NYC Laws & Codes
Part 4 - BANKING CORPORATION TAX¶
Section 11-638¶
Section 11-638
§ 11-638 General definitions. As used in this part:
(a) The word "taxpayer" means a corporation or association subject to
a tax imposed by this part.
(b) The phrase "taxable year" means the taxpayer's taxable year for
federal income tax purposes, or the part thereof during which the
taxpayer is subject to the tax imposed by this part.
* (c) The term "international banking facility" shall mean an
international banking facility located in New York state and shall have
the same meaning as is set forth in the New York state banking law or
regulations of the New York state banking department or as is set forth
in the laws of the United States or regulations of the board of
governors of the federal reserve system.
* NB Amended Ch. 298/85 § 31, language juxtaposed per Ch. 907/85 § 14
* (d) The term "subsidiary" means a corporation or association of which
over fifty percent 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.
* NB Added Ch. 298/85 § 32, language juxtaposed per Ch. 907/85 § 14
* (e) The term "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 part or subchapter two of this chapter, provided,
however, there shall be deducted from subsidiary capital any liabilities
payable by their terms on demand or within one year from the date
incurred, other than loans or advances outstanding for more than a year
as of any date during the year covered by the return, which are
attributable to subsidiary capital.
* NB Added Ch. 298/85 § 32, language juxtaposed per Ch. 907/85 § 14
(f) The term "financial holding company" means a corporation that,
pursuant to subsection (l) of section 4 of the federal bank holding
company act of nineteen hundred fifty-six, as amended, has filed with
the federal reserve board a written declaration that the corporation
elects to be a financial holding company and whose election has not been
found to be ineffective by the federal reserve board.
Section 11-639¶
Section 11-639
§ 11-639 Imposition of tax. (a) For the privilege of doing business in
the city in a corporate or organized capacity, a tax, computed under
section 11-643 of this part, is hereby annually imposed on every banking
corporation for each of its taxable years, or any part thereof,
beginning on or after January first, nineteen hundred seventy-three.
(b) In the case of a taxpayer whose taxable year is other than a
calendar year, there is hereby imposed a tax for the privilege of doing
business in the city in a corporate or organized capacity for the period
beginning January first, nineteen hundred seventy-three and extending
through the subsequent part of its first such taxable year ending after
such date. Such tax shall be computed under section 11-643 of this part
on the basis of such taxpayer's entire net income, or other applicable
basis as the case may be, for such period and shall be paid with a
return which shall be separately filed with the department of finance
not later than the fifteenth day of the third month succeeding the close
of such period. The requirements of sections 11-644 and 11-645, relating
to declarations and payments of estimated tax, except subdivision (a) of
section 11-645, shall not be applicable to the tax imposed by this
subdivision.
(c) For taxable years beginning on or after January first, two
thousand eleven, (1) a banking corporation is doing business in the city
in a corporate or organized capacity if (i) it has issued credit cards
to one thousand or more customers who have a mailing address within the
city as of the last day of its taxable year, or (ii) it has merchant
customer contracts with merchants and the total number of locations
covered by those contracts equals one thousand or more locations in the
city to whom the banking corporation remitted payments for credit card
transactions during the taxable year, or (iii) it has receipts of one
million dollars or more in the taxable year from its customers who have
been issued credit cards by the banking corporation and have a mailing
address within the city, or (iv) it has receipts of one million dollars
or more arising from merchant customer contracts with merchants relating
to locations in the city, or (v) the sum of the number of customers
described in subparagraph (i) of this paragraph plus the number of
locations covered by its contracts described in subparagraph (ii) of
this paragraph equals one thousand or more, or the amount of its
receipts described in subparagraphs (iii) and (iv) of this paragraph
equals one million dollars or more. For purposes of this paragraph,
receipts from processing credit card transactions for merchants include
merchant discount fees received by the banking corporation.
(2) As used in this subdivision, the term "credit card" includes bank,
credit, travel and entertainment cards.
Section 11-640¶
Section 11-640
§ 11-640 Banking, corporation defined; exempt corporations. (a) * For
the purpose of this part, a banking corporation means:
(1) every corporation or association organized under the laws of this
state which is authorized to do a banking business or which is doing a
banking business;
(2) every corporation or association organized under the laws of any
other state or country which is doing a banking business;
(3) every national banking association organized under the authority
of the United States which is doing a banking business;
(4) every federal savings bank which is doing a banking business;
(5) every federal savings and loan association which is doing a
banking business;
(6) a production credit association organized under the federal farm
credit act of nineteen hundred thirty-three, which is doing a banking
business and all of whose stock held by the federal production credit
corporation has been retired;
(7) every other corporation or association organized under the
authority of the United States which is doing a banking business;
(8) the mortgage facilities corporation created by chapter five
hundred sixty-four of the laws of nineteen hundred fifty-six;
* NB Amended Ch. 298/85 § 33, language juxtaposed per Ch. 907/85 § 14
(9) any corporation sixty-five percent or more of whose voting stock
is owned or controlled, directly or indirectly, by a corporation or
corporations subject to article three-a of the banking law, or
registered under the federal bank holding company act of nineteen
hundred fifty-six, as amended, or registered as a savings and loan
holding company (but excluding a diversified savings and loan holding
company) under the federal national housing act, as amended, or by a
corporation or corporations described in any of the foregoing paragraphs
of this subdivision, provided the corporation whose voting stock is so
owned or controlled is principally engaged in a business, regardless of
where conducted, which (i) might be lawfully conducted by a corporation
subject to article three of the banking law or by a national banking
association or (ii) is so closely related to banking or managing or
controlling banks as to be a proper incident thereto, as set forth in
paragraph eight of subsection (c) or subparagraph (F) of paragraph four
of subsection (k) of section four of the federal bank holding company
act of nineteen hundred fifty-six, as amended, or (iii) holds and
manages investment assets, including but not limited to bonds, notes,
debentures and other obligations for the payment of money, stocks,
partnership interests or other equity interests, and other investment
securities, and which is not a business described in subparagraph (i) or
(ii) of this paragraph.
* (b) Banking business defined. The words "banking business" as used
in this section mean such business as a corporation or association may
be created to do under article three, three-B, five, five-A, six or ten
of the banking law or any business which a corporation or association is
authorized by such article to do. However, with respect to a national
banking association organized under the authority of the United States,
a federal savings bank, a federal savings and loan association or a
production credit association, the words "banking business" as used in
this section mean such business as a national banking association,
federal savings bank, federal savings and loan association or production
credit association, respectively, may be created to do or is authorized
to do under the laws of the United States or this state. The words
"banking business" as used in this section shall also mean such business
as any corporation or association organized under the authority of the
United States or organized under the laws of any other state or country
has authority to do which is substantially similar to the business which
a corporation or association may be created to do under article three,
three-B, five, five-A, six or ten of the banking law or any business
which a corporation or association is authorized by such article to do.
* NB Amended Ch. 298/85 § 34, language juxtaposed per Ch. 907/85 § 14
(c) Exempt corporations. A trust company all of whose capital stock is
owned by twenty or more savings banks organized under New York law shall
be exempt from the tax under this part.
(d) Corporations taxable under subchapter two. Notwithstanding the
provisions of this part, all corporations of classes now or heretofore
taxable under subchapter two of this chapter shall continue to be
taxable under subchapter two, except: (1) corporations organized under
article five-a of the banking law; (2) corporations subject to article
three-A of the banking law, or registered under the federal bank holding
company act of nineteen hundred fifty-six, as amended, or registered as
a savings and loan holding company (but excluding a diversified savings
and loan holding company) under the federal national housing act, as
amended, which make a combined return under the provisions of
subdivision (f) of section 11-646; (3) banking corporations described in
paragraph nine of subdivision (a) of section 11-640; and (4) any captive
REIT or captive RIC that is required to be included in a combined return
under the provisions of section 11-646 of this subchapter. Provided,
however, that a corporation described in paragraph three of this
subdivision which was subject to the tax imposed by subchapter two of
this chapter for its taxable year ending during nineteen hundred
eighty-four may, on or before the due date for filing its return
(determined with regard to extensions) for its taxable year ending
during nineteen hundred eighty-five, make a one time election to
continue to be taxable under such subchapter two. Such election shall
continue to be in effect until revoked by the taxpayer. In no event
shall such election or revocation be for a part of a taxable year.
(e) Corporations taxable under article thirty-three of the tax law.
Except for corporations described in subsection (l) of section fourteen
hundred fifty-three of the tax law, corporations liable to tax under
article thirty-three of the tax law shall not be subject to tax under
this part.
(f) A banking corporation organized under the laws of a country, or
any political subdivision thereof, other than the United States shall
not be deemed to be doing business in the city under this subchapter if
its activities in the city are limited solely to (1) 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 (2)
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 (3) any combination of activities described in
paragraphs one and two of this subdivision.
(g) Transitional provisions relating to the enactment and
implementation of the federal Gramm-Leach-Bliley act. (1)
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand, shall continue to be taxable under
subchapter two for all taxable years beginning on or after January
first, two thousand and before January first, two thousand one. The
preceding sentence shall not apply to any taxable year during which such
corporation is a banking corporation described in paragraphs one through
eight of subdivision (a) of this section. Notwithstanding anything to
the contrary contained in this section other than subdivision (m) of
this section, a banking corporation that was in existence before January
first, two thousand and was subject to tax under this subchapter for its
last taxable year beginning before January first, two thousand, shall
continue to be taxable under this subchapter for all taxable years
beginning on or after January first, two thousand and before January
first, two thousand one. Provided, however, that nothing in this
subdivision shall prohibit a corporation that elected pursuant to
subdivision (d) of this section to be taxable under subchapter two of
this chapter from revoking that election in accordance with such
subdivision (d).
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be
considered to be subject to tax under this subchapter for a taxable year
if such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand and before January first, two thousand one, shall be considered
for purposes of this paragraph to have been subject to tax under
subchapter two of this chapter for its last taxable year beginning
before January first, two thousand if such corporation would have been
subject to tax under such subchapter for such taxable year if it had
been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand and before January first, two thousand one, shall be considered
for purposes of this paragraph to have been subject to tax under this
subchapter for its last taxable year beginning before January first, two
thousand if such corporation would have been subject to tax under this
subchapter for such taxable year if it had been a taxpayer during such
taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand and before January first, two thousand
one may elect to be subject to tax under this subchapter or under
subchapter two of this chapter for its first taxable year beginning on
or after January first, two thousand and before January first, two
thousand one in which either (i) sixty-five percent or more of its
voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the
regulations promulgated pursuant to the authority of such section or
(ii) it is a financial subsidiary. An election under this paragraph may
not be made by a corporation described in paragraphs one through eight
of subdivision (a) of this section or in subdivision (e) of this
section. In addition, an election under this paragraph may not be made
by a corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph two shall be irrevocable
and shall apply to each subsequent taxable year beginning on or after
January first, two thousand and before January first, two thousand one,
provided that the stock ownership requirements described in subparagraph
(i) of this paragraph are met or such corporation described in
subparagraph (ii) of this paragraph continues as a financial subsidiary.
(3) For purposes of this section, a financial subsidiary means a
corporation (i) sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly by a banking corporation
described in paragraph one, two or three of subdivision (a) of this
section and (ii) is described in section 5136A(g) of the revised
statutes of the United States or section 46 of the federal deposit
insurance act. For purposes of this subchapter, the term "banking
corporation" shall include a corporation electing to be taxed under this
subchapter pursuant to paragraph two of this subdivision for so long as
such election shall be in effect.
(4) The provisions of this subdivision shall not apply to a captive
REIT or a captive RIC.
(h) Transitional provisions relating to the enactment and
implementation of the federal Gramm-Leach-Bliley act. (1)
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand one and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand one, shall continue to be taxable
under subchapter two for all taxable years beginning on or after January
first, two thousand one and before January first, two thousand three.
The preceding sentence shall not apply to any taxable year during which
such corporation is a banking corporation described in paragraphs one
through eight of subdivision (a) of this section. Notwithstanding
anything to the contrary contained in this section other than
subdivision (m) of this section, a banking corporation that was in
existence before January first, two thousand one and was subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand one, shall continue to be taxable under this
subchapter for all taxable years beginning on or after January first,
two thousand one and before January first, two thousand three. Provided,
however, that nothing in this subdivision shall prohibit a corporation
that elected pursuant to subdivision (d) of this section to be taxable
under subchapter two of this chapter from revoking that election in
accordance with subdivision (d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be
considered to be subject to tax under this subchapter for a taxable year
if such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand one but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand one and before January first, two thousand three, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand one if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand one but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand one and before January first, two thousand three, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand one if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a
taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand one and before January first, two
thousand three may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year
beginning on or after January first, two thousand one and before January
first, two thousand three in which either (i) sixty-five percent or more
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the
regulations promulgated pursuant to the authority of such section or
(ii) it is a financial subsidiary. An election under this paragraph may
not be made by a corporation described in paragraphs one through eight
of subdivision (a) of this section or in subdivision (e) of this
section. In addition, an election under this paragraph may not be made
by a corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph shall be irrevocable and
shall apply to each subsequent taxable year beginning on or after
January first, two thousand one and before January first, two thousand
three, provided that the stock ownership requirements described in
subparagraph (i) of this paragraph are met or such corporation described
in subparagraph (ii) of this paragraph continues as a financial
subsidiary.
(3) For purposes of this section, a financial subsidiary means a
corporation (i) sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly by a banking corporation
described in paragraph one, two or three of subdivision (a) of this
section and (ii) is described in section 5136A(g) of the revised
statutes of the United States or section 46 of the federal deposit
insurance act. For purposes of this subchapter, the term "banking
corporation" shall include a corporation electing to be taxed under this
subchapter pursuant to paragraph two of this subdivision for so long as
such election shall be in effect.
(i) Transitional provisions relating to the enactment and
implementation of the federal Gramm-Leach-Bliley act. (1)
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand three and was subject to
tax under subchapter two of this chapter for its last taxable year
beginning before January first, two thousand three, shall continue to be
taxable under subchapter two for all taxable years beginning on or after
January first, two thousand three and before January first, two thousand
four. The preceding sentence shall not apply to any taxable year during
which such corporation is a banking corporation described in paragraphs
one through eight of subdivision (a) of this section. Notwithstanding
anything to the contrary contained in this section other than
subdivision (m) of this section, a banking corporation that was in
existence before January first, two thousand three and was subject to
tax under this subchapter for its last taxable year beginning before
January first, two thousand three, shall continue to be taxable under
this subchapter for all taxable years beginning on or after January
first, two thousand three and before January first, two thousand four.
Provided, however, that nothing in this subdivision shall prohibit a
corporation that elected pursuant to subdivision (d) of this section to
be taxable under subchapter two of this chapter from revoking that
election in accordance with subdivision (d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be
considered to be subject to tax under this subchapter for a taxable year
if such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand three but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand three and before January first, two thousand four, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand three if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand three but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand three and before January first, two thousand four, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand three if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a
taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand three and before January first, two
thousand four may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year
beginning on or after January first, two thousand three and before
January first, two thousand four in which either (i) sixty-five percent
or more of its voting stock is owned or controlled, directly or
indirectly by a financial holding company, provided the corporation
whose voting stock is so owned or controlled is principally engaged in
activities that are described in section 4(k)(4) or 4(k)(5) of the
federal bank holding company act of nineteen hundred fifty-six, as
amended and the regulations promulgated pursuant to the authority of
such section or (ii) it is a financial subsidiary. An election under
this paragraph may not be made by a corporation described in paragraphs
one through eight of subdivision (a) of this section or in subdivision
(e) of this section. In addition, an election under this paragraph may
not be made by a corporation that is a party to a reorganization, as
defined in subsection (a) of section 368 of the internal revenue code of
1986, as amended, of a corporation described in paragraph one of this
subdivision if both corporations were sixty-five percent or more owned
or controlled, directly or indirectly by the same interests at the time
of the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph shall be irrevocable and
shall apply to each subsequent taxable year beginning on or after
January first, two thousand three and before January first, two thousand
four, provided that the stock ownership requirements described in
subparagraph (i) of this paragraph are met or such corporation described
in subparagraph (ii) of this paragraph continues as a financial
subsidiary.
(3) For purposes of this section, a financial subsidiary means a
corporation (i) sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly by a banking corporation
described in paragraph one, two or three of subdivision (a) of this
section and (ii) is described in section 5136A(g) of the revised
statutes of the United States or section 46 of the federal deposit
insurance act. For purposes of this subchapter, the term "banking
corporation" shall include a corporation electing to be taxed under this
subchapter pursuant to paragraph two of this subdivision for so long as
such election shall be in effect.
