Section 11-602
§ 11-602 Definitions. When used in this subchapter:
1. (a) "Corporation" includes (1) an association within the meaning of
paragraph three of subsection (a) of section seventy-seven hundred one
of the internal revenue code (including a limited liability company),
(2) a joint-stock company or association, (3) a publicly traded
partnership treated as a corporation for purposes of the internal
revenue code pursuant to section seventy-seven hundred four thereof and
(4) any business conducted by a trustee or trustees wherein interest or
ownership is evidenced by certificate or other written instrument;
(b) (1) Notwithstanding paragraph (a) of this subdivision, an
unincorporated organization that (i) is described in subparagraph one or
three of such paragraph (a) and (ii) was subject to the provisions of
chapter five of this title for its taxable year beginning in nineteen
hundred ninety-five, may make a one-time election not to be treated as a
corporation and, instead, to continue to be subject to the provisions of
chapter five of this title for its taxable years beginning in nineteen
hundred ninety-six and thereafter. Such election shall be made on the
return prescribed pursuant to such chapter five for such electing
organization's taxable year beginning in nineteen hundred ninety-six,
which shall be filed on or before the due date (determined with regard
to extensions) for filing such return.
(2) An election under this paragraph shall continue to be in effect
until revoked by the unincorporated organization. An election under this
paragraph shall be revoked by the filing of a return under this
subchapter for the first taxable year with respect to which such
revocation is to be effective, which return shall be filed on or before
the due date (determined with regard to extensions) for filing such
return. In no event shall such election or revocation be for a part of a
taxable year.
(c) Notwithstanding paragraph (a) of this subdivision, a corporation
shall not include an entity classified as a partnership for federal
income tax purposes.
2. "Subsidiary" means a corporation of which over fifty per centum of
the number of shares of stock entitling the holders thereof to vote for
the election of directors or trustees is owned by the taxpayer;
3. "Subsidiary capital" means investments in the stock of subsidiaries
and any indebtedness from subsidiaries, exclusive of accounts receivable
acquired in the ordinary course of trade or business for services
rendered or for sales of property held primarily for sale to customers,
whether or not evidenced by written instrument, on which interest is not
claimed and deducted by the subsidiary for purposes of taxation under
this subchapter or subchapter three of this chapter, provided, however,
that, in the discretion of the commissioner of finance, there shall be
deducted from subsidiary capital any liabilities which are directly or
indirectly attributable to subsidiary capital;
4. "Investment capital" means investments in stocks, bonds and other
securities, corporate and governmental, not held for sale to customers
in the regular course of business, exclusive of subsidiary capital and
stock issued by the taxpayer, provided, however, that, in the discretion
of the commissioner of finance, there shall be deducted from investment
capital any liabilities which are directly or indirectly attributable to
investment capital; and provided, further, that investment capital shall
not include any such investments the income from which is excluded from
entire net income pursuant to the provisions of paragraph (c-1) of
subdivision eight of this section, and that investment capital shall be
computed without regard to any liabilities directly or indirectly
attributable to such investments, but only if air carriers organized in
the United States and operating in the foreign country or countries in
which the taxpayer has its major base of operations and in which it is
organized, resident or headquartered (if not in the same country as its
major base of operations) are not subject to any tax based on or
measured by capital imposed by such foreign country or countries or any
political subdivision thereof, or if taxed are provided an exemption,
equivalent to that provided for herein, from any tax based on or
measured by capital imposed by such foreign country or countries and
from any such tax imposed by any political subdivision thereof;
5. "Investment income" means income, including capital gains in excess
of capital losses, from investment capital to the extent included in
computing entire net income, less, (a) in the discretion of the
commissioner of finance, any deductions allowable in computing entire
net income which are directly or indirectly attributable to investment
capital or investment income, and (b) such portion of any net operating
loss deduction allowable in computing entire net income, as the
investment income, before such deduction, bears to entire net income,
before such deduction, provided, however, that in no case shall
investment income exceed entire net income;
6. (a) "Business capital" means all assets, other than subsidiary
capital, investment capital and stock issued by the taxpayer, less
liabilities not deducted from subsidiary or 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;
(b) Provided, however, "business capital" shall not include assets to
the extent employed for the purpose of generating income which is
excluded from entire net income pursuant to the provisions of paragraph
(c-1) of subdivision eight of this section and shall be computed without
regard to liabilities directly or indirectly attributable to such
assets, but only if air carriers organized in the United States and
operating in the foreign country or countries in which the taxpayer has
its major base of operations and in which it is organized, resident or
headquartered (if not in the same country as its major base of
operations) are not subject to any tax based on or measured by capital
imposed by such foreign country or countries or any political
subdivision thereof, or if taxed, are provided an exemption, equivalent
to that provided for herein, from any tax based on or measured by
capital imposed by such foreign country or countries and from any such
tax imposed by any political subdivision thereof.
7. "Business income" means entire net income minus investment income;
8. "Entire net income" means total net income from all sources, which
shall be presumably the same as the entire taxable income (but not
alternative minimum taxable income),
(i) which the taxpayer is required to report to the United States
treasury department, or
(ii) which the taxpayer would have been required to report to the
United States treasury department if it had not made an election under
subchapter s of chapter one of the internal revenue code, or
(iii) which the taxpayer, in the case of a corporation which is exempt
from federal income tax (other than the tax on unrelated business
taxable income imposed under section five hundred eleven of the internal
revenue code) but which is subject to tax under this subchapter, would
have been required to report to the United States treasury department
but for such exemption, or
(iv) which the taxpayer would have been required to report to the
United States treasury department if no election had been made to treat
the taxpayer as a qualified subchapter s subsidiary under paragraph
three of subsection (b) of section thirteen hundred sixty-one of the
internal revenue code, except as hereinafter provided, and subject to
any modification required by paragraphs (d) and (e) of subdivision three
of section 11-604 of this subchapter.
(a) Entire net income shall not include:
(1) income, gains and losses from subsidiary capital which do not
include the amount of a recovery in respect of any war loss;
(2) fifty percent of dividends other than from subsidiaries, except
that entire net income shall include one hundred percent of dividends on
shares of stock with respect to which a dividend deduction is disallowed
by subsection (c) of section two hundred forty-six of the internal
revenue code;
(2-a) any amounts treated as dividends pursuant to section
seventy-eight of the internal revenue code and not otherwise deductible
under subparagraphs one and two of this paragraph;
(3) bona fide gifts;
(4) income and deductions with respect to amounts received from school
districts and from corporations and associations, organized and operated
exclusively for religious, charitable or educational purposes, no part
of the net earnings of which inures to the benefit of any private
shareholder or individual, for the operation of school buses;
(5) any refund or credit of a tax imposed under this chapter, or
imposed by article nine, nine-A, twenty-three, or thirty-two of the tax
law, for which tax no exclusion or deduction was allowed in determining
the taxpayer's entire net income under this subchapter or subchapter
three of this chapter for any prior year;
(6) in the case of a taxpayer who is separately or as a partner of a
partnership doing an insurance business as a member of the New York
insurance exchange described in section six thousand two hundred one of
the insurance law, any item of income, gain, loss or deduction of such
business which is the taxpayer's distributive or pro rata share for
federal income tax purposes or which the taxpayer is required to take
into account separately for federal income tax purposes;
(7) 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;
(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) and
property of a taxpayer principally engaged in the conduct of an
aviation, steamboat, ferry or navigation business, or two or more of
such businesses, which is placed in service before taxable years
beginning in nineteen hundred eighty-nine, any amount which is included
in the taxpayer's federal taxable 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;
(9) 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) and
property of a taxpayer principally engaged in the conduct of an
aviation, steamboat, ferry or navigation business, or two or more of
such businesses, which is placed in service before taxable years
beginning in nineteen hundred eighty-nine, any amount which the taxpayer
could have excluded from federal taxable income 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;
(10) the amount deductible pursuant to paragraph (j) of this
subdivision;
(11) upon the disposition of property to which paragraph (j) of this
subdivision applies, the amount, if any, by which the aggregate of the
amounts described in subparagraph eleven of paragraph (b) of this
subdivision attributable to such property exceeds the aggregate of the
amounts described in paragraph (j) of this subdivision attributable to
such property; and
(12) for taxable years ending after September tenth, two thousand one,
the amount deductible pursuant to paragraph (k) of this subdivision; and
(13) the amount deductible pursuant to paragraph (o) of this
subdivision.
(a-1) Notwithstanding any other provision of this subchapter, for
taxable years beginning on or after August first, two thousand two, in
the case of a taxpayer that is a partner in a partnership subject to the
tax imposed by chapter eleven of this title as a utility, as defined in
subdivision six of section 11-1101 of such chapter, entire net income
shall not include the taxpayer's distributive or pro rata share for
federal income tax purposes of any item of income, gain, loss or
deduction of such partnership, or any item of income, gain, loss or
deduction of such partnership that the taxpayer is required to take into
account separately for federal income tax purposes.
(b) Entire net income shall be determined without the exclusion,
deduction or credit of:
(1) the amount of any specific exemption or credit allowed in any law
of the United States imposing any tax on or measured by the income of
any corporation,
(2) any part of any income from dividends or interest on any kind of
stock, securities, or indebtedness, except as provided in clauses one
and two of paragraph (a) hereof,
(3) taxes on or measured by profits or income paid or accrued to the
United States, any of its possessions or to any foreign country,
including taxes in lieu of any of the foregoing taxes otherwise
generally imposed by any foreign country or by any possession of the
United States, or taxes paid or accrued to the state under article nine,
nine-A, thirteen-A or thirty-two of the tax law,
(3-a) taxes on or measured by profits or income, or which include
profits or income as a measure, paid or accrued to any other state of
the United States, or any political subdivision thereof, or to the
District of Columbia, including taxes expressly in lieu of any of the
foregoing taxes otherwise generally imposed by any other state of the
United States, or any political subdivision thereof, or the District of
Columbia;
(4) taxes imposed under this chapter,
(4-a) (A) the entire amount allowable as an exclusion or deduction for
stock transfer taxes imposed by article twelve of the tax law in
determining the entire taxable income which the taxpayer is required to
report to the United States treasury department but only to the extent
that such taxes are incurred and paid in market making transactions, and
(B) 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 the entire taxable income which the taxpayer is required to
report to the United States treasury department but only such portion of
such exclusion or deduction which is not in excess of the amount of the
credit allowed pursuant to subdivision twelve of section 11-604 of this
subchapter,
(4-b) the amount allowed as an exclusion or a deduction imposed by the
tax law in determining the entire taxable income which the taxpayer is
required to report to the United States treasury department but only
such portion of such exclusion or deduction which is not in excess of
the amount of the credit allowed pursuant to subdivision thirteen of
section 11-604 of this subchapter,
(4-c) the amount allowed as an exclusion or a deduction imposed by the
tax law in determining the entire taxable income which the taxpayer is
required to report to the United States treasury department but only
such portion of such exclusion or deduction which is not in excess of
the amount of the credit allowed pursuant to subdivision fourteen of
section 11-604 of this subchapter,
(4-d) 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 the entire taxable income which the taxpayer is required to
report to the United States Treasury Department, but only such portion
of such exclusion or deduction which is not in excess of the amount of
the credit allowed pursuant to subdivision fifteen of section 11-604 of
this chapter,
(4-g) 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 the entire
taxable income which the taxpayer is required to report to the United
States treasury department but only such portion of such exclusion or
deduction which is not in excess of the amount of the credit allowed
pursuant to subdivision seventeen-a of section 11-604 of this
subchapter.
(6) in the discretion of the commissioner of finance, any amount of
interest directly or indirectly and any other amount directly or
indirectly attributable as a carrying charge or otherwise to subsidiary
capital or to income, gains or losses from subsidiary capital,
(7) any amount by reason of the granting, issuing or assuming of a
restricted stock option, as defined in the internal revenue code of
nineteen hundred fifty-four, or by reason of the transfer of the share
of stock upon the exercise of the option, unless such share is disposed
of by the grantee of the option within two years from the date of the
granting of the option or within six months after the transfer of such
share to the grantee,
(8) in the case of a taxpayer who is separately or as a partner of a
partnership doing an insurance business as a member of the New York
insurance exchange described in section six thousand two hundred one of
the insurance law, such taxpayer's distributive or pro rata share of the
allocated entire net income of such business as determined under
sections fifteen hundred three and fifteen hundred four of the tax law,
provided however, in the event such allocated entire net income is a
loss, such taxpayer's distributive or pro rata share of such loss shall
not be subtracted from federal taxable income in computing entire net
income under this subdivision,
(9) 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) and
property of a taxpayer principally engaged in the conduct of an
aviation, steamboat, ferry or navigation business, or two or more of
such businesses, which is placed in service before taxable years
beginning in nineteen hundred eighty-nine, any amount which the taxpayer
claimed as a deduction in computing its federal taxable 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,
(10) 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) and
property of a taxpayer principally engaged in the conduct of an
aviation, steamboat, ferry or navigation business, or two or more of
such businesses, which is placed in service before taxable years
beginning in nineteen hundred eighty-nine, any amount which the taxpayer
would have been required to include in the computation of its federal
taxable income had it 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,
(11) 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, 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 property
of a taxpayer principally engaged in the conduct of an aviation,
steamboat, ferry or navigation business, or two or more of such
businesses, which is placed in service before taxable years beginning in
nineteen hundred eighty-nine, the amount allowable as a deduction
determined under section one hundred sixty-eight of the internal revenue
code,
(12) upon the disposition of property to which paragraph (j) of this
subdivision applies, the amount, if any, by which the aggregate of the
amounts described in such paragraph (j) attributable to such property
exceeds the aggregate of the amounts described in subparagraph eleven of
this paragraph attributable to such property.
