New York Computation Of Tax.
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§ 11-604 Computation of tax. 1. * A. For taxable years beginning on or
after January first, nineteen hundred seventy-one and ending on or
before December thirty-first, nineteen hundred seventy-four, the tax
imposed by subdivision one of section 11-603 of this subchapter shall
be, in the case of each taxpayer: (a) a tax (1) computed at the rate of
six and seven-tenths per centum of its entire net income, or the portion
of such entire net income allocated within the city as hereinafter
provided, subject to any modification required by paragraphs (d) and (e)
of subdivision three of this section, or (2) computed at one mill for
each dollar of its total business and investment capital, or the portion
thereof allocated within the city, as hereinafter provided, except that
in the case of a cooperative housing corporation as defined in the
internal revenue code, or in the case of a housing company organized and
operating pursuant to the provisions of article four of the private
housing finance law, the applicable rates shall be one-quarter of one
mill, or (3) computed at the rate of six and seven-tenths per centum on
thirty per centum of the taxpayer's entire net income plus salaries and
other compensation paid to the taxpayer's elected or appointed officers
and to every stockholder owning in excess of five per centum of its
issued capital stock minus fifteen thousand dollars (except as
hereinafter provided) and any net loss for the reported year, or on the
portion of any such sum allocated within the city as hereinafter
provided for the allocation of entire net income, subject to any
modification required by paragraphs (d) and (e) of subdivision three of
this section, or (4) twenty-five dollars, whichever is greatest, plus
(b) a tax computed at the rate of one-half mill for each dollar of the
portion of its subsidiary capital allocated within the city as
hereinafter provided. In the case of a taxpayer which is not subject to
tax for an entire year, the exemption allowed in clause three of
paragraph (a) shall be prorated according to the period such taxpayer
was subject to tax.
* NB Effective until December 31, 2008
* A. For taxable years beginning on or after January first, nineteen
hundred seventy-one and ending on or before December thirty-first,
nineteen hundred seventy-four, and for taxable years beginning on or
after January first, nineteen hundred seventy-six, the tax imposed by
subdivision one of section 11-603 of this subchapter shall be, in the
case of each taxpayer: (a) a tax (1) computed at the rate of six and
seven-tenths per centum of its entire net income, or the portion of such
entire net income allocated within the city as hereinafter provided,
subject to any modification required by paragraphs (d) and (e) of
subdivision three of this section, or (2) computed at one mill for each
dollar of its total business and investment capital, or the portion
thereof allocated within the city, as hereinafter provided, except that
in the case of a cooperative housing corporation as defined in the
internal revenue code, or in the case of a housing company organized and
operating pursuant to the provisions of article four of the private
housing finance law, the applicable rates shall be one-quarter of one
mill, or (3) computed at the rate of six and seven-tenths per centum on
thirty per centum of the taxpayer's entire net income plus salaries and
other compensation paid to the taxpayer's elected or appointed officers
and to every stockholder owning in excess of five per centum of its
issued capital stock minus fifteen thousand dollars (except as
hereinafter provided) and any net loss for the reported year, or on the
portion of any such sum allocated within the city as hereinafter
provided for the allocation of entire net income, subject to any
modification required by paragraphs (d) and (e) of subdivision three of
this section, or (4) twenty-five dollars, whichever is greatest, plus
(b) a tax computed at the rate of one-half mill for each dollar of the
portion of its subsidiary capital allocated within the city as
hereinafter provided. In the case of a taxpayer which is not subject to
tax for an entire year, the exemption allowed in clause three of
paragraph (a) shall be prorated according to the period such taxpayer
was subject to tax.
* NB Effective December 31, 2008
B. For taxable years beginning on or after January first, nineteen
hundred seventy-five and before January first nineteen hundred
seventy-seven, the tax imposed by subdivision one of section 11-603 of
this subchapter shall be, in the case of each taxpayer: (a) a tax (1)
computed at the rate of ten and five one-hundredths per centum of its
entire net income, or the portion of such entire net income allocated
within the city as hereinafter provided, subject to any modification
required by paragraphs (d) and (e) of subdivision three of this section,
or (2) computed at one and one-half mills for each dollar of its total
business and investment capital, or the portion thereof allocated within
the city, as hereinafter provided, except that in the case of a
cooperative housing corporation as defined in the internal revenue code,
or in the case of a housing company organized and operating pursuant to
the provisions of article four of the private housing finance law, the
applicable rate shall be four-tenths of one mill, or (3) computed at the
rate of ten and five one-hundredths per centum on thirty per centum of
the taxpayer's entire net income plus salaries and other compensation
paid to the taxpayer's elected or appointed officers and to every
stockholder owning in excess of five per centum of its issued capital
stock minus fifteen thousand dollars (except as hereinafter provided)
and any net loss for the reported year, or on the portion of any such
sum allocated within the city as hereinafter provided for the allocation
of entire net income, subject to any modification required by paragraphs
(d) and (e) of subdivision three of this section, or (4) one hundred
twenty-five dollars, whichever is greatest, plus (b) a tax computed at
the rate of three-quarters of a mill for each dollar of the portion of
its subsidiary capital allocated within the city as hereinafter
provided. In the case of a taxpayer which is not subject to tax for an
entire year, the exemption allowed in clause three of paragraph (a)
shall be prorated according to the period such taxpayer was subject to
tax.
C. For each taxable year beginning in nineteen hundred seventy-four
and ending in nineteen hundred seventy-five, two tentative taxes shall
be computed, the first as provided in paragraph A and the second as
provided in paragraph B, and the tax for each such year shall be the sum
of that proportion of each tentative tax which the number of days in
nineteen hundred seventy-four and the number of days in nineteen hundred
seventy-five, respectively, bears to the number of days in the entire
taxable year.