(j) Transitional provisions relating to the enactment and
implementation of the federal Gramm-Leach-Bliley act. (1)
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand four and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand four, shall continue to be taxable
under subchapter two for all taxable years beginning on or after January
first, two thousand four and before January first, two thousand six. The
preceding sentence shall not apply to any taxable year during which such
corporation is a banking corporation described in paragraphs one through
eight of subdivision (a) of this section. Notwithstanding anything to
the contrary contained in this section other than subdivision (m) of
this section, a banking corporation that was in existence before January
first, two thousand four and was subject to tax under this subchapter
for its last taxable year beginning before January first, two thousand
four, shall continue to be taxable under this subchapter for all taxable
years beginning on or after January first, two thousand four and before
January first, two thousand six. Provided, however, that nothing in this
subdivision shall prohibit a corporation that elected pursuant to
subdivision (d) of this section to be taxable under subchapter two of
this chapter from revoking that election in accordance with subdivision
(d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be
considered to be subject to tax under this subchapter for a taxable year
if such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand four but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand four and before January first, two thousand six, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand four if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand four but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand four and before January first, two thousand six, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand four if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a
taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand four and before January first, two
thousand six may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year
beginning on or after January first, two thousand four and before
January first, two thousand six in which either (i) sixty-five percent
or more of its voting stock is owned or controlled, directly or
indirectly by a financial holding company, provided the corporation
whose voting stock is so owned or controlled is principally engaged in
activities that are described in section 4(k)(4) or 4(k)(5) of the
federal bank holding company act of nineteen hundred fifty-six, as
amended and the regulations promulgated pursuant to the authority of
such section or (ii) it is a financial subsidiary. An election under
this paragraph may not be made by a corporation described in paragraphs
one through eight of subdivision (a) of this section or in subdivision
(e) of this section. In addition, an election under this paragraph may
not be made by a corporation that is a party to a reorganization, as
defined in subsection (a) of section three hundred sixty-eight of the
internal revenue code of nineteen hundred eighty-six, as amended, of a
corporation described in paragraph one of this subdivision if both
corporations were sixty-five percent or more owned or controlled,
directly or indirectly by the same interests at the time of the
reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph shall be irrevocable and
shall apply to each subsequent taxable year beginning on or after
January first, two thousand four and before January first, two thousand
six, provided that the stock ownership requirements described in
subparagraph (i) of this paragraph are met or such corporation described
in subparagraph (ii) of this paragraph continues as a financial
subsidiary.
(3) For purposes of this section, a financial subsidiary means a
corporation (i) sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly by a banking corporation
described in paragraph one, two or three of subdivision (a) of this
section and (ii) is described in section 5136A(g) of the revised
statutes of the United States or section forty-six of the federal
deposit insurance act. For purposes of this subchapter, the term
"banking corporation" shall include a corporation electing to be taxed
under this subchapter pursuant to paragraph two of this subdivision for
so long as such election shall be in effect.
(k) Transitional provisions relating to the enactment and
implementation of the federal Gramm-Leach-Bliley act. (1)
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand six and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand six, shall continue to be taxable
under subchapter two of this chapter for all taxable years beginning on
or after January first, two thousand six and before January first, two
thousand eight. The preceding sentence shall not apply to any taxable
year during which such corporation is a banking corporation described in
paragraphs one through eight of subdivision (a) of this section.
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a banking corporation that was in
existence before January first, two thousand six and was subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand six, shall continue to be taxable under this
subchapter for all taxable years beginning on or after January first,
two thousand six and before January first, two thousand eight. Provided,
however, that nothing in this subdivision shall prohibit a corporation
that elected pursuant to subdivision (d) of this section to be taxable
under subchapter two of this chapter from revoking that election in
accordance with subdivision (d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be
considered to be subject to tax under this subchapter for a taxable year
if such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this part for such taxable year. A corporation that was in
existence before January first, two thousand six but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand six and before January first, two thousand eight, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand six if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand six but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand six and before January first, two thousand eight, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand six if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a
taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand six and before January first, two
thousand eight may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year
beginning on or after January first, two thousand six and before January
first, two thousand eight in which either (i) sixty-five percent or more
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the
regulations promulgated pursuant to the authority of such section or
(ii) it is a financial subsidiary. An election under this paragraph may
not be made by a corporation described in paragraphs one through eight
of subdivision (a) of this section or in subdivision (e) of this
section. In addition, an election under this paragraph may not be made
by a corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this part. Any
election made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year beginning on or after January
first, two thousand six and before January first, two thousand eight,
provided that the stock ownership requirements described in subparagraph
(i) of this paragraph are met or such corporation described in
subparagraph (ii) of this paragraph continues as a financial subsidiary.
(3) For purposes of this section, a financial subsidiary means a
corporation (i) sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly by a banking corporation
described in paragraph one, two or three of subdivision (a) of this
section and (ii) is described in section 5136A(g) of the revised
statutes of the United States or section 46 of the federal deposit
insurance act. For purposes of this subchapter, the term "banking
corporation" shall include a corporation electing to be taxed under this
subchapter pursuant to paragraph two of this subdivision for so long as
such election shall be in effect.
(l) Transitional provisions relating to the enactment and
implementation of the federal Gramm-Leach-Bliley act.
(1) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation that was in
existence before January first, two thousand twelve and was subject to
tax under subchapter two of this chapter for its last taxable year
beginning before January first, two thousand twelve, shall continue to
be taxable under such subchapter for all taxable years beginning on or
after January first, two thousand twelve and before January first, two
thousand fifteen. The preceding sentence shall not apply to any taxable
year during which such corporation is a banking corporation described in
paragraphs one through eight of subdivision (a) of this section.
Notwithstanding anything to the contrary contained in this section other
than subdivision (m) of this section, a banking corporation or
corporation that was in existence before January first, two thousand
twelve and was subject to tax under this subchapter for its last taxable
year beginning before January first, two thousand twelve, shall continue
to be taxable under this subchapter for all taxable years beginning on
or after January first, two thousand twelve and before January first,
two thousand fifteen only if the corporation is a banking corporation as
defined in subdivision (a) of this section or the corporation satisfies
the requirements for a corporation to elect to be taxable under this
subchapter. Provided further, that nothing in this subdivision shall
prohibit a corporation that elected pursuant to subdivision (d) of this
section to be taxable under subchapter two of this chapter from revoking
that election in accordance with subdivision (d) of this section. For
purposes of this paragraph, a corporation shall be considered to be
subject to tax under subchapter two of this chapter for a taxable year
if such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision four of section 11-605 of
this chapter for such taxable year and a corporation shall be considered
to be subject to tax under this subchapter for a taxable year if such
corporation was not a taxpayer but was properly included in a combined
report filed pursuant to subdivision (f) or (g) of section 11-646 of
this part for such taxable year. A corporation that was in existence
before January first, two thousand twelve but first becomes a taxpayer
in a taxable year beginning on or after January first, two thousand
twelve and before January first, two thousand fifteen, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand twelve if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand twelve but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand twelve and before January first, two thousand fifteen, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand twelve if such corporation would have been subject
to tax under this subchapter for such taxable year if it had been a
taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation formed on or
after January first, two thousand twelve and before January first, two
thousand fifteen may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year
beginning on or after January first, two thousand twelve and before
January first, two thousand fifteen in which either (i) sixty-five
percent or more of its voting stock is owned or controlled, directly or
indirectly by a financial holding company, provided the corporation
whose voting stock is so owned or controlled is principally engaged in
activities that are described in section 4(k)(4) or 4(k)(5) of the
federal bank holding company act of nineteen hundred fifty-six, as
amended and the regulations promulgated pursuant to the authority of
such section or (ii) it is a financial subsidiary. An election under
this paragraph may not be made by a corporation described in paragraphs
one through eight of subdivision (a) of this section or in subdivision
(e) of this section. In addition, an election under this paragraph may
not be made by a corporation that is a party to a reorganization, as
defined in subsection (a) of section 368 of the internal revenue code of
1986, as amended, of a corporation described in paragraph one of this
subdivision if both corporations were sixty-five percent or more owned
or controlled, directly or indirectly by the same interests at the time
of the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this part. Any
election made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year beginning on or after January
first, two thousand twelve and before January first, two thousand
fifteen, provided that the stock ownership and activities requirements
described in subparagraph (i) of this paragraph are met or such
corporation described in subparagraph (ii) of this paragraph continues
as a financial subsidiary.
(3) For purposes of this section, a financial subsidiary means a
corporation (i) sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly by a banking corporation
described in paragraph one, two or three of subdivision (a) of this
section and (ii) is described in section 5136A(g) of the revised
statutes of the United States or section 46 of the federal deposit
insurance act. For purposes of this subchapter, the term "banking
corporation" shall include a corporation electing to be taxed under this
subchapter pursuant to paragraph two of this subdivision for so long as
such election shall be in effect.
(m) (1) Notwithstanding anything in this part to the contrary, if any
of the conditions described in paragraph three of this subdivision apply
to a corporation that has made either the election to be taxable under
subchapter two of chapter six of this title pursuant to the
Gramm-Leach-Bliley transitional provisions in this section, or the
election pursuant to subdivision (d) of this section to continue to be
taxable under subchapter two of chapter six of this title (hereinafter
the "electing corporation"), then such corporation shall be deemed to
have revoked the election as of the first day of the taxable year in
which such condition applied.
(2) Notwithstanding anything in this part to the contrary, if any of
the conditions described in paragraph three of this subdivision apply to
a corporation required to be taxable under subchapter two of chapter six
of this title pursuant to the Gramm-Leach-Bliley transitional provisions
in this section (hereinafter the "grandfathered corporation"), such
corporation, if it is otherwise described in subdivision (a) of this
section, shall be taxable under this part as of the first day of the
taxable year in which such condition applied.
(3) The provisions of paragraph one and paragraph two of this
subdivision shall apply if any of the following conditions exist or
occur with respect to the electing corporation or the grandfathered
corporation in a taxable year (including any short taxable year)
beginning on or after January first, two thousand nine:
(A) the corporation ceases to be a taxpayer under subchapter two of
chapter six of this title;
(B) the corporation becomes subject to the fixed dollar minimum tax
under clause four of subparagraph a of paragraph (E) of subdivision one
of section 11-604 of this chapter;
(C) the corporation has no wages or receipts allocable to New York
city pursuant to subdivision three of section 11-604 of this chapter, or
is otherwise inactive; provided that this subparagraph shall not apply
to a corporation which is engaged in the active conduct of a trade or
business, or substantially all of the assets of which are stock and
securities of corporations which are directly or indirectly controlled
by it and are engaged in the active conduct of a trade or business;
(D) sixty-five percent or more of the voting stock of the corporation
becomes owned or controlled directly by a corporation that acquired the
stock in a transaction (or series of related transactions) that
qualifies as a purchase within the meaning of paragraph three of
subsection (h) of section three hundred thirty-eight of the internal
revenue code unless the corporation whose stock was acquired and the
corporation acquiring the stock were, immediately prior to such
purchase, members of the same affiliated group (as such term is defined
in section fifteen hundred four of the internal revenue code without
regard to the exclusions provided for in subsection (b) of such
section); or
(E) the corporation, in a transaction or series of related
transactions, acquires assets, whether by contribution, purchase, or
otherwise, having an average value (determined in accordance with
subdivision two of section 11-604 of this chapter, or, if greater, a
total tax basis, in excess of forty percent of the average value, or, if
greater, the total tax basis, of all the assets of the corporation
immediately prior to such acquisition and as a result of such
acquisition the corporation is principally engaged in a business that is
different from the business immediately prior to such acquisition,
provided that such different business is described in subparagraph (i)
or (ii) of paragraph nine of subdivision (a) of this section.
Section 11-641¶
Section 11-641
§ 11-641 Computations of entire net income. (a) Entire net income
means total net income from all sources which shall be the same as the
entire taxable income (but not alternative minimum taxable income)
(1) which the taxpayer is required to report to the United States
treasury department, or
(2) 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 511 of the internal revenue code)
but which is subject to tax under this part, would have been required to
report to the United States treasury department but for such exemption,
or
(3) which, in the case of a corporation organized under the laws of a
country other than the United States, is effectively connected with the
conduct of a trade or business within the United States as determined
under section 882 of the internal revenue code, or
(4) which the taxpayer would have been required to report to the
United States treasury department if the taxpayer had not elected to be
taxed under subchapter s of chapter one of the internal revenue code, or
(5) 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, subject to the modifications and adjustments
hereinafter provided.
(b) Entire net income shall be computed without the deduction or
exclusion of:
(1) (A) in the case of a corporation organized under the laws of a
country other than the United States, (i) any part of any income from
dividends or interest on any kind of stock, securities or indebtedness,
but only if such income is treated as effectively connected with the
conduct of a trade or business in the United States pursuant to section
eight hundred sixty-four of the internal revenue code, (ii) any income
exempt from federal taxable income under any treaty obligation of the
United States, but only if such income would be treated as effectively
connected in the absence of such exemption, provided that such treaty
obligation does not preclude the taxation of such income by a state, or
(iii) any income which would be treated as effectively connected if such
income were not excluded from gross income pursuant to subsection (a) of
section one hundred three of the internal revenue code; (B) in the case
of any other corporation, any part of any income from dividends or
interest on any kind of stock, securities or indebtedness; (C) except
that for purposes of subparagraphs (A) and (B) above there shall be
excluded any amounts treated as dividends pursuant to section
seventy-eight of the internal revenue code and any amounts described in
paragraphs eleven and twelve of subdivision (e) of this section;
(2) taxes on or measured by income or profits paid or accrued within
the taxable year to the United States, or any of its possessions or to
any foreign country and taxes imposed under article nine, nine-A,
thirteen-A or thirty-two of the tax law and any tax imposed under this
part or subchapter two of this chapter;
(4) for taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which 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;
(5) for taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which 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;
(6) 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, the
amount allowable as a deduction determined under section one hundred
sixty-eight of the internal revenue code;
(7) upon the disposition of property to which paragraph seven of
subdivision (e) of this section applies, the amount, if any, by which
the aggregate of the amounts described in such paragraph seven
attributable to such property exceeds the aggregate of the amounts
described in paragraph six of this subdivision attributable to such
property;
(11) for taxable years beginning before January first, two thousand
ten, in the case of a taxpayer subject to the provisions of section
585(c) of the internal revenue code, the amount allowed as a deduction
pursuant to section 166 of such code; and
(12) for taxable years beginning before January first, two thousand
ten, for taxpayers subject to the provisions of subdivision (i) of this
section, twenty percent of the excess of (A) the amount determined
pursuant to such subdivision (i) over (B) the amount which would have
been allowable had such institution maintained its bad debt reserve for
all taxable years on the basis of actual experience.
(13) 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 defined in
subdivision (p) of this section, and other than qualified New York
Liberty Zone property described in paragraph two of subsection b of
section fourteen hundred L of the internal revenue code (without regard
to clause (i) of subparagraph (C) of such paragraph), the amount
allowable as a deduction under section one hundred sixty-seven of the
internal revenue code.
(14) 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.
(15) The amount of any deduction allowed pursuant to section one
hundred ninety-nine of the internal revenue code.
(16) The amount of any federal deduction for taxes imposed under
article twenty-three of the tax law.
(c)(1) Except as otherwise provided in paragraphs two and three
hereof, in the case of the sale or exchange of property by a taxpayer
which has been subject to part one or two of this subchapter three where
the property has a higher adjusted basis for city tax purposes than for
federal tax purposes, there shall be allowed as a deduction from entire
net income, the portion of any gain or loss on such sale which equals
the difference in such basis.
(2) In case of property of a taxpayer, other than a savings bank,
acquired prior to January first, nineteen hundred sixty-six, and
disposed of thereafter, the computation of entire net income shall be
modified as follows:
(i) no gain shall be deemed to have been derived if either the cost or
the fair market price or value on January first, nineteen hundred
sixty-six, exceeds the value realized;
(ii) no loss shall be deemed to have been sustained if either the cost
or the fair market price or value on January first, nineteen hundred
sixty-six, is less than the value realized;
(iii) where both the cost and the fair market price or value on
January first, nineteen hundred sixty-six, are less than the value
realized, the basis for computing gain shall be the cost or the fair
market price or value on such date, whichever is higher;
(iv) where both the cost and the fair market price or value on January
first, nineteen hundred sixty-six, are in excess of the value realized,
the basis for computing loss shall be the cost or the fair market price
or value on such date, whichever is lower.
(3) In case of property of a savings bank acquired prior to January
first, nineteen hundred sixty-six, and disposed of thereafter, in
computing entire net income the basis of such property shall be the fair
market price or value on January first, nineteen hundred sixty-six.
(d) Entire net income shall not include any refund or credit of a tax
for which no exclusion or deduction was allowed in determining the
taxpayer's entire net income under this subchapter or subchapter two of
this chapter, or imposed by article twenty-three of the tax law for any
prior year.
