New York Laws
Article 9-A - Franchise Tax on Business Corporations
210-A - Apportionment.

(b) Receipts from sales of electricity delivered to points within the
state shall be included in the numerator of the apportionment fraction.
Receipts from sales of electricity delivered to points within and
without the state shall be included in the denominator of the
apportionment fraction.
(c) Receipts from sales of tangible personal property and electricity
that are traded as commodities, as the term "commodity" is defined in
section 475 of the internal revenue code, are included in the
apportionment fraction in accordance with clause (I) of subparagraph two
of paragraph (a) of subdivision five of this section.
(d) Net gains (not less than zero) from the sales of real property
located within the state shall be included in the numerator of the
apportionment fraction. Net gains (not less than zero) from the sales of
real property located within and without the state shall be included in
the denominator of the apportionment fraction.
3. Rentals and royalties. (a) Receipts from rentals of real and
tangible personal property located within the state are included in the
numerator of the apportionment fraction. Receipts from rentals of real
and tangible personal property located within and without the state
shall be included in the denominator of the apportionment fraction.
(b) Receipts of royalties from the use of patents, copyrights,
trademarks, and similar intangible personal property within the state
are included in the numerator of the apportionment fraction. Receipts of
royalties from the use of patents, copyrights, trademarks and similar
intangibles within and without the state are included in the denominator
of the apportionment fraction. A patent, copyright, trademark or similar
intangible property is used in the state to the extent that the
activities thereunder are carried on in the state.
(c) Receipts from the sales of rights for closed-circuit and cable
television transmissions of an event (other than events occurring on a
regularly scheduled basis) taking place within the state as a result of
the rendition of services by employees of the corporation, as athletes,
entertainers or performing artists are included in the numerator of the
apportionment fraction to the extent that such receipts are attributable
to such transmissions received or exhibited within the state. Receipts
from all sales of rights for closed-circuit and cable television

transmissions of an event are included in the denominator of the
apportionment fraction.
4. Digital products. (a) For purposes of determining the apportionment
fraction under this section, the term "digital product" means any
property or service, or combination thereof, of whatever nature
delivered to the purchaser through the use of wire, cable, fiber-optic,
laser, microwave, radio wave, satellite or similar successor media, or
any combination thereof. Digital product includes, but is not limited
to, an audio work, audiovisual work, visual work, book or literary work,
graphic work, game, information or entertainment service, storage of
digital products and computer software by whatever means delivered. The
term "delivered to" includes furnished or provided to or accessed by. A
digital product does not include legal, medical, accounting,
architectural, research, analytical, engineering or consulting services
provided by the taxpayer.
(b) Receipts from the sale of, licence to use, or granting of remote
access to digital products within the state, determined according to the
hierarchy of methods set forth in subparagraphs one through four of
paragraph (c) of this subdivision, shall be included in the numerator of
the apportionment fraction. Receipts from the sale of, license to use,
or granting of remote access to digital products within and without the
state shall be included in the denominator of the apportionment
fraction. The taxpayer must exercise due diligence under each method
described in paragraph (c) of this subdivision before rejecting it and
proceeding to the next method in the hierarchy, and must base its
determination on information known to the taxpayer or information that
would be known to the taxpayer upon reasonable inquiry. If the receipt
for a digital product is comprised of a combination of property and
services, it cannot be divided into separate components and is
considered to be one receipt regardless of whether it is separately
stated for billing purposes. The entire receipt must be allocated by
this hierarchy.
(c) Hierarchy of sourcing methods. (1) The customer's primary use
location of the digital product;
(2) The location where the digital product is received by the
customer, or is received by a person designated for receipt by the
customer;
(3) The apportionment fraction determined pursuant to this subdivision
for the preceding taxable year for such digital product; or
(4) The apportionment fraction in the current taxable year for those
digital products that can be sourced using the hierarchy of sourcing
methods in subparagraphs one and two of this paragraph.