D. For taxable years beginning on or after January first, nineteen
hundred seventy-seven and before January first, nineteen hundred
seventy-eight, the tax imposed by subdivision one of section 11-603 of
this subchapter shall be, in the case of each taxpayer: (a) a tax (1)
computed at the rate of nine and one-half per centum of its entire net
income, or the portion of such entire net income allocated within the
city as hereinafter provided, subject to any modification required by
paragraphs (d) and (e) of subdivision three of this section, or (2)
computed at one and one-half mills for each dollar of its total business
and investment capital, or the portion thereof allocated within the
city, as hereinafter provided, except that in the case of a cooperative
housing corporation as defined in the internal revenue code, the
applicable rate shall be four-tenths of one mill, or (3) computed at the
rate of nine and one-half per centum on thirty per centum of the
taxpayer's entire net income plus salaries and other compensation paid
to the taxpayer's elected or appointed officers and to every stockholder
owning in excess of five per centum of its issued capital stock minus
fifteen thousand dollars (except as hereinafter provided) and any net
loss for the reported year, or on the portion of any such sum allocated
within the city as hereinafter provided for the allocation of entire net
income, subject to any modification required by paragraphs (d) and (e)
of subdivision three of this section, or (4) one hundred twenty-five
dollars, whichever is greatest, plus (b) a tax computed at the rate of
three-quarters of a mill for each dollar of the portion of its
subsidiary capital allocated within the city as hereinafter provided. In
the case of a taxpayer which is not subject to tax for an entire year,
the exemption allowed in clause three of paragraph (a) shall be prorated
according to the period such taxpayer was subject to tax.
E. For taxable years beginning on or after January first, nineteen
hundred seventy-eight but before January first, two thousand nine, the
tax imposed by subdivision one of section 11-603 of this subchapter
shall be, in the case of each taxpayer:
(a) whichever of the following amounts is the greatest:
(1) an amount computed, for taxable years beginning before nineteen
hundred eighty-seven, at the rate of nine per centum, and for taxable
years beginning after nineteen hundred eighty-six, at the rate of eight
and eighty-five one-hundredths per centum, of its entire net income or
the portion of such entire net income allocated within the city as
hereinafter provided, subject to any modification required by paragraphs
(d) and (e) of subdivision three of this section,
(2) an amount computed at one and one-half mills for each dollar of
its total business and investment capital, or the portion thereof
allocated within the city, as hereinafter provided, except that in the
case of a cooperative housing corporation as defined in the internal
revenue code, the applicable rate shall be four-tenths of one mill,
(3) an amount computed, for taxable years beginning before nineteen
hundred eighty-seven, at the rate of nine per centum, and for taxable
years beginning after nineteen hundred eighty-six, at the rate of eight
and eighty-five one-hundredths per centum, on thirty per centum of the
taxpayer's entire net income plus salaries and other compensation paid
to the taxpayer's elected or appointed officers and to every stockholder
owning in excess of five per centum of its issued capital stock minus
fifteen thousand dollars (subject to proration as hereinafter provided)
and any net loss for the reported year, or on the portion of any such
sum allocated within the city as hereinafter provided for the allocation
of entire net income, subject to any modification required by paragraphs
(d) and (e) of subdivision three of this section, provided, however,
that for taxable years beginning on or after July first, nineteen
hundred ninety-six, the provisions of paragraph H of this subdivision
shall apply for purposes of the computation under this clause, or
(4) for taxable years ending on or before June thirtieth, nineteen
hundred eighty-nine, one hundred twenty-five dollars and for taxable
years ending after June thirtieth, nineteen hundred eighty-nine, three
hundred dollars, plus;
(b) an amount computed at the rate of three-quarters of a mill for
each dollar of the portion of its subsidiary capital allocated within
the city as hereinafter provided.
In the case of a taxpayer which is not subject to tax for an entire
year, the exemption allowed in clause three of subparagraph (a) of this
paragraph shall be prorated according to the period such taxpayer was
subject to tax. Provided, however, that this paragraph shall not apply
to taxable years beginning after December thirty-first, two thousand
eight. For the taxable years specified in the preceding sentence, the
tax imposed by subdivision one of section 11-603 of this subchapter
shall be, in the case of each taxpayer, determined as specified in
paragraph A of this subdivision, provided, however, that the provisions
of paragraphs G and H of this subdivision shall apply for purposes of
the computation under clause three of subparagraph (a) of such paragraph
A.
F. Notwithstanding any other provision of this subdivision to the
contrary, for taxable years beginning after nineteen hundred
eighty-seven the amount of tax computed on the basis of the taxpayer's
total business and investment capital, or the portion thereof allocated
within the city, shall in no event exceed three hundred fifty thousand
dollars.
G. In the case of a foreign air carrier described in the first
sentence of subparagraph one of paragraph (c-1) of subdivision eight of
section 11-602 of this subchapter, there shall be excluded from the
computation of the tax under clause three of subparagraph (a) of
paragraph E of this subdivision salaries and other compensation
described therein which are directly attributable to the generation of
income excluded from entire net income for the taxable year pursuant to
the provisions of paragraph (c-1) of subdivision eight of section 11-602
of this subchapter.
H. For taxable years beginning on or after July first, nineteen
hundred ninety-six, the computation under clause three of subparagraph
(a) of paragraph E of this subdivision shall be subject to the following
modifications:
(a) (1) For taxable years beginning on or after July first, nineteen
hundred ninety-six but before July first, nineteen hundred ninety-eight,
only seventy-five percent of the total salaries and other compensation
paid to the taxpayer's elected or appointed officers shall be added to
the entire net income entering into such computation; for taxable years
beginning on or after July first, nineteen hundred ninety-eight but
before July first, nineteen hundred ninety-nine, only fifty percent of
such salaries and other compensation shall be added to such entire net
income; and for taxable years beginning on or after July first, nineteen
hundred ninety-nine, no part of such salaries and other compensation
shall be added to such entire net income.
(2) Notwithstanding anything in clause one of this subparagraph to the
contrary, the full amount of the salary or other compensation paid to
any such elected or appointed officer shall be added to entire net
income as provided in clause three of subparagraph (a) of paragraph E of
this subdivision if such officer was, at any time during the taxable
year, a stockholder owning more than five percent of taxpayer's issued
capital stock.
(b) For taxable years beginning on or after July first, nineteen
hundred ninety-seven but before July first, nineteen hundred
ninety-eight, the fixed dollar amount entering into the computation
under clause three of subparagraph (a) of paragraph E of this
subdivision shall be thirty thousand dollars instead of fifteen thousand
dollars; and for taxable years beginning on or after July first,
nineteen hundred ninety-eight, such fixed dollar amount shall be forty
thousand dollars.