(16) 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
paragraph (m) of this subdivision, 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), the amount
allowable as a deduction under section one hundred sixty-seven of the
internal revenue code.
(17) 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,
the amount 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.
(18) The amount of any deduction allowed pursuant to section one
hundred ninety-nine of the internal revenue code.
(19) The amount of any federal deduction for taxes imposed under
article twenty-three of the tax law.
(c) Entire net income shall include income within and without the
United States;
(c-1)(1) Notwithstanding any other provision of this subchapter, in
the case of a taxpayer which is a foreign air carrier holding a foreign
air carrier permit issued by the United States department of
transportation pursuant to section four hundred two of the federal
aviation act of nineteen hundred fifty-eight, as amended, and which is
qualified under subparagraph two of this paragraph, entire net income
shall not include, and shall be computed without the deduction of,
amounts directly or indirectly attributable to, (i) any income derived
from the international operation of aircraft as described in and subject
to the provisions of section eight hundred eighty-three of the internal
revenue code, (ii) income without the United States which is derived
from the operation of aircraft, and (iii) income without the United
States which is of a type described in subdivision (a) of section eight
hundred eighty-one of the internal revenue code except that it is
derived from sources without the United States. Entire net income shall
include income described in clauses (i), (ii) and (iii) of this
subparagraph in the case of taxpayers not described in the previous
sentence.
(2) A taxpayer is qualified under this subparagraph if air carriers
organized in the United States and operating in the foreign country or
countries in which the taxpayer has its major base of operations and in
which it is organized, resident or headquartered (if not in the same
country as its major base of operations) are not subject to any income
tax or other tax based on or measured by income or receipts imposed by
such foreign country or countries or any political subdivision thereof,
or if so subject to such tax, are provided an exemption from such tax
equivalent to that provided for herein.
(d) The commissioner of finance may, whenever necessary in order
properly to reflect the entire net income of any taxpayer, determine the
year or period in which any item of income or deduction shall be
included, without regard to the method of accounting employed by the
taxpayer;
(e) The entire net income of any bridge commission created by act of
congress to construct a bridge across an international boundary means
its gross income less the expense of maintaining and operating its
properties, the annual interest upon its bonds and other obligations,
and the annual charge for the retirement of such bonds or obligations at
maturity;
(f) A net operating loss deduction shall be allowed which shall be the
same as the net operating loss deduction allowed under section one
hundred seventy-two of the internal revenue code or which would have
been allowed if the taxpayer had not made an election under subchapter s
of chapter one of the internal revenue code, except that in every
instance where such deduction is allowed under this subchapter:
(1) any net operating loss included in determining such deduction
shall be adjusted to reflect the inclusions and exclusions from entire
net income pursuant to paragraphs (a), (b), (g) and (h) hereof,
(2) such deductions shall not include any net operating loss sustained
during any taxable year in which the taxpayer was not subject to the tax
imposed by this subchapter,
(3) such deduction shall not exceed the deduction for the taxable year
allowed under section one hundred seventy-two of the internal revenue
code, or the deduction for the taxable year which would have been
allowed if the taxpayer had not made an election under subchapter s of
chapter one of the internal revenue code,
(4) 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 code as such section was in full force and effect on
December thirty-first, nineteen hundred eighty, and
(5) the net operating loss deduction allowed under section one hundred
seventy-two of the internal revenue code shall for purposes of this
paragraph be determined as if the taxpayer had elected under such
section 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;
(g) 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.
(1)(A) 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.
(B) 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.
(2) However, such deduction shall be allowed only (A) 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
(B) on condition that such facilities have been certified by the state
commissioner of environmental conservation or the state commissioner's
designated representative, in the same manner as provided for in section
17-0707 or 19-0309 of the environmental conservation law, as applicable,
as complying with applicable provisions of the environmental
conservation law, the state sanitary code and regulations, permits or
orders issued pursuant thereto, and
(C) on condition that entire net income for the taxable year and all
succeeding taxable years be computed without any deductions for such
expenditures or for depreciation of the same property other than the
deductions allowed by this paragraph (g) 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
paragraph 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 entire net income for the taxable year and all succeeding
taxable years, and
(D) where the election provided for in paragraph (d) of subdivision
three of section 11-604 of this subchapter has not been exercised in
respect to the same property.
(3)(A) 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 (10) 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 report 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 (h)
of subdivision three of section 11-674 of this chapter.
(B) 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 environmental
conservation 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 (h)
of subdivision three of section 11-674 of this chapter.
(4) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to this
paragraph, 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 entering into the computation of
entire taxable income which the taxpayer is required to report to the
United States treasury for such taxable year;
(h) With respect to gain derived from the sale or other disposition of
any property acquired prior to January first, nineteen hundred
sixty-six; which had a federal adjusted basis on such date (or on the
date of its sale or other disposition prior to January first, nineteen
hundred sixty-six) lower than its fair market value on January first,
nineteen hundred sixty-six or the date of its sale or other disposition
prior thereto, except property described in subsections one and four of
section twelve hundred twenty-one of the internal revenue code, there
shall be deducted from entire net income, the difference between (1) the
amount of the taxpayer's federal taxable income, and (2) the amount of
the taxpayer's federal taxable income (if smaller than the amount
described in subparagraph one of this paragraph computed as if the
federal adjusted basis of each such property (on the sale or other
disposition of which gain was derived) on the date of the sale or other
disposition had been equal to either (A) 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 or (B) the amount realized
from its sale or disposition, whichever is lower; provided, however,
that the total modification provided by this paragraph (h) shall not
exceed the amount of the taxpayer's net gain from the sale or other
disposition of all such property.
(i) If the period covered by a report under this subchapter is other
than the period covered by the report of the United States treasury
department, entire net income shall be determined by multiplying the
federal taxable income (as adjusted pursuant to the provisions of this
subchapter) by the number of calendar months or major parts thereof
covered by the report under this subchapter and dividing by the number
of calendar months or major parts thereof covered by the report to such
department.
If it shall appear that such method of determining entire net income
does not properly reflect the taxpayer's income during the period
covered by the report under this subchapter, the commissioner of finance
shall be authorized in his or her discretion to determine such entire
net income solely on the basis of the taxpayer's income during the
period covered by its report under this subchapter.
(j) 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 excluded from entire net income
pursuant to subparagraph nine of paragraph (b) of this subdivision, 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. This paragraph shall not apply to property of a
taxpayer principally engaged in the conduct of an aviation, steamboat,
ferry or navigation business, or two or more of such businesses, which
is placed in service before taxable years beginning in nineteen hundred
eighty-nine.
(k) 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
paragraph (m) of this subdivision, 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), the depreciation
deduction allowable under section one hundred sixty-seven 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 paragraph (o) of this subdivision,
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.
(l) for taxable years ending after September tenth, two thousand one,
upon the disposition of property to which paragraph (k) of this
subdivision applies, the amount of any gain or loss includible in entire
net income shall be adjusted to reflect the inclusions and exclusions
from entire net income pursuant to subparagraph twelve of paragraph (a)
and subparagraph sixteen of paragraph (b) of this subdivision
attributable to such property.
(m) for purposes of paragraphs (l) and (m) of this subdivision,
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.
(n) 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 entire
net income or other applicable taxable basis, 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 paragraph 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 paragraph 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 11-604 of this subchapter
for the taxable year.
(iii) The adjustment required in this paragraph 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 paragraph 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.
(o) 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,
the deductions allowable 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, determined as if such
sport utility vehicle were a passenger automobile as defined in such
paragraph five. For purposes of paragraph (k) and subparagraph sixteen
of paragraph (b) of subdivision eight of this section, the terms
qualified resurgence zone property and qualified New York Liberty Zone
property described in paragraph two of subsection b of section fourteen
hundred L of the internal revenue code shall not include any 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.
(p) Upon the disposition of property to which paragraph (o) of this
subdivision applies, the amount of any gain or loss includible in entire
net income shall be adjusted to reflect the inclusions and exclusions
from entire net income pursuant to subparagraph thirteen of paragraph
(a) and subparagraph seventeen of paragraph (b) of this subdivision
attributable to such property.
9. (a) The term "calendar year" means a period of twelve calendar
months (or any shorter period beginning on the date the taxpayer becomes
subject to the tax imposed by this subchapter) ending on the
thirty-first day of December, provided the taxpayer keeps its books on
the basis of such period or on the basis of any period ending on any day
other than the last day of a calendar month, or provided the taxpayer
does not keep books, and includes, in case the taxpayer changes the
period on the basis of which it keeps its books from a fiscal year to a
calendar year, the period from the close of its last old fiscal year up
to and including the following December thirty-first.
(b) The term "fiscal year" means a period of twelve calendar months
(or any shorter period beginning on the date the taxpayer becomes
subject to the tax imposed by this subchapter) ending on the last day of
any month other than December, provided the taxpayer keeps its books on
the basis of such period, and includes, in case the taxpayer changes the
period on the basis of which it keeps its books from a calendar year to
a fiscal year or from one fiscal year to another fiscal year, the period
from the close of its last old calendar or fiscal year up to the date
designated as the close of its new fiscal year.
10. The term "tangible personal property" means corporeal personal
property, such as machinery, tools, implements, goods, wares and
merchandise, and does not mean money, deposits in banks, shares of
stock, bonds, notes, credits or evidence of an interest property and
evidences of debt.
Section 11-603
§ 11-603 Imposition of tax; exemptions. 1. For the privilege of doing
business, or of employing capital, or of owning or leasing property in
the city in a corporate or organized capacity, or of maintaining an
office in the city, for all or any part of each of its fiscal or
calendar years, every domestic or foreign corporation, except
corporations specified in subdivision four of this section, shall
annually pay a tax, upon the basis of its entire net income, or upon
such other basis as may be applicable as hereinafter provided, for such
fiscal or calendar year or part thereof, on a report which shall be
filed, except as hereinafter provided, on or before the fifteenth day of
March next succeeding the close of each such year, or, in the case of a
taxpayer which reports on the basis of a fiscal year, within two and
one-half months after the close of such fiscal year, and shall be paid
as hereinafter provided.
2. A corporation shall not be deemed to be doing business, employing
capital, owning or leasing property, or maintaining an office in the
city, for the purposes of this subchapter, by reason of (a) the
maintenance of cash balances with banks or trust companies in the city,
or (b) the ownership of shares of stock or securities kept in the city,
if kept in a safe deposit box, safe, vault or other receptacle rented
for the purpose, or if pledged as collateral security, or if deposited
with one or more banks or trust companies, or brokers who are members of
a recognized security exchange, in safekeeping or custody accounts, or
(c) the taking of any action by any such bank or trust company or
broker, which is incidental to the rendering of safekeeping or custodian
service to such corporation, or (d) the maintenance of an office in the
city by one or more officers or directors of the corporation who are not
employees of the corporation if the corporation otherwise is not doing
business in the city, and does not employ capital or own or lease
property in the city, or (e) the keeping of books or records of a
corporation in the city if such books or records are not kept by
employees of such corporation and such corporation does not otherwise do
business, employ capital, own or lease property or maintain an office in
the city, or (f) any combination of the foregoing activities.
2-a. An alien corporation shall not be deemed to be doing business,
employing capital, owning or leasing property, or maintaining an office
in the city, for the purposes of this subchapter, if its activities in
the city are limited solely to (a) investing or trading in stocks and
securities for its own account within the meaning of clause (ii) of
subparagraph (A) of paragraph (2) of subsection (b) of section eight
hundred sixty-four of the internal revenue code or (b) investing or
trading in commodities for its own account within the meaning of clause
(ii) of subparagraph (B) of paragraph (2) of subsection (b) of section
eight hundred sixty-four of the internal revenue code or (c) any
combination of activities described in paragraphs (a) and (b) of this
subdivision. For purposes of this subdivision, an alien corporation is a
corporation organized under the laws of a country, or any political
subdivision thereof, other than the United States.
3. Any receiver, referee, trustee, assignee or other fiduciary, or any
officer or agent appointed by any court, who conducts the business of
any corporation, shall be subject to the tax imposed by this subchapter
in the same manner and to the same extent as if the business were
conducted by the agents or officers of such corporation. A dissolved
corporation which continues to conduct business shall also be subject to
the tax imposed by this subchapter.
4. (a) Corporations subject to tax under subchapter three of this
chapter or under chapter eleven of this title, any trust company
organized under a law of this state all of the stock of which is owned
by not less than twenty savings banks organized under a law of this
state, bank holding companies filing a combined return in accordance
with subdivision (f) of section 11-646 of this chapter, a captive REIT
or a captive RIC filing a combined return under subdivision (f) of
section 11-646 of this chapter, housing companies organized and
operating pursuant to the provisions of article two of the private
housing finance law, housing development fund companies organized
pursuant to the provisions of article eleven of the private housing
finance law, corporations described in section three of the tax law, a
corporation principally engaged in the operation of marine vessels whose
activities in the city are limited exclusively to the use of property in
interstate or foreign commerce, provided, however, such a corporation
will not be subject to tax under this subchapter solely because it
maintains an office in the city, or employs capital in the city, in
connection with such use of property, a corporation principally engaged
in the conduct of a ferry business and operating between any of the
boroughs of the city under a lease granted by the city and a corporation
principally engaged in the conduct of an aviation, steamboat, ferry or
navigation business, or two or more of such businesses, all of the
capital stock of which is owned by a municipal corporation of this
state, shall not be subject to tax under this subchapter; provided,
however, that any corporation, other than (1) a utility corporation
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, a utility as defined in subdivision six of section 11-1101
of this title, which is subject to tax under chapter eleven of this
title as a vendor of utility services shall be subject to tax under this
subchapter, but in computing the tax imposed by this section pursuant to
the provisions of clause one of subparagraph (a) of paragraph A of
subdivision one of section 11-604, business income allocated to the city
pursuant to paragraph (a) of subdivision three of such section shall be
reduced by the percentage which such corporation's gross operating
income subject to tax under chapter eleven of this title is of its gross
operating income.