5. Financial transactions. (a) Financial instruments. A financial
instrument is a "nonqualified financial instrument" if it is not a
qualified financial instrument. A qualified financial instrument means a
financial instrument that is of a type described in any of clauses (A),
(B), (C), (D), (G), (H) or (I) of subparagraph two of this paragraph and
that has been marked to market in the taxable year by the taxpayer under
section 475 or section 1256 of the internal revenue code. Further, if
the taxpayer has in the taxable year marked to market a financial
instrument of the type described in any of the clauses (A), (B), (C),
(D), (G), (H) or (I) of subparagraph two of this paragraph, then any
financial instrument within that type described in the above specified
clause or clauses that has not been marked to market by the taxpayer
under section 475 or section 1256 of the internal revenue code is a
qualified financial instrument in the taxable year. Notwithstanding the
two preceding sentences, (i) a loan secured by real property shall not
be a qualified financial instrument, (ii) if the only loans that are

marked to market by the taxpayer under section 475 or section 1256 of
the internal revenue code are loans secured by real property, then no
loans shall be qualified financial instruments, (iii) stock that is
investment capital as defined in paragraph (a) of subdivision five of
section two hundred eight of this article shall not be a qualified
financial instrument, and (iv) stock that generates other exempt income
as defined in subdivision six-a of section two hundred eight of this
article and that is not marked to market under section 475 or section
1256 of the internal revenue code shall not constitute a qualified
financial instrument with respect to the income from that stock that is
described in such subdivision six-a. If a corporation is included in a
combined report, the definition of qualified financial instrument shall
be determined on a combined basis. In the case of a RIC or a REIT that
is not a captive RIC or a captive REIT, a qualified financial instrument
means a financial instrument that is of a type described in any of
clauses (A), (B), (C), (D), (G), (H) or (I) of subparagraph two of this
paragraph, other than (i) a loan secured by real property, (ii) stock
that is investment capital as defined in paragraph (a) of subdivision
five of section two hundred eight of this article, and (iii) stock that
generates other exempt income as defined in subdivision six-a of section
two hundred eight of this article with respect to the income from that
stock that is described in such subdivision six-a.
(1) Fixed percentage method for qualified financial instruments. In
determining the inclusion of receipts and net gains from qualified
financial instruments in the apportionment fraction, taxpayers may elect
to use the fixed percentage method described in this subparagraph for
qualified financial instruments. The election is irrevocable, applies to
all qualified financial instruments, and must be made on an annual basis
on the taxpayer's original, timely filed return, determined with regard
to extensions of time for filing. If the taxpayer elects the fixed
percentage method, then all income, gain or loss, including marked to
market net gains as defined in clause (J) of subparagraph two of this
paragraph, from qualified financial instruments constitutes business
income, gain or loss. If the taxpayer does not elect to use the fixed
percentage method, then receipts and net gains are included in the
apportionment fraction in accordance with the customer sourcing method
described in subparagraph two of this paragraph. Under the fixed
percentage method, eight percent of all net income (not less than zero)
from qualified financial instruments is included in the numerator of the
apportionment fraction. All net income (not less than zero) from
qualified financial instruments is included in the denominator of the
apportionment fraction.
(2) Customer sourcing method. Receipts and net gains from qualified
financial instruments, in cases where the taxpayer did not elect to use
the fixed percentage method described in subparagraph one of this
paragraph, and from nonqualified financial instruments are included in
the apportionment fraction in accordance with this subparagraph. For
purposes of this paragraph, an individual is deemed to be located in the
state if his or her billing address is in the state. A business entity
is deemed to be located in the state if its commercial domicile is
located in the state.
(A) Loans. (i) Receipts constituting interest from loans secured by
real property located within the state shall be included in the
numerator of the apportionment fraction. Receipts constituting interest
from loans secured by real property located within and without the state
shall be included in the denominator of the apportionment fraction.
(ii) Receipts constituting interest from loans not secured by real
property shall be included in the numerator of the apportionment

fraction if the borrower is located in the state. Receipts constituting
interest from loans not secured by real property, whether the borrower
is located within or without the state, shall be included in the
denominator of the apportionment fraction.
(iii) Net gains (not less than zero) from sales of loans secured by
real property are included in the numerator of the apportionment
fraction as provided in this subclause. The amount of net gains from the
sale of loans secured by real property included in the numerator of the
apportionment fraction is determined by multiplying the net gains by a
fraction the numerator of which is the amount of gross proceeds from
sales of loans secured by real property located within the state and the
denominator of which is the gross proceeds from sales of loans secured
by real property within and without the state. Gross proceeds shall be
determined after the deduction of any cost incurred to acquire the loans
but shall not be less than zero. Net gains (not less than zero) from
sales of loans secured by real property within and without the state are
included in the denominator of the apportionment fraction.
(iv) Net gains (not less than zero) from sales of loans not secured by
real property are included in the numerator of the apportionment
fraction as provided in this subclause. The amount of net gains from the
sale of loans not secured by real property included in the numerator of
the apportionment fraction is determined by multiplying the net gains by
a fraction, the numerator of which is the amount of gross proceeds from
sales of loans not secured by real property to purchasers located within
the state and the denominator of which is the amount of gross proceeds
from sales of loans not secured by real property to purchasers located
within and without the state. Gross proceeds shall be determined after
the deduction of any cost incurred to acquire the loans but shall not be
less than zero. Net gains (not less than zero) from sales of loans not
secured by real property are included in the denominator of the
apportionment fraction.