2. The amount of subsidiary capital, investment capital and business
capital shall each be determined by taking the average value of the
gross assets included therein (less liabilities deductible therefrom
pursuant to the provisions of subdivisions three, four and six of
section 11-602 of this subchapter), and, if the period covered by the
report is other than a period of twelve calendar months, by multiplying
such value by the number of calendar months or major parts thereof
included in such period, and dividing the product thus obtained by
twelve. For purposes of this subdivision, real property and marketable
securities shall be valued at fair market value and the value of
personal property other than marketable securities shall be the value
thereof shown on the books and records of the taxpayer in accordance
with generally accepted accounting principles.
3. The portion of the entire net income of a taxpayer to be allocated
within the city shall be determined as follows:
(a) multiply its business income by a business allocation percentage
to be determined by:
(1) ascertaining the percentage which the average value of the
taxpayer's real and tangible personal property, whether owned or rented
to it, within the city during the period covered by its report bears to
the average value of all the taxpayer's real and tangible personal
property, whether owned or rented to it, wherever situated during such
period. For the purpose of this subparagraph, the term "value of the
taxpayer's real and tangible personal property" shall mean the adjusted
bases of such properties for federal income tax purposes (except that in
the case of rented property such value shall mean the product of (A)
eight and (B) the gross rents payable for the rental of such property
during the taxable year); provided, however, that the taxpayer may make
a one-time, revocable election, pursuant to regulations promulgated by
the commissioner of finance to use fair market value as the value of all
of its real and tangible personal property, provided that such election
is made on or before the due date for filing a report under section
11-605 of this subchapter for the taxpayer's first taxable year
commencing on or after January first, nineteen hundred eighty-eight and
provided that such election shall not apply to any taxable year with
respect to which the taxpayer is included on a combined report unless
each of the taxpayers included on such report has made such an election
which remains in effect for such year;
(2) ascertaining the percentage which the receipts of the taxpayer,
computed on the cash or accrual basis according to the method of
accounting used in the computation of its entire net income, arising
during such period from:
(A) except as otherwise provided in subparagraph nine of this
paragraph, sales of its tangible personal property where shipments are
made to points within the city,
(B) services performed within the city, provided, however, that (i) in
the case of a taxpayer engaged in the business of publishing newspapers
or periodicals, receipts arising from sales of advertising contained in
such newspapers and periodicals shall be deemed to arise from services
performed within the city to the extent that such newspapers and
periodicals are delivered to points within the city, (ii) receipts
received from an investment company arising from the sale of management,
administration or distribution services to such investment company shall
be deemed to arise from services performed within the city to the extent
set forth in subparagraph five of this paragraph, (iii) in the case of
taxpayers principally engaged in the activity of air freight forwarding
acting as principal and like indirect air carriage, receipts arising
from such activity shall be deemed to arise from services performed
within the city as follows: one hundred percent of such receipts if both
the pickup and delivery associated with such receipts are made in the
city and fifty percent of such receipts if either the pickup or delivery
associated with such receipts is made in the city, and (iv) for taxable
years beginning on or after January first, two thousand two, in the case
of a taxpayer engaged in the business of publishing newspapers or
periodicals, or broadcasting radio or television programs, whether
through the public airwaves or by cable, direct or indirect satellite
transmission, or any other means of transmission, receipts arising from
sales of subscriptions, advertising or broadcasting shall be deemed to
arise from services performed within the city to the extent provided in
subparagraph nine of this paragraph,
(C) rentals from property situated and royalties from the use of
patents or copyrights, within the city, and
(D) all other business receipts earned within the city, bear to the
total amount of the taxpayer's receipts, similarly computed, arising
during such period from all sales of its tangible personal property,
services, rentals, royalties and all other business transactions,
whether within or without the city;
(3) ascertaining the percentage of the total wages, salaries and other
personal service compensation, similarly computed, during such period of
employees within the city, except general executive officers, to the
total wages, salaries and other personal service compensation, similarly
computed, during such period of all the taxpayer's employees within and
without the city, except general executive officers, and
(4) adding together the percentages so determined and dividing the
result by the number of percentages; provided, however, that for taxable
years beginning on or after July first, nineteen hundred ninety-six, a
taxpayer that is a "manufacturing corporation," as defined in
subparagraph eight of this paragraph, may determine its business
allocation percentage as provided in such subparagraph eight; and
provided, further, however, that for taxable years beginning before July
first, nineteen hundred ninety-six, if the taxpayer does not have a
regular place of business outside the city other than a statutory
office, the business allocation percentage shall be one hundred per
centum.
(5) Rules for receipts from certain services to investment companies.
(A) For purposes of subclause (ii) of clause (B) of subparagraph two of
this paragraph, the portion of receipts received from an investment
company arising from the sale of management, administration or
distribution services to such investment company determined in
accordance with clause (B) of this subparagraph shall be deemed to arise
from services performed within the city (such portion referred to herein
as the New York city portion).
(B) The New York city portion shall be the product of (a) the total of
such receipts from the sale of such services and (b) a fraction. The
numerator of that fraction is the sum of the monthly percentages (as
defined hereinafter) determined for each month of the investment
company's taxable year for federal income tax purposes which taxable
year ends within the taxable year of the taxpayer (but excluding any
month during which the investment company had no outstanding shares).
The monthly percentage for each such month is determined by dividing (a)
the number of shares in the investment company which are owned on the
last day of the month by shareholders which are domiciled in the city by
(b) the total number of shares in the investment company outstanding on
that date. The denominator of the fraction is the number of such monthly
percentages.
(C) (i) For purposes of this subparagraph, the term "domicile", in the
case of an individual, shall have the meaning ascribed to it under
chapter seventeen of this title; an estate or trust is domiciled in the
city if it is a city resident estate or trust as defined in paragraph
three of subdivision (b) of section 11-1705 of this code; a business
entity is domiciled in the city if the location of the actual seat of
management or control is in the city. It shall be presumed that the
domicile of a shareholder, with respect to any month, is his, her or its
mailing address on the records of the investment company as of the last
day of such month.
(ii) For purposes of this subparagraph, the term "investment company"
means a regulated investment company, as defined in section 851 of the
internal revenue code, and a partnership to which section 7704(a) of the
internal revenue code applies (by virtue of section 7704(c)(3) of such
code) and that meets the requirements of section 851(b) of such code.