(e) There shall be allowed as a deduction in determining entire net
income, to the extent not deductible in determining federal taxable
income:
(1) interest on indebtedness incurred or continued to purchase or
carry obligations or securities the income from which is subject to tax
under this part but exempt from federal income tax,
(2) ordinary and necessary expenses paid or incurred during the
taxable year attributable to income which is subject to tax under this
part but exempt from federal income tax,
(3) the amortizable bond premium for the taxable year on any bond the
interest on which is subject to tax under this part but exempt from
federal income tax,
(4) that portion of wages or 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,
(5) 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 communting vehicles), 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,
(6) for taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
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,
(7) 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 paragraph four of subdivision (b) of this section, an amount
with respect to property which is subject to the provisions of section
one hundred sixty-eight of the internal revenue code equal to the amount
allowable as the depreciation deduction 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,
(8) upon the disposition of property to which paragraph seven of this
subdivision applies, the amount, if any, by which the aggregate of the
amounts described in paragraph six of subdivision (b) of this section
attributable to such property exceeds the aggregate of the amounts
described in paragraph seven of this subdivision attributable to such
property,
(9) any amount of money or other property received from the federal
deposit insurance corporation pursuant to subsection (c) of section
thirteen of the federal deposit insurance act, as amended, regardless of
whether any note or other instrument is issued in exchange therefor,
(10) any amount of money or other property received from the federal
savings and loan insurance corporation pursuant to paragraph one, two,
three or four of subsection (f) of section four hundred six of the
federal national housing act, as amended, regardless of whether any note
or other instrument is issued in exchange therefor,
(11) (i) seventeen percent of interest income from subsidiary capital,
and
(ii) sixty percent of dividend income from subsidiary capital, except
as provided in paragraph 16 of this subdivision, and
(iii) sixty percent of the amount by which gains from subsidiary
capital exceed losses from subsidiary capital, to the extent such gains
and losses were taken into account in determining the entire taxable
income referred to in subdivision (a) of this section,
(12) twenty-two and one-half percent of interest income on obligations
of New York state, or of any political subdivision thereof, or on
obligations of the United States, other than obligations held for resale
in connection with regular trading activities,
(13) for taxable years beginning before January first, two thousand
ten, in the case of a taxpayer which recaptures its balance of the
reserve for losses on loans for federal income tax purposes pursuant to
section 585(c) of the internal revenue code, any amount which is
included in federal taxable income pursuant to section 585(c) of such
code,
(14) for taxable years beginning before January first, two thousand
ten, in the case of a taxpayer subject to the provisions of section
585(c) of the internal revenue code, any amount which is included in
federal taxable income as a result of a recovery of a loan.
(15) for taxable years beginning before January first, two thousand
ten, in the case of a taxpayer which is currently or has previously been
subject to subdivision (h) of this section, any amount which is included
in federal taxable income pursuant to section 593(e)(2) of the internal
revenue code, and any other amount so included as a result of a recovery
of or termination from the use of a bad debt reserve as defined in
section 593 of such code as in existence on December thirty-first,
nineteen hundred ninety-five as a result of federal legislation enacted
after December thirty-first, nineteen hundred ninety-five.
(16) one hundred percent of dividend income from subsidiary capital
received during the taxable year if that dividend income is directly
attributable to a dividend from a captive REIT or captive RIC for which
the captive REIT or captive RIC claimed a federal dividends paid
deduction and that captive REIT or captive RIC is included in a combined
report or return under subchapter two or part four of subchapter three
of this chapter.
(f) Provided the taxpayer has not made an election pursuant to
paragraph two of subdivision (b) of section 11-642 of this part, there
shall be allowed as a deduction in determining entire net income, to the
extent not deductible in determining federal taxable income, the
adjusted eligible net income of an international banking facility
determined as follows:
(1) The eligible net income of an international banking facility shall
be the amount remaining after subtracting from the eligible gross income
the applicable expenses.
(2) Eligible gross income shall be the gross income derived by an
international banking facility from:
(A) making, arranging for, placing or servicing loans to foreign
persons, provided, however, that in the case of a foreign person which
is an individual, or which is a foreign branch of a domestic corporation
(other than a bank), or which is a foreign corporation or foreign
partnership which is eighty per centum or more owned or controlled,
either directly or indirectly, by one or more domestic corporations
(other than banks), domestic partnerships or resident individuals,
substantially all the proceeds of the loan are intended for use outside
of the United States;
(B) making or placing deposits with foreign persons which are banks or
foreign branches of banks (including foreign subsidiaries or foreign
branches of the taxpayer) or with other international banking
facilities; or
(C) entering into foreign exchange trading or hedging transactions
related to any of the transactions described in this paragraph.
(3) Applicable expenses shall be any expenses or other deductions
attributable, directly or indirectly, to the eligible gross income
described in paragraph two of this subdivision.
(4) Adjusted eligible net income shall be determined by subtracting
from eligible net income the ineligible funding amount, and by
subtracting from the amount then remaining the floor amount.
(5) The ineligible funding amount shall be the amount, if any,
determined by multiplying eligible net income by a fraction, the
numerator of which is the average aggregate amount for the taxable year
of all liabilities, including deposits, and other sources of funds of
the international banking facility which were not owed to or received
from foreign persons, and the denominator of which is the average
aggregate amount for the taxable year of all liabilities, including
deposits and other sources of funds of the international banking
facility.
(6) The floor amount shall be the amount, if any, determined by
multiplying the amount remaining after subtracting the ineligible
funding amount from the eligible net income by a fraction, not greater
than one, which is determined as follows:
(A) The numerator shall be
(i) the percentage, as set forth in subparagraph (C) of this
paragraph, of the average aggregate amount of the taxpayer's loans to
foreign persons and deposits with foreign persons which are banks or
foreign branches of banks (including foreign subsidiaries or foreign
branches of the taxpayer), which loans and deposits were recorded in the
financial accounts of the taxpayer for its branches, agencies and
offices within the state for taxable years nineteen hundred
seventy-five, nineteen hundred seventy-six and nineteen hundred
seventy-seven, minus
(ii) the average aggregate amount of such loans and such deposits for
the taxable year of the taxpayer (other than such loans and deposits of
an international banking facility), provided, however, that in no case
shall the amount determined in this clause exceed the amount determined
in clause (i) of this subparagraph; and
(B) The denominator shall be the average aggregate amount of the loans
to foreign persons and deposits with foreign persons which are banks or
foreign branches of banks (including foreign subsidiaries or foreign
branches of the taxpayer), which loans and deposits were recorded in the
financial accounts of the taxpayer's international banking facility for
the taxable year.
(C) The percentage shall be one hundred percent for the first taxable
year in which the taxpayer establishes an international banking facility
and for the next succeeding four taxable years. The percentage shall be
eighty percent for the fifth, sixty percent for the sixth, forty percent
for the seventh, and twenty percent for the eighth taxable year next
succeeding the year such taxpayer establishes such international banking
facility, and zero in the ninth succeeding year and thereafter.
(7) In the event adjusted eligible net income is a loss, such loss
shall be added to entire net income.
(8) For purposes of this subdivision, the term "foreign person" means:
(A) an individual who is not a resident of the United States,
(B) a foreign corporation, a foreign partnership or a foreign trust,
as defined in section seventy-seven hundred one of the internal revenue
code, other than a domestic branch thereof,
(C) a foreign branch of a domestic corporation (including the
taxpayer),
(D) a foreign government or an international organization or an agency
of either, or
(E) an international banking facility.
For purposes of this paragraph, the terms "foreign" and "domestic"
shall have the same meaning as set forth in section seventy-seven
hundred one of the internal revenue code.
(g) Entire net income shall be computed without regard to the
reduction in the basis of property that is required by section three
hundred sixty-two of the internal revenue code, because of any amount of
money or other property received from the federal deposit insurance
corporation pursuant to subsection (c) of section thirteen of the
federal deposit insurance act, as amended, or from the federal savings
and loan insurance corporation pursuant to paragraph one, two, three or
four of subsection (f) of section four hundred six of the federal
national housing act, as amended.
(h)(1) For purposes of this subdivision, a "thrift institution" is a
banking corporation which satisfies the requirements of subparagraphs
(A) and (B) of this paragraph.
(A) Such banking corporation must be (i) a banking corporation as
defined in paragraph one of subdivision (a) of section 11-640 of this
part created or authorized to do business under article six or ten of
the banking law, (ii) a banking corporation as defined in paragraph two
or seven of subdivision (a) of section 11-640 of this part which is
doing a business substantially similar to the business which a
corporation or association may be created to do under article six or ten
of the banking law or any business which a corporation or association is
authorized by such article to do, or (iii) a banking corporation as
defined in paragraph four or five of subdivision (a) of section 11-640
of this part.
(B) At least sixty percent of the amount of the total assets (at the
close of the taxable year) of such banking corporation must consist of
(i) cash; (ii) obligations of the United States or of a state or
political subdivision thereof, and stock or obligations of a corporation
which is an instrumentality of the United States or of a state or
political subdivision thereof, but not including obligations the
interest on which is excludable from gross income under section 103 of
the internal revenue code; (iii) loans secured by a deposit or share of
a member; (iv) loans secured by an interest in real property which is
(or from the proceeds of the loan, will become) residential real
property or real property used primarily for church purposes, loans made
for the improvement of residential real property or real property used
primarily for church purposes, provided that for purposes of this
clause, residential real property shall include single or multifamily
dwellings, facilities in residential developments dedicated to public
use or property used on a nonprofit basis for residents, and mobile
homes not used on a transient basis; (v) property acquired through the
liquidation of defaulted loans described in clause (iv) of this
subparagraph; (vi) any regular or residual interest in a REMIC, as such
term is defined in section 860D of the internal revenue code and any
regular interest in a FASIT, as such term is defined in section 860L of
the internal revenue code, but only in the proportion which the assets
of such REMIC or FASIT consist of property described in any of the
preceding clauses of this subparagraph, except that if ninety-five
percent or more of the assets of such REMIC or FASIT are assets
described in clauses (i) through (v) of this subparagraph, the entire
interest in the REMIC or FASIT shall qualify; (vii) any mortgage-backed
security which represents ownership of a fractional undivided interest
in a trust, the assets of which consist primarily of mortgage loans,
provided that the real property which serves as security for the loans
is (or from the proceeds of the loan, will become) the type of property
described in clause (iv) of this subparagraph and any collateralized
mortgage obligation, the security for which consists primarily of
mortgage loans, provided that the real property which serves as security
for the loans is (or from the proceeds of the loan, will become) the
type of property described in clause (iv) of this subparagraph; (viii)
certificates of deposit in, or obligations of, a corporation organized
under a state law which specifically authorizes such corporation to
insure the deposits or share accounts of member associations; (ix) loans
secured by an interest in real property located within any urban renewal
area to be developed for predominantly residential use under an urban
renewal plan approved by the Secretary of Housing and Urban Development
under part A or part B of title I of the Housing Act of 1949, as
amended, or located within any area covered by a program eligible for
assistance under section 103 of the Demonstration Cities and
Metropolitan Development Act of 1966, as amended, and loans made for the
improvement of any such real property; (x) loans secured by an interest
in educational, health, or welfare institutions or facilities, including
structures designed or used primarily for residential purposes for
students, residents, and persons under care, employees, or members of
the staff of such institutions or facilities; (xi) loans made for the
payment of expenses of college or university education or vocational
training; (xii) property used by the taxpayer in the conduct of business
which consists principally of acquiring the savings of the public and
investing in loans; (xiii) loans for which the taxpayer is the creditor
and which are wholly secured by loans described in clause (iv) of this
subparagraph, but excluding loans for which the taxpayer is the creditor
to any banking corporation described in paragraphs one through seven of
subdivision (a) of section 11-640 of this part or a real estate
investment trust, as such term is defined in section 856 of the internal
revenue code, and excluding loans which are treated by the taxpayer as
subsidiary capital for purposes of the deductions provided by paragraph
eleven of subdivision (e) of this section; (xiv) small business loans or
small farm loans located in low-income or moderate-income census tracts
or block numbering areas delineated by the United States bureau of the
census in the most recent decennial census; and (xv) community
development loans or community development investments. For purposes of
clause (xv) of this subparagraph, a "community development loan" is a
loan that (1) has as its primary purpose community development, (II) has
not been reported or collected by the taxpayer for consideration in the
taxpayer's community reinvestment act evaluation pursuant to the federal
community reinvestment act of 1977, as amended, or section
twenty-eight-b of the banking law as a mortgage loan described in clause
(iv) of this subparagraph or a small business loan, small farm loan, or
consumer loan, (III) benefits the taxpayer's assessment area or areas
for purposes of the federal community reinvestment act of 1977, as
amended or section twenty-eight-b of the banking law or a broader
statewide or regional area that includes the taxpayer's assessment area,
and (IV) is identified in the taxpayer's books and records as a
community development loan for purposes of its community reinvestment
act evaluation pursuant to the federal community reinvestment act of
1977, as amended or section twenty-eight-b of the banking law. For
purposes of clause (xv) of this subparagraph, a "community development
investment" is an investment in a security which has as its primary
purpose community development and which is identified in the taxpayer's
books and records as a qualified investment for purposes of its
community reinvestment act evaluation pursuant to the federal community
reinvestment act of 1977, as amended or section twenty-eight-b of the
banking law. For purposes of the two preceding sentences, "community
development" means (I) affordable housing (including multifamily rental
housing for low-income or moderate-income individuals); (II) community
services targeted to low-income or moderate-income individuals; (III)
activities that promote economic development by financing businesses or
farms that meet the size eligibility standards of the small business
administration's development company or small business investment
company programs or have gross annual revenues of one million dollars or
less; (IV) activities that revitalize or stabilize low-income or
moderate-income census tracts or block numbering areas delineated by the
United States bureau of the census in the most recent decennial census;
or (V) activities that seek to prevent defaults and/or foreclosures in
loans included in items (I) and (III) of this sentence.
(C) At the election of the taxpayer, the percentage specified in
subparagraph (B) of this paragraph shall be applied on the basis of the
average assets outstanding during the taxable year, in lieu of the close
of the taxable year. For purposes of clause (iv) of subparagraph (B) of
this paragraph, if a multifamily structure securing a loan is used in
part for nonresidential use purposes, the entire loan is deemed a
residential real property loan if the planned residential use exceeds
eighty percent of the property's planned use (determined as of the time
the loan is made). Also, for purposes of clause (iv) of subparagraph (B)
of this paragraph, loans made to finance the acquisition or development
of land shall be deemed to be loans secured by an interest in
residential real property if there is a reasonable assurance that the
property will become residential real property within a period of three
years from the date of acquisition of such land; but this sentence shall
not apply for any taxable year unless, within such three year period,
such land becomes residential real property. For purposes of determining
whether any interest in a REMIC qualifies under clause (vi) of
subparagraph (B) of this paragraph, any regular interest in another
REMIC held by such REMIC shall be treated as a loan described in a
preceding clause under principles similar to the principle of such
clause (vi); except that if such REMICS are part of a tiered structure,
they shall be treated as one REMIC for purposes of such clause (vi).
(2) For taxable years beginning before January first, two thousand
ten, a thrift institution must exclude from the computation of its
entire net income any amount allowed as a deduction for federal income
tax purposes pursuant to section 166, 585 or 593 of the internal revenue
code.
(3) For taxable years beginning before January first, two thousand
ten, a thrift institution shall be allowed as a deduction in computing
entire net income the amount of a reasonable addition to its reserve for
bad debts. This amount shall be equal to the sum of
(A) the amount determined to be a reasonable addition to the reserve
for losses on nonqualifying loans, computed in the same manner as is
provided with respect to additions to the reserves for losses on loans
of banks under paragraph one of subdivision (i) of this section, plus
(B) the amount determined by the taxpayer to be a reasonable addition
to the reserve for losses on qualifying real property loans, but such
amount shall not exceed the amount determined under paragraph four or
five of this subdivision, whichever is the larger, but the amount
determined under this subparagraph shall in no case be greater than the
larger of
(i) the amount determined under paragraph five of this subdivision, or
(ii) the amount which, when added to the amount determined under
subparagraph (A) of this paragraph, equals the amount by which twelve
percent of the total deposits or withdrawable accounts of depositors of
the taxpayer at the close of such year exceeds the sum of its surplus,
undivided profits and reserves at the beginning of such year (taking
into account any portion thereof attributable to the period before the
first taxable year beginning after December thirty-first, nineteen
hundred fifty-one).
The taxpayer must include in its tax return for each year a
computation of the amount of the addition to the bad debt reserve
determined under this subdivision. The use of a particular method in the
return for a taxable year is not a binding election by the taxpayer.
(4)(A) Subject to subparagraphs (B) and (C) of this paragraph, the
amount determined under this paragraph for the taxable year shall be an
amount equal to thirty-two percent of the entire net income for such
year.
(B) The amount determined under subparagraph (A) of this paragraph
shall be reduced (but not below zero) by the amount determined under
subparagraph (A) of paragraph three of this subdivision.
(C) The amount determined under this paragraph shall not exceed the
amount necessary to increase the balance at the close of the taxable
year of the reserve for losses on qualifying real property loans to six
percent of such loans outstanding at such time.
