particular
premises to which the taxpayer has relocated shall be allowed for the
first taxable year during which such eligible aggregate employment
shares are maintained with respect to such premises and for any of the
twelve succeeding taxable years during which eligible aggregate
employment shares are maintained with respect to such premises; provided
that the credit allowed for the twelfth succeeding taxable year shall be
calculated by multiplying the number of eligible aggregate employment
shares maintained with respect to such premises in the twelfth
succeeding taxable year by the lesser of one and a fraction the
numerator of which is such number of days in the taxable year of
relocation less the number of days the eligible business maintained
employment shares in the eligible premises in the taxable year of
relocation and the denominator of which is the number of days in such
twelfth succeeding taxable year during which such eligible aggregate
employment shares are maintained with respect to such premises. Except
as provided in paragraph four of this subdivision, if the amount of the
credit allowable under this subdivision for any taxable year exceeds the
tax imposed for such year, the excess may be carried over, in order, to
the five immediately succeeding taxable years and, to the extent not
previously deductible, may be deducted from the taxpayer's tax for such
years.
(3) The credit allowable under this subdivision shall be deducted
after the credits allowed by subdivisions (b) and (j) of this section,
but prior to the deduction of any other credit allowed by this section.
(4) In the case of a taxpayer that has obtained a certification of
eligibility pursuant to chapter six-B of title twenty-two of the code
dated on or after July first, two thousand for a relocation to eligible
premises located within the revitalization area defined in subdivision
(n) of section 22-621 of the code, the credits allowed under this
subdivision, or in the case of a taxpayer that has relocated more than
once, the portion of such credits attributed to such certification of
eligibility pursuant to paragraph one of this subdivision, against the
tax imposed by this chapter for the taxable year of such relocation and
for the four taxable years immediately succeeding the taxable year of
such relocation, shall be deemed to be overpayments of tax by the
taxpayer to be credited or refunded, without interest, in accordance
with the provisions of section 11-526 of this chapter. For such taxable
years, such credits or portions thereof may not be carried over to any
succeeding taxable year; provided, however, that this paragraph shall
not apply to any relocation for which an application for a certification
of eligibility was not submitted prior to July first, two thousand
three, unless the date of such relocation is on or after July first, two
thousand.
(j) (1) If a partner in an unincorporated business is taxable under
this chapter and is required to include in unincorporated business
taxable income his, her or its distributive share of income, gain, loss
and deductions of, or guaranteed payments from, such unincorporated
business, such partner shall be allowed a credit against the tax imposed
by this chapter equal to the lesser of the amounts determined in
subparagraphs (A) and (B) of this paragraph:
(A) The amount determined in this subparagraph is the product of (i)
the sum of (I) the tax imposed by this chapter on the unincorporated
business for its taxable year ending within or with the taxable year of
the partner and paid by the unincorporated business and (II) the amount
of any credit or credits taken by the unincorporated business under this
section (except the credit allowed by subdivision (b) of this section)
for its taxable year ending within or with the taxable year of the
partner, to the extent that such credits do not reduce such
unincorporated business's tax below zero, and (ii) a fraction, the
numerator of which is the net total of the partner's distributive share
of income, gain, loss and deductions of, and guaranteed payments from,
the unincorporated business for such taxable year, and the denominator
of which is the sum, for such taxable year, of the net total
distributive shares of income, gain, loss and deductions of, and
guaranteed payments to, all partners in the unincorporated business for
whom or which such net total (as separately determined for each partner)
is greater than zero.
(B) The amount determined in this subparagraph is the difference
between (i) the tax computed pursuant to this chapter on the
unincorporated business taxable income of the partner, without allowance
of any credits allowed by this section, and (ii) the tax so computed,
determined as if the partner had no such distributive share or
guaranteed payments with respect to the unincorporated business,
provided, however, that the amounts computed in clauses (i) and (ii) of
this subparagraph shall be computed with the following modifications:
(I) such amounts shall be computed without taking into account any
carryforward or carryback by the partner of a net operating loss;
(II) if, prior to taking into account any distributive share or
guaranteed payments from any unincorporated business or any net
operating loss carryforward or carryback, the unincorporated business
taxable income of the partner is less than zero, such unincorporated
business taxable income shall be treated as zero; and
(III) if such partner's net total distributive share of income, gain,
loss and deductions of, and guaranteed payments from, any unincorporated
business is less than zero, such net total shall be treated as zero. The
amount determined in this subparagraph shall not be less than zero.
(2) (A) Notwithstanding anything to the contrary in paragraph one of
this subdivision, the credit or the sum of the credits that may be taken
by a partner for a taxable year under this subdivision with respect to
an unincorporated business or unincorporated businesses in which he, she
or it is a partner shall not exceed the tax imposed on the
unincorporated business taxable income of such partner under this
chapter for such taxable year reduced by the credit allowed under
subdivision (b) of this section. If the credit allowed under paragraph
one of this subdivision or the sum of such credits exceeds such tax as
so reduced, the amount of the excess may be carried forward, in order,
to each of the seven immediately succeeding taxable years and, to the
extent not previously taken, shall be allowed as a credit in each of
such years. In applying the provisions of the preceding sentence, the
credit determined for the taxable year under paragraph one of this
subdivision shall be taken before taking any credit carryforward
pursuant to this paragraph and the credit carryforward attributable to
the earliest taxable year shall be taken before taking a credit
carryforward attributable to a subsequent taxable year.
(B) Notwithstanding anything to the contrary in subparagraph (A) of
this paragraph, in the case of a partner which is a partnership, no
credit carryforward to any taxable year shall be allowed unless one or
more of the partners therein during such taxable year were persons
having a proportionate interest or interests, amounting to at least
eighty percent of all such interests, in the unincorporated business
gross income and unincorporated business deductions of the partnership
which was allowed the credit for which a carryforward is claimed. In
such event, the carryforward allowable on account of such credit shall
not exceed the percentage of the amount otherwise allowable, determined
by dividing (i) the sum of the proportionate interests in the
unincorporated business gross income and unincorporated business
deductions of the partnership, for the year to which the credit is
carried forward, attributable to such partners, by (ii) the sum of such
proportionate interests owned by all partners for such taxable year. The
amount by which the carryforward otherwise allowable exceeds the amount
allowable pursuant to the preceding sentence shall not be a carryforward
to any other taxable year.
(3) The credit allowed under this subdivision shall not be allowed to
a partner in an unincorporated business with respect to any tax paid by
the unincorporated business under this chapter for any taxable year
beginning before July first, nineteen hundred ninety-four.
(4) Notwithstanding anything to the contrary, the credit allowable
under this subdivision shall be taken after the credit allowed by
subdivision (b) of this section is taken, but before any other credit
allowed by this section is taken.
(5) The commissioner of finance of the city of New York shall convene
a working group, consisting of representatives of the department of
finance of the city of New York and representatives of affected
industries, and other persons the commissioner deems appropriate, to
study the treatment under the unincorporated business tax of income from
investment and real estate activities and the impact of the credit
permitted by this subdivision, including but not limited to cases where
interests in a taxpayer are held by another taxpayer subject to tax on
unincorporated business taxable income and the first taxpayer is
entitled to claim a deduction for a net operating loss carryover and the
second is not entitled to a corresponding deduction with the result, in
certain cases, that the net income allocated to the second taxpayer may
be subject to an effective rate of tax in excess of the rate imposed by
this chapter. In addition, the working group shall also study the tax
treatment of parking garages which are open or available to the general
public and which also provide available space to tenants. In conducting
such study, such working group shall take into account such factors as
economic development, tax administration and other goals of tax policy
and shall consider alternatives that would reduce disincentives for
investing in corporations and other entities engaged in business in the
city of New York, such as exempting income from investment activities
from the tax on unincorporated business taxable income. The commissioner
shall prepare a report based on the deliberations of the working group
on or before April fifteenth, nineteen hundred ninety-five.
(k) Credit relating to certain sales and compensating use taxes on
certain services. (1) In addition to any other credit allowed by this
section, a taxpayer shall be allowed a credit against the tax imposed by
this chapter to be credited or refunded in the manner hereinafter
provided in this subdivision. The amount of such credit shall be equal
to the amount of sales and compensating use taxes imposed by section
eleven hundred seven of the tax law during the taxpayer's taxable year
(and the amount of any interest imposed in connection therewith) which
was paid after January first, nineteen hundred ninety-five, less any
credit or refund of such taxes (or such interest), with respect to the
purchase or use by the taxpayer of the services described in subdivision
(b) of section eleven hundred five-b of the tax law.
(2) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded, without interest, in accordance with the
provisions of section 11-526 of this chapter.
(3) Where the taxpayer receives a refund or credit of any tax imposed
under section eleven hundred seven of the tax law (or of any interest
imposed in connection therewith) for which the taxpayer had claimed a
credit under this subdivision in a prior taxable year, the amount of
such tax (or such interest) refund or credit shall be added to the tax
imposed by this chapter, and such amount shall be subtracted in
computing unincorporated business taxable income for the taxable year.
(l) Lower Manhattan relocation and employment assistance credit. (1)
In addition to any other credit allowed by this section, a taxpayer that
has obtained the certifications required by chapter six-C of title
twenty-two of the code shall be allowed a credit against the tax imposed
by this chapter. The amount of the credit shall be the amount determined
by multiplying three thousand dollars by the number of eligible
aggregate employment shares maintained by the taxpayer during the
taxable year with respect to eligible premises to which the taxpayer has
relocated; provided, however, that no credit shall be allowed for the
relocation of any retail activity or hotel services; provided, further,
that no credit shall be allowed under this subdivision to any taxpayer
that has elected pursuant to subdivision (d) of section 22-624 of the
code to take such credit against a gross receipts tax imposed under
chapter eleven of this title. For purposes of this subdivision, the
terms "eligible aggregate employment shares", "eligible premises",
"relocate", "retail activity" and "hotel services" shall have the
meanings ascribed by section 22-623 of the code.
(2) The credit allowed under this subdivision with respect to eligible
aggregate employment shares maintained with respect to eligible premises
to which the taxpayer has relocated shall be allowed for the taxable
year of the relocation and for any of the twelve succeeding taxable
years during which eligible aggregate employment shares are maintained
with respect to eligible premises; provided that the credit allowed for
the twelfth succeeding taxable year shall be calculated by multiplying
the number of eligible aggregate employment shares maintained with
respect to eligible premises in the twelfth succeeding taxable year by
the lesser of one and a fraction the numerator of which is such number
of days in the taxable year of relocation less the number of days the
taxpayer maintained employment shares in eligible premises in the
taxable year of relocation and the denominator of which is the number of
days in such twelfth succeeding taxable year during which such eligible
aggregate employment shares are maintained with respect to such
premises.
(3) Except as provided in paragraph four of this subdivision, if the
amount of the credit allowable under this subdivision for any taxable
year exceeds the tax imposed for such year, the excess may be carried
over, in order, to the five immediately succeeding taxable years and, to
the extent not previously deductible, may be deducted from the
taxpayer's tax for such years.
(4) The credits allowed under this subdivision, against the tax
imposed by this chapter for the taxable year of the relocation and for
the four taxable years immediately succeeding the taxable year of such
relocation, shall be deemed to be overpayments of tax by the taxpayer to
be credited or refunded, without interest, in accordance with the
provisions of section 11-526 of this chapter. For such taxable years,
such credits or portions thereof may not be carried over to any
succeeding taxable year.
(5) The credit allowable under this subdivision shall be deducted
after the credits allowed by subdivisions (b), (i) and (j) of this
section, but prior to the deduction of any other credit allowed by this
section.
* (m) Film production credit. (1) allowance of credit. A taxpayer
which is a qualified film production company as defined in this
subdivision and which is subject to tax under this chapter, shall be
allowed a credit against the unincorporated business income tax imposed
pursuant to this chapter, in accordance with the provisions in paragraph
(5) of this subdivision, to be computed as hereinafter provided.
(2) The amount of the credit shall be the product of five percent and
the qualified production costs paid or incurred in the production of a
qualified film, provided that the qualified production costs (excluding
post production costs) paid or incurred which are attributable to the
use of tangible property or the performance of services at a qualified
film production facility in the production of such qualified film equal
or exceed seventy-five percent of the production costs (excluding post
production costs) paid or incurred which are attributable to the use of
tangible property or the performance of services at any film production
facility within and without the city of New York in the production of
such qualified film. However, if the qualified production costs
(excluding post production costs) which are attributable to the use of
tangible property or the performance of services at a qualified film
production facility in the production of such qualified film are less
than three million dollars, then the portion of the qualified
productions costs attributable to the use of tangible property or the
performance of services in the production of such qualified film outside
of a qualified film production facility shall be allowed only if the
shooting days spent in the city of New York outside of a film production
facility in the production of such qualified film equal or exceed
seventy-five percent of the total shooting days spent within and without
the city of New York outside of a film production facility in the
production of such qualified film. The credit shall be allowed for the
taxable year in which the production of such qualified film is
completed.
(3) No qualified production costs used by a taxpayer either as the
basis for the allowance of the credit provided for under this
subdivision or used in the calculation of the credit provided for under
this subdivision shall be used by such taxpayer to claim any other
credit allowed pursuant to this title.
(4) Definitions. As used in this subdivision, the following terms
shall have the following meanings:
(A) "Qualified production costs" means production costs only to the
extent such costs are attributable to the use of tangible property or
the performance of services within the city of New York directly and
predominantly in the production (including pre-production and post
production) of a qualified film.
(B) "Production costs" means any costs for tangible property used and
services performed directly and predominantly in the production
(including pre-production and post production) of a qualified film.
"Production costs" shall not include (i) costs for a story, script or
scenario to be used for a qualified film and (ii) wages or salaries or
other compensation for writers, directors, including music directors,
producers and performers (other than background actors with no scripted
lines). "Production costs" generally include technical and crew
production costs, such as expenditures for film production facilities,
or any part thereof, props, makeup, wardrobe, film processing, camera,
sound recording, set construction, lighting, shooting, editing and
meals.
(C) "Qualified film" means a feature-length film, television film,
television pilot and/or each episode of a television series, regardless
of the medium by means of which the film, pilot or episode is created or
conveyed. "Qualified film" shall not include (i) a documentary film,
news or current affairs program, interview or talk program, "how-to"
(i.e., instructional) film or program, film or program consisting
primarily of stock footage, sporting event or sporting program, game
show, award ceremony, film or program intended primarily for industrial,
corporate or institutional end-users, fundraising film or program,
daytime drama (i.e., daytime "soap opera"), commercials, music videos or
"reality" program, or (ii) a production for which records are required
under section 2257 of title 18, United States code, to be maintained
with respect to any performer in such production (reporting of books,
films, etc. with respect to sexually explicit conduct).
(D) "Film production facility" shall mean a building and/or complex of
buildings and their improvements and associated back-lot facilities in
which films are or are intended to be regularly produced and which
contain at least one sound stage.
(E) "Qualified film production facility" shall mean a film production
facility in the city of New York, which contains at least one sound
stage having a minimum of seven thousand square feet of contiguous
production space.
(F) "Qualified film production company" is an unincorporated business
which is principally engaged in the production of a qualified film and
controls the qualified film during production.
(5) Application of credit. (A) If the amount of the credit allowable
under this subdivision for any taxable year exceeds the taxpayer's tax
for such year, fifty percent of the excess shall be treated as an
overpayment of tax to be credited or refunded as provided in section
11-526 of this chapter, provided, however, that notwithstanding the
provisions of section 11-528 of this chapter, no interest shall be paid
thereon. The balance of such credit not credited or refunded in such
taxable year may be carried over to the immediately succeeding taxable
year and may be deducted from the taxpayer's tax for such year. The
excess, if any, of the amount of the credit over the tax for such
succeeding year shall be treated as an overpayment of tax to be credited
or refunded in accordance with the provisions of section 11-526 of this
chapter, provided, however, that notwithstanding the provisions of
section 11-528 of this chapter, no interest shall be paid thereon.
(B) Notwithstanding anything contained in this section to the
contrary, the credit provided by this subdivision shall be allowed
against the taxes authorized by this chapter for the taxable year after
reduction by all other credits permitted by this chapter.
* NB Expired August 20, 2008
(n) Industrial business zone tax credit. (1) For taxable years
beginning on or after January first, two thousand six, in addition to
any other credit allowed by this section, an eligible business that
first enters into a binding contract on or after July first, two
thousand five to purchase or lease eligible premises to which it
relocates shall be allowed a one-time credit against the tax imposed by
this chapter to be credited or refunded in the manner hereinafter
provided in this subdivision. The amount of such credit shall be one
thousand dollars per full-time employee; provided, however, that the
amount of such credit shall not exceed the lesser of actual relocation
costs or one hundred thousand dollars.
(2) When used in this subdivision, the following terms shall have the
following meanings:
"Eligible business" means any business subject to tax under this
chapter that (A) has been conducting substantial business operations and
engaging primarily in industrial and manufacturing activities at one or
more locations within the city of New York or outside the state of New
York continuously during the twenty-four consecutive full months
immediately preceding relocation, (B) has leased the premises from which
it relocates continuously during the twenty-four consecutive full months
immediately preceding relocation, (C) first enters into a binding
contract on or after July first, two thousand five to purchase or lease
eligible premises to which such business will relocate, and (D) will be
engaged primarily in industrial and manufacturing activities at such
eligible premises.
"Eligible premises" means premises located entirely within an
industrial business zone. For any eligible business, an industrial
business zone tax credit shall not be granted with respect to more than
one eligible premises.
"Full-time employee" means (A) one person gainfully employed in an
eligible premises by an eligible business where the number of hours
required to be worked by such person is not less than thirty-five hours
per week; or (B) two persons gainfully employed in an eligible premises
by an eligible business where the number of hours required to be worked
by each such person is more than fifteen hours per week but less than
thirty-five hours per week.
"Industrial business zone" means an area within the city of New York
established pursuant to section 22-626 of this code.
"Industrial business zone tax credit" means a credit, as provided for
in this subdivision, against a tax imposed under this chapter.
"Industrial and manufacturing activities" means activities involving
the assembly of goods to create a different article, or the processing,
fabrication, or packaging of goods. Industrial and manufacturing
activities shall not include waste management or utility services.
"Relocation" means the physical relocation of furniture, fixtures,
equipment, machinery and supplies directly to an eligible premises, from
one or more locations of an eligible business, including at least one
location at which such business conducts substantial business operations
and engages primarily in industrial and manufacturing activities. For
purposes of this subdivision, the date of relocation shall be (A) the
date of the completion of the relocation to the eligible premises or (B)
ninety days from the commencement of the relocation to the eligible
premises, whichever is earlier.
"Relocation costs" means costs incurred in the relocation of such
furniture, fixtures, equipment, machinery and supplies, including, but
not limited to, the cost of dismantling and reassembling equipment and
the cost of floor preparation necessary for the reassembly of the
equipment. Relocation costs shall include only such costs that are
incurred during the ninety-day period immediately following the
commencement of the relocation to an eligible premises. Relocation costs
shall not include any costs for structural or capital improvements or
items purchased in connection with the relocation.
(3) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded without interest, in accordance with the provisions
of section 11-526 of this chapter.
(4) The number of full-time employees for the purposes of calculating
an industrial business zone tax credit shall be the average number of
full-time employees, calculated on a weekly basis, employed in the
eligible premises by the eligible business in the fifty-two week period
immediately following relocation.
(5) The credit allowed under this subdivision must be taken by the
taxpayer in the taxable year in which such fifty-two week period ends.
(6) For the purposes of calculating entire net income in the taxable
year that an industrial business zone tax credit is allowed, a taxpayer
must add back the amount of the credit allowed under this subdivision,
to the extent of any relocation costs deducted in the current taxable
year or a prior taxable year in calculating federal taxable income.
(7) The credit allowed under this subdivision shall not be granted for
an eligible business for more than one relocation. Notwithstanding the
foregoing, an industrial business zone tax credit allowed under this
subdivision shall not be granted if the eligible business receives
benefits pursuant to chapter six-B or six-C of title twenty-two of this
code, through a grant program administered by the business relocation
assistance corporation, or through the New York city printers relocation
fund grant.
(8) The commissioner of finance is authorized to promulgate rules and
regulations and to prescribe forms necessary to effectuate the purposes
of this subdivision.
(o) Biotechnology Credit. (a)(1) A taxpayer that is a qualified
emerging technology company, engages in biotechnologies, and meets the
eligibility requirements of this subdivision, shall be allowed a credit
against the tax imposed by this subchapter. The amount of credit shall
be equal to the sum of the amounts specified in subparagraphs (3), (4),
(5) of this paragraph, subject to the limitations in subparagraph (7) of
this paragraph and paragraph (b) of this subdivision. For the purposes
of this subdivision, "qualified emerging technology company" shall mean
a company located in city: (A) whose primary products or services are
classified as emerging technologies and whose total annual product sales
are ten million dollars or less; or (B) a company that has research and
development activities in city and whose ratio of research and
development funds to net sales equals or exceeds the average ratio for
all surveyed companies classified as determined by the National Science
Foundation in the most recent published results from its Survey of
Industry Research and Development, or any comparable successor survey as
determined by the department, and whose total annual product sales are
ten million dollars or less. For the purposes of this subdivision, the
definition of research and development funds shall be the same as that
used by the National Science Foundation in the aforementioned survey.
For the purposes of this subdivision, "biotechnologies" shall mean the
technologies involving the scientific manipulation of living organisms,
especially at the molecular and/or the sub-molecular genetic level, to
produce products conducive to improving the lives and health of plants,
animals, and humans; and the associated scientific research,
pharmacological, mechanical, and computational applications and services
connected with these improvements. Activities included with such
applications and services shall include, but not be limited to,
alternative mRNA splicing, DNA sequence amplification, antigenetic
switching bioaugmentation, bioenrichment, bioremediation, chromosome
walking, cytogenetic engineering, DNA diagnosis, fingerprinting, and
sequencing, electroporation, gene translocation, genetic mapping,
site-directed mutagenesis, bio-transduction, bio-mechanical and
bio-electrical engineering, and bio-informatics.
(2) An eligible taxpayer shall (A) have no more than one hundred
full-time employees, of which at least seventy-five percent are employed
in the city, (B) have a ratio of research and development funds to net
sales, as referred to in section thirty-one hundred two-e of the public
authorities law, which equals or exceeds six percent during the calendar
year ending with or within the taxable year for which the credit is
claimed, and (C) have gross revenues, along with the gross revenues of
its "affiliates" and "related members" not exceeding twenty million
dollars for the calendar year immediately preceding the calendar year
ending with or within the taxable year for which the credit is claimed.
For the purposes of this subdivision, "affiliates" shall mean those
corporations that are members of the same affiliated group (as defined
in section fifteen hundred four of the internal revenue code) as the
taxpayer. For the purposes of this subdivision, "related members" shall
mean a person, corporation, or other entity, including an entity that is
treated as a partnership or other pass-through vehicle for purposes of
federal taxation, whether such person, corporation or entity is a
taxpayer or not, where one such person, corporation or entity, or set of
related persons, corporations or entities, directly or indirectly owns
or controls a controlling interest in another entity. Such entity or
entities may include all taxpayers under chapters six, eleven and
seventeen of this title, and subchapters two and three of this chapter.
A controlling interest shall mean, in the case of a corporation, either
thirty percent or more of the total combined voting power of all classes
of stock of such corporation, or thirty percent or more of the capital,
profits or beneficial interest in such voting stock of such corporation;
and in the case of a partnership, association, trust or other entity,
thirty percent or more of the capital, profits or beneficial interest in
such partnership, association, trust or other entity.
(3) An eligible taxpayer shall be allowed a credit for eighteen per
centum of the cost or other basis for federal income tax purposes of
research and development property that is acquired by the taxpayer by
purchase as defined in section 179(d) of the internal revenue code and
placed in service during the calendar year that ends with or within the
taxable year for which the credit is claimed. Provided, however, for the
purposes of this paragraph only, an eligible taxpayer shall be allowed a
credit for such percentage of the (A) cost or other basis for federal
income tax purposes for property used in the testing or inspection of
materials and products, (B) the costs or expenses associated with
quality control of the research and development, (C) fees for use of
sophisticated technology facilities and processes, (D) fees for the
production or eventual commercial distribution of materials and products
resulting from the activities of an eligible taxpayer as long as such
activities fall under activities relating to biotechnologies. The costs,
expenses and other amounts for which a credit is allowed and claimed
under this paragraph shall not be used in the calculation of any other
credit allowed under this subchapter. For the purposes of this
subdivision, "research and development property" shall mean property
that is used for purposes of research and development in the
experimental or laboratory sense. Such purposes shall not be deemed to
include the ordinary testing or inspection of materials or products for
quality control, efficiency surveys, management studies, consumer
surveys, advertising, promotions, or research in connection with
literary, historical or similar projects.
(4) An eligible taxpayer shall be allowed a credit for nine per centum
of qualified research expenses paid or incurred by the taxpayer in the
calendar year ending with or within the taxable year for which the
credit is claimed. For the purposes of this subdivision, "qualified
research expenses" shall mean expenses associated with in-house research
and processes, and costs associated with the dissemination of the
results of the products that directly result from such research and
development activities; provided, however, that such costs shall not
include advertising or promotion through media. In addition, costs
associated with the preparation of patent applications, patent
application filing fees, patent research fees, patent examinations fees,
patent post allowance fees, patent maintenance fees, and grant
application expenses and fees shall qualify as qualified research
expenses. In no case shall the credit allowed under this paragraph apply
to expenses for litigation or the challenge of another entity's
intellectual property rights, or for contract expenses involving outside
paid consultants.
(5) An eligible taxpayer shall be allowed a credit for qualified
high-technology training expenditures as described in this paragraph
paid or incurred by the taxpayer during the calendar year that ends with
or within the taxable year for which the credit is claimed.
(A) The amount of credit shall be one hundred percent of the training
expenses described in subparagraph (C) of this paragraph, subject to a
limitation of no more than four thousand dollars per employee per
calendar year for such training expenses.
(B) Qualified high-technology training shall include a course or
courses taken and satisfactorily completed by an employee of the
taxpayer at an accredited, degree granting post-secondary college or
university in city that (i) directly relates to biotechnology
activities, and (ii) is intended to upgrade, retrain or improve the
productivity or theoretical awareness of the employee. Such course or
courses may include, but are not limited to, instruction or research
relating to techniques, meta, macro, or micro-theoretical or practical
knowledge bases or frontiers, or ethical concerns related to such
activities. Such course or courses shall not include classes in the
disciplines of management, accounting or the law or any class designed
to fulfill the discipline specific requirements of a degree program at
the associate, baccalaureate, graduate or professional level of these
disciplines. Satisfactory completion of a course or courses shall mean
the earning and granting of credit or equivalent unit, with the
attainment of a grade of "B" or higher in a graduate level course or
courses, a grade of "C" or higher in an undergraduate level courses or
courses, or a similar measure of competency for a course that is not
measured according to a standard grade formula.