The preceding sentence shall be applied to the taxable year for federal
income tax purposes of the business entity that is asserted to
constitute an investment company that ends within the taxable year of
the taxpayer.
(iii) For purposes of this subparagraph, the term "receipts from an
investment company" includes amounts received directly from an
investment company as well as amounts received from the shareholders in
such investment company in their capacity as such.
(iv) For purposes of this subparagraph, the term "management services"
means the rendering of investment advice to an investment company,
making determinations as to when sales and purchases of securities are
to be made on behalf of an investment company, or the selling or
purchasing of securities constituting assets of an investment company,
and related activities, but only where such activity or activities are
performed pursuant to a contract with the investment company entered
into pursuant to section 15(a) of the federal investment company act of
nineteen hundred forty, as amended.
(v) For purposes of this subparagraph, the term "distribution
services" means the services of advertising, servicing investor accounts
(including redemptions), marketing shares or selling shares of an
investment company, but, in the case of advertising, servicing investor
accounts (including redemptions) or marketing shares, only where such
service is performed by a person who is (or was, in the case of a closed
end company) also engaged in the service of selling such shares. In the
case of an open end company, such service of selling shares must be
performed pursuant to a contract entered into pursuant to section 15(b)
of the federal investment company act of nineteen hundred forty, as
amended.
(vi) For purposes of this subparagraph, the term "administration
services" includes (1) clerical, accounting, bookkeeping, data
processing, internal auditing, legal and tax services performed for an
investment company but only (2) if the provider of such service or
services during the taxable year in which such service or services are
sold also sells management or distribution services, as defined
hereinabove, to such investment company.
(6) (A) Provided, further, however, that a taxpayer principally
engaged in the conduct of aviation (other than as provided in clause (C)
of this subparagraph) shall, notwithstanding the foregoing provisions of
this paragraph, determine the portion of entire net income to be
allocated within the city by multiplying its business income by a
business allocation percentage which is equal to the arithmetic average
of the following three percentages:
(i) the percentage determined by dividing aircraft arrivals and
departures within the city by the taxpayer during the period covered by
its report by the total aircraft arrivals and departures within and
without the city during such period; provided, however, arrivals and
departures solely for maintenance or repair, refueling (where no
debarkation or embarkation of traffic occurs), arrivals and departures
of ferry and personnel training flights or arrivals and departures in
the event of emergency situations shall not be included in computing
such arrival and departure percentage; provided, further, the
commissioner of finance may also exempt from such percentage aircraft
arrivals and departures of all non-revenue flights including flights
involving the transportation of officers or employees receiving air
transportation to perform maintenance or repair services or where such
officers or employees are transported in conjunction with an emergency
situation or the investigation of an air disaster (other than on a
scheduled flight); provided, however, that arrivals and departures of
flights transporting officers and employees receiving air transportation
for purposes other than specified above (without regard to remuneration)
shall be included in computing such arrival and departure percentage;
(ii) the percentage determined by dividing the revenue tons handled by
the taxpayer at airports within the city during such period by the total
revenue tons handled by it at airports within and without the city
during such period; and
(iii) the percentage determined by dividing the taxpayer's originating
revenue within the city for such period by its total originating revenue
within and without the city for such period.
(B) As used herein, the term "aircraft arrivals and departures" means
the number of landings and takeoffs of the aircraft of the taxpayer and
the number of air pickups and deliveries by the aircraft of such
taxpayer; the term "originating revenue" means revenue to the taxpayer
from the transportation of revenue passengers and revenue property first
received by the taxpayer either as originating or connecting traffic at
airports; and the term "revenue tons handled" by the taxpayer at
airports means the weight in tons of revenue passengers (at two hundred
pounds per passenger) and revenue cargo first received either as
originating or connecting traffic or finally discharged by the taxpayer
at airports;
(C) A foreign air carrier described in the first sentence of
subparagraph one of paragraph (c-1) of subdivision eight of section
11-602 of this subchapter shall determine its business allocation
percentage pursuant to the provisions of subparagraphs one through four
of this paragraph, except that the numerators and denominators involved
in such computation shall exclude property to the extent employed in
generating income excluded from entire net income pursuant to the
provisions of paragraph (c-1) of subdivision eight of section 11-602 of
this subchapter, exclude such receipts as are excluded from entire net
income for the taxable year pursuant to the provisions of paragraph
(c-1) of subdivision eight of section 11-602 of this subchapter, and
exclude wages, salaries or other personal service compensation which are
directly attributable to the generation of income excluded from entire
net income for the taxable year pursuant to the provisions of paragraph
(c-1) of subdivision eight of section 11-602 of this subchapter.
(7) Provided, further, however, that a taxpayer principally engaged in
the operation of vessels shall, notwithstanding the foregoing provisions
of this paragraph, determine the portion of entire net income to be
allocated within the city by multiplying its business income by a
business allocation percentage determined by dividing the aggregate
number of working days of the vessels it owns or leases in territorial
waters of the city during the period covered by its report by the
aggregate number of working days of all the vessels it owns or leases
during such period.
(8) (A) For taxable years beginning on or after July first, nineteen
hundred ninety-six, a manufacturing corporation may elect to determine
its business allocation percentage by adding together the percentages
determined under subparagraphs one, two and three of this paragraph and
an additional percentage equal to the percentage determined under
subparagraph two of this paragraph, and dividing the result by the
number of percentages so added together.
(B) An election under this subparagraph must be made on a timely filed
(determined with regard to extensions granted) original report for the
taxable year. Once made for a taxable year, such election shall be
irrevocable for that taxable year. A separate election must be made for
each taxable year. A manufacturing corporation that has failed to make
an election as provided in this clause shall be required to determine
its business allocation percentage without regard to the provisions of
this subparagraph. Notwithstanding anything in this clause to the
contrary, the commissioner of finance may permit a manufacturing
corporation to make or revoke an election under this subparagraph, upon
such terms and conditions as the commissioner may prescribe, where the
commissioner determines that such permission should be granted in the
interests of fairness and equity due to a change in circumstances
resulting from an audit adjustment.