(D) For purposes of this paragraph, entire net income shall be
computed
(i) by excluding from income any amount included therein by reason of
subparagraph (B) of paragraph eight of this subdivision,
(ii) without regard to any deduction allowable for any addition to the
reserve for bad debts, and
(iii) by excluding from income an amount equal to the net gain for the
taxable year arising from the sale or exchange of stock of a corporation
or of obligations the interest on which is excludable from gross income
under section 103 of the internal revenue code.
(iv) Whenever a thrift institution is properly includable in a
combined return, entire net income, for purposes of this paragraph,
shall not exceed the lesser of the thrift institution's separately
computed entire net income as adjusted pursuant to clauses (i) through
(iii) of this subparagraph or the combined group's entire net income as
adjusted pursuant to clauses (i) through (iii) of this subparagraph.
(5) The amount determined under this paragraph for the taxable year
shall be computed in the same manner as is provided under paragraph one
of subdivision (i) of this section with respect to additions to reserves
for losses on loans of banks. Provided, however, that for any taxable
year beginning after nineteen hundred ninety-five, for purposes of such
computation, the base year shall be the later of (A) the last taxable
year beginning in nineteen hundred ninety-five or (B) the last taxable
year before the current year in which the amount determined under the
provisions of subparagraph (B) of paragraph three of this subdivision
exceeded the amount allowable under this paragraph.
(6) (A) (i) Each taxpayer described in paragraph one of this
subdivision shall establish and maintain a New York reserve for losses
on qualifying real property loans, a New York reserve for losses on
nonqualifying loans and a supplemental reserve for losses on loans. Such
reserves shall be maintained for all subsequent taxable years that this
subdivision applies to the taxpayer.
(ii) For purposes of this subdivision, such reserves shall be treated
as reserves for bad debts, but no deduction shall be allowed for any
addition to the supplemental reserve for losses on loans.
(iii) Except as noted below, the balances of each such reserve at the
beginning of the first day of the first taxable year beginning after
December thirty-first, nineteen hundred ninety-five shall be the same as
the balances maintained for federal income tax purposes in accordance
with section 593(c)(1) of the internal revenue code as in existence on
December thirty-first, nineteen hundred ninety-five for the last day of
the last tax year beginning before January first, nineteen hundred
ninety-six. A taxpayer which maintained a New York reserve for loan
losses on qualifying real property loans in the last tax year beginning
before January first, nineteen hundred ninety-six shall have a
continuation of such New York reserve balance in lieu of the amount
determined under the preceding sentence.
(iv) Notwithstanding clause (ii) of this subparagraph, any amount
allocated to the reserve for losses on qualifying real property loans
pursuant to section 593(c)(5) of the internal revenue code as in effect
immediately prior to the enactment of the Tax Reform Act of 1976 shall
not be treated as a reserve for bad debts for any purpose other than
determining the amount referred to in subparagraph (B) of paragraph
three of this subdivision, and for such purpose such amount shall be
treated as remaining in such reserve.
(B) Any debt becoming worthless or partially worthless in respect of a
qualifying real property loan shall be charged to the reserve for losses
on such loans and any debt becoming worthless or partially worthless in
respect of a nonqualifying loan shall be charged to the reserve for
losses on nonqualifying loans, except that any such debt may, at the
election of the taxpayer, be charged in whole or in part to the
supplemental reserve for losses on loans.
(C) The New York reserve for losses on qualifying real property loans
shall be increased by the amount determined under subparagraph (B) of
paragraph three of this subdivision and the New York reserve for losses
on nonqualifying loans shall be increased by the amount determined under
subparagraph (A) of paragraph three of this subdivision.
(7)(A) For purposes of this subdivision, the term "qualifying real
property loan" shall mean any loan secured by an interest in improved
real property or secured by an interest in real property which is to be
improved out of the proceeds of the loan. Such term shall include any
mortgage-backed security which represents ownership of a fractional
undivided interest in a trust, the assets of which consist primarily of
mortgage loans, provided that the real property which serves as security
for the loans is (or from the proceeds of the loan, will become) the
type of property described in clauses (i) through (v) of subparagraph
(B) of paragraph one of this subdivision. However, such term shall not
include: (i) any loan evidenced by a security (as defined in section
165(g)(2)(C) of the internal revenue code); (ii) any loan, whether or
not evidenced by a security (as defined in such section 165(g)(2)(C)),
the primary obligor of which is (I) a government or political
subdivision or instrumentality thereof, (II) a banking corporation, or
(III) any corporation sixty-five percent or more of whose voting stock
is owned or controlled, directly or indirectly, by the taxpayer or by a
banking corporation or bank holding company that owns or controls,
directly or indirectly, sixty-five percent or more of the voting stock
of the taxpayer; (iii) any loan, to the extent secured by a deposit in
or share of the taxpayer; or (iv) any loan which, within a sixty-day
period beginning in one taxable year of the creditor and ending in its
next taxable year, is made or acquired and then repaid or disposed of,
unless the transactions by which such loan was made or acquired and then
repaid or disposed of are established to be for bona fide business
purposes.
(B) For purposes of this subdivision, the term "nonqualifying loan"
shall mean any loan which is not a qualifying real property loan.
(C) For purposes of this subdivision, the term "loan" shall mean debt,
as the term "debt" is used in section 166 of the internal revenue code.
(D) A regular or residual interest in a REMIC, as such term is defined
in section 860D of the internal revenue code, shall be treated as a
qualifying real property loan, except that, if less than ninety-five
percent of the assets of such REMIC are qualifying real property loans
(determined as if the taxpayer held the assets of the REMIC), such
interest shall be so treated only in the proportion which the assets of
such REMIC consist of such loans. For purposes of determining whether
any interest in a REMIC qualifies under the preceding sentence, any
interest in another REMIC held by such REMIC shall be treated as a
qualifying real property loan under principles similar to the principles
of the preceding sentence, except that if such REMICS are part of a
tiered structure, they shall be treated as one REMIC for purposes of
this paragraph.
(8)(A) Any distribution of property (as defined in section 317(a) of
the internal revenue code) by a thrift institution to a shareholder with
respect to its stock, if such distribution is not allowable as a
deduction under section 591 of such code, shall be treated as made
(i) first out of its New York earnings and profits accumulated in
taxable years beginning after December thirty-first, nineteen hundred
fifty-one, to the extent thereof,
(ii) then out of the New York reserve for losses on qualifying real
property loans, to the extent additions to such reserve exceed the
additions which would have been allowed under paragraph five of this
subdivision,
(iii) then out of the supplemental reserve for losses on loans, to the
extent thereof,
(iv) then out of such other accounts as may be proper.
This subparagraph shall apply in the case of any distribution in
redemption of stock or in partial or complete liquidation of a thrift
institution, except that any such distribution shall be treated as made
first out of the amount referred to in clause (ii) of this subparagraph,
second out of the amount referred to in clause (iii) of this
subparagraph, third out of the amount referred to in clause (i) of this
subparagraph and then out of such other accounts as may be proper. This
subparagraph shall not apply to any transaction to which section 381 of
such code (relating to carryovers and certain corporate acquisitions)
applies, or to any distribution to the federal savings and loan
insurance corporation or the federal deposit insurance corporation in
redemption of an interest in an association or institution, if such
interest was originally received by the federal savings and loan
insurance corporation or the federal deposit insurance corporation in
exchange for financial assistance pursuant to section 406(f) of the
federal national housing act or pursuant to subsection (c) of section
thirteen of the federal deposit insurance act.
(B) If any distribution is treated under subparagraph (A) of this
paragraph as having been made out of the reserves described in clauses
(ii) and (iii) of such subparagraph, the amount charged against such
reserve shall be the amount which, when reduced by the amount of tax
imposed under the internal revenue code and attributable to the
inclusion of such amount in gross income, is equal to the amount of such
distribution; and the amount so charged against such reserve shall be
included in the entire net income of the taxpayer.
(C) (i) For purposes of clause (ii) of subparagraph (A) of this
paragraph, additions to the New York reserve for losses on qualifying
real property loans for the taxable year in which the distribution
occurs shall be taken into account.
(ii) For purposes of computing under this subdivision the amount of a
reasonable addition to the New York reserve for losses on qualifying
real property loans for any taxable year, the amount charged during any
year to such reserve pursuant to the provisions of subparagraph (B) of
this paragraph shall not be taken into account.
(9) A taxpayer which maintains a New York reserve for losses on
qualifying real property loans and which ceases to meet the definition
of a thrift institution as defined in paragraph one of this subdivision,
must include in its entire net income for the last taxable year such
paragraph applied the excess of its New York reserve for losses on
qualifying real property loans over the greater of (A) its reserve for
losses on qualifying real property loans as of the last day of the last
taxable year such reserve is maintained for federal income tax purposes
or (B) the balance of the New York reserve for losses on qualifying real
property loans which would be allowable to the taxpayer for the last
taxable year such taxpayer met such definition of a thrift institution
if the taxpayer had computed its reserve balance pursuant to the method
described in subparagraph (A) of paragraph one of subdivision (i) of
this section.
(i) (1) For taxable years beginning before January first, two thousand
ten, a taxpayer subject to the provisions of section 585(c) of the
internal revenue code and not subject to subdivision (h) of this section
may, in computing entire net income, deduct an amount equal to or less
than the amount determined pursuant to subparagraph (A) of this
paragraph or subparagraph (B) of this paragraph, whichever is greater.
Provided, however, in no event shall the deduction be less than the
amount determined pursuant to such subparagraph (A).
(A) The amount determined pursuant to this subparagraph shall be the
amount necessary to increase the balance of its New York reserve for
losses on loans (at the close of the taxable year) to the amount which
bears the same ratio to loans outstanding at the close of the taxable
year as (i) the total bad debts sustained during the taxable year and
the five preceding taxable years (or, with the approval of the
commissioner of finance, a shorter period), adjusted for recoveries of
bad debts during such period, bears to (ii) the sum of the loans
outstanding at the close of such six or fewer taxable years.
(B)(i) The amount determined pursuant to this subparagraph shall be
the amount necessary to increase the balance of its New York reserve for
losses on loans (at the close of the taxable year) to the lower of --
(I) the balance of the reserve at the close of the base year, or
(II) if the amount of loans outstanding at the close of the taxable
year is less than the amount of loans outstanding at the close of the
base year, the amount which bears the same ratio to loans outstanding at
the close of the taxable year as the balance of the reserve at the close
of the base year bears to the amount of loans outstanding at the close
of the base year.
(ii) For purposes of this paragraph, the base year shall be (I) for
taxable years beginning in nineteen hundred eighty-seven, the last
taxable year before the most recent adoption of the experience method
for federal income tax purposes or for purposes of this part, whichever
is earlier, and (II) for taxable years beginning after nineteen hundred
eighty-seven, the last taxable year beginning before nineteen hundred
eighty-eight.
(2) (A) For taxable years beginning before January first, two thousand
ten, each taxpayer described in paragraph one of this subdivision shall
establish and maintain a New York reserve for losses on loans. Such
reserve shall be maintained for all subsequent taxable years. The
balance of the New York reserve for losses on loans at the beginning of
the first day of the first taxable year the taxpayer becomes subject to
this subdivision shall be the same as the balance at the beginning of
such day of the reserve for losses on loans maintained for federal
income tax purposes. The New York reserve for losses on loans shall be
reduced by an amount equal to the deduction allowed, but not more than
the amount allowable, for worthless debts for federal income tax
purposes pursuant to section 166 of the internal revenue code plus the
amount, if any, charged against its reserve for losses on loans pursuant
to section 585(c)(4) of such code.
(B) For purposes of subparagraph (A) of this paragraph, a taxpayer
which had previously been subject to the provisions of subdivision (h)
of this section shall establish a New York reserve for losses on loans
equal to the sum of (i) the greater of (I) the balance of its federal
reserve for losses on qualifying real property loans as of the first day
of the first taxable year the taxpayer becomes subject to the provisions
of this subdivision or (II) the greater of the amounts determined under
subparagraphs (A) and (B) of paragraph nine of subdivision (h) of this
section in the year such paragraph applied to the taxpayer, (ii) the
greater of (I) the balance in its federal reserve for losses on
nonqualifying loans as of the first day of the first taxable year the
taxpayer becomes subject to this subdivision or (II) the balance in its
New York reserve for losses on nonqualifying loans as of the last date
the taxpayer was subject to the provisions of subdivision (h) of this
section, and (iii) the balance in its supplemental reserve for losses on
loans as of the last date the taxpayer was subject to the provisions of
subdivision (h) of this section.
(3) The determination and treatment of the New York reserve balance,
including any additions thereto, subtractions therefrom, or recapture
thereof, for
(A) any banking corporation which was subject to tax for federal
income tax purposes but not subject to tax under this part for prior
taxable years,
(B) any taxpayer which ceases to be subject to tax under this part, or
(C) any other unusual circumstances
shall be determined by the commissioner of finance. Provided, however,
any banking corporation which was subject to tax for federal income tax
purposes but not subject to tax under this part for prior taxable years
shall have as its opening New York reserve for losses on loans the
amount determined by applying the provisions of subparagraph (A) of
paragraph one of this subdivision to loans outstanding at the close of
its last taxable year for federal income tax purposes ending prior to
the first taxable year for which the taxpayer is subject to tax under
this part and provided, further, that the provisions of subparagraph (B)
of paragraph one of this subdivision shall not apply.
(j) (1) For any taxable year beginning in nineteen hundred
seventy-three or for any period for which a tax is imposed under
subdivision (b) of section 11-639 of this part, entire net income shall
be computed without regard to the amount allowable as a deduction for
bad debts or an addition to a reserve for bad debts in computing federal
taxable income for the taxable year, but, in lieu thereof, a deduction
shall be allowed to the extent and in the manner authorized by
subdivision five of section 11-621 or subdivision (e) of section 11-629
of this subchapter as if such provisions were set forth in full in this
part and by treating such provisions as applicable under this part.
(2) In the case of property placed in service prior to January first,
nineteen hundred seventy-three, for which the taxpayer properly adopted
a different method of computing depreciation under section 11-621 or
section 11-629 of this subchapter than was adopted for federal income
tax purposes with respect to such property, entire net income under this
part shall be computed without regard to the amount allowable as a
deduction for depreciation of such property in computing federal taxable
income for the taxable year but, in lieu thereof, shall be computed as
if such deduction were determined by the method of depreciation adopted
with respect to such property under section 11-621 or 11-629 of this
subchapter.
(3) In computing entire net income, the amount allowable as a
deduction for charitable contributions for federal income tax purposes
shall be: (a) increased for the first taxable year or period beginning
in nineteen hundred seventy-three by the amount of any contributions
made during such taxable year or period which were not allowable as a
deduction for charitable contributions for federal income tax purposes
for such taxable year or period because of an election pursuant to
paragraph two of subsection (a) of section one hundred seventy of the
internal revenue code and which were not deductible in computing the tax
due under part one or two of this subchapter three, and (b) decreased by
any amount allowed as a deduction for federal income tax purposes for
the taxable year under section one hundred seventy of the internal
revenue code as a carryover of excess contributions which are not made
in such taxable year and which were deductible in computing the tax due
under part one or two of this subchapter three.
(4) There shall be excluded from the computation of entire net income
any amount allowed as a deduction for federal income tax purposes for
the taxable year under section twelve hundred twelve of the internal
revenue code as a capital loss carry forward to the taxable year, which
was deductible as a loss in computing the tax due under part one or two
of this subchapter three.
(5) There shall be excluded from the computation of entire net income
the amount of any income or gain from the sale of real or personal
property which is includible in determining federal taxable income for
the taxable year pursuant to the installment method under section four
hundred fifty-three of the internal revenue code, to the extent that
such income or gain was includible in the computation of the tax due
under part one or two of this subchapter three.
(6) To the extent not otherwise provided in this part, there shall be
excluded from entire net income the amount necessary to prevent the
taxation under this part of any other amount of income or gain which was
properly included in income or gain and was taxable under part one or
two of this subchapter three and there shall be disallowed as a
deduction in computing entire net income any amount which was allowed as
a deduction in computing the tax due under such parts.
(k) (1) At the election of the taxpayer, there shall be deducted from
the portion of its entire net income allocated within the city,
depreciation with respect to any property such as described in paragraph
two of this subdivision, 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 depreciation or amortization of the
same property, and the total of all deductions allowed under parts one
and two of this subchapter three and this part in any taxable year or
years with respect to the depreciaton of any such property shall not
exceed its cost or other basis.