(b) The term "gross operating income", when used in paragraph (a) of
this subdivision, means receipts received in or by reason of any
transaction had and consummated in the city, including cash, credits and
property of any kind or nature (whether or not such transaction is made
for profit), without any deduction therefrom on account of the cost of
the property sold, the cost of materials used, labor or other services,
delivery costs or any other costs whatsoever, interest or discount paid
or any other expenses whatsoever.
(c) If it shall appear to the commissioner of finance that the
application of the proviso of paragraph (a) of this subdivision, does
not fairly and equitably reflect the portion of the taxpayer's business
income allocable to the city which is attributable to its city
activities which are not taxable under subchapter two of chapter eleven
of this title, the commissioner may prescribe other means or methods of
determining such portion, including the use of the books and records of
the taxpayer, if the commissioner finds that such means or methods used
in keeping them fairly and equitably reflect such portion.
5. The tax imposed by subdivision one of this section, with the
modifications provided by subdivision six of this section, is imposed
for each calendar or fiscal year beginning with calendar or fiscal years
ending in or with the calendar year nineteen hundred sixty-six.
6. (a) The tax for any taxable year ending prior to December
thirty-first, nineteen hundred sixty-six shall be an amount equal to the
tax imposed by subdivision one of this section for such 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.
(b) In lieu of the method of computation of tax prescribed in
paragraph (a) of this subdivision, if the taxpayer maintained adequate
records for the portion of any taxable year ending prior to December
thirty-first, nineteen hundred sixty-six, which portion falls within the
calendar year nineteen hundred sixty-six, it may elect to compute the
tax for such taxable year by determining entire net income on the basis
of the entire taxable income which it would have reported for federal
income tax purposes had it filed a federal income tax return for a
taxable year beginning January first, nineteen hundred sixty-six and
ending with the close of its actual taxable year and such taxable year
beginning January first, nineteen hundred sixty-six, shall be deemed to
be the period covered by its report, except that in computing such tax
any portion of a capital loss which results from a capital loss
carryover and any net operating loss deduction, as modified pursuant to
paragraph (f) of subdivision eight of section 11-602 of this subchapter,
shall be reduced by the same part of such portion of such capital loss
or of such 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.
7. For any taxable year of a real estate investment trust as defined
in section eight hundred fifty-six of the internal revenue code in which
such trust is subject to federal income taxation under section eight
hundred fifty-seven of such code, such trust shall be subject to a tax
computed under either clause one of subparagraph (a) of paragraph A of
subdivision one of section 11-604 of this subchapter with respect to its
entire net income, or clause four, whichever is greater, and shall not
be subject to any tax under subchapter three of this chapter, except for
a captive REIT required to file a combined return under subdivision (f)
of section 11-646 of this chapter. In the case of such a real estate
investment trust, including a captive REIT as defined in section 11-601
of this chapter, the term "entire net income" means "real estate
investment trust taxable income" as defined in paragraph two of
subdivision (b) of section eight hundred fifty-seven (as modified by
section eight hundred fifty-eight) of the internal revenue code plus the
amount taxable under paragraph three of subdivision (b) of section eight
hundred fifty-seven of such code, subject to the modification required
by subdivision eight of section 11-602 of this subchapter (other than
the modification required by clause two of paragraph (a) and by
paragraph (f) thereof) including the modifications required by
paragraphs (d) and (e) of subdivision three of section 11-604 of this
subchapter.
8. For any taxable year beginning on or after January first, nineteen
hundred eighty-one of a regulated investment company, as defined in
section eight hundred fifty-one of the internal revenue code, in which
such company is subject to federal income taxation under section eight
hundred fifty-two of such code, such company shall be subject to a tax
computed under clause one or four of subparagraph (a) of paragraph E of
subdivision one of section 11-604 of this subchapter, whichever is
greater, and such company shall not be subject to any tax under
subchapter three of this chapter, except for a captive RIC required to
file a combined return under subdivision (f) of section 11-646 of this
chapter. In the case of such a regulated investment company, including a
captive RIC as defined in section 11-601 of this chapter, the term
"entire net income" used in subdivision one of this section means
"investment company taxable income" as defined in paragraph two of
subdivision (b) of section eight hundred fifty-two, as modified by
section eight hundred fifty-five, of the internal revenue code plus the
amount taxable under paragraph three of subdivision (b) of section eight
hundred fifty-two of such code subject to the modifications required by
subdivision eight of section 11-602 of this subchapter, other than the
modification required by clause two of paragraph (a) and by paragraph
(f) thereof, including the modification required by paragraphs (d) and
(e) of subdivision three of section 11-604 of this subchapter.
9. For any taxable year beginning on or after January first, nineteen
hundred eighty-seven, an organization described in paragraph two or
twenty-five of subdivision (c) of section five hundred one of the
Internal Revenue Code of nineteen hundred eighty-six shall be exempt
from all taxes imposed by this chapter.
Section 11-604
§ 11-604 Computation of tax. 1. * A. For taxable years beginning on or
after January first, nineteen hundred seventy-one and ending on or
before December thirty-first, nineteen hundred seventy-four, the tax
imposed by subdivision one of section 11-603 of this subchapter shall
be, in the case of each taxpayer: (a) a tax (1) computed at the rate of
six and seven-tenths per centum of its entire net income, or the portion
of such entire net income allocated within the city as hereinafter
provided, subject to any modification required by paragraphs (d) and (e)
of subdivision three of this section, or (2) computed at one mill for
each dollar of its total business and investment capital, or the portion
thereof allocated within the city, as hereinafter provided, except that
in the case of a cooperative housing corporation as defined in the
internal revenue code, or in the case of a housing company organized and
operating pursuant to the provisions of article four of the private
housing finance law, the applicable rates shall be one-quarter of one
mill, or (3) computed at the rate of six and seven-tenths per centum on
thirty per centum of the taxpayer's entire net income plus salaries and
other compensation paid to the taxpayer's elected or appointed officers
and to every stockholder owning in excess of five per centum of its
issued capital stock minus fifteen thousand dollars (except as
hereinafter provided) and any net loss for the reported year, or on the
portion of any such sum allocated within the city as hereinafter
provided for the allocation of entire net income, subject to any
modification required by paragraphs (d) and (e) of subdivision three of
this section, or (4) twenty-five dollars, whichever is greatest, plus
(b) a tax computed at the rate of one-half mill for each dollar of the
portion of its subsidiary capital allocated within the city as
hereinafter provided. In the case of a taxpayer which is not subject to
tax for an entire year, the exemption allowed in clause three of
paragraph (a) shall be prorated according to the period such taxpayer
was subject to tax.
* NB Effective until December 31, 2014
* A. For taxable years beginning on or after January first, nineteen
hundred seventy-one and ending on or before December thirty-first,
nineteen hundred seventy-four, and for taxable years beginning on or
after January first, nineteen hundred seventy-six, the tax imposed by
subdivision one of section 11-603 of this subchapter shall be, in the
case of each taxpayer: (a) a tax (1) computed at the rate of six and
seven-tenths per centum of its entire net income, or the portion of such
entire net income allocated within the city as hereinafter provided,
subject to any modification required by paragraphs (d) and (e) of
subdivision three of this section, or (2) computed at one mill for each
dollar of its total business and investment capital, or the portion
thereof allocated within the city, as hereinafter provided, except that
in the case of a cooperative housing corporation as defined in the
internal revenue code, or in the case of a housing company organized and
operating pursuant to the provisions of article four of the private
housing finance law, the applicable rates shall be one-quarter of one
mill, or (3) computed at the rate of six and seven-tenths per centum on
thirty per centum of the taxpayer's entire net income plus salaries and
other compensation paid to the taxpayer's elected or appointed officers
and to every stockholder owning in excess of five per centum of its
issued capital stock minus fifteen thousand dollars (except as
hereinafter provided) and any net loss for the reported year, or on the
portion of any such sum allocated within the city as hereinafter
provided for the allocation of entire net income, subject to any
modification required by paragraphs (d) and (e) of subdivision three of
this section, or (4) twenty-five dollars, whichever is greatest, plus
(b) a tax computed at the rate of one-half mill for each dollar of the
portion of its subsidiary capital allocated within the city as
hereinafter provided. In the case of a taxpayer which is not subject to
tax for an entire year, the exemption allowed in clause three of
paragraph (a) shall be prorated according to the period such taxpayer
was subject to tax.
* NB Effective December 31, 2014
B. For taxable years beginning on or after January first, nineteen
hundred seventy-five and before January first nineteen hundred
seventy-seven, the tax imposed by subdivision one of section 11-603 of
this subchapter shall be, in the case of each taxpayer: (a) a tax (1)
computed at the rate of ten and five one-hundredths per centum of its
entire net income, or the portion of such entire net income allocated
within the city as hereinafter provided, subject to any modification
required by paragraphs (d) and (e) of subdivision three of this section,
or (2) computed at one and one-half mills for each dollar of its total
business and investment capital, or the portion thereof allocated within
the city, as hereinafter provided, except that in the case of a
cooperative housing corporation as defined in the internal revenue code,
or in the case of a housing company organized and operating pursuant to
the provisions of article four of the private housing finance law, the
applicable rate shall be four-tenths of one mill, or (3) computed at the
rate of ten and five one-hundredths per centum on thirty per centum of
the taxpayer's entire net income plus salaries and other compensation
paid to the taxpayer's elected or appointed officers and to every
stockholder owning in excess of five per centum of its issued capital
stock minus fifteen thousand dollars (except as hereinafter provided)
and any net loss for the reported year, or on the portion of any such
sum allocated within the city as hereinafter provided for the allocation
of entire net income, subject to any modification required by paragraphs
(d) and (e) of subdivision three of this section, or (4) one hundred
twenty-five dollars, whichever is greatest, plus (b) a tax computed at
the rate of three-quarters of a mill for each dollar of the portion of
its subsidiary capital allocated within the city as hereinafter
provided. In the case of a taxpayer which is not subject to tax for an
entire year, the exemption allowed in clause three of paragraph (a)
shall be prorated according to the period such taxpayer was subject to
tax.
C. For each taxable year beginning in nineteen hundred seventy-four
and ending in nineteen hundred seventy-five, two tentative taxes shall
be computed, the first as provided in paragraph A and the second as
provided in paragraph B, and the tax for each such year shall be the sum
of that proportion of each tentative tax which the number of days in
nineteen hundred seventy-four and the number of days in nineteen hundred
seventy-five, respectively, bears to the number of days in the entire
taxable year.
D. For taxable years beginning on or after January first, nineteen
hundred seventy-seven and before January first, nineteen hundred
seventy-eight, the tax imposed by subdivision one of section 11-603 of
this subchapter shall be, in the case of each taxpayer: (a) a tax (1)
computed at the rate of nine and one-half per centum of its entire net
income, or the portion of such entire net income allocated within the
city as hereinafter provided, subject to any modification required by
paragraphs (d) and (e) of subdivision three of this section, or (2)
computed at one and one-half mills for each dollar of its total business
and investment capital, or the portion thereof allocated within the
city, as hereinafter provided, except that in the case of a cooperative
housing corporation as defined in the internal revenue code, the
applicable rate shall be four-tenths of one mill, or (3) computed at the
rate of nine and one-half per centum on thirty per centum of the
taxpayer's entire net income plus salaries and other compensation paid
to the taxpayer's elected or appointed officers and to every stockholder
owning in excess of five per centum of its issued capital stock minus
fifteen thousand dollars (except as hereinafter provided) and any net
loss for the reported year, or on the portion of any such sum allocated
within the city as hereinafter provided for the allocation of entire net
income, subject to any modification required by paragraphs (d) and (e)
of subdivision three of this section, or (4) one hundred twenty-five
dollars, whichever is greatest, plus (b) a tax computed at the rate of
three-quarters of a mill for each dollar of the portion of its
subsidiary capital allocated within the city as hereinafter provided. In
the case of a taxpayer which is not subject to tax for an entire year,
the exemption allowed in clause three of paragraph (a) shall be prorated
according to the period such taxpayer was subject to tax.