(C) Qualified high-technology training expenditures shall include
expenses for tuition and mandatory fees, software required by the
institution, fees for textbooks or other literature required by the
institution offering the course or courses, minus applicable
scholarships and tuition or fee waivers not granted by the taxpayer or
any affiliates of the taxpayer, that are paid or reimbursed by the
taxpayer. Qualified high-technology expenditures do not include room and
board, computer hardware or software not specifically assigned for such
course or courses, late-charges, fines or membership dues and similar
expenses. Such qualified expenditures shall not be eligible for the
credit provided by this section unless the employee for whom the
expenditures are disbursed is continuously employed by the taxpayer in a
full-time, full-year position primarily located at a qualified site
during the period of such coursework and lasting through at least one
hundred eighty days after the satisfactory completion of the qualifying
course-work. Qualified high-technology training expenditures shall not
include expenses for in-house or shared training outside of a city
higher education institution or the use of consultants outside of credit
granting courses, whether such consultants function inside of such
higher education institution or not.
(D) If a taxpayer relocates from an academic business incubator
facility partnered with an accredited post-secondary education
institution located within city, which provides space and business
support services to taxpayers, to another site, the credit provided in
this subdivision shall be allowed for all expenditures referenced in
subparagraph (C) of this paragraph paid or incurred in the two preceding
calendar years that the taxpayer was located in such an incubator
facility for employees of the taxpayer who also relocate from said
incubator facility to such city site and are employed and primarily
located by the taxpayer in city. Such expenditures in the two preceding
years shall be added to the amounts otherwise qualifying for the credit
provided by this subdivision that were paid or incurred in the calendar
year that the taxpayer relocates from such a facility. Such expenditures
shall include expenses paid for an eligible employee who is a full-time,
full-year employee of said taxpayer during the calendar year that the
taxpayer relocated from an incubator facility notwithstanding (i) that
such employee was employed full or part-time as an officer, staff-person
or paid intern of the taxpayer when such taxpayer was located at such
incubator facility or (ii) that such employee was not continuously
employed when such taxpayer was located at the incubator facility during
the one hundred eighty day period referred to in subparagraph (C) of
this paragraph, provided such employee received wages or equivalent
income for at least seven hundred fifty hours during any twenty-four
month period when the taxpayer was located at the incubator facility.
Such expenditures shall include payments made to such employee after the
taxpayer has relocated from the incubator facility for qualified
expenditures if such payments are made to reimburse an employee for
expenditures paid by the employee during such two preceding years. The
credit provided under this paragraph shall be allowed in any taxable
year that the taxpayer qualifies as an eligible taxpayer.
(E) For purposes of this subdivision the term "academic year" shall
mean the annual period of sessions of a post-secondary college or
university.
(F) For the purposes of this subdivision the term "academic incubator
facility" shall mean a facility providing low-cost space, technical
assistance, support services and educational opportunities, including
but not limited to central services provided by the manager of the
facility to the tenants of the facility, to an entity located in city.
Such entity's primary activity must be in biotechnologies, and such
entity must be in the formative stage of development. The academic
incubator facility and the entity must act in partnership with an
accredited post-secondary college or university located in city. An
academic incubator facility's mission shall be to promote job creation,
entrepreneurship, technology transfer, and provide support services to
incubator tenants, including, but not limited to, business planning,
management assistance, financial-packaging, linkages to financing
services, and coordinating with other sources of assistance.
(6) An eligible taxpayer may claim credits under this subdivision for
three consecutive years. In no case shall the credit allowed by this
subdivision to a taxpayer exceed two hundred fifty thousand dollars per
calendar year for eligible expenditures made during such calendar year.
(7) The credit allowed under this subdivision for any taxable year
shall not reduce the tax due for such year to less than the amount
computed in subdivision (a) of this section. Provided, however, if the
amount of credit allowed under this subdivision for any taxable year
reduces the tax to such amount, any amount of credit not deductible in
such taxable year shall be treated as an overpayment of tax to be
credited or refunded in accordance with the provisions of section 11-526
of this chapter; provided, however, that notwithstanding the provisions
of section 11-528 of this chapter, no interest shall be paid thereon.
(8) The credit allowed under this subdivision shall only be allowed
for taxable years beginning on or after January first, two thousand ten
and before January first, two thousand sixteen.
(b)(1) The percentage of the credit allowed to a taxpayer under this
subdivision in any calendar year shall be:
(A) If the average number of individuals employed full time by a
taxpayer in the city during the calendar year that ends with or within
the taxable year which the credit is claimed is at least one hundred
five percent of the taxpayer's base year employment, one hundred
percent, except that in no case shall the credit allowed under this
clause exceed two hundred fifty thousand dollars per calendar year.
Provided, however, the increase in base year employment shall not apply
to a taxpayer allowed a credit under this subdivision that was (I)
located outside of the city, (II) not doing business, or (III) did not
have any employees, in the year preceding the first year that the credit
is claimed. Any such taxpayer shall be eligible for one hundred percent
of the credit for the first calendar year that ends with or within the
taxable year for which the credit is claimed, provided that such
taxpayer locates in the city, begins doing business in the city or hires
employees in the city during such calendar year and is otherwise
eligible for the credit pursuant to the provisions of this subdivision.
(B) If the average number of individuals employed full time by a
taxpayer in the city during the calendar year that ends with or within
the taxable year for which the credit is claimed is less than one
hundred five percent of the taxpayer's base year employment, fifty
percent, except that in no case shall the credit allowed under this
clause exceed one hundred twenty five thousand dollars per calendar
year. In the case of an entity located in city receiving space and
business support services by an academic incubator facility, if the
average number of individuals employed full time by such entity in the
city during the calendar year in which the credit allowed under this
subdivision is claimed is less than one hundred five percent of the
taxpayer's base year employment, the credit shall be zero.
(2) For the purposes of this subdivision, "base year employment" means
the average number of individuals employed full-time by the taxpayer in
the city in the year preceding the first calendar year that ends with or
within the taxable year for which the credit is claimed.
(3) For the purposes of this subdivision, average number of
individuals employed full-time shall be computed by adding the number of
such individuals employed by the taxpayer at the end of each quarter
during each calendar year or other applicable period and dividing the
sum so obtained by the number of such quarters occurring within such
calendar year or other applicable period.
(4) Notwithstanding anything contained in this section to the
contrary, the credit provided by this subdivision shall be allowed
against the taxes authorized by this chapter for the taxable year after
reduction by all other credits permitted by this chapter.
Section 11-504
§ 11-504 Taxable years to which tax applies; tax for taxable years
beginning prior to and ending after January first, nineteen hundred
sixty-six.
(a) General. The tax imposed by section 11-503 of this chapter, with
any modification permitted by subdivision (b) of this section, is
imposed for each taxable year beginning with taxable years ending on or
after January first, nineteen hundred sixty-six.
(b) Alternate methods for determining tax for taxable years ending on
or after January first, nineteen hundred sixty-six. (1) The tax for any
taxable year ending on or after January first, nineteen hundred
sixty-six and before December thirty-first, nineteen hundred sixty-six,
shall be an amount equal to the tax which would have been imposed had
section 11-503 of this chapter been in effect for the entire taxable
year, multiplied by the number of months (or major portions thereof) in
such taxable year which occur after December thirty-first, nineteen
hundred sixty-five and divided by the number of months (or major
portions thereof) in such taxable year.
(2) In lieu of the method of computation of tax prescribed in
paragraph one of this subdivision, if the taxpayer maintained adequate
records for the portion of any taxable year ending on or after January
first, nineteen hundred sixty-six, and before December thirty-first,
nineteen hundred sixty-six, which falls within the calendar year
nineteen hundred sixty-six, the tax for such taxable year at the
election of the taxpayer may be computed on the basis of the
unincorporated business taxable income which the taxpayer would have
reported had he or she filed a federal income tax return for a taxable
year beginning January first, nineteen hundred sixty-six and ending with
the close of such taxable year ending before December thirty-first,
nineteen hundred sixty-six. Such taxable year beginning January first,
nineteen hundred sixty-six and ending before December thirty-first,
nineteen hundred sixty-six shall be deemed (unless clearly indicated
otherwise) to be the taxable year of the taxpayer. For purposes of this
paragraph, the unincorporated business exemptions allowable under
section 11-510 of this chapter, the credit allowable under subdivision
(b) of section 11-503 of this chapter and any net operating loss
deduction as modified pursuant to subdivision two of section 11-507 of
this chapter shall each be reduced by the same part of such exemptions,
credit, or net operating loss deduction (as the case may be) as the
number of months (or major portions thereof) in the taxable year
occurring before January first, nineteen hundred sixty-six is of the
number of months (or major portions thereof) in such taxable year.
Except as provided in paragraph two, the tax for such period ending
before December thirty-first, nineteen hundred sixty-six, shall be
computed in accordance with the other provisions of this chapter.
Section 11-505
§ 11-505 Unincorporated business taxable income. The unincorporated
business taxable income of an unincorporated business shall be its
unincorporated business entire net income, allocated to the city, less
the amount of:
(1) Its deductions under section 11-509 of this chapter not subject to
allocation; and
(2) Its unincorporated business exemption under section 11-510 of this
chapter.
Section 11-506
§ 11-506 Unincorporated business gross income. (a) (1) General.
Unincorporated business gross income of an unincorporated business means
the sum of the items of income and gain of the business, of whatever
kind and in whatever form paid, includible in gross income for the
taxable year for federal income tax purposes, including income and gain
from any property employed in the business, or from liquidation of the
business, or from collection of installment obligations of the business,
or from the sale or other disposition by an unincorporated entity of an
interest in another unincorporated entity if and to the extent such
income or gain is attributable to a trade, business, profession or
occupation carried on in whole or in part in the city by such other
unincorporated entity, with the modifications specified in this section.
(2) The character of a partner's distributive share of gross income,
gains, losses and deductions of an unincorporated entity shall be
determined as if such gross income, gains, losses and deductions were
realized directly by such partner regardless of how the interest in the
unincorporated entity was acquired and regardless of whether the
distributive share is proportionate to the partner's capital interest in
the unincorporated entity, provided, however, this paragraph shall not
apply to payments to a partner treated as occurring between the
unincorporated entity and one who is not a partner under section seven
hundred seven of the internal revenue code, and provided, further, this
paragraph shall not affect the determination of whether gross income,
gains, losses or deductions of an unincorporated entity are subject to
the tax imposed by this chapter as realized from an unincorporated
business.
(b) Modifications increasing federal gross income. There shall be
added to federal gross income of the business the following items
attributable to the business:
(1) Interest income on obligations of any state other than this state,
or of a political subdivision of any such other state unless created by
compact or agreement to which this state is a party.
(2) Interest or dividend income on obligations or securities of any
authority, commission, or instrumentality of the United States, which
the laws of the United States exempt from federal income tax but not
from state or local income taxes.
(3) In the case of a taxpayer who has exercised the election permitted
by subdivision (b) of section 11-509 of this chapter, if the property to
which such election relates was sold or otherwise disposed of during the
taxable year, the amount required by said subdivision to be added to
federal gross income.
(4) The entire amount allowable as an exclusion or deduction for stock
transfer taxes imposed by article twelve of the tax law in determining
federal gross income but only to the extent that such taxes are incurred
and paid in market making transactions.
(5) The amount allowed as an exclusion or deduction for sales and use
taxes imposed by section eleven hundred seven of the tax law in
determining federal gross income but only such portion of such exclusion
or deduction which is not in excess of the amount of the credit allowed
pursuant to subdivision (d) of section 11-503 of this chapter.
(6) The amount allowed as an exclusion or deduction as rent in
determining federal gross income but only such portion of such exclusion
or deduction which is not in excess of the amount of the credit allowed
pursuant to subdivision (e) of section 11-503 of this chapter.
(7) The amount allowed as an exclusion or deduction in determining
federal gross income but only such portion of such exclusion or
deduction which is not in excess of the amount of the credit allowed
pursuant to subdivision (f) of section 11-503 of this chapter.
(8) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which would properly be includible for federal income tax purposes had
the taxpayer not made the election permitted pursuant to such paragraph
eight as it was in effect for agreements entered into prior to January
first, nineteen hundred eighty-four.
(9) Upon the disposition of property to which subdivision fifteen of
section 11-507 of this chapter applies, the amount, if any, by which the
aggregate of the amounts described in such subdivision fifteen
attributable to such property exceeds the aggregate of the amounts
described in subdivision fourteen of section 11-507 of this chapter
attributable to such property.
(10) The amount allowed as an exclusion or deduction for sales and use
taxes imposed by section eleven hundred seven of the tax law in
determining federal gross income, but only such portion of such
exclusion or deduction which is not in excess of the amount of the
credit allowed pursuant to subdivision (g) of section 11-503 of this
chapter.
(12) The amount allowed as an exclusion or deduction for sales and use
taxes imposed by section eleven hundred seven of the tax law (or for any
interest imposed in connection therewith) in determining federal gross
income, but only such portion of such exclusion or deduction which is
not in excess of the amount of the credit allowed pursuant to
subdivision (k) of section 11-503 of this chapter.
(13) Notwithstanding any other provision of this chapter to the
contrary, the amount allowed as an exclusion or deduction in determining
federal gross income of any loss, including but not limited to, losses
from notional principal contracts, losses, other than as a dealer, from
the holding, sale, disposition, assumption, offset or termination of a
position in, property, as defined in paragraph one of subdivision (c) of
section 11-502 of this chapter, or other substantially similar losses
from ordinary and routine trading or investment activity to the extent
determined by the commissioner of finance, realized in connection with
activities described in paragraph two of subdivision (c) of section
11-502 of this chapter if, and to the extent that, such activities are
not deemed an unincorporated business carried on by the taxpayer
pursuant to the provisions of subdivision (c) of section 11-502 of this
chapter.
(14) Notwithstanding any other provision of this chapter to the
contrary, in the case of a taxpayer that is an unincorporated entity
described in subparagraph (B) of paragraph four of subdivision (c) of
section 11-502 of this chapter, the amount allowed as an exclusion or
deduction in determining federal gross income of any loss realized from
the sale or other disposition of an interest in another unincorporated
entity if, and to the extent that, such loss is attributable to
activities of such other unincorporated entity not deemed an
unincorporated business carried on by the taxpayer pursuant to the
provisions of subdivision (c) of section 11-502 of this chapter.
(15) Notwithstanding any other provision of this chapter to the
contrary, the amount allowed as an exclusion or deduction in determining
federal gross income of any loss realized from the holding, leasing or
managing of real property if, and to the extent that, such holding,
leasing or managing of real property is not deemed an unincorporated
business carried on by the taxpayer pursuant to the provisions of
subdivision (d) of section 11-502 of this chapter.
(16) Notwithstanding any other provision of this chapter to the
contrary, the amount allowed as an exclusion or deduction in determining
federal gross income of any loss realized from the provision by an
owner, lessee or fiduciary holding, leasing or managing real property of
the service of parking, garaging or storing of motor vehicles on a
monthly or longer term basis to tenants at such real property if, and to
the extent that, the provision of such services to such tenants is not
deemed an unincorporated business carried on by the taxpayer pursuant to
the provisions of subdivision (d) of section 11-502 of this chapter.
(c) Modifications reducing federal gross income. There shall be
subtracted from federal gross income of the business the following items
attributable to the business:
(1) Interest income on obligations of the United States and its
possessions to the extent includible in gross income for federal income
tax purposes;
(2) Interest or dividend income on obligations or securities of any
authority, commission or instrumentality of the United States to the
extent includible in gross income for federal income tax purposes but
exempt from state or local income taxes under the laws of the United
States;
(3) Interest or dividend income on obligations or securities to the
extent exempt from income tax under the laws of the city or this state
authorizing the issuance of such obligations or securities but
includible in gross income for federal income tax purposes;
(3-a) Fifty percent of dividends to the extent includible in gross
income for federal income tax purposes and not subtracted under
paragraph two or three of this subdivision, provided, however, that
there shall be no subtraction pursuant to this paragraph for any portion
of a dividend from stock with respect to which a dividend deduction
would be disallowed by subsection (c) of section two hundred forty-six
of the internal revenue code if the unincorporated business were a
corporation;
(4) The amount of any refund or credit for overpayment of income taxes
imposed by the city, this state or any other taxing jurisdiction, or the
tax imposed by article thirteen-A of the tax law, to the extent properly
included in gross income for federal tax purposes;
(5) With respect to gain derived from the sale or other disposition of
any property acquired prior to January first, nineteen hundred
sixty-six, except property described in subsections one and four of
section twelve hundred twenty-one of the internal revenue code, the
difference between:
(a) the amount of gain included in federal gross income with respect
to each such property, and
(b) the amount of gain (if smaller than the amount described in
subparagraph (a) of this paragraph) that would be included in federal
gross income with respect to each such property if the federal adjusted
basis of such property on the date of the sale or other disposition had
been equal to its fair market value on January first, nineteen hundred
sixty-six, or the date of its sale or other disposition prior to January
first, nineteen hundred sixty-six, plus or minus all adjustments to
basis made with respect to such property for federal income tax purposes
for periods on and after January first, nineteen hundred sixty-six;
provided, however, that the total modification provided by this
subparagraph shall not exceed the taxpayer's net gain from the sale or
other disposition of all such property.
(6) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
properly includible in federal gross income solely as a result of an
election made pursuant to the provisions of such paragraph eight as it
was in effect for agreements entered into prior to January first,
nineteen hundred eighty-four.
(7) Upon the disposition of property to which subdivision fifteen of
section 11-507 of this chapter applies, the amount, if any, by which the
aggregate of the amounts described in subdivision fourteen of section
11-507 of this chapter attributable to such property exceeds the
aggregate of the amounts described in subdivision fifteen of section
11-507 of this chapter attributable to such property.
(8) Notwithstanding any other provision of this chapter to the
contrary, the amount of any income or gain (to the extent includible in
gross income for federal income tax purposes) realized from the holding,
leasing or managing of real property if, and to the extent that, such
holding, leasing or managing of real property is not deemed an
unincorporated business carried on by the taxpayer pursuant to the
provisions of subdivision (d) of section 11-502 of this chapter.
(9) Notwithstanding any other provision of this chapter to the
contrary, the amount of any income or gain (to the extent includible in
gross income for federal income tax purposes), including but not limited
to, dividends, interest, payments with respect to securities loans,
income from notional principal contracts, or income and gains, other
than as a dealer, from the holding, sale, disposition, assumption,
offset or termination of a position in, property, as defined in
paragraph one of subdivision (c) of section 11-502 of this chapter, or
other substantially similar income from ordinary and routine trading or
investment activity to the extent determined by the commissioner of
finance, realized in connection with activities described in paragraph
two of subdivision (c) of section 11-502 of this chapter if, and to the
extent that, such activities are not deemed an unincorporated business
carried on by the taxpayer pursuant to the provisions of subdivision (c)
of section 11-502 of this chapter.
(10) Notwithstanding any other provision of this chapter to the
contrary, in the case of a taxpayer that is an unincorporated entity
described in subparagraph (B) of paragraph four of subdivision (c) of
section 11-502 of this chapter, the amount of any income or gain (to the
extent includible in gross income for federal income tax purposes)
realized from the sale or other disposition of an interest in another
unincorporated entity if, and to the extent that, such income or gain is
attributable to activities of such other unincorporated entity not
deemed an unincorporated business carried on by the taxpayer pursuant to
the provisions of subdivision (c) of section 11-502 of this chapter.
(11) Notwithstanding any other provision of this chapter to the
contrary, the amount of any income or gain (to the extent includible in
gross income for federal income tax purposes) realized from the
provision by an owner, lessee or fiduciary holding, leasing or managing
real property of the service of parking, garaging or storing of motor
vehicles on a monthly or longer term basis to tenants at such real
property if, and to the extent that, the provision of such services to
such tenants is not deemed an unincorporated business pursuant to the
provisions of subdivision (d) of section 11-502 of this chapter.
(d) Upon the disposition of property to which subdivisions twenty and
twenty-one of section 11-507 apply, the amount of any gain or loss
includible in entire net income shall be adjusted to reflect the
modifications provided in such subdivisions attributable to such
property.
(e) Related members expense add back. (1) Definitions. (A) Related
member. "Related member" means a related person as defined in
subparagraph (c) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code, except that "fifty
percent" shall be substituted for "ten percent".
(B) Effective rate of tax. "Effective rate of tax" means, as to any
city, the maximum statutory rate of tax imposed by the city on or
measured by a related member's net income multiplied by the
apportionment percentage, if any, applicable to the related member under
the laws of said jurisdiction. For purposes of this definition, the
effective rate of tax as to any city is zero where the related member's
net income tax liability in said city is reported on a combined or
consolidated return including both the taxpayer and the related member
where the reported transactions between the taxpayer and the related
member are eliminated or offset. Also, for purposes of this definition,
when computing the effective rate of tax for a city in which a related
member's net income is eliminated or offset by a credit or similar
adjustment that is dependent upon the related member either maintaining
or managing intangible property or collecting interest income in that
city, the maximum statutory rate of tax imposed by said city shall be
decreased to reflect the statutory rate of tax that applies to the
related member as effectively reduced by such credit or similar
adjustment.
(C) Royalty payments. Royalty payments are payments directly connected
to the acquisition, use, maintenance or management, ownership, sale,
exchange, or any other disposition of licenses, trademarks, copyrights,
trade names, trade dress, service marks, mask works, trade secrets,
patents and any other similar types of intangible assets as determined
by the commissioner of finance, and include amounts allowable as
interest deductions under section one hundred sixty-three of the
internal revenue code to the extent such amounts are directly or
indirectly for, related to or in connection with the acquisition, use,
maintenance or management, ownership, sale, exchange or disposition of
such intangible assets.
(D) Valid business purpose. A valid business purpose is one or more
business purposes, other than the avoidance or reduction of taxation,
which alone or in combination constitute the primary motivation for some
business activity or transaction, which activity or transaction changes
in a meaningful way, apart from tax effects, the economic position of
the taxpayer. The economic position of the taxpayer includes an increase
in the market share of the taxpayer, or the entry by the taxpayer into
new business markets.
(2) Royalty expense add backs. (A) For the purpose of computing
unincorporated business entire net income, a taxpayer must add back
royalty payments directly or indirectly paid, accrued, or incurred in
connection with one or more direct or indirect transactions with one or
more related members during the taxable year to the extent deductible in
calculating federal taxable income.
(B) Exceptions. (i) The adjustment required in this subdivision shall
not apply to the portion of the royalty payment that the taxpayer
establishes, by clear and convincing evidence of the type and in the
form specified by the commissioner of finance, meets all of the
following requirements: (I) the related member was subject to tax in
this city or another city within the United States or a foreign nation
or some combination thereof on a tax base that included the royalty
payment paid, accrued or incurred by the taxpayer; (II) the related
member during the same taxable year directly or indirectly paid, accrued
or incurred such portion to a person that is not a related member; and
(III) the transaction giving rise to the royalty payment between the
taxpayer and the related member was undertaken for a valid business
purpose.
(ii) The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I) the
related member was subject to tax on or measured by its net income in
this city or another city within the United States, or some combination
thereof; (II) the tax base for said tax included the royalty payment
paid, accrued or incurred by the taxpayer; and (III) the aggregate
effective rate of tax applied to the related member in those
jurisdictions is no less than eighty percent of the statutory rate of
tax that applied to the taxpayer under section 11-503 of this chapter
for the taxable year.
(iii) The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I) the
royalty payment was paid, accrued or incurred to a related member
organized under the laws of a country other than the United States; (II)
the related member's income from the transaction was subject to a
comprehensive income tax treaty between such country and the United
States; (III) the related member was subject to tax in a foreign nation
on a tax base that included the royalty payment paid, accrued or
incurred by the taxpayer; (IV) the related member's income from the
transaction was taxed in such country at an effective rate of tax at
least equal to that imposed by this city; and (V) the royalty payment
was paid, accrued or incurred pursuant to a transaction that was
undertaken for a valid business purpose and using terms that reflect an
arm's length relationship.
(iv) The adjustment required in this subdivision shall not apply if
the taxpayer and the commissioner of finance agree in writing to the
application or use of alternative adjustments or computations. The
commissioner of finance may, in his or her discretion, agree to the
application or use of alternative adjustments or computations when he or
she concludes that in the absence of such agreement the income of the
taxpayer would not be properly reflected.
(f) Upon the disposition of property to which subdivisions
twenty-three and twenty-four of section 11-507 of this chapter apply,
the amount of any gain or loss includible in unincorporated business
gross income shall be adjusted to reflect the modifications provided in
such subdivisions attributable to such property.
Section 11-507
§ 11-507 Unincorporated business deductions. The unincorporated
business deductions of an unincorporated business means the items of
loss and deduction directly connected with or incurred in the conduct of
the business, which are allowable for federal income tax purposes for
the taxable year (including losses and deductions connected with any
property employed in the business), with the following modifications:
(1) A deduction shall be allowed for charitable contributions of the
unincorporated business, to the extent that such contributions would be
deductible for federal income tax purposes if made by a corporation, but
not in excess of five per centum of the amount by which the
unincorporated business gross income exceeds the sum of (A) the
unincorporated business deductions computed without the benefit of any
deduction for charitable contributions and (B) the deduction allowed
under subdivision (b) of section 11-509 of this chapter, where the
election permitted by such subsection has been exercised.