(v) For purposes of this subdivision, a loan is secured by real
property if fifty percent or more of the value of the collateral used to
secure the loan, when valued at fair market value as of the time the
loan was entered into, consists of real property.
(B) Federal, state, and municipal debt. Receipts constituting interest
and net gains from sales of debt instruments issued by the United
States, any state, or political subdivision of a state shall not be
included in the numerator of the apportionment fraction. Receipts
constituting interest and net gains (not less than zero) from sales of
debt instruments issued by the United States and the state of New York
or its political subdivisions shall be included in the denominator of
the apportionment fraction. Fifty percent of the receipts constituting
interest and net gains (not less than zero) from sales of debt
instruments issued by other states or their political subdivisions shall
be included in the denominator of the apportionment fraction.
(C) Asset backed securities and other government agency debt. Eight
percent of the interest income from asset backed securities or other
securities issued by government agencies, including but not limited to
securities issued by the Government National Mortgage Association
(GNMA), the Federal National Mortgage Association (FNMA), the Federal
Home Loan Mortgage Corporation (FHLMC), or the Small Business
Administration, or asset backed securities issued by other entities
shall be included in the numerator of the apportionment fraction. Eight
percent of the net gains (not less than zero) from (i) sales of asset
backed securities or other securities issued by government agencies,
including but not limited to securities issued by GNMA, FNMA, or FHLMC,
the Small Business Administration, or (ii) sales of other asset backed

securities that are sold through a registered securities broker or
dealer or through a licensed exchange, shall be included in the
numerator of the apportionment fraction. The amount of net gains (not
less than zero) from sales of other asset backed securities not
referenced in subclause (i) or (ii) of this clause included in the
numerator of the apportionment fraction is determined by multiplying
such net gains by a fraction, the numerator of which is the amount of
gross proceeds from such sales to purchasers located in the state and
the denominator of which is the amount of gross proceeds from such sales
to purchasers located within and without the state. Receipts
constituting interest from asset backed securities and other securities
referenced in this clause and net gains (not less than zero) from sales
of asset backed securities and other securities referenced in this
clause are included in the denominator of the apportionment fraction.
Gross proceeds shall be determined after the deduction of any cost to
acquire the securities but shall not be less than zero.
(D) Corporate bonds. Receipts constituting interest from corporate
bonds are included in the numerator of the apportionment fraction if the
commercial domicile of the issuing corporation is in the state. Eight
percent of the net gains (not less than zero) from sales of corporate
bonds sold through a registered securities broker or dealer or through a
licensed exchange is included in the numerator of the apportionment
fraction. The amount of net gains (not less than zero) from other sales
of corporate bonds included in the numerator of the apportionment
fraction is determined by multiplying such net gains by a fraction, the
numerator of which is the amount of gross proceeds from such sales to
purchasers located in the state and the denominator of which is the
amount of gross proceeds from sales to purchasers located within and
without the state. Receipts constituting interest from corporate bonds,
whether the issuing corporation's commercial domicile is within or
without the state, and net gains (not less than zero) from sales of
corporate bonds to purchasers within and without the state are included
in the denominator of the apportionment fraction. Gross proceeds shall
be determined after the deduction of any cost to acquire the bonds but
shall not be less than zero.
(E) Reverse repurchase agreements and securities borrowing agreements.
Eight percent of net interest income (not less than zero) from reverse
repurchase agreements and securities borrowing agreements shall be
included in the numerator of the apportionment fraction. Net interest
income (not less than zero) from reverse repurchase agreements and
securities borrowing agreements is included in the denominator of the
apportionment fraction. Net interest income from reverse repurchase
agreements and securities borrowing agreements is determined for
purposes of this subdivision after the deduction of the interest expense
from the taxpayer's repurchase agreements and securities lending
agreements but cannot be less than zero. For this calculation, the
amount of such interest expense is the interest expense associated with
the sum of the value of the taxpayer's repurchase agreements where it is
the seller/borrower plus the value of the taxpayer's securities lending
agreements where it is the securities lender, provided such sum is
limited to the sum of the value of the taxpayer's reverse repurchase
agreements where it is the purchaser/lender plus the value of the
taxpayer's securities lending agreements where it is the securities
borrower.
(F) Federal funds. Eight percent of the net interest (not less than
zero) from federal funds is included in the numerator of the
apportionment fraction. The net interest (not less than zero) from
federal funds is included in the denominator of the apportionment

fraction. Net interest from federal funds is determined after deduction
of interest expense from federal funds.