E. For taxable years beginning on or after January first, nineteen
hundred seventy-eight but before January first, two thousand fifteen,
the tax imposed by subdivision one of section 11-603 of this subchapter
shall be, in the case of each taxpayer:
(a) whichever of the following amounts is the greatest:
(1) an amount computed, for taxable years beginning before nineteen
hundred eighty-seven, at the rate of nine per centum, and for taxable
years beginning after nineteen hundred eighty-six, at the rate of eight
and eighty-five one-hundredths per centum, of its entire net income or
the portion of such entire net income allocated within the city as
hereinafter provided, subject to any modification required by paragraphs
(d) and (e) of subdivision three of this section,
(2) an amount computed at one and one-half mills for each dollar of
its total business and investment capital, or the portion thereof
allocated within the city, as hereinafter provided, except that in the
case of a cooperative housing corporation as defined in the internal
revenue code, the applicable rate shall be four-tenths of one mill,
(3) an amount computed, for taxable years beginning before nineteen
hundred eighty-seven, at the rate of nine per centum, and for taxable
years beginning after nineteen hundred eighty-six, at the rate of eight
and eighty-five one-hundredths per centum, on thirty per centum of the
taxpayer's entire net income plus salaries and other compensation paid
to the taxpayer's elected or appointed officers and to every stockholder
owning in excess of five per centum of its issued capital stock minus
fifteen thousand dollars (subject to proration as hereinafter provided)
and any net loss for the reported year, or on the portion of any such
sum allocated within the city as hereinafter provided for the allocation
of entire net income, subject to any modification required by paragraphs
(d) and (e) of subdivision three of this section, provided, however,
that for taxable years beginning on or after July first, nineteen
hundred ninety-six, the provisions of paragraph H of this subdivision
shall apply for purposes of the computation under this clause, or
(4) for taxable years ending on or before June thirtieth, nineteen
hundred eighty-nine, one hundred twenty-five dollars, for taxable years
ending after June thirtieth, nineteen hundred eighty-nine and beginning
before two thousand nine, three hundred dollars, and for taxable years
beginning after two thousand eight:
If New York city receipts are: Fixed dollar minimum tax is:
Not more than $100,000 $25
More than $100,000 but not over $250,000 $75
More than $250,000 but not over $500,000 $175
More than $500,000 but not over $1,000,000 $500
More than $1,000,000 but not over $5,000,000 $1,500
More than $5,000,000 but not over $25,000,000 $3,500
Over $25,000,000 $5,000
For purposes of this clause, New York city receipts are the receipts
computed in accordance with subparagraph two of paragraph (a) of
subdivision three of this section for the taxable year. For taxable
years beginning after two thousand eight, if the taxable year is less
than twelve months, the amount prescribed by this clause shall be
reduced by twenty-five percent if the period for which the taxpayer is
subject to tax is more than six months but not more than nine months and
by fifty percent if the period for which the taxpayer is subject to tax
is not more than six months. If the taxable year is less than twelve
months, the amount of New York city receipts for purposes of this clause
is determined by dividing the amount of the receipts for the taxable
year by the number of months in the taxable year and multiplying the
result by twelve, plus;
(b) an amount computed at the rate of three-quarters of a mill for
each dollar of the portion of its subsidiary capital allocated within
the city as hereinafter provided.
In the case of a taxpayer which is not subject to tax for an entire
year, the exemption allowed in clause three of subparagraph (a) of this
paragraph shall be prorated according to the period such taxpayer was
subject to tax. Provided, however, that this paragraph shall not apply
to taxable years beginning after December thirty-first, two thousand
fourteen. For the taxable years specified in the preceding sentence, the
tax imposed by subdivision one of section 11-603 of this subchapter
shall be, in the case of each taxpayer, determined as specified in
paragraph A of this subdivision, provided, however, that the provisions
of paragraphs G and H of this subdivision shall apply for purposes of
the computation under clause three of subparagraph (a) of such paragraph
A.
F. Notwithstanding any other provision of this subdivision to the
contrary, for taxable years beginning after nineteen hundred
eighty-seven and before two thousand nine the amount of tax computed on
the basis of the taxpayer's total business and investment capital, or
the portion thereof allocated within the city, shall in no event exceed
three hundred fifty thousand dollars and for taxable years beginning
after two thousand eight the amount of tax computed on the basis of the
taxpayer's total business and investment capital, or the portion thereof
allocated within the city, shall in no event exceed one million dollars.
G. In the case of a foreign air carrier described in the first
sentence of subparagraph one of paragraph (c-1) of subdivision eight of
section 11-602 of this subchapter, there shall be excluded from the
computation of the tax under clause three of subparagraph (a) of
paragraph E of this subdivision salaries and other compensation
described therein which are directly attributable to the generation of
income excluded from entire net income for the taxable year pursuant to
the provisions of paragraph (c-1) of subdivision eight of section 11-602
of this subchapter.
H. For taxable years beginning on or after July first, nineteen
hundred ninety-six, the computation under clause three of subparagraph
(a) of paragraph E of this subdivision shall be subject to the following
modifications:
(a) (1) For taxable years beginning on or after July first, nineteen
hundred ninety-six but before July first, nineteen hundred ninety-eight,
only seventy-five percent of the total salaries and other compensation
paid to the taxpayer's elected or appointed officers shall be added to
the entire net income entering into such computation; for taxable years
beginning on or after July first, nineteen hundred ninety-eight but
before July first, nineteen hundred ninety-nine, only fifty percent of
such salaries and other compensation shall be added to such entire net
income; and for taxable years beginning on or after July first, nineteen
hundred ninety-nine, no part of such salaries and other compensation
shall be added to such entire net income.
(2) Notwithstanding anything in clause one of this subparagraph to the
contrary, the full amount of the salary or other compensation paid to
any such elected or appointed officer shall be added to entire net
income as provided in clause three of subparagraph (a) of paragraph E of
this subdivision if such officer was, at any time during the taxable
year, a stockholder owning more than five percent of taxpayer's issued
capital stock.
(b) For taxable years beginning on or after July first, nineteen
hundred ninety-seven but before July first, nineteen hundred
ninety-eight, the fixed dollar amount entering into the computation
under clause three of subparagraph (a) of paragraph E of this
subdivision shall be thirty thousand dollars instead of fifteen thousand
dollars; and for taxable years beginning on or after July first,
nineteen hundred ninety-eight, such fixed dollar amount shall be forty
thousand dollars.
(c) For taxable years beginning on or after January first, two
thousand seven and before January first, two thousand eight the per
centum entering into the computation under clause three of subparagraph
(a) of paragraph E of this subdivision shall be twenty-six and
one-fourth per centum instead of thirty per centum, for taxable years
beginning on or after January first, two thousand eight and before
January first, two thousand nine such per centum shall be twenty-two and
one-half per centum, for taxable years beginning on or after January
first, two thousand nine and before January first, two thousand ten such
per centum shall be eighteen and three-fourths per centum and for
taxable years beginning on or after January first, two thousand ten such
per centum shall be fifteen per centum.
I. Notwithstanding any provision of this subdivision to the contrary,
for taxable years beginning on or after January first, two thousand
seven for any corporation that:
(a) has a business allocation percentage for the taxable year, as
determined under paragraph (a) of subdivision three of this section, of
one hundred percent;
(b) has no investment capital or income at any time during the taxable
year;
(c) has no subsidiary capital or income at any time during the taxable
year; and
(d) has gross income, as defined in section sixty-one of the internal
revenue code, less than two hundred fifty thousand dollars for the
taxable year:
the tax imposed by subdivision one of section 11-603 of this
subchapter shall be the greater of the tax on entire net income computed
under clause one of subparagraph (a) of paragraph E of this subdivision
and the fixed dollar minimum tax specified in clause four of
subparagraph (a) of paragraph E of this subdivision.
For purposes of this paragraph, any corporation for which an election
under subsection (a) of section six hundred sixty of the tax law is not
in effect for the taxable year may elect to treat as entire net income
the sum of:
(i) entire net income as determined under section two hundred eight of
the tax law; and
(ii) any deductions taken for the taxable year in computing federal
taxable income for New York city taxes paid or accrued under this
chapter.
2. The amount of subsidiary capital, investment capital and business
capital shall each be determined by taking the average value of the
gross assets included therein (less liabilities deductible therefrom
pursuant to the provisions of subdivisions three, four and six of
section 11-602 of this subchapter), and, if the period covered by the
report is other than a period of twelve calendar months, by multiplying
such value by the number of calendar months or major parts thereof
included in such period, and dividing the product thus obtained by
twelve. For purposes of this subdivision, real property and marketable
securities shall be valued at fair market value and the value of
personal property other than marketable securities shall be the value
thereof shown on the books and records of the taxpayer in accordance
with generally accepted accounting principles.
3. The portion of the entire net income of a taxpayer to be allocated
within the city shall be determined as follows:
(a) multiply its business income by a business allocation percentage
to be determined by:
(1) ascertaining the percentage which the average value of the
taxpayer's real and tangible personal property, whether owned or rented
to it, within the city during the period covered by its report bears to
the average value of all the taxpayer's real and tangible personal
property, whether owned or rented to it, wherever situated during such
period. For the purpose of this subparagraph, the term "value of the
taxpayer's real and tangible personal property" shall mean the adjusted
bases of such properties for federal income tax purposes (except that in
the case of rented property such value shall mean the product of (A)
eight and (B) the gross rents payable for the rental of such property
during the taxable year); provided, however, that the taxpayer may make
a one-time, revocable election, pursuant to regulations promulgated by
the commissioner of finance to use fair market value as the value of all
of its real and tangible personal property, provided that such election
is made on or before the due date for filing a report under section
11-605 of this subchapter for the taxpayer's first taxable year
commencing on or after January first, nineteen hundred eighty-eight and
provided that such election shall not apply to any taxable year with
respect to which the taxpayer is included on a combined report unless
each of the taxpayers included on such report has made such an election
which remains in effect for such year;
(2) ascertaining the percentage which the receipts of the taxpayer,
computed on the cash or accrual basis according to the method of
accounting used in the computation of its entire net income, arising
during such period from:
(A) except as otherwise provided in subparagraph nine of this
paragraph, sales of its tangible personal property where shipments are
made to points within the city,
(B) services performed within the city, provided, however, that (i) in
the case of a taxpayer engaged in the business of publishing newspapers
or periodicals, receipts arising from sales of advertising contained in
such newspapers and periodicals shall be deemed to arise from services
performed within the city to the extent that such newspapers and
periodicals are delivered to points within the city, (ii) receipts
received from an investment company arising from the sale of management,
administration or distribution services to such investment company shall
be deemed to arise from services performed within the city to the extent
set forth in subparagraph five of this paragraph, (iii) in the case of
taxpayers principally engaged in the activity of air freight forwarding
acting as principal and like indirect air carriage, receipts arising
from such activity shall be deemed to arise from services performed
within the city as follows: one hundred percent of such receipts if both
the pickup and delivery associated with such receipts are made in the
city and fifty percent of such receipts if either the pickup or delivery
associated with such receipts is made in the city, (iv) 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, receipts arising from
sales of subscriptions, advertising or broadcasting shall be deemed to
arise from services performed within the city to the extent provided in
subparagraph nine of this paragraph, and (v) for taxable years beginning
after two thousand eight, in the case of a taxpayer which is a
registered securities or commodities broker or dealer, the receipts
specified in subparagraph ten of this paragraph shall be deemed to arise
from services performed within the city to the extent set forth in such
subparagraph ten,
(C) rentals from property situated and royalties from the use of
patents or copyrights, within the city, and
(D) all other business receipts earned within the city, bear to the
total amount of the taxpayer's receipts, similarly computed, arising
during such period from all sales of its tangible personal property,
services, rentals, royalties and all other business transactions,
whether within or without the city;
(3) ascertaining the percentage of the total wages, salaries and other
personal service compensation, similarly computed, during such period of
employees within the city, except general executive officers, to the
total wages, salaries and other personal service compensation, similarly
computed, during such period of all the taxpayer's employees within and
without the city, except general executive officers, and
(4) adding together the percentages so determined 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 corporation," as defined in
subparagraph eight of this paragraph, may determine its business
allocation percentage as provided in such subparagraph eight; and
provided, further, however, that for taxable years beginning before July
first, nineteen hundred ninety-six, if the taxpayer does not have a
regular place of business outside the city other than a statutory
office, the business allocation percentage shall be one hundred per
centum.
(5) Rules for receipts from certain services to investment companies.
(A) For purposes of subclause (ii) of clause (B) of subparagraph two of
this paragraph, 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 clause (B) of this subparagraph shall be deemed to arise
from services performed within the city (such portion referred to herein
as the New York city portion).
(B) The New York city portion shall be the product of (a) the total of
such receipts from the sale of such services and (b) 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 (a)
the number of shares in the investment company which are owned on the
last day of the month by shareholders which are domiciled in the city by
(b) 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.
(C) (i) For purposes of this subparagraph, 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.
(ii) For purposes of this subparagraph, 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.
(iii) For purposes of this subparagraph, 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.
(iv) For purposes of this subparagraph, 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.
(v) For purposes of this subparagraph, 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.
(vi) For purposes of this subparagraph, the term "administration
services" includes (1) clerical, accounting, bookkeeping, data
processing, internal auditing, legal and tax services performed for an
investment company but only (2) 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.
(6) (A) Provided, further, however, that a taxpayer principally
engaged in the conduct of aviation (other than as provided in clause (C)
of this subparagraph) shall, notwithstanding the foregoing provisions of
this paragraph, determine the portion of entire net income to be
allocated within the city by multiplying its business income by a
business allocation percentage which is equal to the arithmetic average
of the following three percentages:
(i) the percentage determined by dividing aircraft arrivals and
departures within the city by the taxpayer during the period covered by
its report by the total aircraft arrivals and departures within and
without the city during such period; provided, however, arrivals and
departures solely for maintenance or repair, refueling (where no
debarkation or embarkation of traffic occurs), arrivals and departures
of ferry and personnel training flights or arrivals and departures in
the event of emergency situations shall not be included in computing
such arrival and departure percentage; provided, further, the
commissioner of finance may also exempt from such percentage aircraft
arrivals and departures of all non-revenue flights including flights
involving the transportation of officers or employees receiving air
transportation to perform maintenance or repair services or where such
officers or employees are transported in conjunction with an emergency
situation or the investigation of an air disaster (other than on a
scheduled flight); provided, however, that arrivals and departures of
flights transporting officers and employees receiving air transportation
for purposes other than specified above (without regard to remuneration)
shall be included in computing such arrival and departure percentage;
(ii) the percentage determined by dividing the revenue tons handled by
the taxpayer at airports within the city during such period by the total
revenue tons handled by it at airports within and without the city
during such period; and
(iii) the percentage determined by dividing the taxpayer's originating
revenue within the city for such period by its total originating revenue
within and without the city for such period.