(2) 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 this city
and used in the taxpayer's business, (i) 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 which is
properly attributable to such construction, reconstruction or erection
after December thirty-first, nineteen hundred sixty-five, or (ii)
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 this city and commenced after December thirty-first, nineteen hundred
sixty-five, or (iii) acquired, constructed, reconstructed, or erected
subsequent to December thirty-first, nineteen hundred sixty-seven, if
such acquisition, construction, reconstruction or erection is pursuant
to a plan of the taxpayer which was in existence December thirty-first,
nineteen hundred sixty-seven and not thereafter substantially modified,
and such acquisition, construction, reconstruction or erection would
qualify under the rules in paragraph four, five or six of subsection (h)
of section forty-eight of the internal revenue code provided all
references in such paragraphs four, five and six to the dates October
nine, nineteen hundred sixty-six, and October ten, nineteen hundred
sixty-six, shall be read as December thirty-first, nineteen hundred
sixty-seven. A taxpayer shall be allowed a deduction under clause (i),
(ii) or (iii) of this paragraph only if the tangible property shall be
delivered or the construction, reconstruction or erection shall be
completed on or before December thirty-first, nineteen hundred
sixty-nine, except in the case of tangible property which is acquired,
constructed, reconstructed or erected pursuant to a contract which was,
on or before December thirty-first, nineteen hundred sixty-seven, and at
all times thereafter, binding on the taxpayer. 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
one 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 one in proportion to the part of
the year it uses such property.
(3) If the deduction allowable for any taxable year pursuant to this
subdivision exceeds the portion of the taxpayer's entire net income
allocated to this 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 this city for such year
or years.
(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
subdivision, subdivision twelve of section 11-621 or subdivision (j) of
section 11-629 of this subchapter, the gain or loss entering into the
computation of federal taxable income shall be disregarded in computing
entire net income, and there shall be added 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
paragraph one of this subdivision. Provided, however, that no loss shall
be recognized for the purposes of this paragraph 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.
(k-1) A net operating loss deduction shall be allowed which shall be
presumably the same as the net operating loss deduction allowed under
section one hundred seventy-two 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 required by the other provisions of this section;
(2) such deduction shall not include any net operating loss sustained
during any taxable year beginning prior to January first, two thousand
nine, or 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 augmented by the excess of the amount allowed as a deduction
pursuant to subdivision (h) or (i) of this section, whichever is
applicable, over the amount allowed as a deduction pursuant to section
one hundred sixty-six or five hundred eighty-five of the internal
revenue code, for each taxable year in which the taxpayer had a net
operating loss which is carried to the taxable year of the deduction
under this provision, in the aggregate, (except to the extent such
excess was previously deducted in computing entire net income); and
(4) the net operating loss deduction allowed under section one hundred
seventy-two of the internal revenue code shall for purposes of this
subdivision be determined as if the taxpayer had elected under such
section to relinquish the entire carryback period with respect to net
operating losses.
(l) If the period covered by a return under this part is other than
the period covered by the return to the United States treasury
department, entire net income and alternative entire net income shall be
determined by multiplying the taxable income reported to such department
(as adjusted pursuant to the provisions of this part) by the number of
calendar months or major parts thereof covered by the return under this
part and dividing by the number of calendar months or major parts
thereof covered by the return to such department. If it shall appear
that such method of determining entire net income or alternative entire
net income does not properly reflect the taxpayer's income during the
period covered by the return under this part, the commissioner of
finance shall be authorized in his or her discretion to determine such
entire net income or alternative entire net income solely on the basis
of the taxpayer's income during the period covered by its return under
this part.
(m) 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.
* (n) 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.
* NB There are 2 sub (n)'s
* (n) for taxable years ending after September tenth, two thousand
one, in the case of qualified property described in paragraph two of
subsection k of section one hundred sixty-eight of the internal revenue
code, other than qualified resurgence zone property described in
subdivision (p) of this section, and other than qualified New York
Liberty Zone property described in paragraph two of subsection b of
section fourteen hundred L of the internal revenue code (without regard
to clause (i) of subparagraph (C) of such paragraph), a taxpayer shall
be allowed with respect to such property 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 subdivision (r) of this section, the limitation under
clause (i) of subparagraph (A) of paragraph one of subdivision (a) of
section two hundred eighty F of the internal revenue code applicable to
the amount allowed as a deduction under this paragraph shall be
determined as of the date such vehicle was placed in service and not as
of September tenth, two thousand one.
* NB There are 2 sub (n)'s
(o) for taxable years ending after September tenth, two thousand one,
upon the disposition of property to which subdivision (n) of this
section 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 paragraph thirteen of subdivision (b) and
subdivision (n) of this section attributable to such property.
(p) for purposes of subdivisions (n) and (o) of this section,
qualified resurgence zone property shall mean qualified property
described in paragraph two of subsection k of section one hundred
sixty-eight of the internal revenue code substantially all of the use of
which is in the resurgence zone, as defined below, and is in the active
conduct of a trade or business by the taxpayer in such zone, and the
original use of which in the resurgence zone commences with the taxpayer
after September tenth, two thousand one. The resurgence zone shall mean
the area of New York county bounded on the south by a line running from
the intersection of the Hudson River with the Holland Tunnel, and
running thence east to Canal Street, then running along the centerline
of Canal Street to the intersection of the Bowery and Canal Street,
running thence in a southeasterly direction diagonally across Manhattan
Bridge Plaza, to the Manhattan Bridge, and thence along the centerline
of the Manhattan Bridge to the point where the centerline of the
Manhattan Bridge would intersect with the easterly bank of the East
River, and bounded on the north by a line running from the intersection
of the Hudson River with the Holland Tunnel and running thence north
along West Avenue to the intersection of Clarkson Street then running
east along the centerline of Clarkson Street to the intersection of
Washington Avenue, then running south along the centerline of Washington
Avenue to the intersection of West Houston Street, then east along the
centerline of West Houston Street, then at the intersection of the
Avenue of the Americas continuing east along the centerline of East
Houston Street to the easterly bank of the East River.
(q) 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, a taxpayer must add back royalty payments directly or
indirectly paid, accrued, or incurred in connection with one or more
direct or indirect transactions with one or more related members during
the taxable year to the extent deductible in calculating federal taxable
income.
(B) Exceptions. (i) The adjustment required in this subdivision shall
not apply to the portion of the royalty payment that the taxpayer
establishes, by clear and convincing evidence of the type and in the
form specified by the commissioner of finance, meets all of the
following requirements: (I) the related member was subject to tax in
this city or another city within the United States or a foreign nation
or some combination thereof on a tax base that included the royalty
payment paid, accrued or incurred by the taxpayer; (II) the related
member during the same taxable year directly or indirectly paid, accrued
or incurred such portion to a person that is not a related member; and
(III) the transaction giving rise to the royalty payment between the
taxpayer and the related member was undertaken for a valid business
purpose.
(ii) The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I) the
related member was subject to tax on or measured by its net income in
this city or another city within the United States, or some combination
thereof; (II) the tax base for said tax included the royalty payment
paid, accrued or incurred by the taxpayer; and (III) the aggregate
effective rate of tax applied to the related member in those
jurisdictions is no less than eighty percent of the statutory rate of
tax that applied to the taxpayer under section 11-643.5 of this part for
the taxable year.
(iii) The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I) the
royalty payment was paid, accrued or incurred to a related member
organized under the laws of a country other than the United States; (II)
the related member's income from the transaction was subject to a
comprehensive income tax treaty between such country and the United
States; (III) the related member was subject to tax in a foreign nation
on a tax base that included the royalty payment paid, accrued or
incurred by the taxpayer; (IV) the related member's income from the
transaction was taxed in such country at an effective rate of tax at
least equal to that imposed by this city; and (V) the royalty payment
was paid, accrued or incurred pursuant to a transaction that was
undertaken for a valid business purpose and using terms that reflect an
arm's length relationship.
(iv) The adjustment required in this subdivision shall not apply if
the taxpayer and the commissioner of finance agree in writing to the
application or use of alternative adjustments or computations. The
commissioner of finance may, in his or her discretion, agree to the
application or use of alternative adjustments or computations when he or
she concludes that in the absence of such agreement the income of the
taxpayer would not be properly reflected.
(r) For taxable years beginning on or after January first, two
thousand four, in the case of a taxpayer that is not an eligible farmer
as defined in subsection (n) of section six hundred six of the tax law,
a taxpayer shall be allowed with respect to a sport utility vehicle that
is not a passenger automobile as defined in paragraph five of subsection
(d) of section two hundred eighty F of the internal revenue code, the
deductions allowable under sections one hundred seventy-nine, one
hundred sixty-seven and one hundred sixty-eight of the internal revenue
code, determined as if such sport utility vehicle were a passenger
automobile as defined in such paragraph five.
(s) Upon the disposition of property to which subdivision (r) of this
section applies, the amount of any gain or loss includible in entire net
income shall be adjusted to reflect the modification provided in such
subdivision attributable to such property.
Section 11-641.1¶
Section 11-641.1
* § 11-641.1 Computation of alternative entire net income. (a)
Alternative entire net income means entire net income as determined
pursuant to section 11-641, except that the deductions described in
paragraphs eleven and twelve of subdivision (e) of section 11-641 shall
not be allowed.
(b) Any election made pursuant to paragraph two of subdivision (b) of
section 11-642 with respect to the modification provided for in
subdivision (f) of section 11-641 shall be deemed to have been made for
purposes of computing alternative entire net income.
* NB Amended Ch. 298/85 § 41, language juxtaposed per Ch. 907/85 § 14
* NB Number supplied by the Legislative Bill Drafting Commission
Section 11-642¶
Section 11-642
* § 11-642 Allocation. (a) In general. If a taxpayer's entire net
income, alternative entire net income, or taxable assets are derived
from business carried on within and without the city, the taxpayer shall
for purposes of computing allocation percentages compute payroll,
receipts, and deposits percentages in accordance with the following
rules:
(1) The taxpayer shall ascertain the percentage which eighty percent
of the total wages, salaries and other personal service compensation
during the taxable year of employees within the city, except wages,
salaries and other personal service compensation of general executive
officers, bears to the total wages, salaries and other personal service
compensation during the taxable year of all the taxpayer's employees
within and without the city, except wages, salaries and other personal
service compensation of general executive officers.
(2) (A) The taxpayer shall ascertain the percentage which the receipts
of the taxpayer arising during the taxable year from:
(i) loans (including a taxpayer's portion of a participation in a
loan) and financing leases within the city, and all other business
receipts earned within the city, bear to
(ii) the total amount of the taxpayer's receipts from loans (including
a taxpayer's portion of a participation in a loan) and financing leases
and all other business receipts within and without the city.
(B) All interest from loans and financing leases is located where the
greater portion of income producing activity related to the loan or
financing lease occurred; provided, however:
(i) In the case of a taxpayer described in paragraph one, two, three,
four, five or seven of subdivision (a) of section 11-640 of this part, a
loan or financing lease attributed by such taxpayer to a branch without
the city shall be presumed to be properly so attributed provided that
such presumption may be rebutted if the commissioner of finance
demonstrates that the greater portion of income producing activity
related to the loan or financing lease did not occur at such branch.
Where such presumption has been rebutted, the loan or financing lease
shall be presumed to be within the city if the taxpayer had a branch
within the city at the time the loan or financing lease was made. The
taxpayer may rebut such presumption by demonstrating that the greater
portion of income producing activity related to the loan or financing
lease did not occur within the city. In the case of a loan or financing
lease which is recorded on the books of a place without the city which
is not a branch, it shall be presumed that the greater portion of income
producing activity related to such loan or financing lease occurred
within the city if the taxpayer had a branch within the city at the time
the loan or financing lease was made. The taxpayer may rebut such
presumption by demonstrating that the greater portion of income
producing activity related to the loan or financing lease did not occur
within the city.
(ii) In the case of a taxpayer described in paragraph six or nine of
subdivision (a) of section 11-640 of this part, a loan or financing
lease attributed by such taxpayer to a bona fide office without the city
shall be presumed to be properly so attributed provided that such
presumption may be rebutted if the commissioner of finance demonstrates
that the greater portion of income producing activity related to the
loan or financing lease did not occur without the city.
(C) Receipts from lease transactions other than financing leases
referred to in subparagraph (B) are located where the property subject
to the lease is located.
(D) (i) Interest, and fees and penalties in the nature of interest,
from bank, credit, travel and entertainment card receivables are earned
within the city if the mailing address of the card holder in the records
of the taxpayer is in the city; and
(ii) Service charges and fees from such cards are earned within the
city if the card is serviced in the city; and
(iii) Receipts from merchant discounts are earned within the city if
the merchant is located within the city.
(E) The portion of total net gains and other income from trading
activities (including but not limited to foreign exchange, options and
financial futures), and from investment activities which is attributed
within the city shall be ascertained by multiplying such total net gains
and other income by a fraction the numerator of which is the average
value of the trading assets and investment assets attributable to the
city and the denominator of which is the average value of all trading
and investment assets. A trading asset or investment asset is
attributable to the city if the greater portion of income producing
activity related to the trading asset or investment asset occurred
within the city.
(F) Fees or charges from the issuance of letters of credit, travelers
checks and money orders are earned within the city if such letters of
credit, travelers checks or money orders are issued within the city.
(G) Rules for receipts from certain services to investment companies.
(1) For taxable years beginning on or after January first, two thousand
one, 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 two 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).
(2) The New York city portion shall be the product of (i) the total of
such receipts from the sale of such services and (ii) 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 (i)
the number of shares in the investment company which are owned on the
last day of the month by shareholders that are domiciled in the city by
(ii) the total number of shares in the investment company outstanding on
that date. The denominator of the fraction is the number of such monthly
percentages.
(3)(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 clerical, accounting, bookkeeping, data processing,
internal auditing, legal and tax services performed for an investment
company but only if the provider of such service or services during the
taxable year in which such service or services are sold also sells
management or distribution services, as defined hereinabove, to such
investment company.
(H) All receipts from the performance of services not described above
are earned within the city if the services are performed in the city.
When a service is performed both within and without the city, the
receipts shall be allocated within and without the city in accordance
with rules and regulations of the commissioner of finance.
(I) All other receipts not described in subparagraphs (B) through (H)
of this paragraph shall be attributable within and without the city in
accordance with rules and regulations issued by the commissioner of
finance.
(3) The taxpayer shall ascertain the percentage which the average
value of deposits maintained at branches within the city during the
taxable year, bears to the average value of all the taxpayer's deposits
maintained at branches within and without the city during the taxable
year.
(4) Each percentage computed pursuant to this subsection shall be
computed on a cash or accrual basis according to the method of
accounting used for the taxable year. The receipts percentage shall
include only receipts which are included in alternative entire net
income for the taxable year. The deposits and payroll percentages shall
include only deposits and payroll the expenses of which are included in
the computation of alternative entire net income for the taxable year.
(5) For purposes of this section:
(A) The term "bona fide office" means an office at which the taxpayer
carries on its business in a regular and systematic manner and which is
continuously maintained, occupied and used by employees of the taxpayer.
(B) The term "branch" means a bona fide office which is used by the
taxpayer on a regular and systematic basis to (i) approve loans
(regardless of whether the approval of certain classes of loans requires
review or final approval by another office of the taxpayer), (ii) accept
loan repayments, (iii) disburse funds, and (iv) conduct one or more
other functions of a banking business. (i) Notwithstanding subdivision
(c) of this section, but subject to subdivision (g) of this section, the
business allocation percentage shall be computed in the manner set forth
in this subdivision.
(1) For taxable years beginning in two thousand nine, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of thirty percent and the percentage determined under
paragraph one of subdivision (c) of this section,
(B) the product of thirty percent and the percentage determined under
paragraph two of subdivision (c) of this section, and
(C) the product of forty percent and the percentage determined under
paragraph three of subdivision (c) of this section.
(2) For taxable years beginning in two thousand ten, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of twenty-seven percent and the percentage determined
under paragraph one of subdivision (c) of this section,
(B) the product of twenty-seven percent and the percentage determined
under paragraph two of subdivision (c) of this section, and
(C) the product of forty-six percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(3) For taxable years beginning in two thousand eleven, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of twenty-three and one-half percent and the
percentage determined under paragraph one of subdivision (c) of this
section,
(B) the product of twenty-three and one-half percent and the
percentage determined under paragraph two of subdivision (c) of this
section, and
(C) the product of fifty-three percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(4) For taxable years beginning in two thousand twelve, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of twenty percent and the percentage determined under
paragraph one of subdivision (c) of this section,
(B) the product of twenty percent and the percentage determined under
paragraph two of subdivision (c) of this section, and
(C) the product of sixty percent and the percentage determined under
paragraph three of subdivision (c) of this section.
(5) For taxable years beginning in two thousand thirteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of sixteen and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of sixteen and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of sixty-seven percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(6) For taxable years beginning in two thousand fourteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of thirteen and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of thirteen and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of seventy-three percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(7) For taxable years beginning in two thousand fifteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of ten percent and the percentage determined under
paragraph one of subdivision (c) of this section,
(B) the product of ten percent and the percentage determined under
paragraph two of subdivision (c) of this section, and
(C) the product of eighty percent and the percentage determined under
paragraph three of subdivision (c) of this section.