(2) (a) A deduction shall be allowed for net operating losses incurred
by the unincorporated business, except as otherwise provided by
paragraph (b) of this subdivision, in an amount computed in the same
manner as the net operating loss deduction which would be allowed for
the taxable year for federal income tax purposes if the unincorporated
business were an individual taxpayer (but determined solely by reference
to the unincorporated business gross income and unincorporated business
deductions, allocated to the city, of the unincorporated business);
provided, however, that such net operating loss deduction which would be
allowed for the taxable year for federal income tax purposes shall for
purposes of this paragraph be determined as if the unincorporated
business had elected under section one hundred seventy-two of the
internal revenue code to relinquish the entire carryback period with
respect to net operating losses, except with respect to the first ten
thousand dollars of each of such losses, sustained during taxable years
ending after June thirtieth, nineteen hundred eighty-nine. Such
deduction shall not include any net operating loss sustained during any
taxable year beginning prior to January first, nineteen hundred
sixty-six and for the purposes of this paragraph a net operating loss
shall be determined without regard to any deductions allowed pursuant to
subdivision (b) of section 11-509 of this chapter and any net operating
loss for a taxable year beginning in nineteen hundred eighty-one shall
be computed without regard to the deduction allowed with respect to
recovery property under section one hundred sixty-eight of the internal
revenue code; in lieu of such deduction, a taxpayer shall be allowed for
such taxable year with respect to such property the depreciation
deduction allowable under section one hundred sixty-seven of such
internal revenue code as such section was in full force and effect on
December thirty-first, nineteen hundred eighty.
(b) In the case of a partnership, no net operating loss carryback or
carryover to any taxable year shall be allowed unless one or more of the
partners during such taxable year were persons having a proportionate
interest or interests, amounting to at least eighty percent of all such
interests, in the unincorporated business gross income and
unincorporated business deductions of the partnership which sustained
the loss for which a carryback or carryover is claimed. In such event,
the carryback or carryover allowable on account of such loss shall not
exceed the percentage of the amount otherwise allowable, determined by
dividing (A) the sum of the proportionate interests in the
unincorporated business gross income and unincorporated business
deductions of the partnership, for the year to which the loss is carried
back or carried over, attributable to such partners, by (B) the sum of
such proportionate interests owned by all partners for such taxable
year. The amount by which the carryback or carryover otherwise allowable
exceeds the amount allowable pursuant to the preceding sentence shall
not be a carryback or carryover to any other taxable year.
(3) No deduction shall be allowed (except as provided in section
11-509 of this chapter) for amounts paid or incurred to a proprietor or
partner for services or for use of capital.
(4) No deduction shall be allowed for income taxes imposed by the
city, this state or any other taxing jurisdiction, or the tax imposed by
article thirteen-A of the tax law.
(5) No deduction shall be allowed for (A) interest on indebtedness
incurred or continued to purchase or carry obligations or securities the
interest on which is exempt from tax under this chapter; (B) expenses
paid or incurred for the production or collection of such income or the
management, conservation or maintenance of property held for the
production of such income; or (C) the amortizable bond premium on any
bond the interest income from which is so exempt.
(6) No deduction shall be allowed in respect of the excess of net
long-term capital gain over net short-term capital loss, but capital
losses incurred in the unincorporated business shall be treated as
ordinary losses and shall be allowed in full.
(7) In the case of a taxpayer who has exercised the election permitted
by subdivision (b) of section 11-509 of this chapter, no deduction shall
be allowed for expenditures with reference to the property to which such
election relates, or for depreciation of such property, except as
permitted by said subdivision.
(8) A deduction shall be allowed (to the extent not allowable for
federal income tax purposes) for (A) interest on indebtedness incurred
or continued to purchase or carry obligations or securities the interest
on which is subject to tax under this chapter but exempt from federal
income tax; (B) ordinary and necessary expenses paid or incurred during
the taxable year for the production or collection of such income or the
management, conservation or maintenance of property held for the
production of such income; and (C) the amortizable bond premium for the
taxable year on any bond the interest on which is subject to tax under
this chapter but exempt from federal income tax.
(9) At the election of the taxpayer, a deduction shall be allowed for
expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or improvement of industrial
waste treatment facilities and air pollution control facilities.
(A) (i) The term "industrial waste treatment facilities" shall mean
facilities for the treatment, neutralization or stabilization of
industrial waste (as the term "industrial waste" is defined in section
17-0105 of the environmental conservation law) from a point immediately
preceding the point of such treatment, neutralization or stabilization
to the point of disposal, including the necessary pumping and
transmitting facilities, but excluding such facilities installed for the
primary purpose of salvaging materials which are usable in the
manufacturing process or are marketable.
(ii) The term "air pollution control facilities" shall mean facilities
which remove, reduce, or render less noxious air contaminants emitted
from an air contamination source (as the terms "air contaminant" and
"air contamination source" are defined in section 19-0107 of the
environmental conservation law) from a point immediately preceding the
point of such removal, reduction or rendering to the point of discharge
of air, meeting emission standards as established by the air pollution
control board, but excluding such facilities installed for the primary
purpose of salvaging materials which are usable in the manufacturing
process or are marketable and excluding those facilities which rely for
their efficacy on dilution, dispersion or assimilation of air
contaminants in the ambient air after emission.
(B) However, such deduction shall be allowed only (i) with respect to
tangible property which is depreciable, pursuant to section one hundred
sixty-seven of the internal revenue code, having a situs in the city and
used in the taxpayer's trade or business, the construction,
reconstruction, erection or improvement of which, in the case of
industrial waste treatment facilities, is initiated on or after January
first, nineteen hundred sixty-six, and only for expenditures paid or
incurred prior to January first, nineteen hundred seventy-two, or which,
in the case of air pollution control facilities, is initiated on or
after January first, nineteen hundred sixty-six, and
(ii) on condition that such facilities have been certified by the
state commissioner of environmental conservation or his or her
designated representative, in the same manner as provided in either
section 17-0707 or 19-0309 of the environmental conservation law, as
applicable, as complying with the provision of the environmental
conservation law, the sanitary code and regulations, permits or orders
promulgated pursuant thereto, and
(iii) on condition that for the taxable year and all succeeding
taxable years, no deduction for such expenditures or for depreciation of
the same property allowed for federal income tax purposes shall be
allowed under this chapter, except to the extent that the basis of the
property may be attributable to factors other than such expenditures, or
in case a deduction is allowable pursuant to this subdivision, for only
a part of such expenditures, on condition that any deduction allowed for
federal income tax purposes for such expenditures or for depreciation of
the same property be proportionately reduced in computing unincorporated
business deductions for the taxable year and all succeeding taxable
years, and
(iv) where the election provided for in subdivision (b) of section
11-509 of this chapter has not been exercised in respect to the same
property.
(C) (i) If expenditures in respect to an industrial waste treatment
facility or an air pollution control facility have been deducted as
provided herein and if within ten years from the end of the taxable year
in which such deduction was allowed such property or any part thereof is
used for the primary purpose of salvaging materials which are usable in
the manufacturing process or are marketable, the taxpayer shall report
such change of use in its return for the first taxable year during which
it occurs, and the commissioner of finance may recompute the tax for the
year or years for which such deduction was allowed and any carryback or
carryover year, and may assess any additional tax resulting from such
recomputation within the time fixed by paragraph eight of subdivision
(c) of section 11-523 of this chapter.
(ii) If a deduction is allowed as herein provided for expenditures
paid or incurred during any taxable year on the basis of a temporary
certificate of compliance issued pursuant to the public health law, and
if the taxpayer fails to obtain a permanent certificate of compliance
upon completion of the facilities with respect to which such temporary
certificate was issued, the taxpayer shall report such failure in its
report for the taxable year during which such facilities are completed,
and the commissioner of finance may recompute the tax for the year or
years for which such deduction was allowed and any carryback or
carryover year, and may assess any additional tax resulting from such
recomputation within the time fixed by paragraph eight of subdivision
(c) of section 11-523 of this chapter.
(D) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to this
subdivision, such deduction shall be disregarded in computing gain or
loss, and the gain or loss on the sale or other disposition of such
property shall be the gain or loss allowable for federal income tax
purposes for such taxable year.
(10) In the case of mines, oil and gas wells and other natural
deposits, no deduction of any allowance for percentage depletion
pursuant to section six hundred thirteen or section six hundred thirteen
A of the internal revenue code of nineteen hundred fifty-four, as
amended, shall be allowed. However, an allowance for depletion with
respect to such property shall be deductible in the amount which would
be allowable under section six hundred eleven of such internal revenue
code if such deduction were computed without reference to such section
six hundred thirteen or section six hundred thirteen A of such code.
With respect to the computation of depletion pursuant to this section,
the basis for such computation for taxable years beginning in nineteen
hundred seventy-two shall be the federal basis. For subsequent taxable
years, the basis of such computation shall be reduced only by the
deduction for the allowance for depletion deductible pursuant to this
section. In any taxable year when any such property is sold or otherwise
disposed of, with respect to which a deduction has been allowed pursuant
to this subdivision, the gain or loss thereon entering into the
computation of federal taxable income shall be disregarded in computing
unincorporated business taxable income and there shall be added to or
subtracted from federal gross income, so modified, the gain or loss upon
such sale or other disposition. In computing such gain or loss, the
basis of the property sold or disposed of shall be adjusted to reflect
the deduction allowed with respect to such property pursuant to this
subdivision.
(11) A deduction shall be allowed for that portion of wages and
salaries paid or incurred for the taxable year for which a deduction is
not allowed pursuant to the provisions of section two hundred eighty C
of the internal revenue code.
(12) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), a
deduction shall be allowed for any amount which the taxpayer could have
excluded for purposes of this chapter had it not made the election
provided for in such paragraph eight as it was in effect for agreements
entered into prior to January first, nineteen hundred eighty-four.
(13) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), no
deduction shall be allowed for any amount deductible for federal income
tax purposes solely as a result of an election made pursuant to the
provisions of such paragraph eight as it was in effect for agreements
entered into prior to January first, nineteen hundred eighty-four.
(14) In the case of property placed in service in taxable years
beginning before nineteen hundred ninety-four, for taxable years
beginning after December thirty-first, nineteen hundred eighty-one,
except with respect to property subject to the provisions of section two
hundred eighty-F of the internal revenue code and property subject to
the provisions of section one hundred sixty-eight of the internal
revenue code which is placed in service in this state in taxable years
beginning after December thirty-first, nineteen hundred eighty-four, no
deduction shall be allowed for the amount allowable as a deduction
determined under section one hundred sixty-eight of the internal revenue
code.
(15) In the case of property placed in service in taxable years
beginning before nineteen hundred ninety-four, for taxable years
beginning after December thirty-first, nineteen hundred eighty-one,
except with respect to property subject to the provisions of section two
hundred eighty-F of the internal revenue code and property subject to
the provisions of section one hundred sixty-eight of the internal
revenue code which is placed in service in this state in taxable years
beginning after December thirty-first, nineteen hundred eighty-four, and
provided a deduction has not been disallowed pursuant to subdivision
thirteen of this section, a taxpayer shall be allowed with respect to
property which is subject to the provisions of section one hundred
sixty-eight of the internal revenue code the depreciation deduction
allowable under section one hundred sixty-seven of the internal revenue
code as such section would have applied to property placed in service on
December thirty-first, nineteen hundred eighty.
(16) Notwithstanding any other provision of this chapter to the
contrary, no deduction shall be allowed for interest, depreciation or
any other expense directly or indirectly attributable to the holding,
leasing or managing of real property or to income or gain therefrom if,
and to the extent that, such holding, leasing or managing of real
property is not deemed an unincorporated business carried on by the
taxpayer pursuant to the provisions of subdivision (d) of section 11-502
of this chapter.
(17) Notwithstanding any other provision of this chapter to the
contrary, no deduction shall be allowed for any expenses directly or
indirectly attributable to activities described in paragraph two of
subdivision (c) of section 11-502 of this chapter if, and to the extent
that, such activities are not deemed an unincorporated business carried
on by the taxpayer pursuant to the provisions of subdivision (c) of
section 11-502 of this chapter.
(18) Notwithstanding any other provision of this chapter to the
contrary, in the case of a taxpayer that is an unincorporated entity
described in subparagraph (B) of paragraph four of subdivision (c) of
section 11-502 of this chapter, no deduction shall be allowed for any
losses or expenses directly or indirectly attributable to the sale or
other disposition of an interest in another unincorporated entity if,
and to the extent that, such losses or expenses are attributable to
activities of such other unincorporated entity not deemed an
unincorporated business carried on by the taxpayer pursuant to the
provisions of subdivision (c) of section 11-502 of this chapter.
(19) Notwithstanding any other provision of this chapter to the
contrary, no deduction shall be allowed for interest, depreciation or
any other expense directly or indirectly attributable to the provision
by an owner, lessee or fiduciary holding, leasing or managing real
property of the service of parking, garaging or storing of motor
vehicles on a monthly or longer term basis to tenants at such real
property if, and to the extent that, the provision of such services to
such tenants is not deemed an unincorporated business pursuant to the
provisions of subdivision (d) of section 11-502 of this chapter.
(20) For taxable years ending after September tenth, two thousand one,
in the case of qualified property described in paragraph two of
subsection k of section one hundred sixty-eight of the internal revenue
code, other than qualified resurgence zone property described in
subdivision twenty-two of this section, and other than qualified New
York Liberty Zone property described in paragraph two of subsection b of
section fourteen hundred L of the internal revenue code (without regard
to clause (i) of subparagraph (C) of such paragraph), no deduction shall
be allowed for the amount allowable as a deduction under section one
hundred sixty-seven of the internal revenue code.
(21) For taxable years ending after September tenth, two thousand one,
in the case of qualified property described in paragraph two of
subsection k of section one hundred sixty-eight of the internal revenue
code other than qualified resurgence zone property described in
subdivision twenty-two of this section, and other than qualified New
York Liberty Zone property described in paragraph two of subsection b of
section fourteen hundred L of the internal revenue code (without regard
to clause (i) of subparagraph (C) of such paragraph), a deduction shall
be allowed with respect to such property equal to the depreciation
deduction allowable under section one hundred sixty-seven of the
internal revenue code as such section would have applied to such
property had it been acquired by the taxpayer on September tenth, two
thousand one, provided, however, that for taxable years beginning on or
after January first, two thousand four, in the case of a passenger motor
vehicle or a sport utility vehicle subject to the provisions of
subdivision twenty-four of this section, the limitation under clause (i)
of subparagraph (A) of paragraph one of subdivision (a) of section two
hundred eighty F of the internal revenue code applicable to the amount
allowed as a deduction under this paragraph shall be determined as of
the date such vehicle was placed in service and not as of September
tenth, two thousand one.
(22) For purposes of subdivisions twenty and twenty-one of this
section, qualified resurgence zone property shall mean qualified
property described in paragraph two of subsection k of section one
hundred sixty-eight of the internal revenue code substantially all of
the use of which is in the resurgence zone, as defined below, and is in
the active conduct of a trade or business by the taxpayer in such zone,
and the original use of which in the resurgence zone commences with the
taxpayer after September tenth, two thousand one. The resurgence zone
shall mean the area of New York county bounded on the south by a line
running from the intersection of the Hudson River with the Holland
Tunnel and running thence east to Canal Street, then running along the
centerline of Canal Street to the intersection of the Bowery and Canal
Street, running thence in a southeasterly direction diagonally across
Manhattan Bridge Plaza, to the Manhattan Bridge, and thence along the
centerline of the Manhattan Bridge to the point where the centerline of
the Manhattan Bridge would intersect with the easterly bank of the East
River, and bounded on the north by a line running from the intersection
of the Hudson River with the Holland Tunnel and running thence north
along West Avenue to the intersection of Clarkson Street then running
east along the centerline of Clarkson Street to the intersection of
Washington Avenue, then running south along the centerline of Washington
Avenue to the intersection of West Houston Street, then east along the
centerline of West Houston Street, then at the intersection of the
Avenue of the Americas continuing east along the centerline of East
Houston Street to the easterly bank of the East River.
(23) For taxable years beginning on or after January first, two
thousand four, in the case of a taxpayer that is not an eligible farmer
as defined in subsection (n) of section six hundred six of the tax law,
no deduction shall be allowed for the amounts allowable as a deduction
under sections one hundred seventy-nine, one hundred sixty-seven and one
hundred sixty-eight of the internal revenue code with respect to a sport
utility vehicle that is not a passenger automobile as defined in
paragraph five of subsection (d) of section two hundred eighty F of the
internal revenue code.
(24) For taxable years beginning on or after January first, two
thousand four, in the case of a taxpayer that is not an eligible farmer
as defined in subsection (n) of section six hundred six of the tax law,
a deduction shall be allowed with respect to a sport utility vehicle
that is not a passenger automobile as defined in paragraph five of
subsection (d) of section two hundred eighty F of the internal revenue
code equal to the amounts allowable as a deduction under sections one
hundred seventy-nine, one hundred sixty-seven and one hundred
sixty-eight of the internal revenue code, determined as if such sport
utility vehicle were a passenger automobile as defined in such paragraph
five.
Section 11-508
§ 11-508 Allocation to the city. (a) General; allocation of business
income. If an unincorporated business is carried on both within and
without the city, as determined under regulations of the commissioner of
finance, there shall be allocated to the city, in the manner provided in
subdivision (b), (c) or (d) of this section, a fair and equitable
portion of its business income. For taxable years beginning before July
first, nineteen hundred ninety-six, if the unincorporated business has
no regular place of business outside the city, all of such business
income shall be allocated to the city.
(b) (1) Allocation by taxpayer's books. For taxable years beginning
before January first, two thousand five, the portion allocable to the
city may be determined from the books of the business if the methods
used in keeping such books are approved by the commissioner of finance
as fairly and equitably reflecting the income from the city.
(2)(i) If a taxpayer determines the portion of business income to be
allocated to the city using the method prescribed in paragraph one of
this subdivision on a timely filed original return with respect to each
of the two taxable years, each of which must consist of twelve months,
immediately preceding the taxpayer's first taxable year beginning on or
after January first, two thousand five, the taxpayer may make a one-time
election to continue to use that method for taxable years beginning on
or after January first, two thousand five and before January first, two
thousand twelve. Such election shall be made by using the method
prescribed in paragraph one of this subdivision on an original timely
filed return with respect to the first taxable year beginning on or
after January first, two thousand five and before January first, two
thousand six. Such election may not be made, or if made, shall be deemed
revoked as of the beginning of the taxable year if, for either of the
two taxable years immediately preceding the year in which the election
is made, the commissioner of finance has determined the methods used in
keeping such books do not fairly and equitably reflect the income from
the city.
(ii) (A) A taxpayer that has made the election provided for in
subparagraph (i) of this paragraph may revoke it by filing an original
or amended return using an allocation method permitted by this section
other than the method prescribed in paragraph one of this subdivision
unless the commissioner of finance has determined that such method does
not fairly and equitably reflect the income from the city.
(B) The election provided for in subparagraph (i) of this paragraph
shall be deemed to have been revoked as of the beginning of the taxable
year if, for any taxable year during which the election is intended to
be in effect, the commissioner of finance has determined that the
methods used in keeping the taxpayer's books do not fairly and equitably
reflect the income from the city.
(C) In the case of a taxpayer that is a partnership or other
unincorporated entity, the election provided for in subparagraph (i) of
this paragraph shall be deemed to have been revoked as of the beginning
of the taxable year unless one or more of the persons having a
proportionate interest or interests, amounting to more than fifty
percent of all such interests, in the taxpayer's unincorporated business
gross income and unincorporated business deductions for such taxable
year were persons having a proportionate interest or interests,
amounting to more than fifty percent of all such interests, in the
taxpayer's unincorporated business gross income and unincorporated
business deductions at the end of the taxpayer's last taxable year
beginning before January first, two thousand five. For purposes of this
clause, a transfer of an ownership interest in unincorporated business
gross income or unincorporated business deductions upon the death of a
partner or owner to such deceased partner's or owner's estate shall be
disregarded but transfers by such decedent's estate shall not be
disregarded.
(D) Once the election provided for in subparagraph (i) of this
paragraph has been revoked by the taxpayer pursuant to clause (A) or
deemed revoked pursuant to clauses (B) or (C) of this subparagraph, the
taxpayer shall be barred from using the method prescribed in paragraph
one of this subdivision for the taxable year in which the election has
been revoked or deemed revoked and any subsequent taxable year.
(c) Allocation by formula. If subdivision (b) does not apply to the
taxpayer, the portion allocable to the city shall be determined by
multiplying (A) the business income by (B) a business allocation
percentage to be determined by adding together the percentages computed
under paragraphs one, two and three of this subdivision, and dividing
the result by the number of percentages; provided, however, that for
taxable years beginning on or after July first, nineteen hundred
ninety-six, a taxpayer that is a "manufacturing business," as defined in
subdivision (g) of this section, may determine its business allocation
percentage as provided in such subdivision (g):
(1) Property percentage. The percentage computed by dividing (A) the
average of the value, at the beginning and end of the taxable year, of
real and tangible personal property connected with the unincorporated
business and located within the city, by (B) the average of the value,
at the beginning and end of the taxable year, of all real and tangible
personal property connected with the unincorporated business and located
both within and without the city. For this purpose, for taxable years
beginning before January first, two thousand five, real property shall
include real property rented to the unincorporated business and, for
this purpose, for taxable years beginning on and after January first,
two thousand five, real and tangible personal property shall include
real and tangible personal property rented to the unincorporated
business and the value of such real and tangible personal property
rented to the unincorporated business shall mean the product of (i)
eight and (ii) the gross rents payable for the rental of such property
during the taxable year.
(2) Payroll percentage. The percentage computed by dividing (A) the
total wages, salaries and other personal service compensation paid or
incurred during the taxable year to employees in connection with the
unincorporated business carried on within the city, by (B) the total of
all wages, salaries and other personal service compensation paid or
incurred during the taxable year to employees in connection with the
unincorporated business carried on both within and without the city.
(3) Gross income percentage. The percentage computed by dividing (A)
the gross sales or charges for services performed by or through an
agency located within the city, by (B) the total of all gross sales or
charges for services performed within and without the city. The sales or
charges to be allocated to the city shall include all sales negotiated
or consummated, and charges for services performed, by an employee,
agent, agency or independent contractor chiefly situated at, connected
by contract or otherwise with, or sent out from, offices of the
unincorporated business, or other agencies, situated within the city;
provided, however, that for taxable years beginning on or after July
first, nineteen hundred ninety-six, sales of tangible personal property
shall not be allocated to the city as hereinabove in this paragraph
provided, but shall be allocated to the city only where shipments are
made to points within the city, and provided, further, that:
(A) for taxable years beginning on or after July first, two thousand
five, for taxpayers having gross receipts for the taxable year
(determined without regard to any deductions) of less than one hundred
thousand dollars, charges for services performed shall be allocated to
the city to the extent that the services are performed within the city;
(B) for taxable years beginning on or after July first, two thousand
six, for taxpayers having gross receipts for the taxable year
(determined without regard to any deductions) of less than three hundred
thousand dollars, charges for services performed shall be allocated to
the city to the extent that the services are performed within the city;
and
(C) for taxable years beginning on or after July first, two thousand
seven, for all other taxpayers, charges for services performed shall be
allocated to the city to the extent that the services are performed
within the city.
(d) Other allocation methods. The portion allocable to the city shall
be determined in accordance with rules and regulations of the
commissioner of finance if it shall appear to the commissioner of
finance that the income from the city is not fairly and equitably
reflected under the provisions of either subdivision (b) or subdivision
(c) of this section.
(e) Special rules for real estate. Income and deductions from the
rental of real property, and gain and loss from the sale, exchange or
other disposition of real property, shall not be subject to allocation
under subdivision (b), (c), or (d) of this section, but shall be
considered as entirely derived from or connected with the state, other
than this state, in which such property is located or, if such property
is located in this state, the political subdivision thereof. To the
extent that anything in the preceding sentence is inconsistent with any
provision of subdivision (d) of section 11-502, subdivision (c) of
section 11-506 or subdivision sixteen of section 11-507 of this chapter,
the provisions of such subdivisions shall take precedence over the
provisions of the preceding sentence.
(e-1) Special rules for publishers and broadcasters. (1)
Notwithstanding anything in paragraph three of subdivision (c) of this
section to the contrary and except as provided in paragraph four of this
subdivision, in the case of a taxpayer engaged in the business of
publishing newspapers or periodicals, there shall be allocated to the
city, for purposes of such paragraph three, the gross sales or charges
for services arising from sales of subscriptions to, and advertising
contained in, such newspapers or periodicals, to the extent that such
newspapers or periodicals are delivered to points within the city.
(2) Notwithstanding anything in paragraph three of subdivision (c) of
this section to the contrary and except as provided in paragraph four of
this subdivision, in the case of a taxpayer engaged in the business of
broadcasting radio or television programs, whether through the public
airwaves or by cable, direct or indirect satellite transmission, or any
other means of transmission, there shall be allocated to the city, for
purposes of such paragraph three, a portion of the gross sales or
charges for services arising from the sale of subscriptions to such
programs or from the broadcasting of such programs and of commercial
messages in connection therewith, such portion to be determined
according to the number of listeners or viewers within and without the
city.
(3) Notwithstanding anything in this section (other than subdivision
(e) of this section) to the contrary, in the case of a taxpayer that is
substantially engaged, in the aggregate, in any combination of the
businesses referred to in paragraphs one, two and four of this
subdivision, the portion of business income allocable to the city shall
be determined in accordance with the provisions of subdivision (c) of
this section (as modified by paragraphs one, two and four of this
subdivision), unless the commissioner of finance determines that the
business income from the city is not fairly and equitably reflected
under the provisions of such subdivision (c), in which event the
provisions of subdivision (d) of this section shall apply in determining
the portion of business income allocable to the city and the provisions
of subdivision (b) of this section shall not apply. For purposes of this
subdivision, a taxpayer shall be deemed to be substantially engaged in a
business or businesses referred to in such paragraphs one and two if
more than ten percent of the taxpayer's gross receipts for the taxable
year are attributable to such business or businesses.
(4) Notwithstanding anything in paragraph one or two of this
subdivision to the contrary, for taxable years beginning on or after
January first, two thousand two, in the case of a taxpayer engaged in
the business of publishing newspapers or periodicals, or broadcasting
radio or television programs, whether through the public airwaves or by
cable, direct or indirect satellite transmission, or any other means of
transmission, there shall be allocated to the city, for purposes of
paragraph three of subdivision (c) of this section, the gross sales or
charges to subscribers located in the city for subscriptions to such
newspapers, periodicals, or program services. For purposes of this
paragraph, a subscriber shall be deemed located in the city if, in the
case of newspapers and periodicals, the mailing address for the
subscription is within the city and, in the case of program services,
the billing address for the subscription is within the city. For
purposes of this clause, "subscriber" shall mean a member of the general
public who receives such newspapers, periodicals or program services and
does not further distribute them.
(e-2) Rules for receipts from certain services to investment
companies. (1) For taxable years beginning on or after January first,
two thousand one, for purposes of paragraph three of subdivision (c) of
this section, the portion of receipts received from an investment
company arising from the sale of management, administration or
distribution services to such investment company determined in
accordance with paragraph two of this subdivision shall be deemed to
arise from services performed within the city (such portion referred to
herein as the New York city portion).