(B) As used herein, the term "aircraft arrivals and departures" means
the number of landings and takeoffs of the aircraft of the taxpayer and
the number of air pickups and deliveries by the aircraft of such
taxpayer; the term "originating revenue" means revenue to the taxpayer
from the transportation of revenue passengers and revenue property first
received by the taxpayer either as originating or connecting traffic at
airports; and the term "revenue tons handled" by the taxpayer at
airports means the weight in tons of revenue passengers (at two hundred
pounds per passenger) and revenue cargo first received either as
originating or connecting traffic or finally discharged by the taxpayer
at airports;
(C) A foreign air carrier described in the first sentence of
subparagraph one of paragraph (c-1) of subdivision eight of section
11-602 of this subchapter shall determine its business allocation
percentage pursuant to the provisions of subparagraphs one through four
of this paragraph, except that the numerators and denominators involved
in such computation shall exclude property to the extent employed in
generating income excluded from entire net income pursuant to the
provisions of paragraph (c-1) of subdivision eight of section 11-602 of
this subchapter, exclude such receipts as are excluded from entire net
income for the taxable year pursuant to the provisions of paragraph
(c-1) of subdivision eight of section 11-602 of this subchapter, and
exclude wages, salaries or other personal service compensation which are
directly attributable to the generation of income excluded from entire
net income for the taxable year pursuant to the provisions of paragraph
(c-1) of subdivision eight of section 11-602 of this subchapter.
(7) Provided, further, however, that a taxpayer principally engaged in
the operation of vessels shall, notwithstanding the foregoing provisions
of this paragraph, determine the portion of entire net income to be
allocated within the city by multiplying its business income by a
business allocation percentage determined by dividing the aggregate
number of working days of the vessels it owns or leases in territorial
waters of the city during the period covered by its report by the
aggregate number of working days of all the vessels it owns or leases
during such period.
(8) (A) For taxable years beginning on or after July first, nineteen
hundred ninety-six and before January first, two thousand eleven, a
manufacturing corporation may elect to determine its business allocation
percentage by adding together the percentages determined under
subparagraphs one, two and three of this paragraph and an additional
percentage equal to the percentage determined under subparagraph two of
this paragraph, and dividing the result by the number of percentages so
added together.
(B) An election under this subparagraph must be made on a timely filed
(determined with regard to extensions granted) original report 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 corporation that has failed to make
an election as provided in this clause shall be required to determine
its business allocation percentage without regard to the provisions of
this subparagraph. Notwithstanding anything in this clause to the
contrary, the commissioner of finance may permit a manufacturing
corporation to make or revoke an election under this subparagraph, 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.
(C) As used in this subparagraph, the term "manufacturing corporation"
means a corporation 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. A corporation 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.
(D) Notwithstanding anything to the contrary, if a taxpayer that is
otherwise eligible to make the election authorized by this subparagraph
is required or permitted to make a report on a combined basis with one
or more other corporations pursuant to subdivision four of section
11-605 of this chapter, the taxpayer shall be permitted to make an
election under this subparagraph only if such taxpayer and such other
corporation or corporations would be a manufacturing corporation if they
were treated as a single corporation. In making such determination,
intercorporate transactions shall be eliminated. Where such election has
been made by the taxpayer for a taxable year, each of the other
corporations included in the combined report shall also be deemed to
have made a proper election under this subparagraph for such taxable
year.
(9) Special rules for publishers and broadcasters. (A) Notwithstanding
anything in subparagraph two of this paragraph to the contrary and
except as provided in clause (C) of this subparagraph, 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
subparagraph two of this paragraph, the gross sales or charges for
services arising from sales of advertising contained in such newspapers
or periodicals, to the extent that such newspapers or periodicals are
delivered to points within the city.
(B) Notwithstanding anything in subparagraph two of this paragraph to
the contrary and except as provided in clause (C) of this subparagraph,
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
subparagraph two of this paragraph, a portion of the gross sales or
charges for services arising 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.
(C) Notwithstanding anything in clause (A) or (B) of this subparagraph
to the contrary, 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
subparagraph two of this paragraph, the gross sales or charges to
subscribers located in the city for subscriptions to such newspapers,
periodicals, or program services. For purposes of this clause, 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.
* (10) Notwithstanding subparagraphs one through five of this
paragraph, but subject to subparagraph eight of this paragraph, the
business allocation percentage, to the extent that it is computed by
reference to the percentages determined under subparagraphs one, two and
three of this paragraph, shall be computed in the manner set forth in
this subparagraph.
(A) For taxable years beginning in two thousand nine, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of thirty percent and the percentage determined under
subparagraph one of this paragraph,
(ii) the product of forty percent and the percentage determined under
subparagraph two of this paragraph, and
(iii) the product of thirty percent and the percentage determined
under subparagraph three of this paragraph.
(B) For taxable years beginning in two thousand ten, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of twenty-seven percent and the percentage determined
under subparagraph one of this paragraph,
(ii) the product of forty-six percent and the percentage determined
under subparagraph two of this paragraph, and
(iii) the product of twenty-seven percent and the percentage
determined under subparagraph three of this paragraph.
(C) For taxable years beginning in two thousand eleven, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of twenty-three and one-half percent and the
percentage determined under subparagraph one of this paragraph,
(ii) the product of fifty-three percent and the percentage determined
under subparagraph two of this paragraph, and
(iii) the product of twenty-three and one-half percent and the
percentage determined under subparagraph three of this paragraph.
(D) For taxable years beginning in two thousand twelve, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of twenty percent and the percentage determined under
subparagraph one of this paragraph,
(ii) the product of sixty percent and the percentage determined under
subparagraph two of this paragraph, and
(iii) the product of twenty percent and the percentage determined
under subparagraph three of this paragraph.
(E) For taxable years beginning in two thousand thirteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of sixteen and one-half percent and the percentage
determined under subparagraph one of this paragraph,
(ii) the product of sixty-seven percent and the percentage determined
under subparagraph two of this paragraph, and
(iii) the product of sixteen and one-half percent and the percentage
determined under subparagraph three of this paragraph.
(F) For taxable years beginning in two thousand fourteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of thirteen and one-half percent and the percentage
determined under subparagraph one of this paragraph,
(ii) the product of seventy-three percent and the percentage
determined under subparagraph two of this paragraph, and
(iii) the product of thirteen and one-half percent and the percentage
determined under subparagraph three of this paragraph.
(G) For taxable years beginning in two thousand fifteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of ten percent and the percentage determined under
subparagraph one of this paragraph,
(ii) the product of eighty percent and the percentage determined under
subparagraph two of this paragraph, and
(iii) the product of ten percent and the percentage determined under
subparagraph three of this paragraph.
(H) For taxable years beginning in two thousand sixteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of six and one-half percent and the percentage
determined under subparagraph one of this paragraph,
(ii) the product of eighty-seven percent and the percentage determined
under subparagraph two of this paragraph, and
(iii) the product of six and one-half percent and the percentage
determined under subparagraph three of this paragraph.
(I) For taxable years beginning in two thousand seventeen, the
business allocation percentage shall be determined by adding together
the following percentages:
(i) the product of three and one-half percent and the percentage
determined under subparagraph one of this paragraph,
(ii) the product of ninety-three percent and the percentage determined
under subparagraph two of this paragraph, and
(iii) the product of three and one-half percent and the percentage
determined under subparagraph three of this paragraph.
(J) For taxable years beginning after two thousand seventeen, the
business allocation percentage shall be the percentage determined under
subparagraph two of this paragraph.
(K) The commissioner shall promulgate rules necessary to implement the
provisions of this subparagraph under such circumstances where any of
the percentages to be determined under subparagraph one, two or three of
this paragraph cannot be determined because the taxpayer has no
property, receipts or wages within or without the city.
* NB There are 2 ù(10)'s
* (10) (A) In the case of a taxpayer which is a registered securities
or commodities broker or dealer, the receipts specified in items (i)
through (vii) of this clause shall be deemed to arise from services
performed within the city to the extent set forth in each of such items.
(i) 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.
(ii) 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.
(iii) 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 subitem (II) of the
preceding sentence, the taxpayer shall separately calculate such gross
income from principal transactions by type of security or commodity. For
purposes of this item, 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
subparagraph, 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.
(iv) (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.
(v) Receipts constituting interest earned by the taxpayer on loans and
advances made by the taxpayer to a corporation affiliated with the
taxpayer but with which the taxpayer is not permitted or required to
file a combined report pursuant to subdivision four of section 11-605 of
this subchapter shall be deemed to arise from services performed at the
principal place of business of such affiliated corporation.
(vi) 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.
(vii) 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
item (ii) of clause (B) of subparagraph two of this paragraph, 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.
(B) For purposes of this subparagraph, 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 the internal revenue 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
over-the-counter 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).
(C) If the taxpayer receives any of the receipts enumerated in clause
(A) of this subparagraph 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 items of clause (A) of this subparagraph. 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 clause (A) of this
subparagraph 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 items of clause
(A) of this subparagraph.
(D) If, for purposes of item (i) or (ii), subitem (I) of item (iv), or
item (vi), or (vii) of clause (A) of this subparagraph, the taxpayer is
unable from its records to determine the mailing address of the
customer, the receipts enumerated in any of such items 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.
* NB There are 2 ù(10)'s
(b) multiply its investment income by an investment allocation
percentage to be determined by:
(1) multiplying the amount of its investment capital invested in each
stock, bond or other security (other than governmental securities)
during the period covered by its report by the issuer's allocation
percentage of the issuer or obligor thereof.
(i) In the case of an issuer or obligor subject to tax under this
subchapter or subchapter four of this chapter, 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 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 this subchapter, entire capital; in the case of an
issuer or obligor subject to subchapter four of this chapter, issued
capital stock; in the case of an issuer or obligor subject to chapter
eleven of this title as a utility corporation, gross income.
(ii) In the case of an issuer or obligor subject to tax under part
four of subchapter three of this chapter, the issuer's allocation
percentage shall be determined as follows:
(A) In the case of a banking corporation described in paragraphs one
through eight of subdivision (a) of section 11-640 of this chapter 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 chapter, 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.
(B) In the case of a banking corporation described in paragraph two of
subdivision (a) of section 11-640 of this chapter 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 chapter 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.
(C) 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 chapter, 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.
(iii) 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 (A) the issuer's allocation
percentage derived from the most recently filed report or reports of the
issuer or obligor or (B) 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.
(2) adding together the sum so obtained, and
(3) dividing the result 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 report, 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 multiplied by its business allocation percentage; and
(c) add the products so obtained.
(d) Except as provided in subparagraph three of this paragraph or in
paragraph (e) of this subdivision, at the election of the taxpayer there
shall be deducted from the portion of its entire net income allocated
within the city either or both of the items set forth in subparagraphs
one and two of this paragraph, except that only one of such deductions
shall be allowed with respect to any one item of property.
(1) Depreciation with respect to any property such as described in
subparagraph three of this paragraph, 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 entire net income be computed without any deduction for the
depreciation of the same property, and the total of all deductions
allowed in any taxable year or years with respect to the depreciation of
any such property shall not exceed its cost or other basis.
(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in subparagraph three of this paragraph which is used
or to be 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. Such deduction shall be
allowed only on condition that entire net income for the taxable year
and all succeeding taxable years be computed without the deduction of
any such expenditures and without any deduction for 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 subparagraph for only a part of such
expenditures, on condition that any deduction allowed for federal income
tax purposes on account of such expenditures or on account of
depreciation of the same property be proportionately reduced in
computing entire net income 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, a proportionate part of such expenditures shall be deductible. If
all or part of such expenditures with respect to any property shall have
been deducted as provided herein, 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 its report 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 regardless of the time limitations set forth in section
11-674 of this chapter.
(3) 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 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
expenditures 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 paragraphs 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 clauses (A), (B) or (C) of
this subparagraph 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. Provided, 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 (d) hereof
with respect to tangible personal property leased by it 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 the
taxpayer uses itself for purposes other than leasing for part of a
taxable year and leases for a part of a taxable year, the taxpayer shall
be allowed a deduction under paragraph (d) in proportion to the part of
the year it uses such property.
(4) If the deductions allowable for any taxable year, pursuant to this
subdivision, exceed the portion of the taxpayer's entire net income
allocated to the city for such year, the excess may be carried over to
the following taxable year or years and may be deducted from the portion
of the taxpayer's entire net income allocated to the city for such year
or years.
(5) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to
subparagraph one or two of this paragraph, the gain or loss thereon
entering into the computation of federal taxable income shall be
disregarded in computing entire net income, and there shall be added to
or subtracted from the portion of entire net income allocated within the
city 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 subparagraph one or two of this paragraph. Provided,
however, that no loss shall be recognized for the purposes of this
subparagraph with respect to a sale or other disposition of property to
a person whose acquisition thereof is not a purchase as defined in
section one hundred seventy-nine (d) of the internal revenue code.
(e) At the election of the taxpayer there shall be deducted from the
portion of its entire net income allocated within the city either or
both of the items set forth in subparagraphs one and two of this
paragraph, except that only one of such deductions shall be allowed with
respect to any one item of property.
(1) Depreciation with respect to any property such as described in
subparagraphs three and four of this paragraph, 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 entire net income be computed without any deduction for the
depreciation of the same property, and the total of all deductions
allowed in any taxable year or years with respect to the depreciation of
any such property shall not exceed its cost or other basis multiplied by
the taxpayer's business allocation percentage determined under this
subdivision for the first year it deducts such depreciation under this
paragraph.