(8) For taxable years beginning in two thousand sixteen, the business
allocation percentage shall be determined by adding together the
following percentages:
(A) the product of six and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of six and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of eighty-seven percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(9) For taxable years beginning in two thousand seventeen, the
business allocation percentage shall be determined by adding together
the following percentages:
(A) the product of three and one-half percent and the percentage
determined under paragraph one of subdivision (c) of this section,
(B) the product of three and one-half percent and the percentage
determined under paragraph two of subdivision (c) of this section, and
(C) the product of ninety-three percent and the percentage determined
under paragraph three of subdivision (c) of this section.
(10) For taxable years beginning after two thousand seventeen, the
business allocation percentage shall be the percentage determined under
paragraph three of subdivision (c) of this section.
(11) The commissioner shall promulgate rules necessary to implement
the provisions of this subdivision under such circumstances where any of
the percentages to be determined under paragraph one, two or three of
subdivision (c) of this section cannot be determined because the
taxpayer has no property, payroll or gross receipts from sales or
services within or without the city.
(6) If it shall appear to the commissioner of finance that the
allocation percentage determined in subdivision (b), (c), or (d) of this
section does not properly reflect the activity, business, income or
assets of a taxpayer within the city, the commissioner of finance shall
be authorized in his discretion to adjust it by (1) excluding one or
more of the factors therein, (2) including one or more other factors, or
(3) any other similar or different method calculated to effect a fair
and proper allocation of the income or assets reasonably attributable to
the city.
(7) 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 paragraph six of this subdivision.
(b) Allocation of entire net income. (1) If a taxpayer's entire net
income is derived from business carried on both within and without the
city, the portion thereof which is derived from business carried on
within the city shall be determined by multiplying its entire net income
by the income allocation percentage determined as follows: add the
percentages ascertained under paragraphs one, two and three of
subdivision (a) of this section, plus an additional percentage equal to
the receipts percentage ascertained under paragraph two of such
subdivision and an additional percentage equal to the deposits
percentage ascertained under paragraph three of such subdivision, and
divide the result by the number of percentages so added together.
(1-a) Notwithstanding the provisions of paragraph one of this
subdivision, each banking corporation described in paragraph nine of
subdivision (a) of section 11-640 of this part subject to the tax
imposed by this part that substantially provides management,
administrative or distribution services to an investment company, as
such terms are defined in subparagraph (G) of paragraph two of
subdivision (a) of this section, shall determine the portion of its
entire net income derived from business carried on within the city by
multiplying such income by an income allocation percentage obtained as
follows:
(A) For taxable years beginning in two thousand nine, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of eighteen percent and the percentage determined
under paragraph one of subdivision (a) of this section,
(ii) the product of forty-six percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of thirty-six percent and the percentage determined
under paragraph three of subdivision (a) of this section.
(B) For taxable years beginning in two thousand ten, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of sixteen percent and the percentage determined under
paragraph one of subdivision (a) of this section,
(ii) the product of fifty-two percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of thirty-two percent and the percentage determined
under paragraph three of subdivision (a) of this section.
(C) For taxable years beginning in two thousand eleven, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of fourteen percent and the percentage determined
under paragraph one of subdivision (a) of this section,
(ii) the product of fifty-eight percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of twenty-eight percent and the percentage
determined under paragraph three of subdivision (a) of this section.
(D) For taxable years beginning in two thousand twelve, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of twelve percent and the percentage determined under
paragraph one of subdivision (a) of this section,
(ii) the product of sixty-four percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of twenty-four percent and the percentage determined
under paragraph three of subdivision (a) of this section.
(E) For taxable years beginning in two thousand thirteen, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of ten percent and the percentage determined under
paragraph one of subdivision (a) of this section,
(ii) the product of seventy percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of twenty percent and the percentage determined
under paragraph three of subdivision (a) of this section.
(F) For taxable years beginning in two thousand fourteen, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of eight percent and the percentage determined under
subparagraph one of subdivision (a) of this section,
(ii) the product of seventy-six percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of sixteen percent and the percentage determined
under paragraph three of subdivision (a) of this section.
(G) For taxable years beginning in two thousand fifteen, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of six percent and the percentage determined under
paragraph one of subdivision (a) of this section,
(ii) the product of eighty-two percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of twelve percent and the percentage determined
under paragraph three of subdivision (a) of this section.
(H) For taxable years beginning in two thousand sixteen, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of four percent and the percentage determined under
paragraph one of subdivision (a) of this section,
(ii) the product of eighty-eight percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of eight percent and the percentage determined under
paragraph three of subdivision (a) of this section.
(I) For taxable years beginning in two thousand seventeen, the income
allocation percentage shall be determined by adding together the
following percentages:
(i) the product of two percent and the percentage determined under
paragraph one of subdivision (a) of this section,
(ii) the product of ninety-four percent and the percentage determined
under paragraph two of subdivision (a) of this section, and
(iii) the product of four percent and the percentage determined under
paragraph three of subdivision (a) of this section.
(J) For taxable years beginning after two thousand seventeen, the
income allocation percentage shall be the percentage determined under
paragraph two of subdivision (a) of this section.
(K) The commissioner shall promulgate rules necessary to implement the
provisions of this paragraph under such circumstances where any of the
percentages to be determined under paragraph one, two or three of
subdivision (a) of this section cannot be determined because the
taxpayer has no compensation, receipts or deposits within or without the
city.
(2) (A) In lieu of the modification provided for in subdivision (f) of
section 11-641 of this part, (relating to a modification for the
adjusted eligible net income of an international banking facility), a
taxpayer may, in the manner prescribed by the commissioner of finance,
elect to modify on an annual basis its income allocation percentage in
the manner described in clauses (i), (ii) and (iii) below:
(i) wages, salaries and other personal service compensation properly
attributable to the production of eligible gross income of the
taxpayer's international banking facility shall not be included in the
computation of wages, salaries and other personal service compensation
of employees within the city,
(ii) receipts properly attributable to the production of eligible
gross income of the taxpayer's international banking facility shall not
be included in the computation of receipts within the city, and
(iii) deposits from foreign persons which are properly attributable to
the production of eligible gross income of the taxpayer's international
banking facility shall not be included in the computation of deposits
maintained at branches within the city.
(B) For purposes of this paragraph, the term "eligible gross income"
refers to such term as set out in subdivision (f) of section 11-641 of
this part except that the term "foreign person" as defined in paragraph
eight of such subdivision (f) shall not include a foreign branch of the
taxpayer and in no event shall transactions between the taxpayer's
international banking facility and its foreign branches be considered.
(c) Allocation of alternative entire net income. If a taxpayer's
alternative entire net income is derived from business carried on both
within and without the city, the portion thereof which is derived from
business carried on within the city shall be determined by multiplying
its alternative entire net income by the alternative entire net income
allocation percentage determined as follows:
(1) Recompute the payroll percentage under paragraph one of
subdivision (a) of this section without giving consideration to the
phrase "eighty percent of," add to the resulting percentage the
percentages ascertained under paragraphs two and three of such
subdivision, and divide the result by the number of percentages so added
together.
(2) When an election has been made pursuant to paragraph two of
subdivision (b) of this section (relating to international banking
facilities) the taxpayer shall make the modifications described in such
paragraph for purposes of its alternative entire net income allocation
percentage.
(d) Allocation of taxable assets. If the taxpayer's taxable assets are
derived from business carried on both within and without the city, the
portion thereof which is derived from business carried on within the
city shall be determined by multiplying its taxable assets by an asset
allocation percentage determined in the same manner as the income
allocation percentage under subdivision (b) of this section is
determined when the election provided for in paragraph two of such
subdivision has been made, except that the modifications described in
clauses (i), (ii) and (iii) of subparagraph (A) of such paragraph shall
not be made.
* NB Amended Ch. 298/85 § 42, language juxtaposed per Ch. 907/85 § 14
Section 11-643¶
Section 11-643
§ 11-643 Computation of tax for taxable years ending on or before
December thirty-first, nineteen hundred seventy-three. For taxable years
ending on or before December thirty-first, nineteen hundred
seventy-three, the tax imposed by section 11-639 of this part shall be
the greater of the following computations:
(a) Basic tax. Five and sixty-three one-hundredths percent of the
taxpayer's entire net income, or the portion thereof allocated to this
city, for the taxable year or part thereof. (b) Alternative minimum tax.
If the tax under subdivision (a) is less than any of the following
amounts, the tax shall be the largest of the following amounts:
(1) Except for a savings bank and savings and loan association, one
and one-quarter mills upon each dollar of such part of the taxpayer's
issued capital stock on the last day of the taxable year, at its face
value, but if such taxpayer has stock without par value, such stock
shall be taken at its actual or market value, and not less than five
dollars per share, as may be determined by the commissioner of finance,
as the gross income of such taxpayer derived from business carried on
within the city, during such taxable year, bears to its gross income
derived from all business, both within and without the city during said
year; except that if the period covered by the return is other than
twelve months, the tax shall be prorated on the basis of the number of
months or major portions thereof included in the return. For purposes of
this paragraph, the term "gross income" shall have the same meaning as
it has in the laws of the United States relating to federal income
taxes.
(2) For a savings bank and savings and loan association, one and
forty-three one-hundredths percent of the interest or dividends credited
by it to depositors or shareholders during the taxable year, provided
that, in determining such amount, each interest or dividend credit to a
depositor or shareholder shall be deemed to be the interest or dividend
actually credited or the interest or dividend which would have been
credited if it had been computed and credited at the rate of three and
one-half percent per annum, whichever is less.
(3) Twelve and one-half dollars.
Section 11-643.1¶
Section 11-643.1
§ 11-643.1 Computation of tax for taxable years beginning on or after
January first, nineteen hundred seventy-four and ending on or before
December thirty-first, nineteen hundred seventy-four. For taxable years
beginning on or after January first, nineteen hundred seventy-four and
ending on or before December thirty-first, nineteen hundred
seventy-four, the tax imposed by section 11-639 of this part shall be
the greater of the following computations:
(a) Basic tax. Six and seven hundred fifty-six one-thousandths percent
of the taxpayer's entire net income, or the portion thereof allocated to
this city, for the taxable year, or part thereof.
(b) Alternative minimum tax. If the tax under subdivision (a) is less
than any of the following amounts, the tax shall be the largest of the
following amounts:
(1) Except for a savings bank and savings and loan association, one
and one-half mills upon each dollar of such part of the taxpayer's
issued capital stock on the last day of the taxable year, at its face
value, but if such taxpayer has stock without par value, such stock
shall be taken at its actual or market value, and not less than five
dollars per share, as may be determined by the commissioner of finance,
as the gross income of such taxpayer derived from business carried on
within the city, during such taxable year bears to its gross income
derived from all business, both within and without the city during said
year; except that if the period covered by the return is other than
twelve months, the tax shall be prorated on the basis of the number of
months or major portions thereof included in the return. For purposes of
this paragraph, the term "gross income" shall have the same meaning as
it has in the laws of the United States relating to federal income
taxes.
(2) For a savings bank and savings and loan association, one and seven
hundred sixteen one-thousandths percent of the interest or dividends
credited by it to depositors or shareholders during the taxable year,
provided that, in determining such amount, each interest or dividend
credit to a depositor or shareholder shall be deemed to be the interest
or dividend actually credited or the interest or dividend which would
have been credited if it had been computed and credited at the rate of
three and one-half percent per annum, whichever is less.
(3) Fifteen dollars.
Section 11-643.2¶
Section 11-643.2
§ 11-643.2 Computation of tax for taxable years beginning in nineteen
hundred seventy-three and ending in nineteen hundred seventy-four. For
each taxable year beginning in nineteen hundred seventy-three and ending
in nineteen hundred seventy-four, two tentative taxes shall be computed,
the first as provided in section 11-643 and the second as provided in
section 11-643.1 of this part, 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-three and the number of days in
nineteen hundred seventy-four, respectively, which fall within the
taxable year, bears to the number of days in the entire taxable year.
Section 11-643.3¶
Section 11-643.3
* § 11-643.3 ** Computation of tax for taxable years beginning on or
after January first, nineteen hundred seventy-five and before January
first, nineteen hundred eighty-five. For taxable years beginning on or
after January first, nineteen hundred seventy-five and before January
first, nineteen hundred eighty-five, the tax imposed by section 11-639
of this part shall be the greater of the following computations:
** NB Amended Ch. 298/85 § 43, language juxtaposed per Ch. 907/85 § 14
(a) Basic tax. (1) Except for a savings bank and savings and loan
association, thirteen and eight hundred twenty-three one-thousandths
percent of the taxpayer's entire net income, or the portion thereof
allocated to this city, for the taxable year, or part thereof.
(2) For a savings bank and savings and loan association, twelve and
one hundred thirty-four thousandths percent of the taxpayer's entire net
income, or the portion thereof allocated to this city, for the taxable
year, or part thereof.
(b) Alternative minimum tax. If the tax under subdivision (a) is less
than any of the following amounts, the tax shall be the largest of the
following amounts:
(1) Except for a savings bank and savings and loan association, two
and six-tenths mills upon each dollar of such part of the taxpayer's
issued capital stock on the last day of the taxable year, at its face
value, but if such taxpayer has stock without par value, such stock
shall be taken at its actual or market value, and not less than five
dollars per share, as may be determined by the commissioner of finance,
as the gross income of such taxpayer derived from business carried on
within the city during such taxable year bears to its gross income
derived from all business, both within and without the city during said
year; except that if the period covered by the return is other than
twelve months, the tax shall be prorated on the basis of the number of
months or major portions thereof included in the return. For purposes of
this paragraph, the term "gross income" shall have the same meaning as
it has in the laws of the United States relating to federal income
taxes.
(2) Except as otherwise provided in paragraph three of this
subdivision, for a savings bank and savings and loan association, two
and five hundred seventy-four one-thousandths percent of the interest or
dividends credited by it to depositors or shareholders during any
taxable year, provided that, in determining such amount, each interest
or dividend credit to a depositor or shareholder shall be deemed to be
the interest or dividend actually credited or the interest or dividend
which would have been credited if it had been computed and credited at
the rate of three and one-half percent per annum, whichever is less.
(3) (i) For a savings bank and savings and loan association, for any
quarterly accounting period in which such savings bank or savings and
loan association credits or pays dividends to its depositors or
shareholders on or after the first day of October, nineteen hundred
eighty-one but before the first day of July, nineteen hundred
eighty-six, and after such credit or payment the net worth of such
savings bank or savings and loan association is less than five percent
of the amount due depositors, one and eight hundred twenty-four
one-thousandths percent of the interest or dividends credited by it to a
depositor or shareholder during such accounting period, provided that,
in determining such amount, each interest or dividend credit to
depositors or shareholders shall be deemed to be the interest or
dividend actually credited or the interest or dividend which would have
been credited if it had been computed and credited at the rate of three
and one-half percent per annum, whichever is less. In determining the
lesser of the amount of interest or dividends actually credited to
depositors or shareholders or the amount of interest or dividends which
would have been credited if such interest or dividends had been computed
and credited at the rate of three and one-half percent per annum, the
provisions of subparagraph (ii) of this paragraph shall not be
considered.
(ii) For purposes of the computation provided for in subparagraph (i),
except where the tax computed under subparagraph (i) of this paragraph
is computed as if the interest or dividends were computed and credited
at the rate of three and one-half percent per annum, that portion of the
interest or dividends credited on or after the first day of October,
nineteen hundred eighty-one but before the first day of July, nineteen
hundred eighty-six by:
(A) a savings bank to a depositor or shareholder which is attributable
to an increase or a deemed increase in the gross earnings, surplus fund,
or net worth of the savings bank, which increase became available for
interest or dividends upon the prior written approval of the
superintendent of banks pursuant to the provisions of subdivision four
of section two hundred forty-four of the banking law; or
(B) a savings and loan association to a depositor or shareholder which
is attributable to an increase or a deemed increase in gross income,
undivided profits, surplus account or net worth of the savings and loan
association, which increase became available for interest or dividends
upon the prior written approval of the superintendent of banks pursuant
to the provisions of subdivision two of section three hundred
eighty-seven of the banking law; or
(C) a federal savings bank or a federal savings and loan association
to a depositor or shareholder, which would have required and received
prior written approval of the superintendent of banks in respect to
increases in gross income, gross earnings, undivided profits, surplus
funds, surplus accounts or net worth available for dividends pursuant to
the provisions of subdivision four of section two hundred forty-four of
the banking law and subdivision two of section three hundred
eighty-seven of the banking law, respectively, were the provisions of
sections two hundred forty-four and three hundred eighty-seven of the
banking law applicable to federal savings banks and federal savings and
loan associations shall not be considered to have been credited to
depositors or shareholders. Where the tax computed under subparagraph
(i) of this paragraph is computed as if the interest or dividends were
computed and credited at the rate of three and one-half percent per
annum, the amount of interest or dividends which shall not be considered
to have been credited to depositors or shareholders is an amount which
bears the same ratio to the interest or dividends which would have been
credited at the rate of three and one-half percent per annum as the
amount of that portion of the interest or dividends paid or credited on
or after the first day of October, nineteen hundred eighty-one but
before the first day of July, nineteen hundred eighty-six, which is
attributable to an increase or deemed increase in gross income, gross
earnings, undivided profits, surplus funds, surplus account or net worth
available for dividends pursuant to the provisions of subdivision four
of section two hundred forty-four of the banking law or subdivision two
of section three hundred eighty-seven of the banking law, bears to the
amount of interest or dividends actually credited. For purposes of this
clause, the determination of whether a federal savings bank or federal
savings and loan association would have required and received prior
written approval of the superintendent of banks shall be made by the
superintendent of banks, upon application and upon such forms as he or
she may require, by applying the provision of subdivision four of
section two hundred forty-four of the banking law, as if such provisions
were applicable to federal savings banks, and subdivision two of section
three hundred eighty-seven of the banking law, as if such provisions
were applicable to federal savings and loan associations, and the
superintendent of banks may require and examine such information as he
or she may deem necessary to make such determinations.