(C) As used in this subparagraph, the term "manufacturing corporation"
means a corporation primarily engaged in the manufacturing and sale
thereof of tangible personal property; and the term "manufacturing"
includes the process (including the assembly process) (i) of working raw
materials into wares suitable for use or (ii) which gives new shapes,
new qualities or new combinations to matter which already has gone
through some artificial process, by the use of machinery, tools,
appliances and other similar equipment. A corporation shall be deemed to
be primarily engaged in the activities described in the preceding
sentence if more than fifty percent of its gross receipts for the
taxable year are attributable to such activities.
(D) Notwithstanding anything to the contrary, if a taxpayer that is
otherwise eligible to make the election authorized by this subparagraph
is required or permitted to make a report on a combined basis with one
or more other corporations pursuant to subdivision four of section
11-605 of this chapter, the taxpayer shall be permitted to make an
election under this subparagraph only if such taxpayer and such other
corporation or corporations would be a manufacturing corporation if they
were treated as a single corporation. In making such determination,
intercorporate transactions shall be eliminated. Where such election has
been made by the taxpayer for a taxable year, each of the other
corporations included in the combined report shall also be deemed to
have made a proper election under this subparagraph for such taxable
year.
(9) Special rules for publishers and broadcasters. (A) Notwithstanding
anything in subparagraph two of this paragraph to the contrary and
except as provided in clause (C) of this subparagraph, in the case of a
taxpayer engaged in the business of publishing newspapers or
periodicals, there shall be allocated to the city, for purposes of
subparagraph two of this paragraph, the gross sales or charges for
services arising from sales of advertising contained in such newspapers
or periodicals, to the extent that such newspapers or periodicals are
delivered to points within the city.
(B) Notwithstanding anything in subparagraph two of this paragraph to
the contrary and except as provided in clause (C) of this subparagraph,
in the case of a taxpayer engaged in the business of broadcasting radio
or television programs, whether through the public airwaves or by cable,
direct or indirect satellite transmission, or any other means of
transmission, there shall be allocated to the city, for purposes of
subparagraph two of this paragraph, a portion of the gross sales or
charges for services arising from the broadcasting of such programs and
of commercial messages in connection therewith, such portion to be
determined according to the number of listeners or viewers within and
without the city.
(C) Notwithstanding anything in clause (A) or (B) of this subparagraph
to the contrary, in the case of a taxpayer engaged in the business of
publishing newspapers or periodicals, or broadcasting radio or
television programs, whether through the public airwaves or by cable,
direct or indirect satellite transmission, or any other means of
transmission, there shall be allocated to the city, for purposes of
subparagraph two of this paragraph, the gross sales or charges to
subscribers located in the city for subscriptions to such newspapers,
periodicals, or program services. For purposes of this clause, a
subscriber shall be deemed located in the city if, in the case of
newspapers and periodicals, the mailing address for the subscription is
within the city and, in the case of program services, the billing
address for the subscription is within the city. For purposes of this
clause, "subscriber" shall mean a member of the general public who
receives such newspapers, periodicals or program services and does not
further distribute them.
(b) multiply its investment income by an investment allocation
percentage to be determined by:
(1) multiplying the amount of its investment capital invested in each
stock, bond or other security (other than governmental securities)
during the period covered by its report by the issuer's allocation
percentage of the issuer or obligor thereof.
(i) In the case of an issuer or obligor subject to tax under this
subchapter or subchapter four of this chapter, or subject to tax as a
utility corporation under chapter eleven of this title, the issuer's
allocation percentage shall be the percentage of the appropriate measure
(as defined hereinafter) which is required to be allocated within the
city on the report or reports, if any, required of the issuer or obligor
under this title for the preceding year. The appropriate measure
referred to in the preceding sentence shall be: in the case of an issuer
or obligor subject to this subchapter, entire capital; in the case of an
issuer or obligor subject to subchapter four of this chapter, issued
capital stock; in the case of an issuer or obligor subject to chapter
eleven of this title as a utility corporation, gross income.
(ii) In the case of an issuer or obligor subject to tax under part
four of subchapter three of this chapter, the issuer's allocation
percentage shall be determined as follows:
(A) In the case of a banking corporation described in paragraphs one
through eight of subdivision (a) of section 11-640 of this chapter which
is organized under the laws of the United States, this state or any
other state of the United States, the issuer's allocation percentage
shall be its alternative entire net income allocation percentage, as
defined in subdivision (c) of section 11-642 of this chapter, for the
preceding year. In the case of such a banking corporation whose
alternative entire net income for the preceding year is derived
exclusively from business carried on within the city, its issuer's
allocation percentage shall be one hundred percent.
(B) In the case of a banking corporation described in paragraph two of
subdivision (a) of section 11-640 of this chapter which is organized
under the laws of a country other than the United States, the issuer's
allocation percentage shall be determined by dividing (I) the amount
described in clause (i) of subparagraph (A) of paragraph two of
subdivision (a) of section 11-642 of this chapter with respect to such
issuer or obligor for the preceding year, by (II) the gross income of
such issuer or obligor from all sources within and without the United
States, for such preceding year, whether or not included in alternative
entire net income for such year.
(C) In the case of an issuer or obligor described in paragraph nine of
subdivision (a) or in paragraph two of subdivision (d) of section 11-640
of this chapter, the issuer's allocation percentage shall be determined
by dividing the portion of the entire capital of the issuer or obligor
allocable to the city for the preceding year by the entire capital,
wherever located, of the issuer or obligor for the preceding year.
(iii) Provided, however, that if a report or reports for the preceding
year are not filed, or if filed do not contain information which would
permit the determination of such issuer's allocation percentage, then
the issuer's allocation percentage to be used shall, at the discretion
of the commissioner of finance, be either (A) the issuer's allocation
percentage derived from the most recently filed report or reports of the
issuer or obligor or (B) a percentage calculated, by the commissioner of
finance, reasonably to indicate the degree of economic presence in the
city of the issuer or obligor during the preceding year.
(2) adding together the sum so obtained, and
(3) dividing the result so obtained by the total of its investment
capital invested during such period in stocks, bonds and other
securities; provided, however, that in case any investment capital is
invested in any stock, bond or other security during only a portion of
the period covered by the report, only such portion of such capital
shall be taken into account; and provided further, that if a taxpayer's
investment allocation percentage is zero, interest received on bank
accounts shall be multiplied by its business allocation percentage; and
(c) add the products so obtained.