(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in subparagraph three of this paragraph which is used
or to be 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. Such deductions shall be
allowed only on condition that it does not exceed the amount of the
expenditures multiplied by the taxpayer's business allocation percentage
determined under this subdivision for the year the expenditures are paid
or incurred and that entire net income for the taxable year and all
succeeding taxable years be computed without the deduction of any such
expenditures and without any deduction for 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 subparagraph for only a part of such
expenditures, on condition that any deduction allowed for federal income
tax purposes on account of such expenditures or on account of
depreciation of the same property be proportionately reduced in
computing entire net income 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, a proportionate part of such expenditures shall be deductible. If
all or part of such expenditures with respect to any property shall have
been deducted as provided herein, 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 its report 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 regardless of the time limitations set forth in section
11-674 of this chapter.
(3) 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) 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-five, or (B) acquired after December thirty-first, nineteen
hundred sixty-seven by purchase or 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 state and
commenced after December thirty-first nineteen hundred sixty-five.
Provided, 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 (e) hereof with respect to tangible personal
property leased by it 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 the taxpayer uses itself for purposes other
than leasing for part of a taxable year and leases for a part of a
taxable year, the taxpayer shall be allowed a deduction under paragraph
(e) in proportion to the part of the year it uses such property.
(4) A deduction under subparagraph one of this paragraph shall be
allowed with respect to tangible property described in subparagraph
three only if such property is 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 this subparagraph,
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 paragraph
(g) of subdivision eight of section 11-602 of this subchapter 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 such
paragraph (g).
(5) Subject to the limitation imposed by subparagraphs one and two
hereof, if the deductions allowable for any taxable year, pursuant to
this subdivision, exceed the portion of the taxpayer's entire net income
allocated to the city for such year, the excess may be carried over to
the following taxable year or years and may be deducted from the portion
of the taxpayer's entire net income allocated to the city 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
subparagraph one or two of this paragraph, the gain or loss thereon
entering into the computation of federal taxable income shall be
disregarded in computing entire net income, and there shall be added to
or subtracted from the portion of entire net income allocated within the
city 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 subparagraph one or two of this paragraph. Provided,
however, that no loss shall be recognized for the purposes of this
subparagraph with respect to a sale or other disposition of property to
a person whose acquisition thereof is not a purchase as defined in
section one hundred seventy-nine (d) of the internal revenue code.
4. The portion of the business capital of a taxpayer to be allocated
within the city shall be determined by multiplying the amount thereof by
the business allocation percentage determined as hereinabove provided.
Provided, however, such business allocation percentage, for purposes of
allocating business capital, shall (a) for taxable years beginning
before nineteen hundred ninety-four, be determined without regard to
clause (C) of subparagraph six of paragraph (a) of subdivision three of
this section and (b) for taxable years beginning after nineteen hundred
ninety-three, be determined with regard to such clause (C) but only in
the case of a taxpayer subject to the provisions of paragraph (b) of
subdivision six of section 11-602 of this subchapter.
5. The portion of the investment capital of a taxpayer to be allocated
within the city shall be determined by multiplying the amount thereof by
the investment allocation percentage determined as hereinabove provided.
7. The portion of the subsidiary capital of a taxpayer to be allocated
within the city shall be determined by (a) multiplying the amount of its
subsidiary capital invested in each subsidiary during the period covered
by its report (or, in the case of any such capital so invested during
only a portion of such period, such portion of such capital) by the
issuer's allocation percentage, as defined in subparagraph one of
paragraph (b) of subdivision three of this section, of each such
subsidiary and (b) adding together the sums so obtained.
8. 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, income or capital 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 (a) excluding one or more of the
factors therein, (b) including one or more other factors, such as
expenses, purchases, contract values (minus subcontract values), (c)
excluding one or more assets in computing such allocation percentage,
provided the income therefrom is also excluded in determining entire net
income, or (d) any other similar or different method calculated to
effect a fair and proper allocation of the income and capital 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 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.
9. If it shall appear to the commissioner of finance that any business
allocation percentage determined as hereinabove provided does not
properly reflect the activity, business, income or capital of a taxpayer
within the city, the commissioner of finance shall be authorized in his
or her discretion to adjust it by (a) excluding one or more of the
factors therein, (b) including one or more other factors, such as
expenses, purchases, contract values (minus subcontract values), (c)
excluding one or more assets in computing such allocation percentage,
provided the income therefrom, is also excluded in determining entire
net income, or (d) any other similar or different method calculated to
effect a fair and proper allocation of the income and capital 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 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.
11. (a) A taxpayer shall be allowed a credit, to be refunded in the
manner hereinafter provided in this subdivision, against the tax imposed
by this chapter. 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 such tax law).
(b) For purposes of this subdivision:
(1) the term "taxpayer" shall mean any corporation 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 two of this paragraph, and
(2) 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
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.
(c) 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 11-677
of this chapter, except as otherwise provided in subdivision three of
section 11-606 and subdivision eleven of section 11-608; provided,
however, that the provisions of this title 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 three of section 11-679 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.
(d) 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.
12. (a) In addition to the credit allowed by subdivision eleven of
this section, a taxpayer shall be allowed a credit against the tax
imposed by this subchapter 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 credits or
refunds 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
subchapter.
(b) 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 11-677 of this chapter.
(c) 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 subdivision in a prior
taxable year, the amount of such tax refund shall be added to the tax
imposed by subdivision one of section 11-603 of this subchapter, and
such amount shall be subtracted in computing entire net income for the
taxable year.
13. (a) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
subchapter to be credited or refunded without interest, in the manner
hereinafter provided in this section.
(1) 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 subchapter. 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 subchapter.
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.
(2) 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 employees is not less than thirty hours during any given
work week.
"Industrial and commercial incentive board" means the board created
pursuant to part three of subchapter two of chapter two of this title.
(b) 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 11-677 of this chapter.
14. (a) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
subchapter to be credited or refunded without interest, in the manner
hereinafter provided in this section. The amount of such credit shall
be:
(1) A maximum of three hundred dollars for each commercial employment
opportunity 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, no credit shall be allowed
under this subdivision to a taxpayer for industrial employment
opportunities relocated to premises (A) that are within an industrial
business zone established pursuant to section 22-626 of this code and
(B) 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 by a
taxpayer seeking the credit provided hereunder.
(2) 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 and installation of machinery and equipment
into the city 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.
(b) 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
11-677 of this chapter.
17. (a) 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 subchapter. 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 by 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 subdivision 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.
(b) 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 (d) 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.
(c) The credit allowable under this subdivision shall be deducted
after the credit allowed by subdivision eighteen of this section, but
prior to the deduction of any other credit allowed by this section.
(d) 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 (a) 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 11-677 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.
17-a. (a) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
subchapter 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.
(b) 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 11-677 of this chapter.
(c) 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 the provisions of 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 subdivision one of section 11-603 of this
subchapter, and such amount shall be subtracted in computing entire net
income for the taxable year.
17-b. (a) 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 subchapter 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.
(b) When used in this subdivision, the following terms shall have the
following meanings:
"Eligible business" means any business subject to tax under this
subchapter that (1) 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, (2) has leased the premises from which
it relocates continuously during the twenty-four consecutive full months
immediately preceding relocation, (3) 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 (4) 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 (1) 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 (2) 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 subchapter.
"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 (1) the
date of the completion of the relocation to the eligible premises or (2)
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 costs for structural or capital improvements or items
purchased in connection with the relocation.
(c) 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 11-677 of this chapter.
(d) The number of full-time employees for the purposes of calculating
an industrial business 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 the earlier of (1) the date of the completion of
the relocation to eligible premises or (2) ninety days from the
commencement of the relocation to the eligible premises.
(e) The credit allowed under this subdivision must be taken by the
taxpayer in the taxable year in which such twelve month period selected
by the taxpayer ends.
(f) For the purposes of calculating entire net income in the taxable
year that an industrial business 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.
(g) 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 tax credit 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.
(h) The commissioner of finance is authorized to promulgate rules and
regulations and to prescribe forms necessary to effectuate the purposes
of this subdivision.
18. (a) If a corporation is a partner in an unincorporated business
taxable under chapter five of this title, and is required to include in
entire net income its distributive share of income, gain, loss and
deductions of, or guaranteed payments from, such unincorporated
business, such corporation shall be allowed a credit against the tax
imposed by this subchapter equal to the lesser of the amounts determined
in subparagraphs one and two of this paragraph:
(1) The amount determined in this subparagraph is the product of (A)
the sum of (i) the tax imposed by chapter five of this title on the
unincorporated business for its taxable year ending within or with the
taxable year of the corporation and paid by the unincorporated business
and (ii) the amount of any credit or credits taken by the unincorporated
business under section 11-503 of this title (except the credit allowed
by subdivision (b) of such section) for its taxable year ending within
or with the taxable year of the corporation, to the extent that such
credits do not reduce such unincorporated business's tax below zero, and
(B) a fraction, the numerator of which is the net total of the
corporation'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.
(2) The amount determined in this subparagraph is the product of (A)
the excess of (i) the tax computed under clause one of subparagraph (a)
of paragraph E of subdivision one of this section, without allowance of
any credits allowed by this section, over (ii) the tax so computed,
determined as if the corporation had no such distributive share or
guaranteed payments with respect to the unincorporated business, and (B)
a fraction, the numerator of which is four and the denominator of which
is eight and eighty-five one hundredths, 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 entire net income of the
partner is less than zero, such entire net 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.
(b)(1) Notwithstanding anything to the contrary in paragraph (a) of
this subdivision, in the case of a corporation that, before the
application of this subdivision or any other credit allowed by this
section, is liable for the tax on entire net income under clause one of
subparagraph (a) of paragraph E of subdivision one of this section, the
credit or the sum of the credits that may be taken by such corporation
for a taxable year under this subdivision with respect to an
unincorporated business or unincorporated businesses in which it is a
partner shall not exceed the tax so computed, without allowance of any
credits allowed by this section, multiplied by a fraction the numerator
of which is four and the denominator of which is eight and eighty-five
one hundredths. If the credit allowed under this subdivision or the sum
of such credits exceeds the product of such tax and such fraction, 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 (a) 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.
(2) Notwithstanding anything to the contrary in paragraph (a) of this
subdivision, in the case of a corporation that, before the application
of this subdivision or any other credit allowed by this section, is
liable for the tax on entire net income plus certain salaries and other
compensation under clause three of subparagraph (a) of paragraph E of
subdivision one of this section, the maximum credit that may be taken in
any taxable year is the amount that will reduce the tax so computed,
without allowance of any credits allowed by this section, to zero. For
purposes of this paragraph each dollar of credit shall be applied so as
to reduce such tax for taxable years beginning before January first, two
thousand seven by sixty-six and thirty-eight one hundredths cents; for
taxable years beginning on or after January first, two thousand seven
and before January first, two thousand eight by fifty-eight and eight
one-hundredths cents; for taxable years beginning on or after January
first, two thousand eight and before January first, two thousand nine by
forty-nine and seventy-eight one-hundredths cents; for taxable years
beginning on or after January first, two thousand nine and before
January first, two thousand ten by forty-one and forty-eight
one-hundredths cents; and for taxable years beginning on or after
January first, two thousand ten by thirty-three and nineteen
one-hundredths cents. If the amount of credit allowed under this
subdivision or the sum of such credits exceeds the amount that may be
taken against such tax, 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 (a) 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.
(3) No credit allowed under this subdivision may be taken in a taxable
year by a taxpayer that, in the absence of such credit, would be liable
for the tax computed on the basis of business and investment capital
under clause two of subparagraph (a) of paragraph E of subdivision one
of this section or the fixed-dollar minimum tax under clause four of
subparagraph (a) of paragraph E of subdivision one of this section. No
credit allowed under this subdivision may be taken against the tax
computed on the basis of subsidiary capital under subparagraph (b) of
paragraph E of subdivision one of this section.
(c) For corporations that file a report on a combined basis pursuant
to subdivision four of section 11-605 of this chapter, the credit
allowed by this subdivision shall be computed as if the combined group
were the partner in each unincorporated business from which any of the
members of such group had a distributive share or guaranteed payments,
provided, however, if more than one member of the combined group is a
partner in the same unincorporated business, for purposes of the
calculation required in subparagraph one of paragraph (a) of this
subdivision, the numerator of the fraction described in clause (B) of
such subparagraph one shall be the sum of the net total distributive
shares of income, gain, loss and deductions of, and guaranteed payments
from, the unincorporated business of all of the partners of the
unincorporated business within the combined group for which such net
total (as separately determined for each partner) is greater than zero,
and the denominator of such fraction shall be the sum of the net total
distributive shares of income, gain, loss and deductions of, and
guaranteed payments from, the unincorporated business of all partners in
the unincorporated business for whom or which such net total (as
separately determined for each partner) is greater than zero.
(d) The credit allowed by this subdivision shall not be allowed to a
partner in an unincorporated business with respect to any tax paid by
the unincorporated business under chapter five of this title for any
taxable year beginning before July first, nineteen hundred ninety-four.
(e) Notwithstanding any other provision of this subchapter, the credit
allowable under this subdivision shall be taken prior to the taking of
any other credit allowed by this section. Notwithstanding any other
provision of this subchapter, the application of this subdivision shall
not change the basis on which the taxpayer's tax is computed under
paragraph E of subdivision one of this section.
19. Lower Manhattan relocation and employment assistance credit. (a)
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.
(b) 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 taxable year during which such eligible aggregate
employment shares are maintained with respect to such premises.
(c) Except as provided in paragraph (d) 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.
(d) 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 11-677 of this chapter. For such taxable years,
such credits or portions thereof may not be carried over to any
succeeding taxable year.