(4) (i) Except for a savings bank and savings and loan association,
twenty-five dollars.
(ii) For a savings bank and savings and loan association, twenty
dollars.
* NB Number supplied by the Legislative Bill Drafting Commission
Section 11-643.4¶
Section 11-643.4
§ 11-643.4 Computation of tax for taxable years beginning in nineteen
hundred seventy-four and ending in nineteen hundred seventy-five. 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 section 11-643.1 and the second as provided in
section 11-643.3 of this part, 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, which fall within the taxable year,
bears to the number of days in the entire taxable year.
Section 11-643.5¶
Section 11-643.5
§ 11-643.5 Computation of tax for taxable years beginning on or after
January first, nineteen hundred eighty-five. For taxable years beginning
on or after January first, nineteen hundred eighty-five, the tax imposed
by section 11-639 of this part shall be the greater of the following
computations:
(a) Basic tax. Nine percent of the taxpayer's entire net income, or
the portion thereof allocated to the city, for the taxable year or part
thereof.
(b) Alternative minimum tax. If the tax under subdivision (a) of this
section is less than any of the following amounts, the tax shall be the
larger of the following amounts:
(1) For taxable years beginning before two thousand eleven, except in
the case of a corporation organized under the laws of a country other
than the United States, one-tenth of a mill upon each dollar of taxable
assets, or the portion thereof allocated to the city. For taxable years
beginning after two thousand ten, except in the case of a taxpayer
described in clause (i), (ii), or (iii) below, one-tenth of a mill upon
each dollar of taxable assets, or the portion thereof allocated to the
city.
(i) In the case of a taxpayer whose net worth ratio is less than five
percent but greater than or equal to four percent and whose total assets
are comprised of thirty-three percent or more of mortgages,
one-twenty-fifth of a mill upon each dollar of taxable assets, or the
portion thereof allocated to the city.
(ii) In the case of a taxpayer whose net worth ratio is less than four
percent and whose total assets are comprised of thirty-three percent or
more of mortgages, one-fiftieth of a mill upon each dollar of taxable
assets, or the portion thereof allocated to the city.
(iii) A taxpayer (whether or not a qualified institution as defined in
subparagraph (B) of paragraph five of subsection (f) of section four
hundred six of the federal national housing act, as amended, or as
defined in paragraph two of subsection (i) of section thirteen of the
federal deposit insurance act, as amended) shall not be subject to the
provisions of this paragraph for that portion of the taxable year in
which it had outstanding net worth certificates issued in accordance
with paragraph five of subsection (f) of section four hundred six of the
federal national housing act, as amended, or issued in accordance with
subsection (i) of section thirteen of the federal deposit insurance act,
as amended.
(iv) For the purposes of this part: (A) the term "taxable assets"
shall mean the average value of total assets reduced by any amount of
money or other property received from or attributable to amounts
received from the federal deposit insurance corporation pursuant to
subsection (c) of section thirteen of the federal deposit insurance act,
as amended, or the federal savings and loan insurance corporation
pursuant to paragraph one, two, three or four of subsection (f) of
section four hundred six of the federal national housing act, as
amended. Total assets are those assets which are properly reflected on a
balance sheet the income or expenses of which are properly reflected (or
would have been properly reflected if not fully depreciated or expensed
or depreciated or expensed to a nominal amount) in the computation of
alternative entire net income for the taxable year or in the computation
of the eligible net income of the taxpayer's international banking
facility for the taxable year.
(B) The term "net worth ratio" shall mean the percentage of net worth
to assets on the last day of the taxable year. The term "net worth"
means the sum of preferred stock, common stock, surplus, capital
reserves, undivided profits, mutual capital certificates, reserve for
contingencies, reserve for loan losses and reserve for security losses
minus assets classified loss. The term "assets" means the sum of
mortgage loans, nonmortgage loans, repossessed assets, real estate held
for development or investment or resale, cash, deposits, investment
securities, fixed assets and other assets (such as financial futures,
goodwill and other intangible assets) minus assets classified loss. In
no event shall assets be reduced by reserves for losses.
(C) The term "mortgages" shall mean loans secured by real property
within or without the state, participations in and securities
collateralized by pools of residential mortgages, whether or not issued
or guaranteed by a United States government agency, and loans secured by
stock in a cooperative housing corporation. The percentage of total
assets comprised of mortgages shall be an amount equal to the ratio of
the average of the four quarterly balances of such mortgages ending
within the taxable year, to the average of the four quarterly balances
of all assets ending within the taxable year. Such quarterly balances
shall be computed in the same manner as the report of condition required
for federal deposit insurance corporation or federal savings and loan
insurance corporation purposes, whether or not such report is required.
For taxable periods of less than one year, the taxpayer shall compute
such ratio using the number of such quarterly balances ending within
such taxable period.
(2) For taxable years beginning before two thousand eleven, in the
case of a corporation organized under the laws of a country other than
the United States, (i) two and six-tenths mills upon each dollar of such
part of the taxpayer's issued capital stock on the last day of the
taxable year, at its face value, but if such taxpayer has stock without
par value, such stock shall be taken at its actual or market value, and
not less than five dollars per share, as may be determined by the
commissioner of finance, or (ii) if the taxpayer does not have issued
capital stock, two and six-tenths mills upon each dollar of such part of
the amount by which its average total assets exceeds its average total
liabilities, as the gross income of such taxpayer derived from business
carried on within the city during such taxable year bears to its gross
income derived from all business, both within and without the city
during said year; except that if the period covered by the return is
other than twelve months, the tax shall be prorated on the basis of the
number of months or major portions thereof included in the return. For
purposes of this paragraph, the term "gross income" shall have the same
meaning as it has in the laws of the United States relating to federal
income taxes.
(3) Three percent of the taxpayer's alternative entire net income, or
portion thereof allocated to the city, for the taxable year, or part
thereof.
(4) One hundred twenty-five dollars.
Section 11-643.7.¶
Section 11-643.7.
§ 11-643.7. Relocation and employment assistance credit. (a) In
addition to any other credit allowed by this part, 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 part. 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; 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 section, 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 section 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 subdivision (d) of this section, if the amount of the
credit allowable under this section 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 section shall be deducted after
the credit allowed by section 11-643.8, but prior to the deduction of
any other credit allowed by this part.
(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
section, 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 subdivision (a) of this section, 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 subdivision 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.
Section 11-643.8¶
Section 11-643.8
§ 11-643.8 Credit relating to certain distributions from partnerships.
(a) If a banking 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 banking corporation shall be allowed a credit against the
tax imposed by this part equal to the lesser of the amounts determined
in paragraphs one and two of this subdivision:
(1) The amount determined in this paragraph 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 banking 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 banking 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 banking 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 of 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 paragraph is the product of (A) the
excess of (i) the basic tax computed pursuant to subdivision (a) of
section 11-643.5 of this part, without allowance of any credits allowed
by this part, over (ii) the basic tax so computed, determined as if the
banking 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
nine, provided, however, that the amounts computed in clauses (i) and
(ii) of this paragraph shall be computed with the following
modifications:
(I) if, prior to taking into account any distributive share or
guaranteed payments from any unincorporated business, the entire net
income of the partner is less than zero, such entire net income shall be
treated as zero; and
(II) 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 paragraph shall not be less than zero.
(b) (1) Notwithstanding anything to the contrary in subdivision (a) of
this section, in the case of a banking corporation that, before the
application of this section or any other credit allowed by this part, is
liable for the basic tax computed under subdivision (a) of section
11-643.5 of this part, the credit or the sum of the credits that may be
taken by such banking corporation for a taxable year under this section
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 part, multiplied by a fraction
the numerator of which is four and the denominator of which is nine. 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 subdivision (a) of this section 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 subdivision (a) of
this section, in the case of a banking corporation that, before the
application of this section or any other credit allowed by this part, is
liable for the alternative minimum tax on alternative entire net income
under paragraph three of subdivision (b) of section 11-643.5 of this
part, 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 part, to zero. For purposes of this paragraph
each dollar of credit shall be applied so as to reduce such tax by
seventy-five cents. If the amount of credit allowed under this section
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 subdivision (a) of this
section shall be taken before taking any credit carryforward pursuant to
this subdivision 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 under this section 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 taxable assets under paragraph one, the tax
computed on the basis of issued capital stock under paragraph two or the
fixed-dollar minimum tax under paragraph four of subdivision (b) of
section 11-643.5 of this part.
(c) For banking corporations that file a report on a combined basis
pursuant to subdivision (f) of section 11-646 of this part, the credit
allowed by this section 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 paragraph one of subdivision (a) of this
section, the numerator of the fraction described in subparagraph (B) of
such paragraph 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 section 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 provisions of this part, the credit
allowable under this section shall be taken prior to the taking of any
other credit allowed by this part. Notwithstanding any other provisions
of this part, the application of this section shall not change the basis
on which the taxpayer's tax is computed under subdivision (a) or (b) of
section 11-643.5 of this part.
Section 11-643.9¶
Section 11-643.9
§ 11-643.9 Lower Manhattan relocation and employment assistance
credit. (a) In addition to any other credit allowed by this part, 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 part. 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 section 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 section, 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 section with respect to eligible
aggregate employment shares maintained with respect to eligible premises
to which the taxpayer has relocated shall be allowed for the taxable
year of the relocation and for any of the twelve succeeding taxable
years during which eligible aggregate employment shares are maintained
with respect to eligible premises; provided that the credit allowed for
the twelfth succeeding taxable year shall be calculated by multiplying
the number of eligible aggregate employment shares maintained with
respect to eligible premises in the twelfth succeeding taxable year by
the lesser of one and a fraction the numerator of which is such number
of days in the taxable year of relocation less the number of days the
taxpayer maintained employment shares in eligible premises in the
taxable year of relocation and the denominator of which is the number of
days in such twelfth succeeding taxable year during which such eligible
aggregate employment shares are maintained with respect to such
premises.
(c) Except as provided in subdivision (d) of this section, if the
amount of the credit allowable under this section 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 section, 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 section shall be deducted after
the credit allowed by section 11-643.7 of this part, but prior to the
deduction of any other credit allowed by this part.
Section 11-644¶
Section 11-644
§ 11-644 Declarations of estimated tax. (a) Requirements of
declaration. Every taxpayer subject to the tax imposed by subdivision
(a) of section 11-639 of this part shall make a declaration of its
estimated tax for the current taxable year, 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.
(b) Definition of estimated tax. The term "estimated tax" means the
amount which a taxpayer estimates to be the tax imposed by subdivision
(a) of section 11-639 of this part for the current taxable year, less
the amount which it estimates to be the sum of any credits allowable
against the tax.
(c) Time for filing declaration. A declaration of estimated tax shall
be filed on or before June fifteenth of the current taxable year in the
case of a taxpayer which reports on the basis of a calendar year, except
that if the requirements of subdivision (a) of this section are first
met:
(1) after May thirty-first and before September first of such current
taxable year, the declaration shall be filed on or before September
fifteenth, or
(2) after August thirty-first and before December first of such
current taxable year, the declaration shall be filed on or before
December fifteenth.
(d) Amendments of declaration. A taxpayer may amend a declaration
under regulations of the commissioner of finance.
(e) Return as declaration. If, on or before February fifteenth of the
succeeding year in the case of a taxpayer whose taxable year is a
calendar year, a taxpayer files its return 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 return:
(1) such return shall be considered as its declaration if no
declaration was required to be filed during the taxable year for which
the tax was imposed, but is otherwise required to be filed on or before
December fifteenth pursuant to paragraph two of subdivision (c) of this
section, and
(2) such return shall be considered as the amendment permitted by
subdivision (d) of this section to be filed on or before December
fifteenth if the tax shown on the return is greater than the estimated
tax shown on a declaration previously made.
(f) Fiscal year. This section shall apply to taxable years of twelve
months other than a calendar year by the substitutions of the months of
such fiscal year for the corresponding months specified in this section.
(g) Short taxable period. If the taxable period for which a tax is
imposed by subdivision (a) of section 11-639 of this part is less than
twelve months, every taxpayer required to make a declaration of
estimated tax for such taxable period shall make such a declaration in
accordance with regulations of the commissioner of finance.
(h) Extension of time. 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 the commissioner may require.
Section 11-645¶
Section 11-645
§ 11-645 Payments of estimated tax. (a) Every taxpayer subject to the
tax imposed by section 11-639 of this part shall pay an amount equal to
twenty-five percent of the preceding year's tax, if such preceding
year's tax exceeded one thousand dollars. Such amount shall be paid with
the return required to be filed for the preceding taxable year or with
an application for the extension of the time for filing such return.
Provided, however, that for the first taxable year or period commencing
on or after January first, nineteen hundred seventy-three, the
installment required by this subdivision shall be paid with the return
required to be filed for the tax imposed pursuant to part one or two of
this subchapter three computed on the basis of net income for the
calendar year nineteen hundred seventy-two, or under the minimum tax
provisions of section 11-612 of this subchapter.
(b) Other installments. The estimated tax for each taxable year with
respect to which a declaration of estimated tax is required to be filed
under this part shall be paid, in the case of a taxpayer which reports
on the basis of a calendar year, as follows:
(1) 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 taxable year pursuant to subdivision (a) of this
section, 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.
(2) If the declaration is filed after June fifteenth and not after
September fifteenth of such taxable year, and is not required to be
filed on or before June fifteenth of such year, the estimated tax shown
on such declaration, after applying thereto the amount, if any, paid
during the same taxable year pursuant to subdivision (a) of this
section, 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.
(3) If the declaration is filed after September fifteenth of such
taxable year, and is not required to be filed on or before September
fifteenth of such year, the estimated tax shown on such declaration,
after applying thereto the amount, if any, paid in respect of such year
pursuant to subdivision (a) of this section, shall be paid in full at
the time of the filing of the declaration.
(4) If the declaration is filed after the time prescribed therefor, or
after the expiration of any extension of time therefor, paragraphs two
and three 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.
(c) Amendments of declarations. If any amendment of a declaration is
filed, the remaining installments, if any, shall be ratably increased or
decreased (as the case may be) to reflect any increase or decrease in
the estimated tax by reason of such amendment, and if any amendment is
made after September fifteenth of the taxable year, any increase in the
estimated tax by reason thereof shall be paid at the time of making such
amendment.
(d) Application of installments based on the preceding year's tax. Any
amount paid pursuant to subdivision (a) shall be applied as a first
installment against the estimated tax of the taxpayer for the taxable
year shown on the declaration required to be filed pursuant to section
11-644, or if no declaration of estimated tax is required to be filed by
the taxpayer pursuant to such section, any such amount shall be
considered a payment on account of the tax shown on the return required
to be filed by the taxpayer for such taxable year.
(e) Interest on certain installments based on the preceding year's
tax. 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 (a) of this section exceeds the tax shown on the
return required to be filed by the taxpayer for the taxable year 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 six 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 taxable year, provided, however, that
no interest shall be allowed or paid under this subdivision if the
amount thereof is less than one dollar.
(f) The preceding year's tax defined. As used in this section, "the
preceding year's tax" means the tax imposed upon the taxpayer by
subdivision (a) of section 11-639 of this part for the preceding taxable
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 return required to be filed for such preceding taxable year,
the amount properly estimated pursuant to paragraph one of subdivision b
of section 11-647 of this part as the tax imposed upon the taxpayer for
such taxable year. Provided, however, that for the first taxable year or
period commencing on or after January first, nineteen hundred
seventy-three, the term "preceding year's tax" as used in this section
shall mean the tax imposed upon the taxpayer pursuant to part one or two
of this subchapter three which was computed on the basis of net income
for the calendar year nineteen hundred seventy-two, or under the minimum
tax provisions of subdivision two of section 11-612 of this subchapter,
or for purposes of computing the first installment of estimated tax for
such first taxable year or period when an application has been filed for
an extension of the time for filing the return required to be filed for
the tax imposed pursuant to part one or two of this subchapter three
which was computed on the basis of net income for the calendar year
nineteen hundred seventy-two, or under the minimum tax provisions of
section 11-612 of this subchapter, the amount of tax properly estimated
for purposes of such part one or two pursuant to section 11-635 of this
subchapter.