(G) Dividends and net gains from sales of stock or partnership
interests. Dividends from stock, net gains (not less than zero) from
sales of stock and net gains (not less than zero) from the sale of
partnership interests are not included in either the numerator or
denominator of the apportionment fraction unless the commissioner
determines pursuant to subdivision eleven of this section that inclusion
of such dividends and net gains (not less than zero) is necessary to
properly reflect the business income or capital of the taxpayer.
(H) Other financial instruments. (i) Receipts constituting interest
from other financial instruments shall be included in the numerator of
the apportionment fraction if the payor is located in the state.
Receipts constituting interest from other financial instruments, whether
the payor is within or without the state, are included in the
denominator of the apportionment fraction.
(ii) Net gains (not less than zero) from sales of other financial
instruments and other income (not less than zero) from other financial
instruments where the purchaser or payor is located in the state are
included in the numerator of the apportionment fraction, provided that,
if the purchaser or payor is a registered securities broker or dealer or
the transaction is made through a licensed exchange, then eight percent
of the net gains (not less than zero) or other income (not less than
zero) is included in the numerator of the apportionment fraction. Net
gains (not less than zero) from sales of other financial instruments and
other income (not less than zero) from other financial instruments are
included in the denominator of the apportionment fraction.
(I) Physical commodities. Net income (not less than zero) from sales
of physical commodities are included in the numerator of the
apportionment fraction as provided in this clause. The amount of net
income from sales of physical commodities included in the numerator of
the apportionment fraction is determined by multiplying the net income
from sales of physical commodities by a fraction, the numerator of which
is the amount of receipts from sales of physical commodities actually
delivered to points within the state or, if there is no actual delivery
of the physical commodity, sold to purchasers located in the state, and
the denominator of which is the amount of receipts from sales of
physical commodities actually delivered to points within and without the
state or, if there is no actual delivery of the physical commodity, sold
to purchasers located within and without the state. Net income (not less
than zero) from sales of physical commodities is included in the
denominator of the apportionment fraction. Net income (not less than
zero) from sales of physical commodities is determined after the
deduction of the cost to acquire or produce the physical commodities.
(J) Marked to market net gains. (i) For purposes of this subdivision,
"marked to market" means that a financial instrument is, under section
475 or section 1256 of the internal revenue code, treated by the
taxpayer as sold for its fair market value on the last business day of
the taxpayer's taxable year. "Marked to market gain or loss" means the
gain or loss recognized by the taxpayer under section 475 or section
1256 of the internal revenue code because the financial instrument is
treated as sold for its fair market value on the last business day of
the taxpayer's taxable year.
(ii) The amount of marked to market net gains (not less than zero)
from each type of financial instrument that is marked to market included
in the numerator of the apportionment fraction is determined by
multiplying the marked to market net gains (but not less than zero) from
such type of the financial instrument by a fraction, the numerator of

which is the numerator of the apportionment fraction for the net gains
from that type of financial instrument determined under the applicable
clause of this subparagraph and the denominator of which is the
denominator of the apportionment fraction for the net gains for that
type of financial instrument determined under the applicable clause of
this subparagraph. Marked to market net gains (not less than zero) from
financial instruments for which the numerator of the apportionment
fraction is determined under the immediately preceding sentence are
included in the denominator of the apportionment fraction.
(iii) If the type of financial instrument that is marked to market is
not otherwise sourced by the taxpayer under this subparagraph, or if the
taxpayer has a net loss from the sales of that type of financial
instrument under the applicable clause of this subparagraph, the amount
of marked to market net gains (not less than zero) from that type of
financial instrument included in the numerator of the apportionment
fraction is determined by multiplying the marked to market net gains
(but not less than zero) from that type of financial instrument by a
fraction, the numerator of which is the sum of the amount of receipts
included in the numerator of the apportionment fraction under clauses
(A), (B), (C), (D), (E), (F), (G), (H) and (I) of this subparagraph and
subclause (ii) of this clause, and the denominator of which is the sum
of the amount of receipts included in the denominator of the
apportionment fraction under clauses (A), (B), (C), (D), (E), (F), (G),
(H) and (I) and subclause (ii) of this clause. Marked to market net
gains (not less than zero) for which the amount to be included in the
numerator of the apportionment fraction is determined under the
immediately preceding sentence are included in the denominator of the
apportionment fraction.