(d) Except as provided in subparagraph three of this paragraph or in
paragraph (e) of this subdivision, at the election of the taxpayer there
shall be deducted from the portion of its entire net income allocated
within the city either or both of the items set forth in subparagraphs
one and two of this paragraph, except that only one of such deductions
shall be allowed with respect to any one item of property.
(1) Depreciation with respect to any property such as described in
subparagraph three of this paragraph, not exceeding twice the
depreciation allowed with respect to the same property for federal
income tax purposes. Such deduction shall be allowed only upon condition
that entire net income be computed without any deduction for the
depreciation of the same property, and the total of all deductions
allowed in any taxable year or years with respect to the depreciation of
any such property shall not exceed its cost or other basis.
(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in subparagraph three of this paragraph which is used
or to be used for purposes of research and development in the
experimental or laboratory sense. Such purposes shall not be deemed to
include the ordinary testing or inspection of materials or products for
quality control, efficiency surveys, management studies, consumer
surveys, advertising, promotions or research in connection with
literary, historical or similar projects. Such deduction shall be
allowed only on condition that entire net income for the taxable year
and all succeeding taxable years be computed without the deduction of
any such expenditures and without any deduction for depreciation of the
same property, except to the extent that its basis may be attributable
to factors other than such expenditures, or in case a deduction is
allowable pursuant to this subparagraph for only a part of such
expenditures, on condition that any deduction allowed for federal income
tax purposes on account of such expenditures or on account of
depreciation of the same property be proportionately reduced in
computing entire net income for the taxable year and all succeeding
taxable years. With respect to property which is used or to be used for
research and development only in part, or during only part of its useful
life, a proportionate part of such expenditures shall be deductible. If
all or part of such expenditures with respect to any property shall have
been deducted as provided herein, and such property is used for purposes
other than research and development to a greater extent than originally
reported, the taxpayer shall report such use in its report for the first
taxable year during which it occurs, and the commissioner of finance may
recompute the tax for the year or years for which such deduction was
allowed, and may assess any additional tax resulting from such
recomputation regardless of the time limitations set forth in section
11-674 of this chapter.
(3) Such deductions shall be allowed only with respect to tangible
property which is depreciable pursuant to section one hundred
sixty-seven of the internal revenue code, having a situs in the city and
used in the taxpayer's trade or business, (A) constructed, reconstructed
or erected after December thirty-first, nineteen hundred sixty-five,
pursuant to a contract which was, on or before December thirty-first,
nineteen hundred sixty-seven, and at all times thereafter, binding on
the taxpayer or, property, the physical construction, reconstruction or
erection of which began on or before December thirty-first, nineteen
hundred sixty-seven or which began after such date pursuant to an order
placed on or before December thirty-first, nineteen hundred sixty-seven,
and then only with respect to that portion of the basis thereof or the
expenditures relating thereto which is properly attributable to such
construction, reconstruction or erection after December thirty-first,
nineteen hundred sixty-five, or (B) acquired after December
thirty-first, nineteen hundred sixty-five, pursuant to a contract which
was, on or before December thirty-first, nineteen hundred sixty-seven,
and at all times thereafter, binding on the taxpayer or pursuant to an
order placed on or before December thirty-first, nineteen hundred
sixty-seven, by purchase as defined in section one hundred seventy-nine
(d) of the internal revenue code, if the original use of such property
commenced with the taxpayer, commenced in the city and commenced after
December thirty-first, nineteen hundred sixty-five, or (C) acquired,
constructed, reconstructed, or erected subsequent to December
thirty-first nineteen hundred sixty-seven, if such acquisition,
construction, reconstruction or erection is pursuant to a plan of the
taxpayer which was in existence December thirty-first, nineteen hundred
sixty-seven and not thereafter substantially modified, and such
acquisition, construction, reconstruction or erection would qualify
under the rules in paragraphs four, five or six of subsection (h) of
section forty-eight of the internal revenue code provided all references
in such paragraphs four, five and six to the dates October nine,
nineteen hundred sixty-six, and October ten, nineteen hundred sixty-six,
shall be read as December thirty-first, nineteen hundred sixty-seven. A
taxpayer shall be allowed a deduction under clauses (A), (B) or (C) of
this subparagraph only if the tangible property shall be delivered or
the construction, reconstruction or erection shall be completed on or
before December thirty-first, nineteen hundred sixty-nine, except in the
case of tangible property which is acquired, constructed, reconstructed
or erected pursuant to a contract which was, on or before December
thirty-first, nineteen hundred sixty-seven, and at all times thereafter,
binding on the taxpayer. Provided, however, for any taxable year
beginning on or after January first, nineteen hundred sixty-eight, a
taxpayer shall not be allowed a deduction under paragraph (d) hereof
with respect to tangible personal property leased by it to any other
person or corporation. For purposes of the preceding sentence, any
contract or agreement to lease or rent or for a license to use such
property shall be considered a lease. With respect to property which the
taxpayer uses itself for purposes other than leasing for part of a
taxable year and leases for a part of a taxable year, the taxpayer shall
be allowed a deduction under paragraph (d) in proportion to the part of
the year it uses such property.
(4) If the deductions allowable for any taxable year, pursuant to this
subdivision, exceed the portion of the taxpayer's entire net income
allocated to the city for such year, the excess may be carried over to
the following taxable year or years and may be deducted from the portion
of the taxpayer's entire net income allocated to the city for such year
or years.
(5) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to
subparagraph one or two of this paragraph, the gain or loss thereon
entering into the computation of federal taxable income shall be
disregarded in computing entire net income, and there shall be added to
or subtracted from the portion of entire net income allocated within the
city the gain or loss upon such sale or other disposition. In computing
such gain or loss the basis of the property sold or disposed of shall be
adjusted to reflect the deduction allowed with respect to such property
pursuant to subparagraph one or two of this paragraph. Provided,
however, that no loss shall be recognized for the purposes of this
subparagraph with respect to a sale or other disposition of property to
a person whose acquisition thereof is not a purchase as defined in
section one hundred seventy-nine (d) of the internal revenue code.