(2) The New York city portion shall be the product of the total of
such receipts from the sale of such services and a fraction. The
numerator of that fraction is the sum of the monthly percentages (as
defined hereinafter) determined for each month of the investment
company's taxable year for federal income tax purposes which taxable
year ends within the taxable year of the taxpayer (but excluding any
month during which the investment company had no outstanding shares).
The monthly percentage for each such month is determined by dividing the
number of shares in the investment company which are owned on the last
day of the month by shareholders that are domiciled in the city by the
total number of shares in the investment company outstanding on that
date. The denominator of the fraction is the number of such monthly
percentages.
(3)(A) For purposes of this subdivision the term "domicile", in the
case of an individual shall have the meaning ascribed to it under
chapter seventeen of this title; an estate or trust is domiciled in the
city if it is a city resident estate or trust as defined in paragraph
three of subdivision (b) of section 11-1705 of this code; a business
entity is domiciled in the city if the location of the actual seat of
management or control is in the city. It shall be presumed that the
domicile of a shareholder, with respect to any month, is his, her or its
mailing address on the records of the investment company as of the last
day of such month.
(B) For purposes of this subdivision, the term "investment company"
means a regulated investment company, as defined in section 851 of the
internal revenue code, and a partnership to which section 7704(a) of the
internal revenue code applies (by virtue of section 7704(c)(3) of such
code) and that meets the requirements of section 851(b) of such code.
The preceding sentence shall be applied to the taxable year for federal
income tax purposes of the business entity that is asserted to
constitute an investment company that ends within the taxable year of
the taxpayer.
(C) For purposes of this subdivision, the term "receipts from an
investment company" includes amounts received directly from an
investment company as well as amounts received from the shareholders in
such investment company in their capacity as such.
(D) For purposes of this subdivision, the term "management services"
means the rendering of investment advice to an investment company,
making determinations as to when sales and purchases of securities are
to be made on behalf of an investment company, or the selling or
purchasing of securities constituting assets of an investment company,
and related activities, but only where such activity or activities are
performed pursuant to a contract with the investment company entered
into pursuant to section 15(a) of the federal investment company act of
nineteen hundred forty, as amended.
(E) For purposes of this subdivision, the term "distribution services"
means the services of advertising, servicing investor accounts
(including redemptions), marketing shares or selling shares of an
investment company, but, in the case of advertising, servicing investor
accounts (including redemptions) or marketing shares, only where such
service is performed by a person who is (or was, in the case of a closed
end company) also engaged in the service of selling such shares. In the
case of an open end company, such service of selling shares must be
performed pursuant to a contract entered into pursuant to section 15(b)
of the federal investment company act of nineteen hundred forty, as
amended.
(F) For purposes of this subdivision, the term "administration
services" includes clerical, accounting, bookkeeping, data processing,
internal auditing, legal and tax services performed for an investment
company but only if the provider of such service or services during the
taxable year in which such service or services are sold also sells
management or distribution services, as defined hereinabove, to such
investment company.
(e-3) Rules for receipts for services performed by registered
securities or commodities brokers or dealers.
(1) For taxable years beginning after two thousand eight, in the case
of a taxpayer which is a registered securities or commodities broker or
dealer, for purposes of paragraph three of subdivision (c) of this
section, the receipts specified in subparagraphs (A) through (G) of this
paragraph shall be deemed to arise from services performed within the
city to the extent set forth in such subparagraphs.
(A) Receipts constituting brokerage commissions derived from the
execution of securities or commodities purchase or sales orders for the
accounts of customers shall be deemed to arise from services performed
at the mailing address in the records of the taxpayer of the customer
who is responsible for paying such commissions.
(B) Receipts constituting margin interest earned on behalf of
brokerage accounts shall be deemed to arise from services performed at
the mailing address in the records of the taxpayer of the customer who
is responsible for paying such margin interest.
(C) Gross income, including any accrued interest or dividends, from
principal transactions for the purchase or sale of stocks, bonds,
foreign exchange and other securities or commodities (including futures
and forward contracts, options and other types of securities or
commodities derivatives contracts) shall be deemed to arise from
services performed within the city either (i) to the extent that
production credits are awarded to branches, offices or employees of the
taxpayer within the city as a result of such principal transactions or
(ii) if the taxpayer so elects, to the extent that the gross proceeds
from such principal transactions (determined without deduction for any
cost incurred by the taxpayer to acquire the securities or commodities)
are generated from sales of securities or commodities to customers
within the city based upon the mailing addresses of such customers in
the records of the taxpayer. For purposes of clause (ii) of this
subparagraph, the taxpayer shall separately calculate such gross income
from principal transactions by type of security or commodity. For
purposes of this subparagraph, gross income from principal transactions
shall be determined after the deduction of any cost incurred by the
taxpayer to acquire the securities or commodities. For purposes of this
subdivision, the term "production credits" means credits granted
pursuant to the internal accounting system used by the taxpayer to
measure the amount of revenue that should be awarded to a particular
branch or office or employee of the taxpayer which is based, at least in
part, on the branch's, the office's or the employee's particular
activities. Upon request, the taxpayer shall be required to furnish a
detailed explanation of such internal accounting system to the
department.
(D) (i) Receipts constituting fees earned by the taxpayer for advisory
services to a customer in connection with the underwriting of securities
for such customer (such customer being the entity which is contemplating
issuing or is issuing securities) or fees earned by the taxpayer for
managing an underwriting shall be deemed to arise from services
performed at the mailing address in the records of the taxpayer of such
customer who is responsible for paying such fees.
(ii) Receipts constituting the primary spread or selling concession
from underwritten securities shall be deemed to arise from services
performed within the city to the extent that production credits are
awarded to branches, offices or employees of the taxpayer within the
city as a result of the sale of the underwritten securities.
(iii) The term "primary spread" means the difference between the price
paid by the taxpayer to the issuer of the securities being marketed and
the price received from the subsequent sale of the underwritten
securities at the initial public offering price, less any selling
concession and any fees paid to the taxpayer for advisory services or
any manager's fees, if such fees are not paid by the customer to the
taxpayer separately. The term "public offering price" means the price
agreed upon by the taxpayer and the issuer at which the securities are
to be offered to the public. The term "selling concession" means the
amount paid to the taxpayer for participating in the underwriting of a
security where the taxpayer is not the lead underwriter.
(E) Receipts constituting interest earned by the taxpayer on loans and
advances made by the taxpayer to an entity affiliated with the taxpayer
shall be deemed to arise from services performed at the principal place
of business of such affiliated entity. For purposes of this
subparagraph, an entity shall be considered affiliated with the taxpayer
if such entity and the taxpayer have eighty percent or more common
direct or indirect, actual or beneficial ownership.
(F) Receipts constituting account maintenance fees shall be deemed to
arise from services performed at the mailing address in the records of
the taxpayer of the customer who is responsible for paying such account
maintenance fees.
(G) Receipts constituting fees for management or advisory services,
including fees for advisory services in relation to merger or
acquisition activities, but excluding fees paid for services described
in paragraph one of subdivision (e-2) of this section, shall be deemed
to arise from services performed at the mailing address in the records
of the taxpayer of the customer who is responsible for paying such fees.
(2) For purposes of this subdivision, the term "securities" shall have
the same meaning as in section 475(c)(2) of the internal revenue code
and the term "commodities" shall have the same meaning as in section
475(e)(2) of such code. The term "registered securities or commodities
broker or dealer" means a broker or dealer registered as such by the
securities and exchange commission or the commodities futures trading
commission, and shall include an OTC derivatives dealer as defined under
regulations of the securities and exchange commission at title 17, part
240, section 3b-12 of the code of federal regulations (17 CFR
240.3b-12).
(3) If the taxpayer receives any of the receipts enumerated in
paragraph (1) of this subdivision as a result of a securities
correspondent relationship such taxpayer has with another registered
securities or commodities broker or dealer with the taxpayer acting in
this relationship as the clearing firm, such receipts shall be deemed to
arise from services performed within the city to the extent set forth in
each of the subparagraphs in paragraph (1) of this subdivision. The
amount of such receipts shall exclude the amount the taxpayer is
required to pay to the correspondent firm for such correspondent
relationship. If the taxpayer receives any of the receipts enumerated in
paragraph (1) of this subdivision as a result of a securities
correspondent relationship such taxpayer has with another registered
securities or commodities broker or dealer with the taxpayer acting in
this relationship as the introducing firm, such receipts shall be deemed
to arise from services performed within the city to the extent set forth
in each of the subparagraphs in paragraph (1) of this subdivision.
(4) If, for purposes of subparagraph (A), (B), (F), or (G) of
paragraph (1) of this subdivision, and clause (i) of subparagraph (C) of
paragraph (1) of this subdivision, the taxpayer is unable from its
records to determine the mailing address of the customer, the receipts
described in any of such subparagraphs and such clause shall be deemed
to arise from services performed at the branch or office of the taxpayer
that generates the transaction for the customer that generated such
receipts.
(f) Allocation of investment income. (1) The investment income of an
unincorporated business shall be allocated to the city by multiplying
such investment income by an investment allocation percentage to be
determined as follows:
(A) multiply the amount of its investment capital invested in each
stock, bond or other security (other than governmental securities)
during the period covered by its return by the issuer's allocation
percentage (determined as provided in paragraph two of this subdivision)
of the issuer or obligor thereof:
(B) add together the products so obtained; and
(C) divide the sum so obtained by the total of its investment capital
invested during such period in stocks, bonds and other securities;
provided, however, that in case any investment capital is invested in
any stock, bond or other security during only a portion of the period
covered by the return, only such portion of such capital shall be taken
into account; and provided, further, that if a taxpayer's investment
allocation percentage is zero, interest received on bank accounts shall
be allocated in the manner provided in subdivision (b), (c) or (d) of
this section.
(2) (A) In the case of an issuer or obligor subject to tax under
subchapter two of chapter six of this title, or subject to tax as a
utility corporation under chapter eleven of this title, the issuer's
allocation percentage shall be the percentage of the appropriate measure
(as defined hereinafter) which is required to be allocated within the
city on the report or reports, if any, required of the issuer or obligor
under chapter six or eleven of this title for the preceding year. The
appropriate measure referred to in the preceding sentence shall be: in
the case of an issuer or obligor subject to subchapter two of chapter
six of this title, entire capital; and in the case of an issuer or
obligor subject to chapter eleven of this title as a utility
corporation, gross income.
(B) In the case of an issuer or obligor subject to tax under part four
of subchapter three of chapter six of this title, the issuer's
allocation percentage shall be determined as follows:
(i) In the case of a banking corporation described in paragraphs one
through eight of subdivision (a) of section 11-640 of this title which
is organized under the laws of the United States, this state or any
other state of the United States, the issuer's allocation percentage
shall be its alternative entire net income allocation percentage, as
defined in subdivision (c) of section 11-642 of this title, for the
preceding year. In the case of such a banking corporation whose
alternative entire net income for the preceding year is derived
exclusively from business carried on within the city, its issuer's
allocation percentage shall be one hundred percent.
(ii) In the case of a banking corporation described in paragraph two
of subdivision (a) of section 11-640 of this title which is organized
under the laws of a country other than the United States, the issuer's
allocation percentage shall be determined by dividing (I) the amount
described in clause (i) of subparagraph (A) of paragraph two of
subdivision (a) of section 11-642 of this title with respect to such
issuer or obligor for the preceding year, by (II) the gross income of
such issuer or obligor from all sources within and without the United
States, for such preceding year, whether or not included in alternative
entire net income for such year.
(iii) In the case of an issuer or obligor described in paragraph nine
of subdivision (a) or in paragraph two of subdivision (d) of section
11-640 of this title, the issuer's allocation percentage shall be
determined by dividing the portion of the entire capital of the issuer
or obligor allocable to the city for the preceding year by the entire
capital, wherever located, of the issuer or obligor for the preceding
year.
(C) Provided, however, that if a report or reports for the preceding
year are not filed, or if filed do not contain information which would
permit the determination of such issuer's allocation percentage, then
the issuer's allocation percentage to be used shall, at the discretion
of the commissioner of finance, be either (i) the issuer's allocation
percentage derived from the most recently filed report or reports of the
issuer or obligor or (ii) a percentage calculated, by the commissioner
of finance, reasonably to indicate the degree of economic presence in
the city of the issuer or obligor during the preceding year.
(3) For purposes of this subdivision, investment capital shall be
determined by taking the average value of the gross assets included
therein (less liabilities deductible therefrom pursuant to the
provisions of subdivision (h) of section 11-501 of this chapter). The
value of investment capital which consists of marketable securities
shall be the fair market value thereof and the value of investment
capital other than marketable securities shall be the value thereof
shown on the books and records of the unincorporated business in
accordance with generally accepted accounting principles.
(g) Special rules for manufacturing businesses. (1) For taxable years
beginning on or after July first, nineteen hundred ninety-six and before
January first, two thousand eleven, a manufacturing business may elect
to determine its business allocation percentage by adding together the
percentages determined under paragraphs one, two and three of
subdivision (c) of this section and an additional percentage equal to
the percentage determined under paragraph three of subdivision (c) of
this section, and dividing the result by the number of percentages so
added together.
(2) An election under this subdivision must be made on a timely filed
(determined with regard to extensions granted) original return for the
taxable year. Once made for a taxable year, such election shall be
irrevocable for that taxable year. A separate election must be made for
each taxable year. A manufacturing business that has failed to make an
election as provided in this paragraph shall be required to determine
its business allocation percentage without regard to the provisions of
this subdivision. Notwithstanding anything in this paragraph to the
contrary, the commissioner of finance may permit a manufacturing
business to make or revoke an election under this subdivision, upon such
terms and conditions as the commissioner may prescribe, where the
commissioner determines that such permission should be granted in the
interests of fairness and equity due to a change in circumstances
resulting from an audit adjustment.
(3) As used in this subdivision, the term "manufacturing business"
means an unincorporated business primarily engaged in the manufacturing
and sale thereof of tangible personal property; and the term
"manufacturing" includes the process (including the assembly process)
(i) of working raw materials into wares suitable for use or (ii) which
gives new shapes, new qualities or new combinations to matter which
already has gone through some artificial process, by the use of
machinery, tools, appliances and other similar equipment. An
unincorporated business shall be deemed to be primarily engaged in the
activities described in the preceding sentence if more than fifty
percent of its gross receipts for the taxable year are attributable to
such activities.
(h) Notwithstanding subdivision (d) of this section, if it shall
appear to the commissioner of finance that any business or investment
allocation percentage determined as hereinabove provided does not
properly reflect the activity, business, or income of a taxpayer within
the city, the commissioner of finance shall be authorized in his or her
discretion, in the case of a business allocation percentage, to adjust
it by (1) excluding one or more of the factors therein; (2) including
one or more factors, such as expenses, purchases, contract values (minus
subcontract values); (3) excluding one or more assets in computing such
allocation percentage, provided the income therefrom is also excluded in
determining unincorporated business entire net income, or (4) any other
similar or different method calculated to effect a fair and proper
allocation of the income reasonably attributable to the city, and in the
case of an investment allocation percentage, to adjust it by excluding
one or more assets in computing such percentage; provided the income
therefrom is also excluded in determining unincorporated business entire
net income. The commissioner of finance from time to time shall publish
all rulings of general public interest with respect to any application
of the provisions of this subdivision.
(i) Notwithstanding subdivision (c) of this section, but subject to
subdivision (g) of this section, the business allocation percentage
shall be computed in the manner set forth in this subdivision.
(1) For taxable years beginning in two thousand nine, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of thirty percent and the percentage determined under
paragraph one of subdivision (c) of this section,
(B) the product of thirty percent and the percentage determined under
paragraph two of subdivision (c) of this section, and
(C) the product of forty percent and the percentage determined under
paragraph three of subdivision (c) of this section.
(2) For taxable years beginning in two thousand ten, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of twenty-seven percent and the percentage determined
under paragraph one of subdivision (c) of this section,
(B) the product of twenty-seven percent and the percentage determined
under paragraph two of subdivision (c) of this section, and
(C) the product of forty-six percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(3) For taxable years beginning in two thousand eleven, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of twenty-three and one-half percent and the
percentage determined under paragraph one of subdivision (c) of this
section,
(B) the product of twenty-three and one-half percent and the
percentage determined under paragraph two of subdivision (c) of this
section, and
(C) the product of fifty-three percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(4) For taxable years beginning in two thousand twelve, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of twenty percent and the percentage determined under
paragraph one of subdivision (c) of this section,
(B) the product of twenty percent and the percentage determined under
paragraph two of subdivision (c) of this section, and
(C) the product of sixty percent and the percentage determined under
paragraph three of subdivision (c) of this section.
(5) For taxable years beginning in two thousand thirteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of sixteen and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of sixteen and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of sixty-seven percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(6) For taxable years beginning in two thousand fourteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of thirteen and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of thirteen and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of seventy-three percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(7) For taxable years beginning in two thousand fifteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of ten percent and the percentage determined under
paragraph one of subdivision (c) of this section,
(B) the product of ten percent and the percentage determined under
paragraph two of subdivision (c) of this section, and
(C) the product of eighty percent and the percentage determined under
paragraph three of subdivision (c) of this section.
(8) For taxable years beginning in two thousand sixteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of six and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of six and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of eighty-seven percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(9) For taxable years beginning in two thousand seventeen, the
business allocation percentage shall be determined by adding together
the following percentages:
(A) the product of three and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of three and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of ninety-three percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(10) For taxable years beginning after two thousand seventeen, the
business allocation percentage shall be the percentage determined under
paragraph three of subdivision (c) of this section.
(11) The commissioner shall promulgate rules necessary to implement
the provisions of this subdivision under such circumstances where any of
the percentages to be determined under paragraph one, two or three of
subdivision (c) of this section cannot be determined because the
taxpayer has no property, payroll or gross receipts from sales or
services within or without the city.
Section 11-509
§ 11-509 Deductions not subject to allocation. (a) In computing
unincorporated business taxable income, there shall be allowed (without
allocation under section 11-508 of this chapter) deductions for
reasonable compensation for taxable years beginning before January
first, two thousand seven, not in excess of five thousand dollars, and
for taxable years beginning on or after January first, two thousand
seven, not in excess of ten thousand dollars, for personal services of
the proprietor and each partner actively engaged in the unincorporated
business, but the aggregate of such deductions shall not exceed twenty
per centum of the unincorporated business taxable income computed
without the benefit of any deductions under this subdivision or the
unincorporated business exemptions under section 11-510 of this chapter.
(b) Subject to the conditions provided in paragraphs three and four of
this subdivision at the election of the taxpayer there shall also be
allowed (without allocation under section 11-508 of this chapter) either
or both of the items set forth in paragraphs one and two of this
subdivision, except that only one of the items shall be allowed with
respect to any one item of property.
(1) Depreciation with respect to any property such as described in
paragraphs three or four of this subdivision, and subject to the
conditions provided therein, not exceeding twice the depreciation
allowed with respect to the same property for federal income tax
purposes. Such deduction shall be allowed only upon condition that no
deduction shall be allowed pursuant to section 11-507 of this chapter
for depreciation of the same property, and the total of all deductions
allowed pursuant to this paragraph in any taxable year or years with
respect to any property shall not exceed its cost or other basis and, in
the case of an unincorporated business carried on both within and
without this city, with respect to property described in paragraph four
of this subdivision, such total shall not exceed its cost or other basis
multiplied by (A) the percentage of the excess of the taxpayer's
unincorporated business gross income over its unincorporated business
deductions allocated to this city, or (B) the percentage of the
taxpayer's business income allocated to this city, whichever is
applicable, which percentage shall be determined under section 11-508 of
this chapter for the first year such depreciation is deducted.
(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in paragraph three or four of this subdivision, and
subject to the conditions provided therein, which is used or to be used
for purposes of research or development in the experimental or
laboratory sense. Such purposes shall not be deemed to include the
ordinary testing or inspection of materials or products for quality
control, efficiency surveys, management studies, consumer surveys,
advertising, promotions or research in connection with literary,
historical or similar projects. Such deduction shall be allowed only on
condition that, in the case of an unincorporated business carried on
both within and without this city, with respect to property described in
paragraph four of this subdivision, such deduction does not exceed the
expenditures multiplied by (A) the percentage of the excess of the
taxpayer's unincorporated business gross income over its unincorporated
business deductions allocated to this city, or (B) the percentage of the
taxpayer's business income allocated to this city, whichever is
applicable, which percentage shall be determined under section 11-508 of
this chapter for the first year such depreciation is deducted, and that,
for the taxable year and all succeeding taxable years, no deduction
shall be allowed pursuant to section 11-507 of this chapter on account
of such expenditures or on account of depreciation of the same property,
except to the extent that its basis may be attributable to factors other
than such expenditures, or in case a deduction is allowable pursuant to
this paragraph for only a part of such expenditures, on condition that
any deduction allowable for federal income tax purposes on account of
such expenditures or on account of depreciation of the same property
shall be proportionately reduced in determining the deductions allowable
pursuant to section 11-507 of this chapter for the taxable year and all
succeeding taxable years. With respect to property which is used or to
be used for research and development only in part, or during only part
of its useful life, the deduction allowable pursuant to this paragraph
shall be limited to a proportionate part of the expenditures relating
thereto. If a deduction shall have been allowed pursuant to this
paragraph for all or part of such expenditures with respect to any
property, and such property is used for purposes other than research and
development to a greater extent than originally reported, the taxpayer
shall report such use in the taxpayer's return for the first taxable
year during which it occurs, and the commissioner of finance may
recompute the tax for the year or years for which such deduction was
allowed, and may assess any additional tax resulting from such
recomputation within the time fixed by subdivision (c) of section 11-523
of this chapter.
(3) For purposes of this paragraph, such deduction shall be allowed
only with respect to tangible property which is depreciable pursuant to
section one hundred sixty-seven of the internal revenue code, having a
situs in the city and used in the taxpayer's trade or business, (A)
constructed, reconstructed or erected after December thirty-first,
nineteen hundred sixty-five, pursuant to a contract which was, on or
before December thirty-first, nineteen hundred sixty-seven, and at all
times thereafter, binding on the taxpayer or, property, the physical
construction, reconstruction or erection of which began on or before
December thirty-first, nineteen hundred sixty-seven or which began after
such date pursuant to an order placed on or before December
thirty-first, nineteen hundred sixty-seven, and then only with respect
to that portion of the basis thereof or the expenditure relating thereto
which is properly attributable to such construction, reconstruction or
erection after December thirty-first, nineteen hundred sixty-five, or
(B) acquired after December thirty-first, nineteen hundred sixty-five,
pursuant to a contract which was, on or before December thirty-first,
nineteen hundred sixty-seven, and at all times thereafter, binding on
the taxpayer or pursuant to an order placed on or before December
thirty-first, nineteen hundred sixty-seven, by purchase as defined in
section one hundred seventy-nine (d) of the internal revenue code, if
the original use of such property commenced with the taxpayer, commenced
in the city and commenced after December thirty-first, nineteen hundred
sixty-five or (C) acquired, constructed, reconstructed, or erected
subsequent to December thirty-first, nineteen hundred sixty-seven, if
such acquisition, construction, reconstruction or erection is pursuant
to a plan of the taxpayer which was in existence December thirty-first,
nineteen hundred sixty-seven and not thereafter substantially modified,
and such acquisition, construction, reconstruction or erection would
qualify under the rules in paragraph four, five or six of subsection (h)
of section forty-eight of the internal revenue code provided all
references in such paragraphs four, five and six to the dates October
nine, nineteen hundred sixty-six, and October ten, nineteen hundred
sixty-six, shall be read as December thirty-first, nineteen hundred
sixty-seven. A taxpayer shall be allowed a deduction under subparagraph
(A), (B) or (C) of this paragraph only if the tangible property shall be
delivered or the construction, reconstruction or erection shall be
completed on or before December thirty-first, nineteen hundred
sixty-nine, except in the case of tangible property which is acquired,
constructed, reconstructed or erected pursuant to a contract which was,
on or before December thirty-first, nineteen hundred sixty-seven, and at
all times thereafter, binding on the taxpayer. However, for any taxable
year beginning on or after January first, nineteen hundred sixty-eight,
a taxpayer shall not be allowed a deduction under paragraph one of this
subdivision with respect to tangible personal property leased to any
other person or corporation. For purposes of the preceding sentence, any
contract or agreement to lease or rent or for a license to use such
property shall be considered a lease. With respect to property which a
taxpayer uses for purposes other than leasing for part of a taxable year
and leases for a part of a taxable year, a deduction under paragraph one
may be taken in proportion to the part of the year such property is used
by the taxpayer.
(4) For purposes of this paragraph, such deductions shall be allowed
only with respect to tangible property which is depreciable pursuant to
section one hundred sixty-seven of the internal revenue code, having a
situs in this city and used in the taxpayer's trade or business, (A) the
construction, reconstruction, or erection of which is completed after
December thirty-first, nineteen hundred sixty-seven, and then only with
respect to that portion of the basis thereof or the expenditures
relating thereto which is properly attributable to such construction,
reconstruction or erection after December thirty-first, nineteen hundred
sixty-three, or (B) acquired after December thirty-first, nineteen
hundred sixty-seven, by purchase as defined in section one hundred
seventy-nine (d) of the internal revenue code, if the original use of
such property commenced with the taxpayer, commenced in this city and
commenced after December thirty-first, nineteen hundred sixty-five.
Provided, however, a deduction under paragraph one of this subdivision
shall be allowed with respect to property described in this paragraph
only on condition that such property shall be principally used by the
taxpayer in the production of goods by manufacturing; processing;
assembling; refining; mining; extracting; farming; agriculture;
horticulture; floriculture; viticulture or commercial fishing. For
purposes of the preceding sentence, manufacturing shall mean the process
of working raw materials into wares suitable for use or which gives new
shapes, new qualities or new combinations to matter which already has
gone through some artificial process by the use of machinery, tools,
appliances, and other similar equipment. Property used in the production
of goods shall include machinery, equipment or other tangible property
which is principally used in the repair and service of other machinery,
equipment or other tangible property used principally in the production
of goods and shall include all facilities used in the manufacturing
operation, including storage of material to be used in manufacturing and
of the products that are manufactured. At the option of the taxpayer,
air and water pollution control facilities which qualify for elective
deductions under subdivision nine of section 11-507 of this chapter may
be treated, for purposes of this paragraph, as tangible property
principally used in the production of goods by manufacturing;
processing; assembling; refining; mining; extracting; farming;
agriculture; horticulture; floriculture; viticulture or commercial
fishing, in which event, a deduction shall not be allowed under
subdivision nine of section 11-507 of this chapter. However, for any
taxable year beginning on or after January first, nineteen hundred
sixty-eight, a taxpayer shall not be allowed a deduction under paragraph
one of this subdivision with respect to tangible personal property
leased to any other person or corporation. For purposes of the preceding
sentence, any contract or agreement to lease or rent or for a license to
use such property shall be considered a lease. With respect to property
which a taxpayer uses for purposes other than leasing for part of a
taxable year and leases for a part of a taxable year, a deduction under
paragraph one shall be allowed in proportion to the part of the year
such property is used by the taxpayer.