(b) Other receipts from broker or dealer activities. Receipts of a
registered securities broker or dealer from securities or commodities
broker or dealer activities described in this paragraph shall be deemed
to be generated within the state as described in subparagraphs one
through eight of this paragraph. Receipts from such activities generated
within the state shall be included in the numerator of the apportionment
fraction. Receipts from such activities generated within and without the
state shall be included in the denominator of the apportionment
fraction. For the purposes of this paragraph, the term "securities"
shall have the same meaning as in section 475(c)(2) of the internal
revenue code and the term "commodities" shall have the same meaning as
in section 475(e)(2) of the internal revenue code.
(1) Receipts constituting brokerage commissions derived from the
execution of securities or commodities purchase or sales orders for the
accounts of customers shall be deemed to be generated within the state
if the mailing address in the records of the taxpayer of the customer
who is responsible for paying such commissions is within the state.
(2) Receipts constituting margin interest earned on behalf of
brokerage accounts shall be deemed to be generated within the state if
the mailing address in the records of the taxpayer of the customer who
is responsible for paying such margin interest is within the state.
(3)(A) Receipts constituting fees earned by the taxpayer for advisory
services to a customer in connection with the underwriting of securities
for such customer (such customer being the entity that is contemplating
issuing or is issuing securities) or fees earned by the taxpayer for
managing an underwriting shall be deemed to be generated within the
state if the mailing address in the records of the taxpayer of such
customer who is responsible for paying such fees is within the state.
(B) Receipts constituting the primary spread of selling concession
from underwritten securities shall be deemed to be generated within the
state if the customer is located in the state.
(C) The term "primary spread" means the difference between the price
paid by the taxpayer to the issuer of the securities being marketed and
the price received from the subsequent sale of the underwritten
securities at the initial public offering price, less any selling
concession and any fees paid to the taxpayer for advisory services or
any manager's fees, if such fees are not paid by the customer to the
taxpayer separately. The term "public offering price" means the price
agreed upon by the taxpayer and the issuer at which the securities are
to be offered to the public. The term "selling concession" means the
amount paid to the taxpayer for participating in the underwriting of a
security where the taxpayer is not the lead underwriter.
(4) Receipts constituting account maintenance fees shall be deemed to
be generated within the state if the mailing address in the record of
the taxpayer of the customer who is responsible for paying such account
maintenance fees is within the state.
(5) Receipts constituting fees for management or advisory services,
including fees for advisory services in relation to merger or
acquisition activities, but excluding fees paid for services described
in paragraph (d) of this subdivision, shall be deemed to be generated
within the state if the mailing address in the records of the taxpayer
of the customer who is responsible for paying such fees is within the
state.
(6) Receipts constituting interest earned by the taxpayer on loans and
advances made by the taxpayer to a corporation affiliated with the
taxpayer but with which the taxpayer is not permitted or required to
file a combined report pursuant to section two hundred ten-C of this
article shall be deemed to arise from services performed at the
principal place of business of such affiliated corporation.
(7) If the taxpayer receives any of the receipts enumerated in
subparagraphs one through four of this paragraph as a result of a
securities correspondent relationship such taxpayer has with another
broker or dealer with the taxpayer acting in this relationship as the
clearing firm, such receipts shall be deemed to be generated within the
state to extent set forth in each of such subparagraphs. The amount of
such receipts shall exclude the amount the taxpayer is required to pay
to the correspondent firm for such correspondent relationship. If the
taxpayer receives any of the receipts enumerated in subparagraphs one
through four of this paragraph as as result of a securities
correspondent relationship such taxpayer has with another broker or
dealer with the taxpayer acting in this relationship as the introducing
firm, such receipts shall be deemed to be generated within the state to
the extent set forth in each of such subparagraphs.
(8) If, for purposes of subparagraphs one, two, clause (A) of
subparagraph three, four, or five of this paragraph the taxpayer is
unable from its records to determine the mailing address of the
customer, eight percent of the receipts is included in the numerator of
the apportionment fraction.
(c) Receipts from credit card and similar activities. Receipts
relating to the bank, credit, travel and entertainment card activities
described in this paragraph shall be deemed to be generated within the
state as described in subparagraphs one through four of this paragraph.
Receipts from such activities generated within the state shall be
included in the numerator of the apportionment fraction. Receipts from
such activities generated within and without the state shall be included
in the denominator of the apportionment fraction.
(1) Receipts constituting interest, and fees and penalties in the
nature of interest, from bank, credit, travel and entertainment card
receivables shall be deemed to be generated within the state if the
mailing address of the card holder in the records of the taxpayer is in
the state;
(2) Receipts from service charges and fees from such cards shall be
deemed to be generated within the state if the mailing address of the
card holder in the records of the taxpayer is in the state; and
(3) Receipts from merchant discounts shall be deemed to be generated
within the state if the merchant is located within the state. In the
case of a merchant with locations both within and without New York
state, only receipts from merchant discounts attributable to sales made
from locations within New York state are allocated to New York state. It
shall be presumed that the location of the merchant is the address of
the merchant shown on the invoice submitted by the merchant to the
taxpayer.