(e) At the election of the taxpayer there shall be deducted from the
portion of its entire net income allocated within the city either or
both of the items set forth in subparagraphs one and two of this
paragraph, except that only one of such deductions shall be allowed with
respect to any one item of property.
(1) Depreciation with respect to any property such as described in
subparagraphs three and four of this paragraph, not exceeding twice the
depreciation allowed with respect to the same property for federal
income tax purposes. Such deduction shall be allowed only upon condition
that entire net income be computed without any deduction for the
depreciation of the same property, and the total of all deductions
allowed in any taxable year or years with respect to the depreciation of
any such property shall not exceed its cost or other basis multiplied by
the taxpayer's business allocation percentage determined under this
subdivision for the first year it deducts such depreciation under this
paragraph.
(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in subparagraph three of this paragraph which is used
or to be used for purposes of research and development in the
experimental or laboratory sense. Such purposes shall not be deemed to
include the ordinary testing or inspection of materials or products for
quality control, efficiency surveys, management studies, consumer
surveys, advertising, promotions or research in connection with
literary, historical or similar projects. Such deductions shall be
allowed only on condition that it does not exceed the amount of the
expenditures multiplied by the taxpayer's business allocation percentage
determined under this subdivision for the year the expenditures are paid
or incurred and that entire net income for the taxable year and all
succeeding taxable years be computed without the deduction of any such
expenditures and without any deduction for depreciation of the same
property, except to the extent that its basis may be attributable to
factors other than such expenditures, or in case a deduction is
allowable pursuant to this subparagraph for only a part of such
expenditures, on condition that any deduction allowed for federal income
tax purposes on account of such expenditures or on account of
depreciation of the same property be proportionately reduced in
computing entire net income for the taxable year and all succeeding
taxable years. With respect to property which is used or to be used for
research and development only in part, or during only part of its useful
life, a proportionate part of such expenditures shall be deductible. If
all or part of such expenditures with respect to any property shall have
been deducted as provided herein, and such property is used for purposes
other than research and development to a greater extent than originally
reported, the taxpayer shall report such use in its report for the first
taxable year during which it occurs, and the commissioner of finance may
recompute the tax for the year or years for which such deduction was
allowed, and may assess any additional tax resulting from such
recomputation regardless of the time limitations set forth in section
11-674 of this chapter.
(3) Such deduction shall be allowed only with respect to tangible
property which is depreciable pursuant to section one hundred
sixty-seven of the internal revenue code, having a situs in the city and
used in the taxpayer's trade or business (A) the construction,
reconstruction or erection of which is completed after December
thirty-first, nineteen hundred sixty-seven, and then only with respect
to that portion of the basis thereof or the expenditures relating
thereto which is properly attributable to such construction,
reconstruction or erection after December thirty-first, nineteen hundred
sixty-five, or (B) acquired after December thirty-first, nineteen
hundred sixty-seven by purchase or defined in section one hundred
seventy-nine (d) of the internal revenue code, if the original use of
such property commenced with the taxpayer, commenced in this state and
commenced after December thirty-first nineteen hundred sixty-five.
Provided, however, for any taxable year beginning on or after January
first, nineteen hundred sixty-eight, a taxpayer shall not be allowed a
deduction under paragraph (e) hereof with respect to tangible personal
property leased by it to any other person or corporation. For purposes
of the preceding sentence, any contract or agreement to lease or rent or
for a license to use such property shall be considered a lease. With
respect to property which the taxpayer uses itself for purposes other
than leasing for part of a taxable year and leases for a part of a
taxable year, the taxpayer shall be allowed a deduction under paragraph
(e) in proportion to the part of the year it uses such property.
(4) A deduction under subparagraph one of this paragraph shall be
allowed with respect to tangible property described in subparagraph
three only if such property is principally used by the taxpayer in the
production of goods by manufacturing; processing; assembling; refining;
mining; extracting; farming; agriculture; horticulture; floriculture;
viticulture or commercial fishing. For purposes of this subparagraph,
manufacturing shall mean the process of working raw materials into wares
suitable for use or which gives new shapes, new qualities or new
combinations to matter which already has gone through some artificial
process by the use of machinery, tools, appliances and other similar
equipment. Property used in the production of goods shall include
machinery, equipment or other tangible property which is principally
used in the repair and service of other machinery, equipment or other
tangible property used principally in the production of goods and shall
include all facilities used in the manufacturing operation, including
storage of material to be used in manufacturing and of the products that
are manufactured. At the option of the taxpayer, air and water pollution
control facilities which qualify for elective deductions under paragraph
(g) of subdivision eight of section 11-602 of this subchapter may be
treated, for purposes of this paragraph, as tangible property
principally used in the production of goods by manufacturing;
processing; assembling; refining; mining; extracting; farming;
agriculture; horticulture; floriculture; viticulture; or commercial
fishing, in which event, a deduction shall not be allowed under such
paragraph (g).
(5) Subject to the limitation imposed by subparagraphs one and two
hereof, if the deductions allowable for any taxable year, pursuant to
this subdivision, exceed the portion of the taxpayer's entire net income
allocated to the city for such year, the excess may be carried over to
the following taxable year or years and may be deducted from the portion
of the taxpayer's entire net income allocated to the city for such year
or years.
(6) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to
subparagraph one or two of this paragraph, the gain or loss thereon
entering into the computation of federal taxable income shall be
disregarded in computing entire net income, and there shall be added to
or subtracted from the portion of entire net income allocated within the
city the gain or loss upon such sale or other disposition. In computing
such gain or loss the basis of the property sold or disposed of shall be
adjusted to reflect the deduction allowed with respect to such property
pursuant to subparagraph one or two of this paragraph. Provided,
however, that no loss shall be recognized for the purposes of this
subparagraph with respect to a sale or other disposition of property to
a person whose acquisition thereof is not a purchase as defined in
section one hundred seventy-nine (d) of the internal revenue code.
4. The portion of the business capital of a taxpayer to be allocated
within the city shall be determined by multiplying the amount thereof by
the business allocation percentage determined as hereinabove provided.