(g) Application to short taxable period. This section shall apply to a
taxable period of less than twelve months in accordance with regulations
of the commissioner of finance.
(h) Fiscal year. The provisions of this section shall apply to taxable
years 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.
(i) Extension of time. 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.
(j) Payment of installments in advance. A taxpayer may elect to pay
any installment of estimated tax prior to the date prescribed in this
section for payment thereof.
Section 11-646¶
Section 11-646
§ 11-646 Returns. (a) Every taxpayer shall annually on or before the
fifteenth day of the third month following the close of each of its
taxable years transmit to the commissioner of finance a return in a form
prescribed by the commissioner setting forth such information as the
commissioner of finance may prescribe and every taxpayer which ceases to
exercise its franchise in the city or to be subject to the tax imposed
by this part shall transmit to the commissioner of finance a return on
the date of such cessation or at such other time as the commissioner of
finance may require covering each year or period for which no return was
therefore filed.
(b) Every taxpayer shall also transmit such other returns and such
facts and information as the commissioner of finance may require in the
administration of this part.
* (c) The commissioner of finance may grant a reasonable extension of
time for filing returns whenever good cause exists. An automatic
extension of six months for the filing of its annual return shall be
allowed any taxpayer, if within the time prescribed by subdivision (a),
such taxpayer files with the commissioner of finance an application for
extension in such form as said commissioner of finance 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 § 2, language juxtaposed per Ch. 907/85 § 14
(d) Every return shall have annexed thereto a certification by the
president, vice president, treasurer, assistant treasurer, chief
accounting officer or any other officer of the taxpayer duly authorized
so to act to the effect that the statements contained therein are true.
The fact that an individual's name is signed on a certification of the
return shall be prima facie evidence that such individual is authorized
to sign and certify the return on behalf of the corporation.
(e) 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 that 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 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 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 return under this subchapter
for such year) after such execution or 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. The allowance of a tentative carryback adjustment based upon
a 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
(or one hundred twenty days, in the case of a taxpayer making a combined
return under this subchapter for such year) thereafter an amended return
with the commissioner of finance which shall contain such information as
the commissioner shall require.
(f) * (1) For purposes of this subdivision, the term "bank holding
company" means any corporation subject to article three-A of the banking
law, or registered under the federal bank holding company act of
nineteen hundred fifty-six, as amended, or registered as a savings and
loan holding company (but excluding a diversified savings and loan
holding company) under the federal national housing act, as amended.
* NB Amended Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
(2) * (i) Any banking corporation or bank holding company which is
doing business in the city in a corporate or organized capacity, and
(A) which owns or controls, directly or indirectly, eighty percent or
more of the voting stock of one or more banking corporations or bank
holding companies, or
(B) whose voting stock is eighty percent or more owned or controlled,
directly or indirectly, by a banking corporation or a bank holding
company,
shall make a return on a combined basis under this part covering itself
and such corporations described in clause (A) or (B) and shall set forth
such information as the commissioner of finance may require unless the
taxpayer or the commissioner of finance shows that the inclusion of such
a corporation in the combined return fails to properly reflect the tax
liability of such corporation under this part. Provided, however, that
no banking corporation or bank holding company not a taxpayer shall be
subject to the requirements of this subparagraph unless the commissioner
of finance deems that the application of such requirements is necessary
in order to properly reflect the tax liability under this part, because
of intercompany transactions or some agreement, understanding,
arrangement or transaction of the type referred to in subdivision (g) of
this section.
* NB Amended Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
* (ii) In the discretion of the commissioner of finance, any banking
corporation or bank holding company which is doing business in the city
in a corporate or organized capacity, and
(A) which owns or controls, directly or indirectly, sixty-five percent
or more of the voting stock of one or more banking corporations or bank
holding companies, or
(B) whose voting stock is sixty-five percent or more owned or
controlled, directly or indirectly, by a banking corporation or a bank
holding company,
may be required or permitted to make a return on a combined basis under
this part covering itself and such corporations described in clause (A)
or (B) and shall set forth such information as the commissioner of
finance may require; provided, however, that no combined return shall be
required or permitted unless the commissioner of finance deems such
report necessary in order to properly reflect the tax liability under
this part of any one or more of such banking corporations or bank
holding companies.
* NB Amended Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
* (iii) In the discretion of the commissioner of finance, banking
corporations or bank holding companies which are each sixty-five percent
or more owned or controlled, directly or indirectly, by the same
interest may be permitted or required to make a return on a combined
basis under this part and shall set forth such information as the
commissioner of finance may require, if at least one such banking
corporation or bank holding company is doing business in the city in a
corporate or organized capacity. No combined return shall be required or
permitted unless the commissioner of finance deems such report necessary
in order to properly reflect the tax liability under this part of any
one or more of such banking corporations or bank holding companies.
* NB Amended Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
* (iv) (A) Notwithstanding any provision of this paragraph, any bank
holding company exercising its corporate franchise or doing business in
the city may make a return on a combined basis without seeking the
permission of the commissioner with any banking corporation exercising
its corporate franchise or doing business in the city in a corporate or
organized capacity sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by such bank holding
company, for the first taxable year beginning on or after January first,
two thousand and before January first, two thousand fifteen during which
such bank holding company registers for the first time under the federal
bank holding company act, as amended, and also elects to be a financial
holding company. In addition, for each subsequent taxable year beginning
after January first, two thousand and before January first, two thousand
fifteen, any such bank holding company may file on a combined basis
without seeking the permission of the commissioner with any banking
corporation that is exercising its corporate franchise or doing business
in the city and sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by such bank holding
company if either such banking corporation is exercising its corporate
franchise or doing business in the city in a corporate or organized
capacity for the first time during such subsequent taxable year, or
sixty-five percent or more of the voting stock of such banking
corporation is owned or controlled, directly or indirectly, by such bank
holding company for the first time during such subsequent taxable year.
Provided however, for each subsequent taxable year beginning after
January first, two thousand and before January first, two thousand
fifteen, a banking corporation described in either of the two preceding
sentences which filed on a combined basis with any such bank holding
company in a previous taxable year, must continue to file on a combined
basis with such bank holding company if such banking corporation, during
such subsequent taxable year, continues to exercise its corporate
franchise or do business in the city in a corporate or organized
capacity and sixty-five percent or more of such banking corporation's
voting stock continues to be owned or controlled, directly or
indirectly, by such bank holding company, unless the permission of the
commissioner has been obtained to file on a separate basis for such
subsequent taxable year. Provided further, however, for each subsequent
taxable year beginning after January first, two thousand and before
January first, two thousand fifteen, a banking corporation described in
either of the first two sentences of this clause which did not file on a
combined basis with any such bank holding company in a previous taxable
year, may not file on a combined basis with such bank holding company
during any such subsequent taxable year unless the permission of the
commissioner has been obtained to file on a combined basis for such
subsequent taxable year.
(B) Notwithstanding any provision of this paragraph other than clause
(A) of this subparagraph, the commissioner may not require a bank
holding company which, during a taxable year beginning on or after
January first, two thousand and before January first, two thousand
fifteen, registers for the first time during such taxable year under the
federal bank holding company act, as amended, and also elects to be a
financial holding company, to make a return on a combined basis for any
taxable year beginning on or after January first, two thousand and
before January first, two thousand fifteen with a banking corporation
sixty-five percent or more of whose voting stock is owned or controlled,
directly or indirectly, by such bank holding company.
* NB There are 2 sbù (iv)'s
* (iv)(A) 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 return under this chapter 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.
(B) A captive REIT or a captive RIC must be included in a combined
return with the banking corporation or bank holding company that
directly owns or controls over fifty percent of the voting stock of the
captive REIT or captive RIC if that banking corporation or bank holding
company is subject to tax or required to be included in a combined
return under this subchapter.
(C) If over fifty percent of the voting stock of a captive REIT or
captive RIC is not directly owned or controlled by a banking corporation
or bank holding company that is subject to tax or required to be
included in a combined return under this subchapter, then the captive
REIT or captive RIC must be included in a combined return 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 a banking corporation or bank holding
company that is subject to tax or otherwise required to be included in a
combined return under this subchapter, then the captive REIT or captive
RIC must be included in a combined return under this subchapter.
(D) If the corporation which directly owns or controls the voting
stock of the captive REIT or captive RIC is described in subparagraph
(ii) of paragraph four of this subdivision as a corporation not
permitted to make a combined return, then the provisions in clause (C)
of this subparagraph must be applied to determine the corporation in
whose combined return the captive REIT or captive RIC should be
included. If, under clause (C) of this subparagraph, the corporation
that is the closest controlling stockholder of the captive REIT or
captive RIC is described in subparagraph (ii) or (iv) of paragraph four
of this subdivision as a corporation not permitted to make a combined
return, 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.
(E) 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 any combined return required to be made
by the captive REIT that owns its stock.
(F) If a captive REIT or a captive RIC is required under this
subparagraph to be included in a combined return with another
corporation, and that other corporation is required to be included in a
combined return with another corporation under other provisions of this
subdivision, the captive REIT or captive RIC must be included in that
combined return with those corporations.
(G) If the banking corporation or bank holding company that directly
or indirectly owns or controls over fifty percent of the voting stock of
the captive REIT or captive RIC and is the closest controlling
stockholder of the captive REIT or captive RIC is a member of an
affiliated group (1) that does not include any corporation that is
engaged in a business that a subsidiary of a bank holding company would
not be permitted to engage in, unless such business is de minimis, and
(2) whose members own assets the combined average value of which does
not exceed eight billion dollars, then the captive REIT or captive RIC
must not be included in a combined return under this subchapter. In that
instance, the captive REIT or captive RIC is subject to the provisions
of subdivision seven or eight of section 11-603 of this chapter. 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.
* NB There are 2 sbù (iv)'s
(v) For taxable years beginning on or after January first two thousand
eleven, a banking corporation doing business in the city solely because
it meets one or more of the tests in subparagraphs (i) through (v) of
paragraph one of subdivision (c) of section 11-639 of this chapter
(referred to in this subparagraph as the "credit card bank") will not be
included in a combined return pursuant to subparagraph (i) of this
paragraph with another banking corporation or bank holding company which
is doing business in the city unless the credit card bank or the
commissioner shows that the inclusion of the credit card bank in the
combined return is necessary to properly reflect the tax liability of
the credit card bank, the banking corporation or bank holding company
under this subchapter. However, any banking corporation that meets one
or more of the tests in subparagraphs (i) through (v) of paragraph one
of subsection (c) of section 11-639 of this chapter and was included in
a combined return for its last taxable year beginning before January
first, two thousand eleven may continue to be included in a combined
return for future taxable years, provided that once that banking
corporation has been included in a combined return for any taxable year
beginning on or after January first, two thousand eleven, it must
continue to be included in a combined return until it obtains the
consent of the commissioner to cease being included in a combined return
because the combined return no longer properly reflects the tax
liability under this subchapter of any of the corporations included in
the combined return. Further, the credit card bank will be included in a
combined return with (A) any banking corporation not subject to tax
under this subchapter sixty-five percent or more of whose voting stock
is owned or controlled, directly or indirectly, by the credit card bank,
or (B) any banking corporation or bank holding company not subject to
tax under this subchapter which owns or controls, directly or
indirectly, sixty-five percent or more of the voting stock of the credit
card bank, or (C) any banking corporation not subject to tax under this
subchapter sixty-five percent or more of the voting stock of which is
owned or controlled, directly or indirectly, by the same corporation or
corporations that own or control, directly or indirectly, sixty-five
percent or more of the voting stock of the credit card bank, if the
corporation or corporations described in clauses (A), (B) and (C) of
this subparagraph provide services for or support to the credit card
bank's operations, unless the credit card bank or the commissioner shows
that the inclusion of any of those corporations in the combined return
fails to properly reflect the tax liability of the credit card bank. For
purposes of this subparagraph, services for or support to the credit
card bank's operations include such activities as billing, credit
investigation and reporting, marketing, research, advertising, mailing,
customer service, information technology, lending and financing
services, and communications services, but will not include accounting,
legal or personnel services.
(3) (i) In the case of a combined return, the tax shall be measured by
the combined entire net income, combined alternative entire net income
or combined assets of all the corporations included in the return,
including any captive REIT or captive RIC. The allocation percentage
shall be computed based on the combined factors with respect to all the
corporations included in the combined return. In computing combined
entire net income and alternative entire net income, intercorporate
dividends and all other intercorporate transactions shall be eliminated,
and in computing combined assets, intercorporate stockholdings and
intercorporate bills, notes and accounts receivable and payable and
other intercorporate indebtedness shall be eliminated.
(ii) In the case of a captive REIT required under this subdivision to
be included in a combined return, "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 that code, subject to the modifications
required by section 11-641 of this chapter. In the case of a captive RIC
required under this subdivision to be included in a combined return,
"entire net income" 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 that code, subject
to the modifications required by section 11-641 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 be limited to twenty-five percent for taxable years beginning
on or after January first, two thousand nine and before January first,
two thousand eleven and shall not be allowed for taxable years beginning
on or after January first, two thousand eleven. 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.
* (4) (i) In no event shall an item of income or expense of a
corporation organized under the laws of a country other than the United
States be included in a combined return unless it is includible in
entire net income or alternative entire net income, as the case may be,
nor shall an asset of such a corporation be included in a combined
return unless it is included in taxable assets.
(ii) In no event shall a corporation organized under the laws of the
United States, this state or any other state, be included in a combined
return with a corporation organized under the laws of a country other
than the United States.
(iii) In no event shall a corporation which has made an election
pursuant to subdivision (d) of section 11-640 of this part to be subject
to the tax imposed by subchapter two of this chapter be included in a
combined return for those taxable years for which it is subject to the
tax imposed by subchapter two of this chapter.
* NB Amended Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
* (5) Tax liability under this part may be deemed to be improperly
reflected because of intercompany transactions or some agreement,
understanding, arrangement or transaction referred to in subdivision (g)
of this section.
* NB Added Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
* (g) 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 assets of the taxpayer within the city is improperly
or inaccurately reflected, the commissioner of finance is authorized and
empowered, in his discretion and in such manner as he may determine, to
adjust items of income or deductions in computing entire net income or
alternative entire net income and to adjust assets, and to adjust wages,
salaries and other personal service compensation, receipts or deposits
in computing any allocation percentage, provided only that entire net
income or alternative entire net income be adjusted accordingly and that
any asset directly traceable to the elimination of any receipt be
eliminated from assets so as to accurately determine the tax. If
however, in the determination of the commissioner of finance, such
adjustments do not, or cannot effectively provide for the accurate
determination of the tax, the commissioner of finance shall be
authorized to require the filing of a combined report by the taxpayer
and any such other corporations. Where (1) 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 (2) any taxpayer enters into any transaction with
another corporation on such terms as to create an improper loss or net
income, the commissioner of finance may include in the entire net income
or alternative 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.
* NB Added Ch. 298/85 § 45, language juxtaposed per Ch. 907/85 § 14
Section 11-647¶
Section 11-647
§ 11-647 Payment of tax. (a) To the extent the tax imposed for section
11-639 of this part shall not have been previously paid pursuant to
section 11-645:
(1) such tax, or the balance thereof, shall be payable to the
commissioner of finance in full at the time its return is required to be
filed, and
(2) such tax, or the balance thereof, imposed on any taxpayer which
ceased to exercise its franchise or to be subject to the tax imposed by
this part shall be payable to the commissioner of finance at the time
the return is required to be filed, provided such tax of a domestic
corporation which continues to possess its franchise shall be subject to
adjustment as the circumstances may require; all other taxes of any such
taxpayer, which pursuant to the foregoing provisions of this subdivision
would otherwise be payable subsequent to the time such return is
required to be filed, shall nevertheless be payable at such time.
(b) If the taxpayer, within the time prescribed by subdivision (c) of
section 11-646 of this part, shall have applied for an automatic
extension of time to file its annual return and shall have paid to the
commissioner of finance on or before the date of such application is
filed an amount properly estimated as provided by said subdivision 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 portion
thereof payable on or before the date the return was required to be
filed, exceeds the amount so paid. For the purposes of the preceding
sentence:
(1) an amount so paid shall be deemed properly estimated if it is
either: (i) not less than ninety per cent of the tax as finally
determined, or (ii) not less than the tax shown on the taxpayer's return
for the preceding taxable year, if such preceding year was a taxable
year of twelve months; and
(2) the time when a return is required to be filed shall be determined
without regard to any extension of time for filing such return.
(c) The commissioner of finance may grant a reasonable extension of
time for payment of any tax imposed by this part under such conditions
as the commissioner deems just and proper.