(4) Receipts from credit card authorization processing, and clearing
and settlement processing received by credit card processors shall be
deemed to be generated within the state if the location where the credit
card processor's customer accesses the credit card processor's network
is located within the state. The amount of all other receipts received
by credit card processors not specifically addressed in subdivisions one
through nine of this section deemed to be generated within the state
shall be determined by multiplying the total amount of such other
receipts by the average of (i) eight percent and (ii) the percent of its
New York access points. The percent of New York access points is the
number of locations in New York from which the credit card processor's
customers access the credit card processor's network divided by the
total number of locations in the United States where the credit card
processor's customers access the credit card processor's network.
(d) Receipts from certain services to investment companies. Receipts
received from an investment company arising from the sale of management,
administration or distribution services to such investment company are
included in the denominator of the apportionment fraction. The portion
of such receipts included in the numerator of the apportionment fraction
(such portion referred to herein as the New York portion) shall be
determined as provided in this paragraph.
(1) The New York portion shall be the product of the total of such
receipts from the sale of such services and a fraction. The numerator of
that fraction is the sum of the monthly percentages (as defined
hereinafter) determined for each month of the investment company's
taxable year for federal income tax purposes which taxable year ends
within the taxable year of the taxpayer (but excluding any month during
which the investment company had no outstanding shares). The monthly
percentage for each such month is determined by dividing the number of
shares in the investment company that are owned on the last day of the
month by shareholders that are located in the state by the total number
of shares in the investment company outstanding on that date. The
denominator of the fraction is the number of such monthly percentages.
(2)(A) For purposes of this paragraph, an individual, estate or trust
is deemed to be located in the state if his, her or its mailing address
on the records of the investment company is in the state. A business
entity is deemed to be located in the state if its commercial domicile
is located in the state.
(B) For purposes of this paragraph, the term "investment company"
means a regulated investment company, as defined in section 851 of the
internal revenue code, and a partnership to which section 7704(a) of the
internal revenue code applies (by virtue of section 7704(c)(3) of such

code) and that meets the requirements of section 851(b) of such code.
The preceding sentence shall be applied to the taxable year for federal
income tax purposes of the business entity that is asserted to
constitute an investment company that ends within the taxable year of
the taxpayer.
(C) For purposes of this paragraph the term "receipts from an
investment company" includes amounts received directly from an
investment company as well as amounts received from the shareholders in
such investment company, in their capacity as such.
(D) For purposes of this paragraph, the term "management services"
means the rendering of investment advice to an investment company,
making determinations as to when sales and purchases of securities are
to be made on behalf of an investment company, or the selling or
purchasing of securities constituting assets of an investment company,
and related activities, but only where such activity or activities are
performed pursuant to a contract with the investment company entered
into pursuant to section 15(a) of the federal investment company act of
nineteen hundred forty, as amended.
(E) For purposes of this paragraph, the term "distribution services"
means the services of advertising, servicing investor accounts
(including redemptions), marketing shares or selling shares of an
investment company, but, in the case of advertising, servicing investor
accounts (including redemptions) or marketing shares, only where such
service is performed by a person who is (or was, in the case of a closed
end company) also engaged in the service of selling such shares. In the
case of an open end company, such service of selling shares must be
performed pursuant to a contract entered into pursuant to section 15(b)
of the federal investment company act of nineteen hundred forty, as
amended.
(F) For purposes of this paragraph, the term "administration services"
includes clerical, accounting, bookkeeping, data processing, internal
auditing, legal and tax services performed for an investment company but
only if the provider of such service or services during the taxable year
in which such service or services are sold also sells management or
distribution services, as defined hereinabove, to such investment
company.
(e) For purposes of this subdivision, a taxpayer shall use the
following hierarchy to determine the commercial domicile of a business
entity, based on the information known to the taxpayer or information
that would be known upon reasonable inquiry: (i) the seat of management
and control of the business entity; and (ii) the billing address of the
business entity in the taxpayer's records. The taxpayer must exercise
due diligence before rejecting the first method in this hierarchy and
proceeding to the next method.
(f) For purposes of this subdivision, the term "registered securities
broker or dealer" means a broker or dealer registered as such by the
securities and exchange commission or a broker or dealer registered as
such by the commodities futures trading commission, and shall include an
OTC derivatives dealer as defined under regulations of the securities
and exchange commission at title 17, part 240, section 3b-12 of the code
of federal regulations (17 CFR 240.3b-12).