(5) If the deductions allowable for any taxable year pursuant to this
subdivision exceed the taxpayer's unincorporated business taxable
income, determined without the allowance of such deductions, the excess
may be carried over to the following taxable year or years and may be
deducted (without allocation under section 11-508 of this chapter) in
computing unincorporated business taxable income for such year or years.
(6) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to
paragraph one or two of this subdivision, the basis of such property
shall be adjusted to reflect the deductions so allowed, and if the basis
as so adjusted is lower than the adjusted basis of the same property for
federal income tax purposes, there shall be added to federal gross
income the amount of the difference between such adjusted bases.
Section 11-510
§ 11-510 Unincorporated business exemptions. In computing
unincorporated business taxable income, there shall be allowed (without
allocation under section 11-508 of this chapter):
(1) an unincorporated business exemption of five thousand dollars,
prorated for taxable years of less than twelve months under regulations
of the commissioner of finance;
(2) if a partner in an unincorporated business is taxable under this
chapter or under any local law imposed pursuant to section one of
chapter seven hundred seventy-two of the laws of nineteen hundred
sixty-six, an exemption for the amount of the partner's proportionate
interest in the excess of the unincorporated business gross income over
the deductions allowed under sections 11-507 and 11-509 of this chapter,
but this exemption shall be limited to the amount which is included in
the partner's unincorporated business taxable income allocable to the
city, or included in a corporate partner's net income allocable to the
city, provided, however, no such exemption shall be allowed to an
unincorporated business for any taxable year of the unincorporated
business beginning after June thirtieth, nineteen hundred ninety-four.
Section 11-511
§ 11-511 Declarations of estimated tax. (a) Requirement of
declaration. Except as provided in subdivision (j) of this section,
every unincorporated business shall make a declaration of its estimated
tax for the taxable year, containing such information as the
commissioner of finance may prescribe by regulations or instruction, if:
(1) for taxable years beginning after nineteen hundred eighty-six but
before nineteen hundred ninety-six, its unincorporated business taxable
income can reasonably be expected to exceed fifteen thousand dollars;
(2) for taxable years beginning in nineteen hundred ninety-six, its
unincorporated business taxable income can reasonably be expected to
exceed twenty thousand dollars;
(3) for taxable years beginning after nineteen hundred ninety-six but
before two thousand nine, its estimated tax can reasonably be expected
to exceed one thousand eight hundred dollars; and
(4) for taxable years beginning after two thousand eight, its
estimated tax can reasonably be expected to exceed three thousand four
hundred dollars.
(b) Definition of estimated tax. The term "estimated tax" means the
amount which an unincorporated business estimates to be its tax under
this chapter for the taxable year, less the amount which it estimates to
be the sum of any credits allowable against the tax other than the
credit allowable under subdivision (c) of section 11-503 of this
chapter.
(c) Time for filing declaration. Except as hereinafter provided, a
declaration of estimated tax required under this section shall be filed
on or before April fifteenth of the taxable year provided, however, that
if the requirements of subdivision (a) of this section are first met:
(1) after April first and before June second of the taxable year, the
declaration shall be filed on or before June fifteenth, or
(2) after June first and before September second of the taxable year,
the declaration shall be filed on or before September fifteenth, or
(3) after September first of the taxable year, the declaration shall
be filed on or before January fifteenth of the succeeding year.
(d) Filing of declarations on or before January fifteenth.
(1) A declaration of estimated tax by an unincorporated business
having an estimated unincorporated business taxable income from farming
(including oyster farming) for the taxable year which is at least
two-thirds of its total estimated unincorporated business taxable income
for the taxable year may be filed at any time on or before January
fifteenth of the succeeding year.
(2) For taxable years beginning before nineteen hundred ninety-seven,
a declaration of estimated tax under this section of forty dollars or
less for the taxable year may be filed at any time on or before January
fifteenth of the succeeding year under regulations of the commissioner
of finance.
(e) Amendments of declaration. An unincorporated business may amend a
declaration under regulations of the commissioner of finance.
(f) Return as declaration or amendment. If on or before February
fifteenth of the succeeding taxable year an unincorporated business
subject to the estimated tax requirements of this section files its
return for the taxable year for which the declaration is required, and
pays on or before such date the full amount of the tax shown to be due
on the return:
(1) such return shall be considered as its declaration if no
declaration was required to be filed during the taxable year, but is
otherwise required to be filed on or before January fifteenth of the
succeeding year, and
(2) such return shall be considered as the amendment permitted by
subdivision (e) to be filed on or before January fifteenth if the tax
shown on the return is greater than the estimated tax shown in a
declaration previously made.
(g) Fiscal year. This section shall apply to a taxable year other than
a calendar year by the substitution of the months of such fiscal year
for the corresponding months specified in this section.
(h) Short taxable year. An unincorporated business subject to the
estimated tax requirements of this section and having a taxable year of
less than twelve months shall make a declaration in accordance with
regulations of the commissioner of finance.
(i) Declaration of unincorporated business under a disability. The
declaration of estimated tax for an unincorporated business which is
unable to make a declaration for any reason shall be made and filed by
the committee, fiduciary or other person charged with the care of the
property of such unincorporated business (other than a receiver in
possession of only a part of such property), or by his or her duly
authorized agent.
(j) Declaration of estimated tax for taxable years beginning prior to
July thirteenth, nineteen hundred sixty-six. Notwithstanding subdivision
(c) of this section, no declaration of estimated tax required by
subdivision (a) of this section need be filed until September twelfth,
nineteen hundred sixty-six.
Section 11-512
§ 11-512 Payments of estimated tax. (a) General. The estimated tax
with respect to which a declaration is required shall be paid as
follows:
(1) If the declaration is filed on or before April fifteenth of the
taxable year, the estimated tax shall be paid in four equal
installments. The first installment shall be paid at the time of the
filing of the declaration, and the second, third and fourth installments
shall be paid on the following June fifteenth, September fifteenth, and
January fifteenth, respectively.
(2) If the declaration is filed after April fifteenth and not after
June fifteenth of the taxable year, and is not required to be filed on
or before April fifteenth of the taxable year, the estimated tax shall
be paid in three equal installments. The first installment shall be paid
at the time of the filing of the declaration, and the second and third
installments shall be paid on the following September fifteenth and
January fifteenth, respectively.
(3) If the declaration is filed after June fifteenth and not after
September fifteenth of the taxable year, and is not required to be filed
on or before June fifteenth of the taxable year, the estimated tax shall
be paid in two equal installments. The first installment shall be paid
at the time of the filing of the declaration, and the second shall be
paid on the following January fifteenth.
(4) If the declaration is filed after September fifteenth of the
taxable year, and is not required to be filed on or before September
fifteenth of the taxable year, the estimated tax shall be paid in full
at the time of the filing of the declaration.
(5) If the declaration is filed after the time prescribed therefor, or
after the expiration of any extension of time therefor, paragraphs two,
three and four of this subdivision shall not apply, and there shall be
paid at the time of such filing all installments of estimated tax
payable at or before such time, and the remaining installments shall be
paid at the times at which, and in the amounts in which, they would have
been payable if the declaration had been filed when due.
(b) Amendments of declaration. If any amendment of a declaration is
filed, the remaining installments, if any, shall be ratably increased or
decreased (as the case may be) to reflect any increase or decrease in
the estimated tax by reason of such amendment, and if any amendment is
made after September fifteenth of the taxable year, any increase in the
estimated tax by reason thereof shall be paid at the time of making such
amendment.
(c) Application to short taxable year. This section shall apply to a
taxable year of less than twelve months in accordance with regulations
of the commissioner of finance.
(d) Fiscal year. This section shall apply to a taxable year other than
a calendar year by the substitution of the months of such fiscal year
for the corresponding months specified in this section.
(e) Installments paid in advance. An unincorporated business may elect
to pay any installment of its estimated tax prior to the date prescribed
for the payment thereof.
(f) Cross reference. For unincorporated businesses with taxable years
beginning prior to July thirteenth, nineteen hundred sixty-six, see
subdivision (j) of section 11-511 of this chapter.
(g) Taxpayers with credit relating to stock transfer tax. The portion
of an overpayment attributable to a credit allowable pursuant to
subdivision (c) of section 11-503 of this chapter may not be credited
against any payment due under this section.
Section 11-513
§ 11-513 Accounting periods and methods. (a) Accounting periods. A
taxpayer's taxable year under this chapter shall be the same as the
taxpayer's taxable year for federal income tax purposes.
(b) Accounting methods. A taxpayer's method of accounting under this
chapter shall be the same as the taxpayer's method of accounting for
federal income tax purposes. In the absence of any method of accounting
for federal income tax purposes, unincorporated business taxable income
shall be computed under such method as in the opinion of the
commissioner of finance clearly reflects income.
(c) Change of accounting period or method. (1) If a taxpayer's taxable
year or method of accounting is changed for federal income tax purposes,
the taxable year or method of accounting for purposes of this chapter
shall be similarly changed.
(2) If a taxpayer's method of accounting is changed, other than from
an accrual to an installment method, any additional tax which results
from adjustments determined to be necessary solely by reason of the
change shall not be greater than if such adjustments were ratably
allocated and included for the taxable year of the change and the
preceding taxable years, not in excess of two, beginning after January
first, nineteen hundred sixty-six, during which the taxpayer used the
method of accounting from which the change is made.
(3) If a taxpayer's method of accounting is changed from an accrual to
an installment method, any additional tax for the year of such change of
method and for any subsequent year, which is attributable to the receipt
of installment payments properly accrued in a prior year, shall be
reduced by the portion of tax for any prior taxable year attributable to
the accrual of such installment payments, in accordance with regulations
of the commissioner of finance.
Section 11-514
§ 11-514 Returns, payment of tax. (a) General. On or before the
fifteenth day of the fourth month following the close of a taxable year,
an unincorporated business income tax return shall be made and filed,
and the balance of any tax shown on the face of such return, not
previously paid as installments of estimated tax, shall be paid:
(1) by or for every unincorporated business, for taxable years
beginning after nineteen hundred eighty-six but before nineteen hundred
ninety-seven, having unincorporated business gross income, determined
for purposes of this subdivision without any deduction for the cost of
goods sold or services performed, of more than ten thousand dollars, or
having any amount of unincorporated business taxable income;
(2) by or for every partnership, for taxable years beginning after
nineteen hundred ninety-six but before two thousand nine, having
unincorporated business gross income, determined for purposes of this
subdivision without any deduction for the cost of goods sold or services
performed, of more than twenty-five thousand dollars, or having
unincorporated business taxable income of more than fifteen thousand
dollars;
(3) by or for every unincorporated business other than a partnership,
for taxable years beginning after nineteen hundred ninety-six but before
two thousand nine, having unincorporated business gross income,
determined for purposes of this subdivision without any deduction for
the cost of goods sold or services performed, of more than seventy-five
thousand dollars, or having unincorporated business taxable income of
more than thirty-five thousand dollars; and
(4) by or for every unincorporated business, for taxable years
beginning after two thousand eight, having unincorporated business gross
income, determined for purposes of this subdivision without any
deduction for the cost of goods sold or services performed, of more than
ninety-five thousand dollars.
(b) Decedents. The return for any deceased individual shall be made
and filed by his or her executor, administrator, or other person charged
with his or her property. If a final return of a decedent is for a
fractional part of a year, the due date of such return shall be the
fifteenth day of the fourth month following the close of the
twelve-month period which began with the first day of such fractional
part of the year.
(c) Individuals under a disability. The return for an individual who
is unable to make a return by reason of minority or other disability
shall be made and filed by such individual's guardian, committee,
fiduciary or other person charged with the care of his or her person or
property (other than a receiver in possession of only a part of his or
her property), or by such individual's duly authorized agent.
(d) Estates and trusts. The return for an estate or trust shall be
made and filed by the fiduciary.
(e) Joint fiduciaries. If two or more fiduciaries are acting jointly,
the return may be made by any one of them.
(f) Returns for taxable years ending prior to December thirty-first
nineteen hundred sixty-six. With respect to taxable years ending prior
to December thirty-first, nineteen hundred sixty-six, the returns
required to be made and filed pursuant to this section shall be made and
filed on or before the fifteenth day of the fourth month following the
close of such taxable year or September twelfth, nineteen hundred
sixty-six, whichever is later.
(g) Taxpayers with credit relating to stock transfer tax. Subdivisions
one and two of this section shall apply to a taxpayer which has a right
to a credit pursuant to subdivision (c) of section 11-503 of this
chapter, except that the tax, or balance thereof, payable to the
commissioner of finance in full pursuant to subdivision (a) of this
section, at the time the report is required to be filed, shall be
calculated and paid at such time as if the credit provided for in
subdivision (c) of section 11-503 of this chapter were not allowed.
Section 11-515
§ 11-515 Time and place for filing returns and paying tax. A person
required to make and file a return under this chapter shall, without
assessment, notice or demand, pay any tax due thereon to the
commissioner of finance on or before the date fixed for filing such
return (determined without regard to any extension of time for filing
the return). The commissioner of finance shall prescribe by regulation
the place for filing any return, declaration, statement, or other
document required pursuant to this chapter and for payment of any tax.
Section 11-516
§ 11-516 Signing of returns and other documents. (a) General. Any
return, declaration, statement or other document required to be made
pursuant to this chapter shall be signed in accordance with regulations
or instructions prescribed by the commissioner of finance. The fact that
an individual's name is signed to a return, declaration, statement, or
other document, shall be prima facie evidence for all purposes that the
return, declaration, statement or other document was actually signed by
such individual.
(b) Partnerships. Any return, statement or other document required of
a partnership shall be signed by one or more partners. The fact that a
partner's name is signed to a return, statement, or other document,
shall be prima facie evidence for all purposes that such partner is
authorized to sign on behalf of the partnership.
(c) Certifications. The making or filing of any return, declaration,
statement or other document or copy thereof required to be made or filed
pursuant to this chapter, including a copy of a federal return, shall
constitute a certification by the person making or filing such return,
declaration, statement or other document or copy thereof that the
statements contained therein are true and that any copy filed is a true
copy.
Section 11-517
§ 11-517 Extensions of time. (a) General. The commissioner of finance
may grant a reasonable extension of time for payment of tax or estimated
tax (or any installment), or for filing any return, declaration,
statement, or other document required pursuant to this chapter, on such
terms and conditions as it may require. Except for a taxpayer who is
outside the United States, no such extension for filing any return,
declaration, statement or other document, shall exceed six months.
(b) Furnishing of security. If any extension of time is granted for
payment of any amount of tax, the commissioner of finance may require
the taxpayer to furnish a bond or other security in an amount not
exceeding twice the amount for which the extension of time for payment
is granted, on such terms and conditions as the commissioner of finance
may require.
Section 11-518
§ 11-518 Requirements concerning returns, notices, records and
statements. (a) General. The commissioner of finance may prescribe
regulations as to the keeping of records, the content and forms of
returns and statements, and the filing of copies of federal income tax
returns and determinations. The commissioner of finance may require any
person, by regulation or notice served upon such person, to make such
returns, render such statements, or keep such records, as the
commissioner of finance may deem sufficient to show whether or not such
person is liable under this chapter for tax or for collection of tax.
(b) Notice of qualification as receiver, etc. Every receiver, trustee
in bankruptcy, assignee for benefit of creditors, or other like
fiduciary shall give notice of his or her qualification as such to the
commissioner of finance, as may be required by regulation.
Section 11-519
§ 11-519 Report of change in federal or New York state taxable income.
If the amount of a taxpayer's federal or New York state taxable income
reported on his or her federal or New York state income tax for any
taxable year is changed or corrected by the United States internal
revenue service or the New York state tax commission or other competent
authority, or as the result of a renegotiation of a contract or
subcontract with the United States or the state of New York, or if a
taxpayer, pursuant to subsection (d) of section sixty-two hundred
thirteen of the internal revenue code, executes a notice of waiver of
the restrictions provided in subsection (a) of said section, or if a
taxpayer, pursuant to subsection (f) of section six hundred eighty-one
of the tax law, executes a notice or waiver of the restrictions provided
in subsection (c) of such section of the tax law, the taxpayer shall
report such change or correction in federal or New York state taxable
income or such execution of such notice of waiver and the changes or
corrections of the taxpayer's federal or New York state taxable income
on which it is based, within ninety days after the final determination
of such change, correction, or renegotiation, or such execution of such
notice of waiver, or as otherwise required by the commissioner of
finance, and shall concede the accuracy of such determination or state
wherein it is erroneous. Any taxpayer filing an amended federal or New
York state income tax return shall also file within ninety days
thereafter an amended return under this chapter, and shall give such
information as the commissioner of finance may require. The commissioner
of finance may by regulation prescribe such exceptions to the
requirements of this section as the commissioner deems appropriate.
Section 11-519.1
§ 11-519.1 Report of change of state sales and compensating use tax
liability. Where the state tax commission changes or corrects a
taxpayer's sales and compensating use tax liability with respect to the
purchase or use of items for which a sales or compensating use tax
credit against the tax imposed by this chapter was claimed, the taxpayer
shall report such change or correction to the commissioner of finance
within ninety days of the final determination of such change or
correction, or as required by the commissioner of finance, and shall
concede the accuracy of such determination or state wherein it is
erroneous. Any taxpayer filing an amended return or report relating to
the purchase or use of such items shall also file within ninety days
thereafter a copy of such amended return or report with the commissioner
of finance.
Section 11-520
§ 11-520 Change of election. Any election expressly authorized by this
chapter, other than the election authorized by section 11-506 of this
chapter, may be changed on such terms and conditions as the commissioner
of finance may prescribe by regulation.
Section 11-521
§ 11-521 Notice of deficiency. (a) General. If upon examination of a
taxpayer's return under this chapter the commissioner of finance
determines that there is a deficiency of income tax, the commissioner
may mail a notice of deficiency to the taxpayer. If a taxpayer fails to
file a return required under this chapter, the commissioner of finance
is authorized to estimate the taxpayer's city unincorporated business
taxable income and tax thereon, from any information in the
commissioner's possession, and to mail a notice of deficiency to the
taxpayer. A notice of deficiency shall be mailed by certified or
registered mail to the taxpayer at his or her last known address in or
out of the city. If the taxpayer is deceased or under a legal
disability, a notice of deficiency may be mailed to his or her last
known address in or out of the city, unless the commissioner of finance
has received notice of the existence of a fiduciary relationship with
respect to the taxpayer.
(b) Notice of deficiency as assessment. After ninety days from the
mailing of a notice of deficiency or, if the commissioner of finance has
established a conciliation procedure pursuant to section 11-124 of the
code and the taxpayer has requested a conciliation conference in
accordance therewith, after ninety days from the mailing of the
conciliation decision or the date of the commissioner's confirmation of
the discontinuance of the conciliation proceeding, such notice shall be
an assessment of the amount of tax specified therein, together with the
interest, additions to tax and penalties stated in such notice, except
only for any such tax or other amounts as to which the taxpayer has
within such ninety day period filed with the tax appeals tribunal a
petition under section 11-529 of this chapter. If the notice of
deficiency or conciliation decision is addressed to a person outside of
the United States, such period shall be one hundred fifty days instead
of ninety days.
(c) Restrictions on assessment and levy. No assessment of a deficiency
in tax and no levy or proceeding in court for its collection shall be
made, begun or prosecuted, except as otherwise provided in section
11-534 of this chapter, until a notice of deficiency has been mailed to
the taxpayer, nor until the expiration of the time for filing a petition
with the tax appeals tribunal contesting such notice, nor, if a petition
with respect to the taxable year has been both served upon the
commissioner of finance and filed with the tax appeals tribunal, until
the decision of the tax appeals tribunal has become final. For exception
in the case of judicial review of the decision of the tax appeals
tribunal, see subdivision (c) of section 11-530 of this chapter.
(d) Exceptions for mathematical errors. If a mathematical error
appears on a return (including an overstatement of the amount paid as
estimated tax), the commissioner of finance shall notify the taxpayer
that an amount of tax in excess of that shown upon the return is due,
and that such excess has been assessed.
Such notice shall not be considered as a notice of deficiency for the
purposes of this section, subdivision (f) of section 11-527 of this
chapter (limiting credits or refunds after petition to the tax appeals
tribunal), or subdivision (b) of section 11-529 of this chapter
(authorizing the filing of a petition with the tax appeals tribunal
based on a notice of deficiency) nor shall such assessment or collection
be prohibited by the provisions of subdivision (c) of this section.
(e) Exception where change in federal or New York state taxable income
is not reported.
(1) If the taxpayer fails to comply with section 11-519 of this
chapter in not reporting a change or correction increasing or decreasing
the taxpayer's federal or New York state taxable income as reported on
the taxpayer's federal or New York state return or in not reporting a
change or correction which is treated in the same manner as if it were a
deficiency for federal or New York state income tax purposes or in not
filing an amended return or in not reporting the execution of a notice
of waiver described in such section, instead of the mode and time of
assessment provided for in subdivision (b) of this section, the
commissioner of finance may assess a deficiency based upon such changed
or corrected federal or New York state taxable income by mailing to the
taxpayer a notice of additional tax due specifying the amount of the
deficiency, and such deficiency, together with the interest, additions
to tax and penalties stated in such notice, shall be deemed assessed on
the date such notice is mailed unless within thirty days after the
mailing of such notice a report of the federal or New York state change
or correction or an amended return, where such return was required by
section 11-519 of this chapter, is filed accompanied by a statement
showing wherein such federal or New York state determination and such
notice of additional tax due are erroneous.
(2) Such notice shall not be considered as a notice of deficiency for
the purposes of this section, subdivision (f) of section 11-527 of this
chapter (limiting credits or refunds after petition to the tax appeals
tribunal), or subdivision (b) of section 11-529 of this chapter
(authorizing the filing of a petition with the tax appeals tribunal
based on a notice of deficiency), nor shall such assessment or
collection thereof be prohibited by the provisions of subdivision (c) of
this section.
(3) If the taxpayer is deceased or under a legal disability, a notice
of additional tax due may be mailed to his or her last known address in
or out of the city, unless the commissioner of finance has received
notice of the existence of a fiduciary relationship with respect to the
taxpayer.
(f) Waiver of restrictions. The taxpayer shall at any time (whether or
not a notice of deficiency has been issued) have the right to waive the
restrictions on assessment and collection of the whole or any part of
the deficiency by a signed notice in writing filed with the commissioner
of finance.
(g) Deficiency defined. For purposes of this chapter, a deficiency
means the amount of the tax imposed by this chapter, less (i) the amount
shown as the tax upon the taxpayer's return (whether the return was made
or the tax computed by the taxpayer or by the commissioner of finance),
and less, (ii) the amounts previously assessed (or collected without
assessment) as a deficiency and plus (iii) the amount of any rebates.
For the purpose of this definition, the tax imposed by this chapter and
the tax shown on the return shall both be determined without regard to
payments on account of estimated tax; and a rebate means so much of an
abatement, credit, refund or other repayment (whether or not erroneous)
made on the ground that the amounts entering into the definition of a
deficiency showed a balance in favor of the taxpayer.
(h) Exception where change or correction of sales and compensating use
tax liability is not reported. (1) If a taxpayer fails to comply with
section 11-519.1 of this chapter in not reporting a change or correction
of his or her sales and compensating use tax liability or in not filing
a copy of an amended return or report relating to his or her sales and
compensating use tax liability, instead of the mode and time of
assessment provided for in subdivision (b) of this section, the
commissioner of finance may assess a deficiency based upon such changed
or corrected sales and compensating use tax liability, as same relates
to credits claimed under this chapter by mailing to the taxpayer a
notice of additional tax due specifying the amount of the deficiency,
and such deficiency, together with the interest, additions to tax and
penalties stated in such notice, shall be deemed assessed on the date
such notice is mailed unless within thirty days after the mailing of
such notice a report of the state change or correction or a copy of an
amended return or report, where such copy was required by section
11-519.1 of this chapter, is filed accompanied by a statement showing
where such state determination and such notice of additional tax due are
erroneous.
(2) Such notice shall not be considered as a notice of deficiency for
the purposes of this section, subdivision (f) of section 11-527 of this
chapter (limiting credits or refunds after petition to the tax appeals
tribunal), or subdivision (b) of section 11-529 of this chapter
(authorizing the filing of a petition with the tax appeals tribunal
based on a notice of deficiency), nor shall such assessment or the
collection thereof be prohibited by the provisions of subdivision (c) of
this section.
(3) If the taxpayer is deceased or under a legal disability, a notice
of additional tax due may be mailed to his or her last known address in
or out of the city, and such notice shall be sufficient for purposes of
this chapter. If the commissioner of finance has received notice that a
person is acting for the taxpayer in a fiduciary capacity, a copy of
such notice shall also be mailed to the fiduciary named in such notice.
Section 11-522
§ 11-522 Assessment. (a) Assessment date. The amount of tax which a
return shows to be due, or the amount of tax which a return would have
shown to be due but for a mathematical error, shall be deemed to be
assessed on the date of filing of the return (including any amended
return showing an increase of tax). In the case of a return properly
filed without computation of tax, the tax computed by the commissioner
of finance shall be deemed to be assessed on the date on which payment
is due. If a notice of deficiency has been mailed, the amount of the
deficiency shall be deemed to be assessed on the date specified in
subdivision (b) of section 11-521 of this chapter if no petition is both
served on the commissioner of finance and filed with the tax appeals
tribunal, or if a petition is filed, then upon the date when a decision
of the tax appeals tribunal establishing the amount of the deficiency
becomes final. If an amended return or report filed pursuant to section
11-519 of this chapter concedes the accuracy of a federal or New York
state adjustment, change or correction, any deficiency in tax under this
chapter resulting therefrom shall be deemed to be assessed on the date
of filing such report or amended return, and such assessment shall be
timely notwithstanding section 11-523 of this chapter.