(e) The credit allowable under this subdivision shall be deducted
after the credits allowed by subdivisions seventeen and eighteen of this
section, but prior to the deduction of any other credit allowed by this
section.
* 20. Film production credit. (a)(1) allowance of credit. A taxpayer
which is a qualified film production company, and which is subject to
tax under this subchapter, shall be allowed a credit against such tax,
pursuant to the provisions in subdivision (c) of this section, 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 production
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.
(b) Definitions. As used in this subdivision, the following terms
shall have the following meanings:
(1) "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.
(2) "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.
(3) "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).
(4) "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.
(5) "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.
(6) "Qualified film production company" shall mean a corporation which
is principally engaged in the production of a qualified film and
controls the qualified film during production.
(c) Application of credit. (1) The credit allowed under this
subdivision for any taxable year shall not reduce the tax due for such
year to less than the amount prescribed in clause (4) of subparagraph
(a) of paragraph E of subdivision one of this section. Provided,
however, that if the amount of the credit allowable under this
subdivision for any taxable year reduces the tax to such amount, fifty
percent of the excess shall be treated as an overpayment of tax to be
credited or refunded in accordance with the provisions of section 11-677
of this chapter; provided, however, the provisions of section 11-679 of
this chapter notwithstanding, 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
credited against 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 11-677 of this chapter.
Provided, however, the provisions of section 11-679 of this chapter
notwithstanding, no interest shall be paid thereon.
(2) 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
21. 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),
and (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, the term "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 five,
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, and (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 that ends 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 subparagraph
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 subparagraph
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 clause (C) of this subparagraph, 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 course 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
clause (C) of this subparagraph 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 clause (C) of this
subparagraph, 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
prescribed in clause (4) of subparagraph (a) of paragraph E of
subdivision one 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 11-677 of this
chapter; provided, however, that notwithstanding the provisions of
section 11-679 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 for 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 11-605
§ 11-605 Reports. 1. Every corporation having an officer, agent or
representative within the city, shall annually on or before March
fifteenth, transmit to the commissioner of finance a report in a form
prescribed by the commissioner (except that a corporation which reports
on the basis of a fiscal year shall transmit its report within two and
one-half months after the close of its fiscal year), setting forth such
information as the commissioner of finance may prescribe and every
taxpayer which ceases to do business in the city or to be subject to the
tax imposed by this subchapter shall transmit to the commissioner of
finance a report on the date of such cessation or at such other time as
the commissioner may require covering each year or period for which no
report was theretofore filed. Every taxpayer shall also transmit such
other reports and such facts and information as the commissioner of
finance may require in the administration of this subchapter. The
commissioner of finance may grant a reasonable extension of time for
filing reports whenever good cause exists.
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 third month following the close of such taxable
year or September eleventh, nineteen hundred sixty-six, whichever is
later.
* An automatic extension of six months for the filing of its annual
report shall be allowed any taxpayer if, within the time prescribed by
either of the preceding paragraphs, whichever is applicable, such
taxpayer files with the commissioner of finance an application for
extension in such form as the commissioner may prescribe by regulation
and pays on or before the date of such filing the amount properly
estimated as its tax.
* NB Amended L.L. 64/85 § 1, language juxtaposed per Ch. 907/85 § 14
2. Every report shall have annexed thereto a certification by the
president, vice-president, treasurer, assistant treasurer, chief
accounting officer or another officer of the taxpayer duly authorized so
to act to the effect that the statements contained therein are true. In
the case of an association, within the meaning of paragraph three of
section (a) of section seventy-seven hundred one of the internal revenue
code, a publicly-traded partnership treated as a corporation for
purposes of the internal revenue code pursuant to section seventy-seven
hundred four thereof and any business conducted by a trustee or trustees
wherein interest or ownership is evidenced by certificates or other
written instruments, such certification shall be made by any person duly
authorized so to act on behalf of such association, publicly-traded
partnership or business. The fact that an individual's name is signed on
a certification of the report shall be prima facie evidence that such
individual is authorized to sign and certify the report on behalf of the
corporation. Blank forms of reports shall be furnished by the
commissioner of finance, on application, but failure to secure such a
blank shall not release any corporation from the obligation of making
any report required by this subchapter.
2-a. The commissioner of finance may prescribe regulations and
instructions requiring returns of information to be made and filed in
conjunction with the reports required to be filed pursuant to this
section, relating to payments made to shareholders owning, directly or
indirectly, individually or in the aggregate, more than fifty percent of
the issued capital stock of the taxpayer, where such payments are
treated as payments of interest in the computation of entire net income
reported on such reports.
3. If the amount of taxable income, alternative minimum taxable income
or other basis of tax for any year of any taxpayer, or of any
shareholder of any taxpayer which has elected to be taxed under
subchapter s of chapter one of the internal revenue code or of any
shareholder of any taxpayer with respect to which an election has been
made to be treated as a qualified subchapter s subsidiary under
paragraph three of subsection (b) of section thirteen hundred sixty-one
of the internal revenue code, as returned to the United States treasury
department or the New York state commissioner of taxation and finance is
changed or corrected by the commissioner of internal revenue or other
officer of the United States or the New York state commissioner of
taxation and finance or other competent authority, or where a
renegotiation of a contract or subcontract with the United States or the
state of New York results in a change in taxable income, alternative
minimum taxable income or other basis of tax, or where a recovery of a
war loss results in a computation or recomputation of any tax imposed by
the United States or the state of New York, or if a taxpayer or such
shareholder of 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, or such shareholder of a taxpayer, pursuant
to subsection (f) of section one thousand eighty-one of the tax law,
executes a notice of waiver of the restrictions provided in subsection
(c) of said section, such taxpayer shall report such changed or
corrected taxable income, alternative minimum taxable income or other
basis of tax, or the results of such renegotiation, or such computation,
or recomputation, or such execution of such notice of waiver and the
changes or corrections of the taxpayer's federal or New York state
taxable income, alternative minimum taxable income or other basis of tax
on which it is based, within ninety days (or one hundred twenty days, in
the case of a taxpayer making a combined report under this subchapter
for such year) after such execution or the final determination of such
change or correction or renegotiation, or such computation, or
recomputation, or as required by the commissioner of finance, and shall
concede the accuracy of such determination or state wherein it is
erroneous. The allowance of a tentative carryback adjustment based upon
a net operating loss carryback or net capital loss carryback pursuant to
section sixty-four hundred eleven of the internal revenue code shall be
treated as a final determination for purposes of this subdivision. Any
taxpayer filing an amended return with such department shall also file
within ninety days thereafter an amended report with the commissioner of
finance.
4. (a) Any taxpayer which owns or controls either directly or
indirectly substantially all the capital stock of one or more other
corporations, or substantially all the capital stock of which is owned
or controlled either directly or indirectly by one or more other
corporations or by interests which own or control either directly or
indirectly substantially all the capital stock of one or more other
corporations, (hereinafter referred to in this paragraph as "related
corporations"), shall make a combined report covering any related
corporations if there are substantial intercorporate transactions among
the related corporations, regardless of the transfer price for such
intercorporate transactions. It is not necessary that there be
substantial intercorporate transactions between any one corporation and
every other related corporation. It is necessary, however, that there be
substantial intercorporate transactions between the taxpayer and a
related corporation or, collectively, a group of such related
corporations. The report shall set forth such information as the
commissioner of finance may require.
In determining whether there are substantial intercorporate
transactions, the commissioner shall consider and evaluate all
activities and transactions of the taxpayer and its related
corporations. Activities and transactions that will be considered
include, but are not limited to: manufacturing, acquiring goods or
property, or performing services, for related corporations; selling
goods acquired from related corporations; financing sales of related
corporations; performing related customer services using common
facilities and employees for related corporations; incurring expenses
that benefit, directly or indirectly, one or more related corporations;
and transferring assets, including such assets as accounts receivable,
patents or trademarks from one or more related corporations.
(1) No taxpayer may be permitted to make a report on a combined basis
covering any such other corporations where such taxpayer or any such
other corporation allocates in accordance with clause (A) of
subparagraph six of paragraph (a) of subdivision three of section 11-604
of this subchapter and such taxpayer or any such other corporation does
not so allocate.
(2) No taxpayer may be permitted to make a report on a combined basis
covering any such other corporations where such taxpayer or any such
other corporation allocates in accordance with subparagraph seven of
paragraph (a) of subdivision three of section 11-604 of this subchapter
and such taxpayer or any such other corporation does not so allocate.
(3) Except as provided in the first undesignated paragraph of this
subdivision, no combined report covering any corporation not a taxpayer
shall be required unless the commissioner of finance deems such a report
necessary, because of inter-company transactions or some agreement,
understanding, arrangement or transaction referred to in subdivision
five of this section, in order properly to reflect the tax liability
under this subchapter.
(4) A corporation organized under the laws of a country other than the
United States shall not be required or permitted to make a report on a
combined basis.
(5)(i) For purposes of this subparagraph, the term "closest
controlling stockholder" means the corporation that indirectly owns or
controls over fifty percent of the voting stock of a captive REIT or
captive RIC, is subject to tax under this subchapter or otherwise
required to be included in a combined report under this subchapter, and
is the fewest tiers of corporations away in the ownership structure from
the captive REIT or captive RIC. The commissioner is authorized to
prescribe by regulation or published guidance the criteria for
determining the closest controlling stockholder.
(ii) A captive REIT or a captive RIC must be included in a combined
report with the corporation that directly owns or controls over fifty
percent of the voting stock of the captive REIT or captive RIC if that
corporation is subject to tax or required to be included in a combined
report under this subchapter.
(iii) If over fifty percent of the voting stock of a captive REIT or
captive RIC is not directly owned or controlled by a corporation that is
subject to tax or required to be included in a combined report under
this subchapter, then the captive REIT or captive RIC must be included
in a combined report with the corporation that is the closest
controlling stockholder of the captive REIT or captive RIC. If the
closest controlling stockholder of the captive REIT or captive RIC is
subject to tax or otherwise required to be included in a combined report
under this subchapter, then the captive REIT or captive RIC must be
included in a combined report under this subchapter.
(iv) If the corporation that directly owns or controls the voting
stock of the captive REIT or captive RIC is described in subparagraph
one, two or four of this paragraph as a corporation not permitted to
make a combined report, then the provisions in clause (iii) of this
subparagraph must be applied to determine the corporation in whose
combined report the captive REIT or captive RIC should be included. If,
under clause (iii) of this subparagraph, the corporation that is the
closest controlling stockholder of the captive REIT or captive RIC is
described in subparagraph one, two or four of this paragraph as a
corporation not permitted to make a combined report, then that
corporation is deemed to not be in the ownership structure of the
captive REIT or captive RIC, and the closest controlling stockholder
will be determined without regard to that corporation.
(v) If a captive REIT owns the stock of a qualified REIT subsidiary
(as defined in paragraph two of subsection (i) of section eight hundred
fifty-six of the internal revenue code), then the qualified REIT
subsidiary must be included in a combined report with the captive REIT.
(vi) If a captive REIT or a captive RIC is required under this
subparagraph to be included in a combined report with another
corporation, and that other corporation is also required to be included
in a combined report with another related corporation or corporations
under this paragraph, then the captive REIT or the captive RIC must be
included in that combined report with those corporations.
(vii) If a captive REIT or a captive RIC is not required to be
included in a combined report with another corporation under clause (ii)
or (iii) of this subparagraph, or in a combined return under the
provisions of subparagraph (v) of paragraph two of subdivision (f) of
section 11-646 of this chapter, then the captive REIT or captive RIC is
subject to the opening provisions of this paragraph and the provisions
of subparagraph three of this paragraph. The captive REIT or captive RIC
must be included in a combined report under this subchapter with another
corporation if either the substantial intercorporate transactions
requirement in the opening provisions of this paragraph or the
inter-company transactions or agreement, understanding, arrangement or
transaction requirement of subparagraph three of this paragraph is
satisfied and more than fifty percent of the voting stock of the captive
REIT or the captive RIC and substantially all of the capital stock of
that other corporation are owned and controlled, directly or indirectly,
by the same corporation.
(b)(1)(i) In the case of a combined report the tax shall be measured
by the combined entire net income or combined capital of all the
corporations included in the report, including any captive REIT or
captive RIC; provided, however, in no event shall the tax measured by
combined capital exceed the limitation provided for in paragraph F of
subdivision one of section 11-604 of this subchapter.
(ii) In the case of a captive REIT or captive RIC required under this
subdivision to be included in a combined report, entire net income must
be computed as required under subdivision seven (in the case of a
captive REIT) or subdivision eight (in the case of a captive RIC) of
section 11-603 of this chapter. However, the deduction under the
internal revenue code for dividends paid by the captive REIT or captive
RIC to any member of the affiliated group that includes the corporation
that directly or indirectly owns over fifty percent of the voting stock
of the captive REIT or captive RIC shall not be allowed for taxable
years beginning on or after January first, two thousand nine. The term
"affiliated group" means "affiliated group" as defined in section
fifteen hundred four of the internal revenue code, but without regard to
the exceptions provided for in subsection (b) of that section.
(2) In computing combined entire net income intercorporate dividends
shall be eliminated, in computing combined business and investment
capital intercorporate stock holdings and intercorporate bills, notes
and accounts receivable and payable and other intercorporate
indebtedness shall be eliminated and in computing combined subsidiary
capital intercorporate stockholdings shall be eliminated.