5-a. Global intangible low-taxed income. (a) Notwithstanding any other
provision of this section, global intangible low-taxed income shall be
included in the apportionment fraction as provided in this subdivision.
(b) For New York C corporations, global intangible low-taxed income
shall not be included in the numerator of the apportionment fraction.
Five percent of global intangible low-taxed income shall be included in
the denominator of the apportionment fraction.
(c) For New York S corporations, global intangible low-taxed income
shall not be included in the numerator of the apportionment fraction.
Global intangible low-taxed income shall be included in the denominator
of the apportionment fraction.
(d) For purposes of this subdivision, the term "global intangible
low-taxed income" means the amount required to be included in the
taxpayer's federal gross income pursuant to subsection (a) of section
951A of the internal revenue code.
6. Receipts from railroad and trucking business. Receipts from the
conduct of a railroad business (including surface railroad, whether or
not operated by steam, subway railroad, elevated railroad, palace car or
sleeping car business) or a trucking business are included in the
numerator of the apportionment fraction as follows. The amount of
receipts from the conduct of a railroad business or a trucking business
included in the numerator of the apportionment fraction is determined by
multiplying the amount of receipts from such business by a fraction, the
numerator of which is the miles in such business within the state during
the period covered by the taxpayer's report and the denominator of which
is the miles in such business within and without the state during such
period. Receipts from the conduct of the railroad business or a trucking
business are included in the denominator of the apportionment fraction.
6-a. Receipts from the operation of vessels. Receipts from the
operation of vessels are included in the numerator of the apportionment
fraction as follows. The amount of receipts from the operation of
vessels included in the numerator of the apportionment fraction is
determined by multiplying the amount of such receipts by a fraction, the
numerator of which is the aggregate number of working days of the
vessels owned or leased by the taxpayer in territorial waters of the
state during the period covered by the taxpayer's report and the
denominator of which is the aggregate number of working days of all
vessels owned or leased by the taxpayer during such period. Receipts
from the operation of vessels are included in the denominator of the
apportionment fraction.
7. Receipts from aviation services. (a) Air freight forwarding.
Receipts of a taxpayer from the activity of air freight forwarding
acting as principal and like indirect air carrier receipts arising from
such activity shall be included in the numerator of the apportionment
fraction as follows: one hundred percent of such receipts if both the
pickup and delivery associated with such receipts are made in the state
and fifty percent of such receipts if either the pickup or delivery
associated with such receipts is made in this state. Such receipts,
whether the pickup or delivery associated with the receipts is within or
without the state, shall be included in the denominator of the
apportionment fraction.
(b) Other aviation services. (1)(A) The portion of receipts of a
taxpayer from aviation services (other than services described in
paragraph (a) of this subdivision, but including the receipts of a
qualified air freight forwarder) to be included in the numerator of the
apportionment fraction shall be determined by multiplying its receipts
from such aviation services by a percentage which is equal to the
arithmetic average of the following three percentages:
(i) the percentage determined by dividing sixty percent of the
aircraft arrivals and departures within this state by the taxpayer
during the period covered by its report by the total aircraft arrivals
and departures within and without this state during such period;
provided, however, arrivals and departures solely for maintenance or
repair, refueling (where no debarkation or embarkation of traffic
occurs), arrivals and departures of ferry and personnel training flights

or arrivals and departures in the event of emergency situations shall
not be included in computing such arrival and departure percentage;
provided, further, the commissioner may also exempt from such percentage
aircraft arrivals and departures of all non-revenue flights including
flights involving the transportation of officers or employees receiving
air transportation to perform maintenance or repair services or where
such officers or employees are transported in conjunction with an
emergency situation or the investigation of an air disaster (other than
on a scheduled flight); provided, however, that arrivals and departures
of flights transporting officers and employees receiving air
transportation for purposes other than specified above (without regard
to remuneration) shall be included in computing such arrival and
departure percentage;
(ii) the percentage determined by dividing sixty percent of the
revenue tons handled by the taxpayer at airports within this state
during such period by the total revenue tons handled by it at airports
within and without this state during such period; and
(iii) the percentage determined by dividing sixty percent of the
taxpayer's originating revenue within this state for such period by its
total originating revenue within and without this state for such period.
(B) As used herein the term "aircraft arrivals and departures" means
the number of landings and takeoffs of the aircraft of the taxpayer and
the number of air pickups and deliveries by the aircraft of such
taxpayer; the term "originating revenue" means revenue to the taxpayer
from the transportation or revenue passengers and revenue property first
received by the taxpayer either as originating or connecting traffic at
airports; and the term "revenue tons handled" by the taxpayer at
airports means the weight in tons of revenue passengers (at two hundred
pounds per passenger) and revenue cargo first received either as
originating or connecting traffic or finally discharged by the taxpayer
at airports;
(2) All such receipts of a taxpayer from aviation services described
in this paragraph are included in the denominator of the apportionment
fraction.