If a report or amended return or report filed pursuant to section
11-519.1 of this chapter concedes the accuracy of a state change or
correction of sales and compensating use tax liability, any deficiency
in tax under this chapter resulting therefrom shall be deemed assessed
on the date of filing such report, and such assessment shall be timely
notwithstanding section 11-523 of this chapter.
If a notice of additional tax due, as prescribed in subdivision (e) of
section 11-521 of this chapter has been mailed, the amount of the
deficiency shall be deemed to be assessed on the date specified in such
subdivision unless within thirty days after the mailing of such notice a
report of the federal or New York state change or correction or an
amended return, where such return was required by section 11-519 of this
chapter is filed accompanied by a statement showing wherein such federal
or New York state determination and such notice of additional tax due
are erroneous.
If a notice of additional tax due, as prescribed in subdivision (h) of
section 11-521 of this chapter, has been mailed, the amount of the
deficiency shall be deemed to be assessed on the date specified in such
subdivision unless within thirty days after the mailing of such notice a
report of the state change or correction, or a copy of an amended return
or report, where such copy was required by section 11-519.1 of this
chapter, is filed accompanied by a statement showing wherein such state
determination and such notice of additional tax due are erroneous.
Any amount paid as a tax or in respect of a tax, other than amounts
paid as estimated income tax, shall be deemed to be assessed upon the
date of receipt of payment, notwithstanding any other provisions.
(b) Other assessment powers. If the mode or time for the assessment of
any tax under this chapter (including interest, additions to tax and
assessable penalties) is not otherwise provided for, the commissioner of
finance may establish the same by regulations.
(c) Estimated income tax. No unpaid amount of estimated tax under
section one hundred sixteen shall be assessed.
(d) Supplemental assessment. The commissioner of finance may, at any
time within the period prescribed for assessment, make a supplemental
assessment, subject to the provisions of section 11-521 of this chapter
where applicable, whenever it is ascertained that any assessment is
imperfect or incomplete in any material respect.
(e) Cross reference. For assessment in case of jeopardy, see section
11-534 of this chapter.
Section 11-523
§ 11-523 Limitations on assessment. (a) General. Except as otherwise
provided in this section, any tax under this chapter shall be assessed
within three years after the return was filed (whether or not such
return was filed on or after the date prescribed).
(b) Time return deemed filed. For purposes of this section a return of
tax filed before the last day prescribed by law or by regulations
promulgated pursuant to law for the filing thereof, shall be deemed to
be filed on such last day.
(c) Exceptions. (1) Assessment at any time. The tax may be assessed at
any time if:
(A) no return is filed,
(B) a false or fraudulent return is filed with intent to evade tax,
(C) the taxpayer fails to comply with section 11-519 of this chapter
in not reporting a change or correction increasing or decreasing the
taxpayer's federal or New York state taxable income as reported on the
taxpayer's federal or New York state income tax return, or the execution
of a notice of waiver and the changes or corrections on which it is
based or in not reporting a change or correction which is treated in the
same manner as if it were a deficiency for federal or New York state
income tax purposes, or in not filing an amended return, or
(D) the taxpayer fails to file a report or amended return or report
required under section 11-519.1 of this chapter, in respect of a change
or correction of sales and compensating use tax liability, relating to
the purchase or use of items for which a sales or compensating use tax
credit against the tax imposed by this chapter was claimed.
(2) Extension by agreement. Where, before the expiration of the time
prescribed in this section for the assessment of tax, both the
commissioner of finance and the taxpayer have consented in writing to
its assessment after such time, the tax may be assessed at any time
prior to the expiration of the period agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made before the
expiration of the period previously agreed upon.
(3) Report of changed or corrected federal or New York state income.
If the taxpayer shall, pursuant to section 11-519 of this chapter,
report a change or correction or file an amended return increasing or
decreasing federal or New York state taxable income or report the
execution of a notice of waiver and the changes and corrections on which
it is based, or a change or correction which is treated in the same
manner as if it were a deficiency for federal or New York state income
tax purposes, the assessment (if not deemed to have been made upon the
filing of the report or amended return) may be made at any time within
two years after such report or amended return was filed. The amount of
such assessment of tax shall not exceed the amount of the increase in
city tax attributable to such federal or New York state change or
correction. The provisions of this paragraph shall not affect the time
within which or the amount for which an assessment may otherwise be
made.
(4) Deficiency attributable to net operating loss carryback. If a
deficiency is attributable to the application to the taxpayer of a net
operating loss carryback, it may be assessed at any time that a
deficiency for the taxable year of the loss may be assessed.
(5) Recovery of erroneous refund. An erroneous refund shall be
considered an underpayment of tax on the date made, and an assessment of
a deficiency arising out of an erroneous refund may be made at any time
within two years from the making of the refund, except that the
assessment may be made within five years from the making of the refund
if it appears that any part of the refund was induced by fraud or
misrepresentation of a material fact.
(6) Request for prompt assessment. If a return is required for a
decedent or for his or her estate during the period of administration,
the tax shall be assessed within eighteen months after written request
therefor (made after the return is filed) by the executor, administrator
or other person representing the estate of such decedent, but not more
than three years after the return was filed, except as otherwise
provided in this subdivision and subdivision (d) of this section.
(7) Report on use of certain property. Under the circumstances
described in paragraph two of subdivision (b) of section 11-509 of this
chapter, the tax may be assessed within three years after the filing of
a return reporting that property has been used for purposes other than
research and development to a greater extent than originally reported.
(8) Report concerning waste treatment facility. Under the
circumstances described in paragraph nine of section 11-507 of this
chapter, the tax may be assessed within three years after the filing of
the return containing the information required by such paragraph.
(9) Report of changed or corrected sales and compensating use tax
liability. If the taxpayer files a report or amended return or report
required under section 11-519.1 of this chapter, in respect of a change
or correction of sales and compensating use tax liability, the
assessment (if not deemed to have been made upon the filing of the
report) may be made at any time within two years after such report or
amended return or report was filed. The amount of such assessment of tax
shall not exceed the amount of the increase in city tax attributable to
such state change or correction. The provisions of this paragraph shall
not affect the time within which or the amount for which an assessment
may otherwise be made.
(d) Omission of income on return. The tax may be assessed at any time
within six years after the return was filed if (1) a taxpayer omits from
his or her city unincorporated business gross income an amount properly
includible therein which is in excess of twenty-five per centum of the
amount of city unincorporated business gross income stated in the
return, or (2) an estate or trust omits income from its return in an
amount in excess of twenty-five percent of its income determined as if
it were an individual.
For purposes of this subdivision there shall not be taken into account
any amount which is omitted in the return if such amount is disclosed in
the return, or in a statement attached to the return, in a manner
adequate to apprise the commissioner of finance of the nature and amount
of such item.
(e) Suspension of running of period of limitation. The running of the
period of limitations on assessment or collection of tax or other amount
(or of a transferee's liability) shall, after the mailing of a notice of
deficiency, be suspended for the period during which the commissioner of
finance is prohibited under subdivision (c) of section 11-521 of this
chapter from making the assessment or from collecting by levy.
Section 11-524
§ 11-524 Interest on underpayment. (a) General. If any amount of tax
is not paid on or before the last date prescribed in this chapter for
payment, interest on such amount at the underpayment rate set by the
commissioner of finance pursuant to section 11-537 of this chapter, or,
if no rate is set, at the rate of seven and one-half percent per annum
shall be paid for the period from such last date to the date paid,
whether or not any extension of time for payment was granted. Interest
under this subdivision shall not be paid if the amount thereof is less
than one dollar.
(b) Exception as to estimated tax. This section shall not apply to any
failure to pay estimated tax under section 11-512 of this chapter.
(c) Exception for mathematical error. No interest shall be imposed on
any underpayment of tax due solely to mathematical error if the taxpayer
files a return within the time prescribed in this chapter (including any
extension of time) and pays the amount of underpayment within three
months after the due date of such return, as it may be extended.
(d) Suspension of interest on deficiencies. If a waiver of
restrictions on assessment of a deficiency has been filed by the
taxpayer, and if notice and demand by the commissioner of finance for
payment of such deficiency is not made within thirty days after the
filing of such waiver, interest shall not be imposed on such deficiency
for the period beginning immediately after such thirtieth day and ending
with the date of notice and demand.
(e) Tax reduced by carryback. If the the amount of tax for any taxable
year is reduced by reason of a carryback of a net operating loss, such
reduction in tax shall not affect the computation of interest under this
section for the period ending with the filing date for the taxable year
in which the net operating loss arises. Such filing date shall be
determined without regard to extensions of time to file.
(f) Interest treated as tax. Interest under this section shall be paid
upon notice and demand and shall be assessed, collected and paid in the
same manner as tax. Any reference in this chapter to the tax imposed by
this chapter shall be deemed also to refer to interest imposed by this
section on such tax.
(g) Interest on penalties or additions to tax. Interest shall be
imposed under subdivision (a) of this section in respect of any
assessable penalty or addition to tax only if such assessable penalty or
addition to tax is not paid within ten days from the date of the notice
and demand therefor under subdivision (b) of section 11-532 of this
chapter, and in such case interest shall be imposed only for the period
from such date of the notice and demand to the date of payment.
(h) Payment within ten days after notice and demand. If notice and
demand is made for payment of any amount under subdivision (b) of
section 11-532 of this chapter, and if such amount is paid within ten
days after the date of such notice and demand, interest under this
section on the amount so paid shall not be imposed for the period after
the date of such notice and demand.
(i) Limitation on assessment and collection. Interest prescribed under
this section may be assessed and collected at any time during the period
within which the tax or other amount to which such interest relates may
be assessed and collected, respectively.
(j) Interest on erroneous refund. Any portion of tax or other amount
which has been erroneously refunded, and which is recoverable by the
commissioner of finance, shall bear interest at the underpayment rate
set by the commissioner of finance pursuant to section 11-537 of this
chapter, or, if no rate is set, at the rate of seven and one-half
percent per annum from the date of the payment of the refund, but only
if it appears that any part of the refund was induced by fraud or a
misrepresentation of a material fact.
(k) Satisfaction by credits. If any portion of a tax is satisfied by
credit of an overpayment, then no interest shall be imposed under this
section on the portion of the tax so satisfied for any period during
which, if the credit had not been made, interest would have been
allowable with respect to such overpayment.
Section 11-525
§ 11-525 Additions to tax and civil penalties. (a) (1) Failure to file
tax return. (A) In case of failure to file a tax return under this
chapter on or before the prescribed date (determined with regard to any
extension of time for filing), unless it is shown that such failure is
due to reasonable cause and not due to willful neglect, there shall be
added to the amount required to be shown as tax on such return five
percent of the amount of such tax if the failure is for not more than
one month, with an additional five percent for each additional month or
fraction thereof during which such failure continues, not exceeding
twenty-five percent in the aggregate.
(B) In the case of a failure to file a tax return within sixty days of
the date prescribed for filing of such return (determined with regard to
any extension of time for filing), unless it is shown that such failure
is due to reasonable cause and not due to willful neglect, the addition
to tax under subparagraph (A) of this paragraph shall not be less than
the lesser of one hundred dollars or one hundred percent of the amount
required to be shown as tax on such return.
(C) For purposes of this paragraph, the amount of tax required to be
shown on the return shall be reduced by the amount of any part of the
tax which is paid on or before the date prescribed for payment of the
tax and by the amount of any credit against the tax which may be claimed
upon the return.
(2) Failure to pay tax shown on return. In case of failure to pay the
amounts shown as tax on any return required to be filed under this
chapter on or before the prescribed date (determined with regard to any
extension of time for payment), unless it is shown that such failure is
due to reasonable cause and not due to willful neglect, there shall be
added to the amount shown as tax on such return one-half of one percent
of the amount of such tax if the failure is not for more than one month,
with an additional one-half of one percent for each additional month or
fraction thereof during which such failure continues, not exceeding
twenty-five percent in the aggregate. For the purpose of computing the
addition for any month, the amount of tax shown on the return shall be
reduced by the amount of any part of the tax which is paid on or before
the beginning of such month and by the amount of any credit against the
tax which may be claimed upon the return. If the amount of tax required
to be shown on a return is less than the amount shown as tax on such
return, this paragraph shall be applied by substituting such lower
amount.
(3) Failure to pay tax required to be shown on return. In case of
failure to pay any amount in respect of any tax required to be shown on
a return required to be filed under this chapter which is not so shown
(including an assessment made pursuant to subdivision (a) of section
11-522 of this chapter) within ten days of the date of a notice and
demand therefor, unless it is shown that such failure is due to
reasonable cause and not due to willful neglect, there shall be added to
the amount of tax stated in such notice and demand one-half of one
percent of such tax if the failure is not for more than one month, with
an additional one-half of one percent for each additional month or
fraction thereof during which such failure continues, not exceeding
twenty-five percent in the aggregate. For the purpose of computing the
addition for any month, the amount of tax stated in the notice and
demand shall be reduced by the amount of any part of the tax which is
paid before the beginning of such month.
(4) Limitations on additions. (A) With respect to any return the
amount of the addition under paragraph one of this subdivision shall be
reduced by the amount of the addition under paragraph two of this
subdivision for any month to which an addition applies under both
paragraphs one and two of this subdivision. In any case described in
subparagraph (B) of paragraph one of this subdivision, the amount of the
addition under such paragraph one shall not be reduced below the amount
provided in such subparagraph.
(B) With respect to any return, the maximum amount of the addition
permitted under paragraph three of this subdivision shall be reduced by
the amount of the addition under paragraph one of this subdivision
(determined without regard to subparagraph (B) of such paragraph one)
which is attributable to the tax for which the notice and demand is made
and which is not paid within ten days of such notice and demand.
* (b) Deficiency due to negligence. (1) If any part of a deficiency is
due to negligence or intentional disregard of this chapter or rules or
regulations hereunder (but without intent to defraud), there shall be
added to the tax an amount equal to five percent of the deficiency.
(2) There shall be added to the tax (in addition to the amount
determined under paragraph (1) of this subdivision) an amount equal to
fifty percent of the interest payable under subdivision (a) of section
11-524 with respect to the portion of the deficiency described in such
paragraph (1) which is attributable to the negligence or intentional
disregard referred to in such paragraph (1), for the period beginning on
the last date prescribed by law for payment of such deficiency
(determined without regard to any extension) and ending on the date of
the assessment of the tax (or, if earlier, the date of the payment of
the tax).
(3) If any payment is shown on a return made by a payor with respect
to dividends, patronage dividends and interest under subsection (a) of
section six thousand forty-two, subsection (a) of section six thousand
forty-four or subsection (a) of section six thousand forty-nine of the
internal revenue code of nineteen hundred fifty-four, respectively, and
the payee fails to include any portion of such payment in unincorporated
business gross income, as that term is defined in section 11-506, any
portion of a deficiency attributable to such failure shall be treated,
for purposes of this subdivision, as due to negligence in the absence of
clear and convincing evidence to the contrary. If any addition to tax is
imposed under this subdivision by reason of the preceding sentence, the
amount of the addition to tax imposed by paragraph one of this
subdivision shall be five percent of the portion of the deficiency which
is attributable to the failure described in the preceding sentence.
* NB Amended Ch. 765/85 § 68, language juxtaposed per Ch. 907/85 § 14
(c) Failure to file declaration or underpayment of estimated tax. If
any taxpayer fails to file a declaration of estimated tax or fails to
pay all or any part of an installment of estimated tax, the taxpayer
shall be deemed to have made an underpayment of estimated tax. There
shall be added to the tax for the taxable year an amount at the
underpayment rate set by the commissioner of finance pursuant to section
11-537 of this chapter, or, if no rate is set, at the rate of seven and
one-half percent per annum upon the amount of the underpayment for the
period of the underpayment but not beyond the fifteenth day of the
fourth month following the close of the taxable year. The amount of the
underpayment shall be the excess of the amount of the installment which
would be required to be paid if the estimated tax were equal to ninety
percent of the tax shown on the return for the taxable year (or if no
return was filed, ninety percent of the tax for such year) over the
amount, if any, of the installment paid on or before the last day
prescribed for such payment. No underpayment shall be deemed to exist
with respect to a declaration or installment otherwise due on or after
the taxpayer's death. In any case in which there would be no
underpayment if this subdivision were applied by substituting "eighty
percent" for "ninety percent" where it appears in the second preceding
sentence, the addition to tax under this subdivision shall be equal to
seventy-five percent of the amount otherwise determined under this
subdivision.
(d) Exception to addition for underpayment of estimated tax. The
addition to tax under subdivision (c) of this section with respect to
any underpayment of any installment shall not be imposed if the total
amount of all payments of estimated tax made on or before the last date
prescribed for the payment of such installment equals or exceeds
whichever of the following is the lesser:
(1) The amount which would have been required to be paid on or before
such date if the estimated tax were whichever of the following is the
least:
(A) The tax shown on the return of the taxpayer for the preceding
taxable year, if a return showing a liability for tax was filed by the
taxpayer for the preceding taxable year and such preceding year was a
taxable year of twelve months, or
(B) An amount equal to the tax computed, at the rates applicable to
the taxable year, but otherwise on the basis of the facts shown on the
taxpayer's return for, and the law applicable to, the preceding taxable
year, or
(C) An amount equal to ninety percent of the tax for the taxable year
computed by placing on an annualized basis the unincorporated business
taxable income for the months in the taxable year ending before the
month in which the installment is required to be paid. For purposes of
this subparagraph, the unincorporated business taxable income shall be
placed on an annualized basis by:
(i) multiplying by twelve (or, in the case of a taxable year of less
than twelve months, the number of months in the taxable year) the
unincorporated business taxable income for the months in the taxable
year ending before the month in which the installment is required to be
paid, and
(ii) dividing the resulting amount by the number of months in the
taxable year ending before the month in which such installment date
falls, or
(D)(i) If the base period percentage for any six consecutive months of
the taxable year equals or exceeds seventy percent, an amount equal to
ninety percent of the tax determined in the following manner:
(I) take the unincorporated business taxable income for all months
during the taxable year preceding the filing month,
(II) divide such amount by the base period percentage for all months
during the taxable year preceding the filing month,
(III) determine the tax on the amounts determined under subclause
(II), and
(IV) multiply the tax determined under subclause (III) by the base
period percentage for the filing month and all months during the taxable
year preceding the filing month.
(ii) For purposes of clause (i) of this subparagraph:
(I) the base period percentage for any period of months shall be the
average percent which the unincorporated business taxable income for the
corresponding months in each of the three preceding years bears to the
unincorporated business taxable income for the three preceding taxable
years. The commissioner of finance may by regulations provide for the
determination of the base period percentage in the case of new
unincorporated businesses and other similar circumstances, and
(II) the term "filing month" means the month in which the installment
is required to be paid;
(2) An amount equal to ninety percent of the tax computed, at the
rates applicable to the taxable year, on the basis of the actual
unincorporated business taxable income for the months in the taxable
year ending before the month in which the installment is required to be
paid.
(e)(1) Except as provided in paragraph two hereof, subparagraphs (A)
and (B) of paragraph one of subdivision (d) of this section shall not
apply in the case of any taxpayer which had unincorporated business
taxable income, or the portion thereof allocated within the city, of one
million dollars or more for any taxable year during the three taxable
years immediately preceding the taxable year involved.
(2) The amount treated as the estimated tax under subparagraphs (A)
and (B) of paragraph one of subdivision (d) of this section shall in no
event be less than seventy-five percent of the tax shown on the return
for the taxable year beginning in nineteen hundred eighty-three or, if
no return was filed, seventy-five percent of the tax for such year.
(f) Deficiency due to fraud. (1) If any part of a deficiency is due
to fraud, there shall be added to the tax an amount equal to two times
the deficiency.
(3) The addition to tax under this subdivision shall be in lieu of any
other addition to tax imposed by subdivision (a) or (b).
(g) Additional penalty. Any taxpayer who with fradulent intent shall
fail to pay any tax, or to make, render, sign or certify any return or
declaration of estimated tax, or to supply any information within the
time required by or under this chapter shall be liable to a penalty of
not more than one thousand dollars, in addition to any other amounts
required under this chapter, to be imposed, assessed and collected by
the commissioner of finance. The commissioner of finance shall have the
power, in his or her discretion, to waive, reduce or compromise any
penalty under this subdivision.
* (h) Additions treated as tax. The additions to tax and penalties
provided by this section shall be paid upon notice and demand and shall
be assessed, collected and paid in the same manner as taxes, and any
reference in this chapter to tax or tax imposed by this chapter, shall
be deemed also to refer to the additions to tax and penalties provided
by this section. For purposes of section 11-521, this subdivision shall
not apply to--
(1) any addition to tax under subdivision (a) except as to that
portion attributable to a deficiency;
(2) any addition to tax under subdivision (c); and
(3) any additional penalties under subdivisions (g) and (k).
* NB Amended Ch. 765/85 § 68, language juxtaposed per Ch. 907/85 § 14
(i) Determination of deficiency. For purposes of subdivisions (b) and
(c) of this section, the amounts shown as the tax by the taxpayer upon
his or her return shall be taken into account in determining the amount
of the deficiency only if such return was filed on or before the last
day prescribed for the filing of such return, determined with regard to
any extension of time for such filing.
* (j) Substantial understatement of liability. If there is a
substantial understatement of tax for any taxable year, there shall be
added to the tax an amount equal to ten percent of the amount of any
underpayment attributable to such understatement. For purposes of this
subdivision, there is a substantial understatement of tax for any
taxable year if the amount of the understatement for the taxable year
exceeds the greater of ten percent of the tax required to be shown on
the return for the taxable year, or five thousand dollars. For purposes
of the preceding sentence, the term "understatement" means the excess of
the amount of the tax required to be shown on the return for the taxable
year, over the amount of the tax imposed which is shown on the return,
reduced by any rebate (within the meaning of subdivision (g) of section
11-521). The amount of such understatement shall be reduced by that
portion of the understatement which is attributable to the tax treatment
of any item by the taxpayer if there is or was substantial authority for
such treatment, or any item with respect to which the relevant facts
affecting the item's tax treatment are adequately disclosed in the
return or in a statement attached to the return. The commissioner of
finance may waive all or any part of the addition to tax provided by
this subdivision on a showing by the taxpayer that there was reasonable
cause for the understatement (or part thereof) and that the taxpayer
acted in good faith.
* NB Amended Ch. 765/85 § 68, language juxtaposed per Ch. 907/85 § 14
* (k) Aiding or assisting in the giving of fraudulent returns,
reports, statements or other documents. (1) Any person who, with the
intent that tax be evaded, shall, for a fee or other compensation or as
an incident to the performance of other services for which such person
receives compensation, aid or assist in, or procure, counsel, or advise
the preparation or presentation under, or in connection with any matter
arising under this chapter of any return, report, declaration, statement
or other document which is fraudulent or false as to any material
matter, or supply any false or fraudulent information, whether or not
such falsity or fraud is with the knowledge or consent of the person
authorized or required to present such return, report, declaration,
statement or other document shall pay a penalty not exceeding ten
thousand dollars.
(2) For purposes of paragraph (1) of this subdivision, the term
"procures" includes ordering (or otherwise causing) a subordinate to do
an act, and knowing of, and not attempting to prevent, participation by
a subordinate in an act. The term "subordinate" means any other person
(whether or not a member, employee, or agent of the taxpayer involved)
over whose activities the person has direction, supervision, or control.
(3) For purposes of paragraph (1) of this subdivision, a person
furnishing typing, reproducing, or other mechanical assistance with
respect to a document shall not be treated as having aided or assisted
in the preparation of such document by reason of such assistance.
(4) The penalty imposed by this subdivision shall be in addition to
any other penalty provided by law.
* NB Added Ch. 765/85 § 68, language juxtaposed per Ch. 907/85 § 14
(l) False or fraudulent document penalty. Any taxpayer that submits a
false or fraudulent document to the department shall be subject to a
penalty of one hundred dollars per document submitted, or five hundred
dollars per tax return submitted. Such penalty shall be in addition to
any other penalty or addition provided by law.
Section 11-526
§ 11-526 Overpayment. (a) General. The commissioner of finance,
within the applicable period of limitations, may credit an overpayment
of tax and interest on such overpayment against any liability in respect
of any tax imposed by this chapter or by chapters six, seventeen and
nineteen of this title, on the person who made overpayment, and the
balance shall be refunded.
(b) Credits against estimated tax. The commissioner of finance may
prescribe regulations providing for the crediting against the estimated
tax for any taxable year of the amount determined to be an overpayment
of the tax for a preceding taxable year. If any overpayment of tax is so
claimed as a credit against estimated tax for the succeeding taxable
year, such amount shall be considered as a payment of the tax for the
succeeding taxable year (whether or not claimed as a credit in the
declaration of estimated tax for such succeeding taxable year), and no
claim for credit or refund of such overpayment shall be allowed for the
taxable year for which the overpayment arises.
(c) Rule where no tax liability. If there is no tax liability for a
period in respect of which an amount is paid as tax, such amount shall
be considered an overpayment.
(d) Assessment and collection after limitation period. If any amount
of income tax is assessed or collected after the expiration of the
period of limitations properly applicable thereto, such amount shall be
considered an overpayment.
(e) Notwithstanding any provision of law in article fifty-two of the
civil practice law and rules to the contrary, the procedures for the
enforcement of money judgments shall not apply to the department of
finance, or to any officer or employee of the department of finance, as
a garnishee, with respect to any amount of money to be refunded or
credited to a taxpayer under this chapter.
Section 11-527
§ 11-527 Limitation on credit or refund. (a) General. Claim for credit
or refund of an overpayment of tax shall be filed by the taxpayer within
three years from the time the return was filed or two years from the
time the tax was paid, whichever of such periods expires the later, or
if no return was filed, within two years from the time the tax was paid.
If the claim is filed within the three year period, the amount of the
credit or refund shall not exceed the portion of the tax paid within the
three years immediately preceding the filing of the claim plus the
period of any extension of time for filing the return. If the claim is
not filed within the three year period, but is filed within the two year
period, the amount of the credit or refund shall not exceed the portion
of the tax paid during the two years immediately preceding the filing of
the claim. Except as otherwise provided in this section, if no claim is
filed, the amount of a credit or refund shall not exceed the amount
which would be allowable if a claim had been filed on the date the
credit or refund is allowed.