5. In case it shall appear to the commissioner of finance that any
agreement, understanding or arrangement exists between the taxpayer and
any other corporation or any person or firm, whereby the activity,
business, income or capital of the taxpayer within the city is
improperly or inaccurately reflected, the commissioner of finance is
authorized and empowered, in its discretion and in such manner as it may
determine, to adjust items of income, deductions and capital, and to
eliminate assets in computing any allocation percentage provided only
that any income directly traceable thereto be also excluded from entire
net income, so as equitably to determine the tax. Where (a) any taxpayer
conducts its activity or business under any agreement, arrangement or
understanding in such manner as either directly or indirectly to benefit
its members or stockholders, or any of them, or any person or persons
directly or indirectly interested in such activity or business, by
entering into any transaction at more or less than a fair price which,
but for such agreement, arrangement or understanding, might have been
paid or received therefor, or (b) any taxpayer, a substantial portion of
whose capital stock is owned either directly or indirectly by another
corporation, enters into any transaction with such other corporation on
such terms as to create an improper loss or net income, the commissioner
of finance may include in the entire net income of the taxpayer the fair
profits, which, but for such agreement, arrangement or understanding,
the taxpayer might have derived from such transaction.
6. An action may be brought at any time by the corporation counsel at
the instance of the commissioner of finance to compel the filing of
reports due under this subchapter.
7. Reports shall be preserved for five years, and thereafter until the
commissioner of finance orders them to be destroyed.
8. 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 11-606
§ 11-606 Payment and lien of tax. 1. To the extent the tax imposed by
section 11-603 of this subchapter shall not have been previously paid
pursuant to section 11-608 of this subchapter,
(a) such tax, or the balance thereof, shall be payable to the
commissioner of finance in full at the time the report is required to be
filed, and
(b) such tax, or the balance thereof, imposed on any taxpayer which
ceases to do business in the city or to be subject to the tax imposed by
this subchapter shall be payable to the commissioner of finance at the
time the report is required to be filed; all other taxes of any such
taxpayer, which pursuant to the foregoing provisions of this section
would otherwise be payable subsequent to the time such report is
required to be filed, shall nevertheless be payable at such time.
If the taxpayer, within the time prescribed by section 11-605 of this
subchapter, shall have applied for an automatic extension of time to
file its annual report and shall have paid to the commissioner of
finance on or before the date such application is filed an amount
properly estimated as provided by said section, the only amount payable
in addition to the tax shall be interest at the underpayment rate set by
the commissioner of finance pursuant to section 11-687 of this chapter,
or, if no rate is set, at the rate of seven and one-half percent per
annum upon the amount by which the tax, or the portion thereof payable
on or before the date the report was required to be filed, exceeds the
amount so paid. For purposes of the preceding sentence:
(1) an amount so paid shall be deemed properly estimated if it is
either: (A) not less than ninety percent of the tax as finally
determined (computed without regard to any credit allowable under
subdivision eleven of section 11-604 of this subchapter), or (B) not
less than the tax shown (computed without regard to any credit allowable
under subdivision eleven of section 11-604 of this subchapter) on the
taxpayer's report for the preceding taxable year, if such preceding year
was a taxable year of twelve months; and
(2) the time when a report is required to be filed shall be determined
without regard to any extension of time for filing such report.
2. The commissioner of finance may grant a reasonable extension of
time for payment of any tax imposed by this subchapter under such
conditions as it deems just and proper.
3. Subdivision one of this section shall apply to a taxpayer which has
a right to a credit pursuant to subdivision eleven of section 11-604 of
this subchapter, except that the tax, or balance thereof, payable to the
commissioner of finance in full pursuant to subdivision one 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 eleven of section 11-604 of this subchapter were not
allowed.
Section 11-607
§ 11-607 Declaration of estimated tax. 1. Every taxpayer subject to
the tax imposed by section 11-603 of this subchapter shall make a
declaration of its estimated tax for the current privilege period,
containing such information as the commissioner of finance may prescribe
by regulations or instructions, if such estimated tax can reasonably be
expected to exceed one thousand dollars.
2. The term "estimated tax" means the amount which a taxpayer
estimates to be the tax imposed by section 11-603 of this subchapter for
the current privilege period, less the amount which it estimates to be
the sum of any credits allowable against the tax other than the credit
allowable under subdivision eleven of section 11-604 of this subchapter.
3. In the case of a taxpayer which reports on the basis of a calendar
year, a declaration of estimated tax shall be filed on or before June
fifteenth of the current privilege period, except that if the
requirements of subdivision one are first met:
(a) after May thirty-first and before September first of such current
privilege period, the declaration shall be filed on or before September
fifteenth, or
(b) after August thirty-first and before December first of such
current privilege period, the declaration shall be filed on or before
December fifteenth.
4. A taxpayer may amend a declaration under regulations of the
commissioner of finance.
5. If, on or before February fifteenth of the succeeding year in the
case of a taxpayer which reports on the basis of a calendar year, a
taxpayer files its report for the year for which the declaration is
required, and pays therewith the balance, if any, of the full amount of
the tax shown to be due on the report,
(a) such report shall be considered as its declaration if no
declaration is required to be filed during the calendar or fiscal year
for which the tax was imposed, but is otherwise required to be filed on
or before December fifteenth pursuant to subdivision three, and
(b) such report shall be considered as the amendment permitted by
subdivision four to be filed on or before December fifteenth if the tax
shown on the report is greater than the estimated tax shown on a
declaration previously made.
6. This section shall apply to privilege periods of twelve months
other than a calendar year by the substitution of the months of such
fiscal year for the corresponding months specified in this section.
7. If the privilege period for which a tax is imposed by section
11-603 of this subchapter is less than twelve months, every taxpayer
required to make a declaration of estimated tax for such privilege
period shall make such a declaration in accordance with regulations of
the commissioner of finance.
8. The commissioner of finance may grant a reasonable extension of
time, not to exceed three months, for the filing of any declaration
required pursuant to this section, on such terms and conditions as it
may require.
Section 11-608
§ 11-608 Payments on account of estimated tax. 1. Every taxpayer
subject to the tax imposed by section 11-603 of this subchapter shall
pay with the report required to be filed for the preceding privilege
period, if any, or with an application for extension of the time and
filing such report, an amount equal to twenty-five per centum of the
preceding year's tax if such preceding year's tax exceeded one thousand
dollars.
2. The estimated tax with respect to which a declaration for such
privilege period is required shall be paid, in the case of a taxpayer
which reports on the basis of a calendar year, as follows:
(a) If the declaration is filed on or before June fifteenth, the
estimated tax shown thereon, after applying thereto the amount, if any,
paid during the same privilege period pursuant to subdivision one, shall
be paid in three equal installments. One of such installments shall be
paid at the time of the filing of the declaration, one shall be paid on
the following September fifteenth, and one on the following December
fifteenth.
(b) If the declaration is filed after June fifteenth and not after
September fifteenth of such privilege period, and is not required to be
filed on or before June fifteenth of such period, the estimated tax
shown on such declaration, after applying thereto the amount, if any,
paid during the same privilege period pursuant to subdivision one, shall
be paid in two equal installments. One of such installments shall be
paid at the time of the filing of the declaration and one shall be paid
on the following December fifteenth.
(c) If the declaration is filed after September fifteenth of such
privilege period, and is not required to be filed on or before September
fifteenth of such privilege period, the estimated tax shown on such
declaration, after applying thereto the amount, if any, paid in respect
to such privilege period pursuant to subdivision one, shall be paid in
full at the time of the filing of the declaration.
(d) If the declaration is filed after the time prescribed therefor, or
after the expiration of any extension of time therefor, paragraphs (b)
and (c) 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.
3. 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 privilege period, any increase in the estimated tax by
reason thereof shall be paid at the time of making such amendment.
4. Any amount paid shall be applied after payment as a first
installment against the estimated tax of the taxpayer for the current
privilege period shown on the declaration required to be filed pursuant
to section 11-607 of this subchapter or, if no declaration of estimated
tax is required to be filed by the taxpayer to such section, any such
amount shall be considered a payment on account of the tax shown on the
report required to be filed by the taxpayer for such privilege period.
5. Notwithstanding the provisions of section 11-679 of this chapter or
of section three-a of the general municipal law, if an amount paid
pursuant to subdivision one exceeds the tax shown on the report required
to be filed by the taxpayer for the privilege period during which the
amount was paid, interest shall be allowed and paid on the amount by
which the amount so paid pursuant to such subdivision exceeds such tax,
at the overpayment rate set by the commissioner of finance pursuant to
section 11-687 of this chapter, or, if no rate is set, at the rate of
four percent per annum from the date of payment of the amount so paid
pursuant to such subdivision to the fifteenth day of the third month
following the close of the privilege period, provided, however, that no
interest shall be allowed or paid under this subdivision if the amount
thereof is less than one dollar or if such interest becomes payable
solely because of a carryback of a net operating loss in a subsequent
privilege period.
6. As used in this section, "the preceding year's tax" means the tax
imposed upon the taxpayer by section 11-603 of this subchapter for the
preceding calendar or fiscal year, or, for purposes of computing the
first installment of estimated tax when an application has been filed
for extension of the time for filing the report required to be filed for
such preceding calendar or fiscal year, the amount properly estimated
pursuant to section 11-607 of this subchapter as the tax imposed upon
the taxpayer for such calendar or fiscal year.
7. This section shall apply to a privilege period of less than twelve
months in accordance with regulations of the commissioner of finance.
8. The provisions of this section shall apply to privilege periods of
twelve months other than a calendar year by the substitution of the
months of such fiscal year for the corresponding months specified in
such provisions.
9. The commissioner of finance may grant a reasonable extension of
time, not to exceed six months, for payment of any installment of
estimated tax required pursuant to this section, on such terms and
conditions as the commissioner may require including the furnishing of a
bond or other security by the taxpayer in an amount not exceeding twice
the amount for which any extension of time for payment is granted,
provided however that interest at the underpayment rate set by the
commissioner of finance pursuant to section 11-687 of this chapter, or,
if no rate is set, at the rate of seven and one-half percent per annum
for the period of the extension shall be charged and collected on the
amount for which any extension of time for payment is granted under this
subdivision.
10. A taxpayer may elect to pay any installment of estimated tax prior
to the date prescribed in this section for payment thereof.
11. The portion of an overpayment attributable to a credit allowable
pursuant to subdivision eleven of section 11-604 of this subchapter may
not be credited against any payment due under this section.
Section 11-609
§ 11-609 Collection of taxes. Every foreign corporation (other than a
moneyed corporation) subject to the provisions of this subchapter,
except a corporation having authority to do business by virtue of
section thirteen hundred five of the business corporation law, shall
file in the department of state a certificate of designation in its
corporate name, signed and acknowledged by its president or a
vice-president or its secretary or treasurer, under its corporate seal,
designating the secretary of state as its agent upon whom process in any
action provided for by this subchapter may be served within this state,
and setting forth an address to which the secretary of state shall mail
a copy of any such process against the corporation which may be served
upon the secretary of state. In case any such corporation shall have
failed to file such certificate of designation, it shall be deemed to
have designated the secretary of state as its agent upon whom such
process against it may be served; and until a certificate of designation
shall have been filed the corporation shall be deemed to have directed
the secretary of state to mail copies of process served upon him or her
to the corporation at its last known office address within or without
the state. When a certificate of designation has been filed by such
corporation the secretary of state shall mail copies of process
thereafter served upon the secretary of state to the address set forth
in such certificate. Any such corporation, from time to time, may change
the address to which the secretary of state is directed to mail copies
of process, by filing a certificate to that effect executed, signed and
acknowledged in like manner as a certificate of designation as herein
provided. Service of process upon any such corporation or upon any
corporation having a certificate of authority under section two hundred
twelve of the general corporation law or having authority to do business
by virtue of section thirteen hundred five of the business corporation
law, in any action commenced at any time pursuant to the provisions of
this subchapter, may be made by either: (a) personally delivering to and
leaving with the secretary of state, a deputy secretary of state or with
any person authorized by the secretary of state to receive such service
duplicate copies thereof at the office of the department of state in the
city of Albany, in which event the secretary of state shall forthwith
send by registered mail, return receipt requested, one of such copies to
the corporation at the address designated by it or at its last known
office address within or without the state, or (b) personally delivering
to and leaving with the secretary of state, a deputy secretary of state
or with any person authorized by the secretary of state to receive such
service, a copy thereof at the office of the department of state in the
city of Albany and by delivering a copy thereof to, and leaving such
copy with, the president, vice-president, secretary, assistant
secretary, treasurer, assistant treasurer, or cashier of such
corporation, or the officer performing corresponding functions under
another name, or a director or managing agent of such corporation,
personally without the state. Proof of such personal service without the
state shall be filed with the clerk of the court in which the action is
pending within thirty days after such service, and such service shall be
complete ten days after proof thereof is filed.
Section 11-610
§ 11-610 Limitations of time. The provisions of the civil practice law
and rules relative to the limitation of time enforcing a civil remedy
shall not apply to any proceeding or action taken to levy, appraise,
assess, determine or enforce the collection of any tax or penalty
prescribed by this subchapter, provided, however, that as to real estate
in the hands of persons who are owners thereof who would be purchasers
in good faith but for such tax or penalty and as to the lien on real
estate of mortgages held by persons who would be holders thereof in good
faith but for such tax or penalty, all such taxes and penalties shall
cease to be a lien on such real estate as against such purchasers or
holders after the expiration of ten years from the date such taxes
became due and payable. The limitations herein provided for shall not
apply to any transfer from a corporation to a person or corporation with
intent to avoid payment of any taxes, or where with like intent the
transfer is made to a grantee corporation, or any subsequent grantee
corporation, controlled by such grantor or which has any community of
interest with it, either through stock ownership or otherwise.
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.
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