(3) A corporation is a qualified air freight forwarder with respect to
another corporation:
(A) if it owns or controls either directly or indirectly all of the
capital stock of such other corporation, or if all of its capital stock
is owned or controlled either directly or indirectly by such other
corporation, or if all of the capital stock of both corporations is
owned or controlled either directly or indirectly by the same interests,
(B) if it is principally engaged in the business of air freight
forwarding, and
(C) if its air freight forwarding business is carried on principally
with the airline or airlines operated by such other corporation.
8. Receipts from sales of advertising. (a) The amount of receipts from
sales of advertising in newspapers or periodicals included in the
numerator of the apportionment fraction is determined by multiplying the
total of such receipts by a fraction, the numerator of which is the
number of newspapers and periodicals delivered to points within the
state and the denominator of which is the number of newspapers and
periodicals delivered to points within and without the state. The total
of such receipts from sales of advertising in newspapers or periodicals
is included in the denominator of the apportionment fraction.
(b) The amount of receipts from sales of advertising on television or
radio included in the numerator of the apportionment fraction is
determined by multiplying the total of such receipts by a fraction, the
numerator of which is the number of viewers or listeners within the

state and the denominator of which is the number of viewers or listeners
within and without the state. The total of such receipts from sales of
advertising on television and radio is included in the denominator of
the apportionment fraction.
(c) The amount of receipts from sales of advertising not described in
paragraph (a) or (b) of this subdivision that is furnished, provided or
delivered to, or accessed by the viewer or listener through the use of
wire, cable, fiber-optic, laser, microwave, radio wave, satellite or
similar successor media or any combination thereof, included in the
numerator of the apportionment fraction is determined by multiplying the
total of such receipts by a fraction, the numerator of which is the
number of viewers or listeners within the state and the denominator of
which is the number of viewers or listeners within and without the
state. The total of such receipts from sales of advertising described in
this paragraph is included in the denominator of the apportionment
fraction.
9. Receipts from transportation or transmission of gas through pipes.
Receipts from the transportation or transmission of gas through pipes
are included in the numerator of the apportionment fraction as follows.
The amount of receipts from the transportation or transmission of gas
through pipes included in the numerator of the apportionment fraction is
determined by multiplying the total amount of such receipts by a
fraction, the numerator of which is the taxpayer's transportation units
within the state and the denominator of which is the taxpayer's
transportation units within and without the state. A transportation unit
is the transportation of one cubic foot of gas over a distance of one
mile. The total amount of receipts from the transportation or
transmission of gas through pipes is included in the denominator of the
apportionment fraction.
10. (a) Receipts from other services and other business receipts.
Receipts from services not addressed in subdivisions one through nine of
this section and other business receipts not addressed in such
subdivisions shall be included in the numerator of the apportionment
fraction if the location of the customer is within the state. Such
receipts from customers within and without the state are included in the
denominator of the apportionment fraction. Whether the receipts are
included in the numerator of the apportionment fraction is determined
according to the hierarchy of method set forth in paragraph (b) of this
subdivision. The taxpayer must exercise due diligence under each method
described in such paragraph (b) before rejecting it and proceeding to
the next method in the hierarchy, and must base its determination on
information known to the taxpayer or information that would be known to
the taxpayer upon reasonable inquiry.
(b) Hierarchy of methods. (1) The benefit is received in this state;
(2) Delivery destination;
(3) The apportionment fraction for such receipts within the state
determined pursuant to this subdivision for the preceding taxable year;
or
(4) The apportionment fraction in the current taxable year determined
pursuant to this subdivision for those receipts that can be sourced
using the hierarchy of sourcing methods in subparagraphs one and two of
this paragraph.
11. If it shall appear that the apportionment fraction determined
pursuant to this section does not result in a proper reflection of the
taxpayer's business income or capital within the state, the commissioner
is authorized in his or her discretion to adjust it, or the taxpayer may
request that the commissioner adjust it, by (a) excluding one or more
items in such determination, (b) including one or more other items in

such determination, or (c) any other similar or different method
calculated to effect a fair and proper apportionment of the business
income and capital reasonably attributed to the state. The party seeking
the adjustment shall bear the burden of proof to demonstrate that the
apportionment fraction determined pursuant to this section does not
result in a proper reflection of the taxpayer's business income or
capital within the state and that the proposed adjustment is
appropriate.