(b) Extension of time by agreement. If an agreement under the
provisions of paragraph two of subdivision (c) of section 11-523 of this
chapter (extending the period for assessment of income tax) is made
within the period prescribed in subdivision (a) of this section for the
filing of a claim for credit or refund the period for filing a claim for
credit or refund, or for making credit or refund if no claims filed,
shall not expire prior to six months after the expiration of the period
within which an assessment may be made pursuant to the agreement or any
extension thereof. The amount of such credit or refund shall not exceed
the portion of the tax paid after the execution of the agreement and
before the filing of the claim or the making of the credit or refund, as
the case may be, plus the portion of the tax paid within the period
which would be applicable under subdivision (a) of this section if a
claim had been filed on the date the agreement was executed.
(c) Notice of change or correction of federal or New York state
taxable income. If a taxpayer is required by section 11-519 of this
chapter to report a change or correction in federal or New York state
taxable income reported on the taxpayer's federal or New York state
income tax return, or to report a change or correction which is treated
in the same manner as if it were an overpayment for federal or New York
state income tax purposes, or to file an amended return with the
commissioner of finance, claim for credit or refund of any resulting
overpayment of tax shall be filed by the taxpayer within two years from
the time the notice of such change or correction or such amended return
was required to be filed with the commissioner of finance. If the report
or amended return required by section 11-519 of this chapter is not
filed within the ninety day period therein specified, no interest shall
be payable on any claim for credit or refund of the overpayment
attributable to the federal or New York state change or correction. The
amount of such credit or refund shall not exceed the amount of the
reduction in tax attributable to such federal or New York state change,
correction or items amended on the taxpayer's amended federal or New
York state income tax return. This subdivision shall not affect the time
within which or the amount for which a claim for credit or refund may be
filed apart from this subdivision.
(d) Overpayment attributable to net operating loss carryback. A claim
for credit or refund of so much of an overpayment as is attributable to
the application to the taxpayer of a net operating loss carryback shall
be filed within three years from the time the return was due for the
taxable year of the loss, or within the period prescribed in subdivision
(b) of this section in respect of such taxable year, or within the
period prescribed in subdivision (c) of this section, where applicable
in respect of the taxable year to which the net operating loss is
carried back, whichever expires the latest.
(e) Failure to file claim within prescribed period. No credit or
refund shall be allowed or made, except as provided in subdivision (f)
of this section or subdivision (d) of section 11-530 of this chapter
after the expiration of the applicable period of limitation specified in
this chapter unless a claim for credit or refund is filed by the
taxpayer within such period. Any later credit shall be void and any
later refund erroneous. No period of limitations specified in any other
law shall apply to the recovery by a taxpayer of moneys paid in respect
of taxes under this chapter.
(f) Effect of petition to tax appeals tribunal. If a notice of
deficiency for a taxable year has been mailed to the taxpayer under
section 11-521 of this chapter and if the taxpayer files a timely
petition with the tax appeals tribunal under section 11-529 of this
chapter, the tax appeals tribunal may determine that the taxpayer has
made an overpayment for such year (whether or not it also determines a
deficiency for such year). No separate claim for credit or refund for
such year shall be filed, and no credit or refund for such year shall be
allowed or made, except:
(1) as to overpayments determined by a decision of the tax appeals
tribunal which has become final;
(2) as to any amount collected in excess of an amount computed in
accordance with the decision of the tax appeals tribunal which has
become final;
(3) as to any amount collected after the period of limitation upon the
making of levy for collection has expired; and
(4) as to any amount claimed as a result of a change or correction
described in subdivision (c) of this section.
(g) Limit on amount of credit or refund. The amount of overpayment
determined under subdivision (f) of this section shall, when the
decision of the tax appeals tribunal has become final, be credited or
refunded in accordance with subdivision (a) of section 11-526 of this
chapter and shall not exceed the amount of tax which the tax appeals
tribunal determines as part of its decision was paid:
(1) after the mailing of the notice of deficiency, or
(2) within the period which would be applicable under subdivision (a),
(b) or (c) of this section, if on the date of the mailing of the notice
of deficiency a claim has been filed (whether or not filed) stating the
grounds upon which the tax appeals tribunal finds that there is an
overpayment.
(h) Early return. For purposes of this section, any return filed
before the last day prescribed for the filing thereof shall be
considered as filed on such last day, determined without regard to any
extension of time granted the taxpayer.
(i) Prepaid tax. For purposes of this section, any tax paid by the
taxpayer before the last day prescribed for its payment and any amount
paid by the taxpayer as estimated tax for a taxable year shall be deemed
to have been paid by the taxpayer on the fifteenth day of the fourth
month following the close of his or her taxable year with respect to
which such amount constitutes a credit or payment.
(j) Cross reference. For provision barring refund of overpayment
credited against tax of a succeeding year, see subdivision (d) of
section 11-526 of this chapter.
(k) Notice of change or correction of sales and compensating use tax
liability. If a taxpayer is required by section 11-519.1 of this chapter
to file a report or amended return or report in respect of a change or
correction of his or her sales and compensating use tax liability, claim
for credit or refund of any resulting overpayment of tax shall be filed
by the taxpayer within two years from the time such report or amended
return or report was required to be filed with the commissioner of
finance. The amount of such credit or refund shall be computed without
change of the allocation of income upon which the taxpayer's return (or
any additional assessment) was based, and shall not exceed the amount of
the reduction in tax attributable to such change or correction of sales
and compensating use tax liability.
This subdivision shall not affect the time within which or the amount
for which a claim for credit or refund may be filed apart from this
subdivision.
Section 11-528
§ 11-528 Interest on overpayment. (a) General. Notwithstanding the
provisions of section three-a of the general municipal law, interest
shall be allowed and paid as follows at the overpayment rate set by the
commissioner of finance pursuant to section 11-537 of this chapter, or,
if no rate is set, at the rate of six percent per annum upon any
overpayment in respect of the tax imposed by this chapter:
(1) from the date of the overpayment to the due date of an amount
against which a credit is taken; or
(2) from the date of the overpayment to a date (to be determined by
the commissioner of finance) preceding the date of a refund check by not
more than thirty days, whether or not such refund check is accepted by
the taxpayer after tender of such check to the taxpayer. The acceptance
of such check shall be without prejudice to any right of the taxpayer to
claim any additional overpayment and interest thereon.
(3) Late and amended returns and claims for credit or refund.
Notwithstanding paragraph one or two of this subdivision, in the case of
an overpayment claimed on a return of tax which is filed after the last
date prescribed for filing such return (determined with regard to
extensions), or claimed on an amended return of tax or claimed on a
claim, for credit or refund, no interest shall be allowed or paid for
any day before the date on which such return or claim is filed.
(4) Interest on certain refunds. To the extent provided for in
regulations promulgated by the commissioner of finance, if an item of
income, gain, loss, deduction or credit is changed from the taxable year
or period in which it is reported to the taxable year or period in which
it belongs and the change results in an underpayment in a taxable year
or period and an overpayment in some other taxable year or period, the
provisions of paragraph three of this subdivision with respect to an
overpayment shall not be applicable to the extent that the limitation in
such paragraph on the right to interest would result in a taxpayer not
being allowed interest for a length of time with respect to an
overpayment while being required to pay interest on an equivalent amount
of the related underpayment. However, this paragraph shall not be
construed as limiting or mitigating the effect of any statute of
limitations or any other provisions of law relating to the authority of
such commissioner to issue a notice of deficiency or to allow a credit
or refund of an overpayment.
(5) Amounts of less than one dollar. No interest shall be allowed or
paid if the amount thereof is less than one dollar.
(b) Advance payment of tax and payment of estimated tax. The
provisions of subdivisions (h) and (i) of section 11-527 of this chapter
applicable in determining the date of payment of tax for purposes of
determining the period of limitations on credit or refund, shall be
applicable in determining the date of payment for purposes of this
section.
(c) Refund within three months of claim for overpayment. If any
overpayment of tax imposed by this chapter is credited or refunded
within three months after the last date prescribed (or permitted by
extension of time) for filing the return of such tax on which such
overpayment was claimed or within three months after such return was
filed, whichever is later, or within three months after an amended
return was filed claiming such overpayment or within three months after
a claim for credit or refund was filed on which such overpayment was
claimed, no interest shall be allowed under this section on any such
overpayment. For purposes of this subdivision, any amended return or
claim for credit or refund filed before the last day prescribed (or
permitted by extension of time) for the filing of the return of tax for
such year shall be considered as filed on such last day.
(d) Refund of tax caused by carryback. For purposes of this section,
if any overpayment of tax imposed by this chapter results from a
carryback of a net operating loss, such overpayment shall be deemed not
to have been made prior to the filing date for the taxable year in which
such net operating loss arises. Such filing date shall be determined
without regard to extensions of time to file. For purposes of
subdivision (c) of this section any overpayment described herein shall
be treated as an overpayment for the loss year and such subdivision
shall be applied with respect to such overpayment by treating the return
for the loss year as not filed before claim for such overpayment is
filed. The term "loss year" means the taxable year in which such loss
arises.
(e) No interest until return in processible form. (1) For purposes of
subdivisions (a) and (c) of this section, a return shall not be treated
as filed until it is filed in processible form.
(2) For purposes of paragraph one of this subdivision, a return is in
a processible form if:
(A) such return is filed on a permitted form, and
(B) such return contains:
(i) the taxpayer's name, address, and identifying number and the
required signatures, and
(ii) sufficient required information (whether on the return or on
required attachments) to permit the mathematical verification of tax
liability shown on the return.
(f) Cross-reference. For provision with respect to interest after
failure to file notice of federal or New York state change under section
11-519 of this chapter, see subdivision (c) of section 11-527 of this
chapter.
Section 11-529
§ 11-529 Petition to tax appeals tribunal. (a) General. The form of a
petition to the tax appeals tribunal, and further proceedings before the
tax appeals tribunal in any case initiated by the filing of a petition,
shall be governed by such rules as the tax appeals tribunal shall
prescribe. No petition shall be denied in whole or in part without
opportunity for a hearing on reasonable prior notice. Such hearing and
any appeal to the tribunal sitting en banc from the decision rendered in
such hearing shall be conducted in the manner and subject to the
requirements prescribed by the tax appeals tribunal pursuant to sections
one hundred sixty-eight through one hundred seventy-two of the charter.
A decision of the tax appeals tribunal shall be rendered, and notice
thereof shall be given, in the manner provided by section one hundred
seventy-one of the charter.
(b) Petition for redetermination of a deficiency. Within ninety days,
or one hundred fifty days if the notice is addressed to a person outside
of the United States, after the mailing of the notice of deficiency
authorized by section 11-521 of this chapter, or if the commissioner of
finance has established a conciliation procedure pursuant to section
11-124 of the code and the taxpayer has requested a conciliation
conference in accordance therewith, within ninety days from the mailing
of the conciliation decision or the date of the commissioner's
confirmation of the discontinuance of the conciliation proceeding, the
taxpayer may file a petition with the tax appeals tribunal for a
redetermination of the deficiency. Such petition may also assert a claim
for refund for the same taxable year or years, subject to the
limitations of subdivision (g) of section 11-527 of this chapter.
(c) Petition for refund. A taxpayer may file a petition with the tax
appeals tribunal for the amounts asserted in a claim for refund if:
(1) the taxpayer has filed a timely claim for refund with the
commissioner of finance,
(2) the taxpayer has not previously filed with the tax appeals
tribunal a timely petition under subdivision (b) of this section for the
same taxable year unless the petition under this subdivision relates to
a separate claim for credit or refund properly filed under subdivision
(f) of section 11-527 of this chapter, and
(3) either: (A) six months have expired since the claim was filed, or
(B) the commissioner of finance has mailed to the taxpayer, by
registered or certified mail, a notice of disallowance of such claim in
whole or in part. No petition under this subdivision shall be filed more
than two years after the date of mailing of a notice of disallowance,
unless prior to the expiration of such two year period it has been
extended by written agreement between the taxpayer and the commissioner
of finance. If a taxpayer files a written waiver of the requirement that
he or she be mailed a notice of disallowance, the two year period
prescribed by this subdivision for filing a petition for refund shall
begin on the date such waiver is filed.
(4) If the commissioner of finance has established a conciliation
procedure pursuant to section 11-124 of the code, a taxpayer who is
eligible to file a petition for refund with the tax appeals tribunal
pursuant to this subdivision may request a conciliation conference prior
to filing such petition, provided the request is made within the time
prescribed for filing the petition. Notwithstanding anything in this
subdivision to the contrary, if the taxpayer has requested a
conciliation conference in accordance with the procedure established
pursuant to section 11-124 of the code, a petition for refund may be
filed no later than ninety days from the mailing of the conciliation
decision or the date of the commissioner's confirmation of the
discontinuance of the conciliation proceeding.
(d) Assertion of deficiency after filing petition. (1) Petition for
redetermination of deficiency. If a taxpayer files with the tax appeals
tribunal a petition for redetermination of a deficiency, the tax appeals
tribunal shall have power to determine a greater deficiency than
asserted in the notice of deficiency and to determine if there should be
assessed any addition to tax or penalty provided in section 11-525 of
this chapter, if claim therefor is asserted at or before the hearing
under the rules of the tax appeals tribunal.
(2) Petition for refund. If the taxpayer files with the tax appeals
tribunal a petition for credit or refund for a taxable year, the tax
appeals tribunal may:
(A) determine a deficiency for such year as to any amount of
deficiency asserted at or before the hearing under rules of the tax
appeals tribunal, and within the period in which an assessment would be
timely under section 11-523 of this chapter, or
(B) deny so much of the amount for which credit or refund is sought in
the petition, as is offset by other issues pertaining to the same
taxable year which are asserted at or before the hearing under rules of
the tax appeals tribunal.
(3) Opportunity to respond. A taxpayer shall be given a reasonable
opportunity to respond to any matters asserted by the commissioner of
finance under this subdivision.
(4) Restriction on further notices of deficiency. If the taxpayer
files a petition with the tax appeals tribunal under this section, no
notice of deficiency under section 11-521 of this chapter may thereafter
be issued by the commissioner of finance for the same taxable year,
except in case of fraud or with respect to a change or correction in
federal or New York state taxable income required to be reported under
section 11-519 of this chapter or with respect to a state change or
correction of sales and compensating use tax liability to be reported
under section 11-519.1 of this chapter.
(e) Burden of proof. In any case before the tax appeals tribunal under
this chapter, the burden of proof shall be upon the petitioner except
for the following issues, as to which the burden of proof shall be upon
the commissioner of finance:
(1) whether the petitioner has been guilty of fraud with intent to
evade tax;
(2) whether the petitioner is liable as the transferee of property of
a taxpayer, but not to show that the taxpayer was liable for the tax;
(3) whether the petitioner is liable for any increase in a deficiency
where such increase is asserted initially after a notice of deficiency
was mailed and a petition under this section filed, unless such increase
in deficiency is the result of a change or correction of federal or New
York state taxable income required to be reported under section 11-519
of this chapter, and of which change or correction the commissioner of
finance had no notice at the time he or she mailed the notice of
deficiency or unless such increase in deficiency is the result of a
change or correction of sales and compensating use tax liability
required to be reported under section 11-519.1 of this chapter, and of
which change or correction the commissioner of finance had no notice at
the time he or she mailed the notice of deficiency; and
(4) whether any person is liable for a penalty under subdivision (k)
of section 11-525.
(f) Evidence of related federal or state determination. Evidence of a
federal or state determination relating to issues raised in a case
before the tax appeals tribunal under this section shall be admissible,
under rules established by the tax appeals tribunal.
(g) Jurisdiction over other years. The tax appeals tribunal shall
consider such facts with relation to the taxes for other years as may be
necessary correctly to determine the tax for the taxable year, but in so
doing shall have no jurisdiction to determine whether or not the tax for
any other year has been overpaid or underpaid.
Section 11-530
§ 11-530 Review of tax appeals tribunal's decision. (a) General. A
decision of the tax appeals tribunal sitting en banc shall be subject to
judicial review at the instance of any taxpayer affected thereby in the
manner provided by law for the review of a final decision or action of
administrative agencies of the city. An application by a taxpayer for
such review must be made within four months after notice of the decision
is sent by certified mail, return receipt requested, to the taxpayer and
the commissioner of finance.
(b) Judicial review exclusive remedy. The review of a decision of the
tax appeals tribunal provided by this section shall be the exclusive
remedy available to any taxpayer for the judicial determination of the
liability of the taxpayer for the taxes imposed by this chapter.
(c) Assessment pending review; review bond. Irrespective of any
restrictions on the assessment and collection of deficiencies, the
commissioner of finance may assess a deficiency determined by the tax
appeals tribunal in a decision rendered pursuant to section one hundred
seventy-one of the charter after the expiration of the period specified
in subdivision (a) of this section, notwithstanding that an application
for judicial review in respect of such deficiency has been duly made by
the taxpayer, unless the taxpayer, at or before the time his or her
application for review is made, has paid the deficiency, has deposited
with the commissioner of finance the amount of the deficiency, or has
filed with the commissioner of finance a bond (which may be a jeopardy
bond under subdivision (h) of section 11-534 of this chapter) in the
amount of the portion of the deficiency (including interest and other
amounts) in respect of which the application for review is made and all
costs and charges which may accrue against such taxpayer in the
prosecution of the proceeding, including costs of all appeals, and with
surety approved by a justice of the supreme court of the state of New
York, conditioned upon the payment of the deficiency (including
interests and other amounts) as finally determined and such costs and
charges. If, as a result of a waiver of the restrictions on the
assessment and collection of a deficiency, any part of the amount
determined by the tax appeals tribunal is paid after the filing of the
review bond, such bond shall, at the request of the taxpayer, be
proportionately reduced.
(d) Credit, refund or abatement after review. If the amount of a
deficiency determined by the tax appeals tribunal is disallowed in whole
or in part by the court of review, the amount so disallowed shall be
credited, or refunded to the taxpayer, without the making of claim
therefor, or, if payment has not been made, shall be abated.
(e) Date of finality of tax appeals tribunal's decision. A decision of
the tax appeals tribunal shall become final upon the expiration of the
period specified in subdivision (a) of this section for making an
application for review, if no such application has been duly made within
such time, or if such application has been duly made, upon expiration of
the time for all further judicial review, or upon the rendering by the
tax appeals tribunal of a decision in accordance with the mandate of the
court on review. Notwithstanding the foregoing, for the purpose of
making an application for review, the decision of the tax appeals
tribunal shall be deemed final on the date the notice of decision is
sent by certified mail to the taxpayer and the commissioner of finance.
Section 11-531
§ 11-531 Mailing rules; holidays; miscellaneous. (a) Timely mailing.
(1) If any return, declaration of estimated tax, claim, statement,
notice, petition, or other document required to be filed, or any payment
required to be made, within a prescribed period or on or before a
prescribed date under authority of any provision of this chapter is,
after such period or such date, delivered by the United States mail to
the commissioner of finance, tax appeals tribunal, bureau, office,
officer or person with which or with whom such document is required to
be filed, or to which or to whom such payment is required to be made,
the date of the United States postmark stamped on the envelope shall be
deemed to be the date of delivery. This subdivision shall apply only if
the postmark date falls within the prescribed period or on or before the
prescribed date for the filing of such document, or for making the
payment, including any extension granted for such filing or payment, and
only if such document or payment was deposited in the mail, postage
prepaid, properly addressed to the commissioner of finance, tax appeals
tribunal, bureau, office, officer or person with which or with whom the
document is required to be filed or to which or to whom such payment is
required to be made. If any document is sent by United States registered
mail, such registration shall be prima facie evidence that such document
was delivered to the commissioner of finance, tax appeals tribunal,
bureau, office, officer or person to which or to whom addressed. To the
extent that the commissioner of finance or, where relevant, the tax
appeals tribunal shall prescribe by regulation, certified mail may be
used in lieu of registered mail under this section. Except as provided
in paragraph two of this subdivision, this subdivision shall apply in
the case of postmarks not made by the United States postal service only
if and to the extent provided by regulations of the commissioner of
finance or, where relevant, the tax appeals tribunal.
(2) (A) Any reference in paragraph one of this subdivision to the
United States mail shall be treated as including a reference to any
delivery service designated by the secretary of the treasury of the
United States pursuant to section seventy-five hundred two of the
internal revenue code and any reference in paragraph one of this
subdivision to a United States postmark shall be treated as including a
reference to any date recorded or marked in the manner described in
section seventy-five hundred two of the internal revenue code by a
designated delivery service. If the commissioner of finance finds that
any delivery service designated by such secretary is inadequate for the
needs of the city, the commissioner may withdraw such designation for
purposes of this title. The commissioner may also designate additional
delivery services meeting the criteria of section seventy-five hundred
two of the internal revenue code for purposes of this title, or may
withdraw any such designation if the commissioner of finance finds that
a delivery service so designated is inadequate for the needs of the
city. Any reference in paragraph one of this subdivision to the United
States mail shall be treated as including a reference to any delivery
service designated by the commissioner of finance and any reference in
paragraph one of this subdivision to a United States postmark shall be
treated as including a reference to any date recorded or marked in the
manner described in section seventy-five hundred two of the internal
revenue code by a delivery service designated by the commissioner of
finance. Notwithstanding the foregoing, any withdrawal of designation
or additional designation by the commissioner of finance shall not be
effective for purposes of service upon the tax appeals tribunal, unless
and until such withdrawal of designation or additional designation is
ratified by the president of the tax appeals tribunal.
(B) Any equivalent of registered or certified mail designated by the
United States secretary of the treasury, or as may be designated by the
commissioner of finance pursuant to the same criteria used by such
secretary for such designations pursuant to section seventy-five hundred
two of the internal revenue code, shall be included within the meaning
of registered or certified mail as used in paragraph one of this
subdivision. If the commissioner of finance finds that any equivalent of
registered or certified mail designated by such secretary or the
commissioner of finance is inadequate for the needs of the city, the
commissioner of finance may withdraw such designation for purposes of
this title. Notwithstanding the foregoing, any withdrawal of designation
or additional designation by the commissioner of finance shall not be
effective for purposes of service upon the tax appeals tribunal, unless
and until such withdrawal of designation or additional designation is
ratified by the president of the tax appeals tribunal.
(b) Last known address. For purposes of this chapter, a taxpayer's
last known address shall be given in the last return filed by the
taxpayer, unless subsequently to the filing of such return the taxpayer
shall have notified the commissioner of finance of a change of address.
(c) Last day a Saturday, Sunday or legal holiday. When the last day
prescribed under authority of this chapter (including any extension of
time) for performing any act falls on Saturday, Sunday, or a legal
holiday in the state of New York, the performance of such act shall be
considered timely if it is performed on the next succeeding day which is
not a Saturday, Sunday or legal holiday.
(d) Certificate: unfiled return. For purposes of this chapter and
sections one hundred sixty-eight through one hundred seventy-two of the
charter, the certificate of the commissioner of finance to the effect
that a tax has not been paid, that a return or declaration of estimated
tax has not been filed, or that information has not been supplied, as
required by or under the provisions of this title, shall be prima facie
evidence that such tax has not been paid, that such return or
declaration has not been filed, or that such information has not been
supplied.
Section 11-532
§ 11-532 Collection, levy and liens. (a) Collection procedures. The
taxes imposed by this chapter shall be collected by the commissioner of
finance, and the commissioner may establish the mode or time for the
collection of any amount due it under this chapter if not otherwise
specified. The commissioner of finance shall, upon request, give a
receipt for any sum collected under this chapter. The commissioner of
finance may authorize banks or trust companies which are depositories or
financial agents of the city to receive and give a receipt for any tax
imposed under this chapter in such manner, at such times, and under such
conditions as the commissioner of finance may prescribe; and the
commissioner of finance shall prescribe the manner, times and conditions
under which the receipt of such tax by such banks and trust companies is
to be treated as payment of such tax to the commissioner of finance.
(b) Notice and demand for tax. The commissioner of finance shall as
soon as practicable give notice to each person liable for any amount of
tax, addition to tax, penalty or interest, which has been assessed but
remains unpaid, stating the amount and demanding payment thereof. Such
notice shall be left at the dwelling or usual place of business of such
person or shall be sent by mail to such person's last known address.
Except where the commissioner of finance determines that collection
would be jeopardized by delay, if any tax is assessed prior to the last
date (including any date fixed by extension) prescribed for payment of
such tax, payment of such tax shall not be demanded until after such
date.
(c) Issuance of warrant after notice and demand. If any person liable
under this chapter for the payment of any tax, addition to tax, penalty
or interest neglects or refuses to pay the same within the ten days
after notice and demand herefor is given to such person under
subdivision (b) of this section, the commissioner of finance may within
six years after the date of such assessment issue a warrant directed to
the sheriff of any county of the state, or to any officer or employee of
the department of finance, commanding such person to levy upon and sell
such person's real and personal property for the payment of the amount
assessed, with the cost of executing the warrant, and to return such
warrant to the commissioner of finance and pay to the commissioner the
money collected by virtue thereof within sixty days after the receipt of
the warrant. If the commissioner of finance finds that the collection of
the tax or other amount is in jeopardy, notice and demand for immediate
payment of such tax may be made by the commissioner of finance and upon
failure or refusal to pay such tax or other amount the commissioner of
finance may issue a warrant without regard to the ten-day period
provided in this subdivision.
(d) Copy of warrant to be filed and lien to be created. Any sheriff or
officer or employee who receives a warrant under subdivision (c) of this
section shall within five days thereafter file a copy with the clerk of
the appropriate county. The clerk shall thereupon enter in the judgment
docket, in the column for judgment debtors, the name of the taxpayer
mentioned in the warrant, and in appropriate columns the tax or other
amounts for which the warrant is issued and the date when such copy is
filed; and such amount shall thereupon be a binding lien upon the real,
personal and other property of the taxpayer.
(e) Judgment. When a warrant has been filed with the county clerk the
commissioner of finance shall, on behalf of the city, be deemed to have
obtained judgment against the taxpayer for the tax or other amounts.
(f) Execution. The sheriff or officer or employee shall thereupon
proceed upon the judgment in all respects, with like effect, and in the
same manner prescribed by law in respect to executions issued against
property upon judgments of a court of record, and a sheriff shall be
entitled to the same fees for the sheriff's services in executing the
warrant, to be collected in the same manner. An officer or employee of
the department of finance may proceed in any county or counties of this
state and shall have all the powers of execution conferred by law upon
sheriffs, but shall be entitled to no fee or compensation in excess of
actual expenses paid in connection with the execution of the warrant.
(g) Taxpayer not a resident of this state. Where a notice and demand
under subdivision (b) of this section shall have been given to a
taxpayer who is not then a resident of this state, and it appears to the
commissioner of finance that it is not practicable to find in this state
property of the taxpayer sufficient to pay the entire balance of tax or
other amount owing by such taxpayer who is not then a resident of this
state, the commissioner of finance may, in accordance with subdivision
(c) of this section, issue a warrant directed to an officer or employee
of the department of finance, a copy of which warrant shall be mailed by
certified or registered mail to the taxpayer at the taxpayer's last
known address, subject to the rules for mailing provided in subdivision
(a) of section 11-521 of this chapter. Such warrant shall command the
officer or employee to proceed in New York county, and such officer or
employee shall, within five days after receipt of the warrant, file the
warrant and obtain a judgment in accordance with this section. Thereupon
the commissioner of finance may authorize the institution of any action
or proceeding to collect or enforce the judgment in any place and by any
procedure that a civil judgment of the supreme court of the state of New
York could be collected or enforced. The commissioner of finance may
also, in the commissioner's discretion, designate agents or retain
counsel for the purpose of collecting, outside the state of New York,
any unpaid taxes, additions to tax, penalties or interest which have
been assessed under this chapter against taxpayers who are not residents
of this state, may fix the compensation of such agents and counsel to be
paid out of money appropriated or otherwise lawfully available for
payment thereof, and may require of them bonds or other security for the
faithful performance of their duties, in such form and in such amount as
the commissioner of finance shall deem proper and sufficient.
(h) Action by city for recovery of taxes. Action may be brought by the
corporation counsel of the city at the instance of the commissioner of
finance as agent and trustee for the city to recover the amount of any
unpaid taxes, additions to tax, penalties or interest which have been
assessed under this chapter within six years prior to the date the
action is commenced.
(i) Release of lien or vacating warrant. The commissioner of finance,
if he or she finds that the interests of the city will not thereby be
jeopardized, and upon such conditions as the commissioner may require,
may release any property from the lien of any warrant or vacate such
warrant for unpaid taxes, additions to tax, penalties and interest filed
pursuant to subdivision (d) or (g) of this section, and such release or
vacating of the warrant may be recorded in the office of any recording
officer in which such warrant has been filed. The clerk shall thereupon
cancel and discharge as of the original date of docketing the vacated
warrant.
Section 11-533
§ 11-533 Transferees. (a) General. The liability, at law or in equity,
of a transferee of property of a taxpayer for any tax, additions to tax,
penalty or interest due the commissioner of finance under this chapter,
shall be assessed, paid, and collected in the same manner and subject to
the same provisions and limitations as in the case of the tax to which
the liability relates, except that the period of limitations for
assessment against the transferee shall be extended by one year for each
successive transfer, in order, from the original taxpayer to the
transferee involved, but not by more than three years in the aggregate.
The term "transferee" includes donee, heir, legatee, devisee and
distributee.
(b) Exceptions. (1) If before the expiration of the period of
limitations for assessment of liability of the transferee, a claim has
been filed by the commissioner of finance in any court against the
original taxpayer or the last preceeding transferee based upon the
liability of the original taxpayer, then the period of limitation for
assessment of liability of the transferee shall in no event expire prior
to one year after such claim has been finally allowed, disallowed or
otherwise disposed of.
(2) If, before the expiration of the time prescribed in subdivision
(a) of this section or the immediately preceding paragraph of this
subdivision for the assessment of the liability, the commissioner of
finance and the transferee have both consented in writing to its
assessment after such time, the liability may be assessed at any time
prior to the expiration of the period agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made before the
expiration of the period previously agreed upon. For the purpose of
determining the period of limitation on credit or refund to the
transferee of overpayments of tax made by such transferee or
overpayments of tax made by the transferor as to which the transferee is
legally entitled to credit or refund, such agreement and any extension
thereof shall be deemed an agreement and extension thereof referred to
in subdivision (b) of section 11-527 of this chapter. If the agreement
is executed after the expiration of the period of limitation for
assessment against the original taxpayer, then in applying the
limitations under subdivision (b) of section 11-527 of this chapter on
the amount of the credit or refund, the periods specified in subdivision
(a) of section 11-527 of this chapter shall be increased by the period
from the date of such expiration to the date of agreement.
(c) Deceased transferor. If any person is deceased, the period of
limitation for assessment against such person shall be the period that
would be in effect if such person had lived.
(d) Evidence. Notwithstanding the provisions of subdivision (e) of
section 11-537 of this chapter the commissioner of finance shall use his
or her powers to make available to the transferee evidence necessary to
enable the transferee to determine the liability of the original
taxpayer and of any preceding transferees, but without undue hardship to
the original taxpayer or preceding transferee. See subdivision (e) of
section 11-529 of this chapter for rules as to burden of proof.
Section 11-534
§ 11-534 Jeopardy assessment. (a) Authority for making. If the
commissioner of finance believes that the assessment or collection of a
deficiency will be jeopardized by delay, the commissioner shall,
notwithstanding the provision of sections 11-521 and 11-536 of this
chapter, and immediately assess such deficiency (together with all
interest, penalties and additions to tax provided for by law), and
notice and demand shall be made by the commissioner of finance for the
payment thereof.
(b) Notice of deficiency. If the jeopardy assessment is made before
any notice in respect to the tax to which the jeopardy assessment
relates has been mailed under section 11-521 of this chapter, then the
commissioner of finance shall mail a notice under such section within
sixty days after the making of the assessment.
(c) Amount assessable before decision of tax appeals tribunal. The
jeopardy assessment may be made in respect of a deficiency greater or
less than that of which notice is mailed to the taxpayer and whether or
not the taxpayer has heretofore filed a petition with the tax appeals
tribunal. The commissioner of finance may, at any time before the tax
appeals tribunal renders its decision, abate such assessment, or any
unpaid portion thereof, to the extent that the commissioner believes the
assessment to be excessive in amount. The tax appeals tribunal may in
its decision redetermine the entire amount of the deficiency and of all
amounts assessed at the same time in connection therewith.
(d) Amount assessable after decision of tax appeals tribunal. If the
jeopardy assessment is made after the decision of the tax appeals
tribunal is rendered, such assessment may be made only in respect of the
deficiency determined by the tax appeals tribunal in its decision.
(e) Expiration of right to assess. A jeopardy assessment may not be
made after the decision of the tax appeals tribunal has become final or
after the taxpayer has made an application for review of the decision of
the tax appeals tribunal.
(f) Collection of unpaid amounts. When a petition has been filed with
the tax appeals tribunal and when the amount which should have been
assessed has been determined by a decision of the tax appeals tribunal
which has become final, then any unpaid portion, the collection of which
has been stayed by bond, shall be collected as part of the tax upon
notice and demand from the commissioner of finance, and any remaining
portion of the assessment shall be abated. If the amount already
collected exceeds the amount determined as the amount which should have
been assessed, such excess shall be credited or refunded to the taxpayer
as provided in section 11-526 of this chapter without the filing of
claim therefor. If the amount determined as the amount which should have
been assessed is greater than the amount actually assessed, then the
difference shall be assessed and shall be collected as part of the tax
upon notice and demand from the commissioner of finance.
(g) Abatement if jeopardy does not exist. The commissioner of finance
may abate the jeopardy assessment if the commissioner finds that
jeopardy does not exist. Such abatement may not be made after a decision
of the tax appeals tribunal in respect of the deficiency has been
rendered or, if no petition is filed with the tax appeals tribunal,
after the expiration of the period for filing such petition. The period
of limitation on the making of assessments and levy or a proceeding for
collection, in respect of any deficiency, shall be determined as if the
jeopardy assessment so abated had not been made, except that the running
of such period shall in any event be suspended for the period from the
date of such jeopardy assessment until the expiration of the tenth day
after the day on which such jeopardy assessment is abated.
(h) Bond to stay collection. The collection of the whole or any amount
of any jeopardy assessment may be stayed by filing with the commissioner
of finance, within such time as may be fixed by regulation, a bond in an
amount equal to the amount as to which the stay is desired, conditioned
upon the payment of the amount (together with interest thereon) the
collection of which is stayed at the time at which, but for the making
of the jeopardy assessment, such amount would be due. Upon the filing of
the bond the collection of so much of the amount assessed as is covered
by the bond shall be stayed. The taxpayer shall have the right to waive
such stay at any time in respect of the whole or any part of the amount
covered by the bond, and if as a result of such waiver any part of the
amount covered by the bond is paid, then the bond shall at the request
of the taxpayer, be proportionately reduced. If any portion of the
jeopardy assessment is abated, or if a notice or deficiency under
section 11-521 of this chapter is mailed to the taxpayer in a lesser
amount, the bond shall, at the request of the taxpayer, be
proportionately reduced.
(i) Petition to tax appeals tribunal. If the bond is given before the
taxpayer has filed his or her petition under section 11-529 of this
chapter, the bond shall contain a further condition that if a petition
is not filed within the period provided in such section, then the amount
the collection of which is stayed by the bond, will be paid on notice
and demand at any time after the expiration of such period, together
with interest thereon from the date of the jeopardy notice and demand to
the date of notice and demand under this subdivision. The bond shall be
conditioned upon the payment of so much of such assessment (collection
of which is stayed by the bond) as is not abated by a decision of the
tax appeals tribunal which has become final. If the tax appeals tribunal
determines that the amount assessed is greater than the amount which
should have been assessed, then the bond shall, at the request of the
taxpayer, be proportionately reduced when the decision of the tax
appeals tribunal is rendered.
(j) Stay of sale of seized property pending tax appeals tribunal
decision. Where a jeopardy assessment is made, the property seized for
the collection of the tax shall not be sold:
(1) if subdivision (b) of this section is applicable, prior to the
issuance of the notice of deficiency and the expiration of the time
provided in section 11-529 of this chapter for filing a petition with
the tax appeals tribunal, and
(2) if a petition is filed with the tax appeals tribunal (whether
before or after the making of such jeopardy assessment), prior to the
expiration of the period during which the assessment of the deficiency
would be prohibited if subdivision (a) of this section were not
applicable.
Such property may be sold if the taxpayer consents to the sale, or if
the commissioner of finance determines that the expenses of conservation
and maintenance will greatly reduce the net proceeds, or if the property
is perishable.
(k) Interest. For the purpose of subdivision (a) of section 11-524 of
this chapter, the last date prescribed for payment shall be determined
without regard to any notice and demand for payment issued under this
section prior to the last date otherwise prescribed for such payment.
(l) Early termination of taxable year. If the commissioner of finance
finds that a taxpayer designs quickly to depart from this state or to
remove his or her property therefrom, or to conceal himself or herself
or his or her property therein, or to do any other act tending to
prejudice or to render wholly or partly ineffectual proceedings to
collect the income tax for the current or the preceding taxable year
unless such proceedings be brought without delay, the commissioner of
finance shall declare the taxable period for such taxpayer immediately
terminated, and shall cause notice of such finding and declaration to be
given to the taxpayer, together with a demand for immediate payment of
the tax for the taxable period so declared terminated and of the tax for
the preceding taxable year or so much of such tax as is unpaid, whether
or not the time otherwise allowed by law for filing return and paying
the tax has expired; and such taxes shall thereupon become immediately
due and payable. In any proceeding brought to enforce payment of taxes
made due and payable by virtue of the provisions of this subdivision,
the finding of the commissioner of finance made as herein provided,
whether made after notice to the taxpayer or not, shall be for all
purposes presumptive evidence of jeopardy.
(m) Reopening of taxable period. Notwithstanding the termination of
the taxable period of the taxpayer by the commissioner of finance as
provided in subdivision (l) of this section, the commissioner of finance
may reopen such taxable period each time the taxpayer is found by the
commissioner of finance to have received income, within the current
taxable year, since the termination of such period. A taxable period so
terminated by the commissioner of finance may be reopened by the
taxpayer if the taxpayer files with the commissioner of finance a true
and accurate return of taxable income and credits allowed under this
chapter for taxable period, together with such other information as the
commissioner of finance may by regulations prescribe.
(n) Furnishing of bond where taxable year is closed by the
commissioner of finance. Payment of taxes shall not be enforced by any
proceedings under the provisions of subdivision (1) of this section
prior to the expiration of the time otherwise allowed for paying such
taxes if the taxpayer furnishes, under regulations prescribed by the
commissioner of finance, a bond to insure the timely making of returns
with respect to, and payment of, such taxes or any taxes under this
chapter for prior years.
Section 11-535
* § 11-535 Criminal penalties; cross-reference. For criminal
penalties, see chapter forty of this title.
* NB Amended Ch. 765/85 § 72, language juxtaposed per Ch. 907/85 § 14
Section 11-536
§ 11-536 Armed forces relief provisions. (a) Time to be disregarded.
In the case of an individual serving in the armed forces of the United
States or serving in support of such armed forces, in an area designated
by the president of the United States by executive order as a "combat
zone" at any time during the period designated by the president by
executive order as the period of combatant activities in such zone, or
hospitalized outside the state as a result of injury received while
serving in such an area during such time, the period of service in such
area, plus the period of continuous hospitalization outside the state
attributable to such injury, and the next one hundred eighty days
thereafter, shall be disregarded in determining, under this chapter, in
respect of the tax liability (including any interest, penalty, or
addition to the tax) of such individual:
(1) Whether any of the following acts was performed within the time
prescribed therefor: (A) filing any return of tax;
(B) payment of any tax or any installment thereof or of any other
liability to the commissioner of finance, in respect thereof;
(C) filing a petition with the tax appeals tribunal for credit or
refund or for redetermination of a deficiency, or application for review
of a decision rendered by the tax appeals tribunal;
(D) allowance of a credit or refund of tax;
(E) filing a claim for credit or refund of tax;
(F) assessment of tax;
(G) giving or making any notice or demand for the payment of any tax,
or with respect to any liability to the commissioner of finance in
respect of tax;
(H) collection, by the commissioner of finance, by levy or otherwise
of the amount of any liability in respect of tax;
(I) bringing suit by the city, or any officer, on its behalf, in
respect of any liability in respect of tax; and
(J) any other act required or permitted under this chapter or
specified in regulations prescribed under this section by the
commissioner of finance.
(2) The amount of any credit or refund (including interest).
(b) Action taken before ascertainment of right to benefits. The
assessment or collection of the tax imposed by this chapter or of any
liability to the commissioner of finance in respect of such tax, or any
action or proceeding by or on behalf of the commissioner of finance in
connection therewith, may be made, taken, begun, or prosecuted in
accordance with law, without regard to the provisions of subdivision (a)
of this section, unless prior to such assessment, collection, action, or
proceeding it is ascertained that the person concerned is entitled to
the benefit of subdivision (a) of this section.
(c) Members of armed forces dying in action. In the case of any person
who dies during an induction period while in active service as a member
of the armed forces of the United States, if such death occurred while
serving in a combat zone during a period of combatant activities in such
zone, as described in subdivision (a) of this section, or as a result of
wounds, disease or injury incurred while so serving, the tax imposed by
this chapter shall not apply with respect to the taxable year in which
falls the date of such person's death, or with respect to any prior
taxable year ending on or after the first day he or she so served in a
combat zone, and no returns shall be required in behalf of such person
or such person's estate for such year; and the tax for any such taxable
year which is unpaid at the date of his or her death, including
interest, additions to tax and penalties, if any, shall not be assessed
and if assessed, the assessment shall be abated and, if collected, shall
be refunded to the legal representative of such person's estate if one
has been appointed and has qualified, or, if no legal representative has
been appointed or has qualified, to such person's surviving spouse.
Section 11-537
§ 11-537 General powers of commissioner of finance. (a) General. The
commissioner of finance shall administer and enforce the tax imposed by
this chapter and the commissioner is authorized to make such rules and
regulations, and to require such facts and information to be reported,
as the commissioner may deem necessary to enforce the provision of this
chapter; and the commissioner may delegate his or her powers and
functions under all parts of this chapter to one of the commissioner's
deputies or to any employee or employees of the commissioner's
department.
(b) Examination of books and witnesses. The commissioner of finance
for the purpose of ascertaining the correctness of any return, or for
the purpose of making an estimate of tax of any person, shall have power
to examine or to cause to have examined, by any agent or representative
designated by the commissioner for that purpose, any books, papers,
records or memoranda bearing upon the matters required to be included in
the return, and may require the attendance of the person rendering the
return or any officer or employee of such person, or the attendance of
any other person having knowledge in the premises, and may take
testimony and require proof material for the commissioner's information,
with power to administer oaths to such person or persons.
(c) Abatement authority. The commissioner of finance, of his or her
own motion, may abate any small unpaid balance of an assessment of tax
under this part, or any liability in respect thereof, if the
commissioner of finance determines under uniform rules prescribed by the
commissioner that the administration and collection costs involved would
not warrant collection of the amount due. The commissioner may also
abate, of his or her own motion, the unpaid portion of the assessment of
any tax or any liability in respect thereof, which is excessive in
amount, or is assessed after the expiration of the period of limitation
properly applicable thereto, or is erroneously or illegally assessed. No
claim for abatement under this subdivision shall be filed by a taxpayer.
(d) Special refund authority. Where no questions of fact or law are
involved and it appears from the records of the commissioner of finance
that any moneys have been erroneously or illegally collected from any
taxpayer or other person, or paid by such taxpayer or other person under
a mistake of facts, pursuant to the provisions of this chapter, the
commissioner of finance at any time, without regard to any period of
limitations, shall have the power, upon making a record of his or her
reasons therefor in writing, to cause such moneys so paid and being
erroneously and illegally held to be refunded.
(e) Cooperation with the United States, this state and other states.
Notwithstanding the provisions of section 11-538 of this chapter, the
commissioner of finance may permit the secretary of the treasury of the
United States or the secretary's delegates, or the proper officer of
this or any other state imposing an income tax upon the incomes of
individuals, or the authorized representative of any such officer, to
inspect any return filed under this chapter or may furnish to such
officer or his or her authorized representative an abstract of any such
return or supply such officer with information concerning an item
contained in any such return, or disclosed by any investigation of tax
liability under this chapter, but such permission shall be granted or
such information furnished to such officer or such officer's
representative only if the laws of the United States or of such state,
as the case may be, grant substantially similar privileges to the
commissioner of finance and such information is to be used for tax
purposes only; and provided further the commissioner of finance may
furnish to the secretary of the treasury of the United States or the
secretary's delegates or to the tax commission of the state of New York
or its delegates such returns filed under this chapter and other tax
information, as he or she may consider proper for use in court actions
or proceedings under the internal revenue code or the tax law of the
state of New York, whether civil or criminal, where a written request
therefor has been made to the commissioner of finance by the secretary
of the treasury or by such tax commission or by their delegates,
provided the laws of the United States or the laws of the state of New
York grant substantially similar powers to the secretary of the treasury
of the United States or the secretary's delegates or to such tax
commission or its delegates. Where the commissioner of finance has so
authorized use of returns or other information in such actions or
proceedings, officers and employees of the department of finance may
testify in such actions or proceedings in respect to such returns or
other information.
(f) (1) Authority to set interest rates. The commissioner of finance
shall set the overpayment and underpayment rates of interest to be paid
pursuant to sections 11-524, 11-525 and 11-528 of this chapter, but if
no such rate or rates of interest are set, such overpayment rate shall
be deemed to be set at six percent per annum and such underpayment rate
shall be deemed to be set at seven and one-half percent per annum. Such
overpayment and underpayment rates shall be the rates prescribed in
paragraph two of this subdivision, but the underpayment rate shall not
be less than seven and one-half percent per annum. Any such rates set by
the commissioner of finance shall apply to taxes, or any portion
thereof, which remain or become due or overpaid on or after the date on
which such rates become effective and shall apply only with respect to
interest computed or computable for periods or portions of periods
occurring in the period during which such rates are in effect.
(2) General rule. (A) Overpayment rate. The overpayment rate set under
this subdivision shall be the sum of (i) the federal short-term rate as
provided under paragraph three of this subdivision, plus (ii) two
percentage points.
(B) Underpayment rate. The underpayment rate set under this
subdivision shall be the sum of (i) the federal short-term rate as
provided under paragraph three of this subdivision, plus (ii) seven
percentage points.
(3) Federal short-term rate. For purposes of this subdivision:
(A) The federal short-term rate for any month shall be the federal
short-term rate determined by the United States secretary of the
treasury during such month in accordance with subsection (d) of section
twelve hundred seventy-four of the internal revenue code for use in
connection with section six thousand six hundred twenty-one of the
internal revenue code. Any such rate shall be rounded to the nearest
full percent (or, if a multiple of one-half of one percent, such rate
shall be increased to the next highest full percent).
(B) Period during which rate applies. (i) In general. Except as
provided in clause (ii) of this subparagraph, the federal short-term
rate for the first month in each calendar quarter shall apply during the
first calendar quarter beginning after such month.
(ii) Special rule for the month of September, nineteen hundred
eighty-nine. The federal short-term rate for the month of April,
nineteen hundred eighty-nine shall apply with respect to setting the
overpayment and underpayment rates for the month of September, nineteen
hundred eighty-nine.
(4) Publication of interest rates. The commissioner of finance shall
cause to be published in the city record, and give other appropriate
general notice of, the interest rates to be set under this subdivision
no later than twenty days preceding the first day of the calendar
quarter during which such interest rates apply. The setting and
publication of such interest rates shall not be included within
paragraph (a) of subdivision five of section one thousand forty-one of
the city charter relating to the definition of a rule.
(5) Cross-reference. For provisions relating to the power of the
commissioner of finance to abate small amounts of interest, see
subdivision (c) of this section.
(g) In computing the amount of any interest required to be paid under
this chapter by the commissioner of finance or by the taxpayer, or any
other amount determined by reference to such amount of interest, such
interest and such amount shall be compounded daily. The preceding
sentence shall not apply for purposes of computing the amount of any
addition to tax for failure to pay estimated tax under subdivision (c)
of section 11-525 of this chapter.
Section 11-538
§ 11-538 Secrecy requirement and the penalties for violation. 1.
Except in accordance with proper judicial order or as otherwise provided
by law, it shall be unlawful for the commissioner of finance, the
department of finance of the city, any officer or employee of the
department of finance of the city, any person engaged or retained by
such department on an independent contract basis, any depository to
which any return may be delivered as provided in subdivision four of
this section, any officer or employee of such depository, the tax
appeals tribunal, any commissioner or employee of such tribunal, or any
person who, pursuant to this section, is permitted to inspect any report
or return or to whom a copy, an abstract or a portion of any report or
return is furnished, or to whom any information contained in any report
or return is furnished, to divulge or make known in any manner the
amount of income or any particulars set forth or disclosed in any report
or return required under this chapter. The officers charged with the
custody of such reports and returns shall not be required to produce any
of them or evidence of anything contained in them in any action or
proceeding in any court, except on behalf of the city in an action or
proceeding under the provisions of this chapter or in any other action
or proceeding involving the collection of a tax due under this chapter
to which the city is a party or a claimant, or on behalf of any party to
any action or proceeding under the provisions of this chapter when the
reports, returns or facts shown thereby are directly involved in such
action or proceeding, in any of which events the court may require the
production of, and may admit in evidence, so much of said reports,
returns or of the facts shown thereby, as are pertinent to the action or
proceeding and no more. Nothing herein shall be construed to prohibit
the delivery to a taxpayer or to the taxpayer's duly authorized
representative of a certified copy of any return or report filed in
connection with his or her tax or to prohibit the publication of
statistics so classified as to prevent the identification of particular
reports or returns and the items thereof, or the inspection by the
corporation counsel or other legal representatives of the city of the
report or return of any taxpayer who shall bring action to set aside or
review the tax based thereon, or against whom an action or proceeding
under this chapter has been recommended by the commissioner of finance
or the corporation counsel or has been instituted, or the inspection of
the reports or returns required under this chapter by the duly
designated officers or employees of the city for purposes of an audit
under this chapter or an audit authorized by the enacting of this
chapter. Reports and returns shall be preserved for three years and
thereafter until the commissioner of finance orders them to be
destroyed.
2. Any officer or employee of the city or the state who willfully
violates the provisions of subdivision one of this section shall be
dismissed from office and be incapable of holding any public office in
the city or the state for a period of five years thereafter.
3. Cross-reference: For criminal penalties, see chapter forty of this
title.
4. Notwithstanding the provisions of subdivision one of this section,
the commissioner of finance, in his or her discretion, may require or
permit any or all persons liable for any tax imposed by this chapter, to
make payments on account of estimated tax and payment of any tax,
penalty or interest imposed by this chapter to banks, banking houses or
trust companies designated by the commissioner of finance and to file
declarations of estimated tax and reports and returns with such banks,
banking houses or trust companies as agents of the commissioner of
finance, in lieu of making any such payment directly to the commissioner
of finance. However, the commissioner of finance shall designate only
such banks, banking houses or trust companies as are depositories or
financial agents of the city.
5. This section shall be deemed a state statute for purposes of
paragraph (a) of subdivision two of section eighty-seven of the public
officers law.
6. Notwithstanding anything in subdivision one of this section to the
contrary, if a taxpayer has petitioned the tax appeals tribunal for
administrative review as provided in section one hundred seventy of the
charter, the commissioner of finance shall be authorized to present to
the tribunal any report or return of such taxpayer, or any information
contained therein or relating thereto, which may be material or relevant
to the proceeding before the tribunal. The tax appeals tribunal shall be
authorized to publish a copy or a summary of any decision rendered
pursuant to section one hundred seventy-one of the charter.
7. Notwithstanding anything in subdivision one of this section, the
commissioner of finance may disclose to a taxpayer or a taxpayer's
related member, as defined in subdivision (e) of section 11-506 of this
chapter, information relating to any royalty paid, incurred or received
by such taxpayer or related member to or from the other, including the
treatment of such payments by the taxpayer or the related member in any
report or return transmitted to the commissioner of finance under this
title.
Section 11-539
§ 11-539 Inconsistencies with other laws. If any provision of this
chapter is inconsistent with, in conflict with, or contrary to any other
provision of law, such provision of this chapter shall prevail over such
other provision and such other provision shall be deemed to have been
amended, superseded or repealed to the extent of such inconsistency,
conflict or contrariety.
Section 11-540
§ 11-540 Disposition of revenues. All revenues resulting from the
imposition of the taxes under this chapter shall be paid into the
treasury of the city and shall be credited to and deposited in the
general fund of the city, but no part of such revenues may be expended
unless appropriated in the annual budget of the city.
To the extent possible under law, Friends of Devin Balkind for Public Advocate has waived all copyright and related or neighboring rights to New York City Administrative Code. This work is published from: United States.
Special thanks to Benjarmin Kallos and Thom Neale who made this content publicly available as a bulk download.