Provided, however, such business allocation percentage, for purposes of
allocating business capital, shall (a) for taxable years beginning
before nineteen hundred ninety-four, be determined without regard to
clause (C) of subparagraph six of paragraph (a) of subdivision three of
this section and (b) for taxable years beginning after nineteen hundred
ninety-three, be determined with regard to such clause (C) but only in
the case of a taxpayer subject to the provisions of paragraph (b) of
subdivision six of section 11-602 of this subchapter.
5. The portion of the investment capital of a taxpayer to be allocated
within the city shall be determined by multiplying the amount thereof by
the investment allocation percentage determined as hereinabove provided.
7. The portion of the subsidiary capital of a taxpayer to be allocated
within the city shall be determined by (a) multiplying the amount of its
subsidiary capital invested in each subsidiary during the period covered
by its report (or, in the case of any such capital so invested during
only a portion of such period, such portion of such capital) by the
issuer's allocation percentage, as defined in subparagraph one of
paragraph (b) of subdivision three of this section, of each such
subsidiary and (b) adding together the sums so obtained.
8. If it shall appear to the commissioner of finance that any business
or investment allocation percentage determined as hereinabove provided
does not properly reflect the activity, business, income or capital of a
taxpayer within the city, the commissioner of finance shall be
authorized in his or her discretion, in the case of a business
allocation percentage, to adjust it by (a) excluding one or more of the
factors therein, (b) including one or more other factors, such as
expenses, purchases, contract values (minus subcontract values), (c)
excluding one or more assets in computing such allocation percentage,
provided the income therefrom is also excluded in determining entire net
income, or (d) any other similar or different method calculated to
effect a fair and proper allocation of the income and capital reasonably
attributable to the city, and in the case of an investment allocation
percentage to adjust it by excluding one or more assets in computing
such percentage provided the income therefrom is also excluded in
determining entire net income. The commissioner of finance from time to
time shall publish all rulings of general public interest with respect
to any application of the provisions of this subdivision.
9. If it shall appear to the commissioner of finance that any business
allocation percentage determined as hereinabove provided does not
properly reflect the activity, business, income or capital of a taxpayer
within the city, the commissioner of finance shall be authorized in his
or her discretion to adjust it by (a) excluding one or more of the
factors therein, (b) including one or more other factors, such as
expenses, purchases, contract values (minus subcontract values), (c)
excluding one or more assets in computing such allocation percentage,
provided the income therefrom, is also excluded in determining entire
net income, or (d) any other similar or different method calculated to
effect a fair and proper allocation of the income and capital reasonably
attributable to the city, and in the case of an investment allocation
percentage, to adjust it by excluding one or more assets in computing
such percentage provided the income therefrom is also excluded in
determining entire net income. The commissioner of finance from time to
time shall publish all rulings of general public interest with respect
to any application of the provisions of this subdivision.
11. (a) A taxpayer shall be allowed a credit, to be refunded in the
manner hereinafter provided in this subdivision, against the tax imposed
by this chapter. The amount of such credit shall be fifty percent of the
tax incurred in market making transactions under the provisions of
article twelve of the tax law on such transactions subject to such tax
occurring on and after August first, nineteen hundred seventy-six and
paid by such taxpayer (except when such tax shall have been paid
pursuant to section two hundred seventy-nine-a of such tax law).
(b) For purposes of this subdivision:
(1) the term "taxpayer" shall mean any corporation subject to tax
under this chapter registered with the United States securities and
exchange commission in accordance with subsection (b) of section fifteen
of the securities exchange act of nineteen hundred thirty-four, as
amended, and acting as a dealer in a transaction described in
subparagraph two of this paragraph, and
(2) the term "market making transaction" shall mean any transaction
involving a sale (including a short sale) by a dealer of shares or
certificates subject to the tax imposed by article twelve of the tax
law, provided such shares or certificates are sold:
(i) as stock in trade or inventory or as property held for sale in the
ordinary course of such dealer's trade or business (including transfers
which are part of an underwriting),
(ii) in (a) a bona fide arbitrage transaction; (b) a bona fide hedge
transaction involving a long or short position in any equity security
and a long or short position in a security entitling the holder to
acquire or sell such equity security; or (c) a risk arbitrage
transaction in connection with a merger, acquisition, tender offer,
recapitalization, reorganization, or similar transaction, or
(iii) to offset a transaction made in error.
Provided, however, that, except as to subclause (c) of clause (ii) of
this paragraph, the term "market making transaction" shall not include
any sale of shares or certificates identified in such dealer's records
as a security held for investment within the meaning of section twelve
hundred thirty-six of the internal revenue code.
(c) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded in accordance with the provisions of section 11-677
of this chapter, except as otherwise provided in subdivision three of
section 11-606 and subdivision eleven of section 11-608; provided,
however, that the provisions of this title notwithstanding, the amount
to be refunded pursuant to this subdivision shall not be paid prior to
the first day of the eighth month following the close of the taxable
year, and the provisions of subdivision three of section 11-679 of this
chapter notwithstanding interest shall be allowed and paid on the
overpayment of the credit under this subdivision from the first day of
the eleventh month following the close of the taxable year, or three
months after a claim for the credit or refund provided for in this
subdivision has been filed, whichever is later.
(d) Provided, however, that the credit provided under this subdivision
shall be allowed only to the extent that the amount of credit allowable
with respect to market making transactions under the provisions of this
subdivision (determined without regard to the provisions of this
paragraph) exceeds fifty percent of all rebates (provided for under the
provisions of section two hundred eighty-a of article twelve of the tax
law) allowed for such taxes incurred in the same market making
transactions with respect to which the credit is determined. No credit
shall be allowed under this subdivision with respect to any tax incurred
in market making transactions occurring on or after October first,
nineteen hundred eighty-one.
12. (a) In addition to the credit allowed by subdivision eleven of
this section, a taxpayer shall be allowed a credit against the tax
imposed by this subchapter to be credited or refunded in the manner
hereinafter provided in this section. The amount of such credit shall be
the excess of (A) the amount of sales and compensating use taxes imposed
by section eleven hundred seven of the tax law during the taxpayer's
taxable year which became legally due on or after and was paid on or
after July first, nineteen hundred seventy-seven, less any credits or
refunds of such taxes, with respect to the purchase or use by the
taxpayer of machinery or equipment for use or consumption directly and
predominantly in the production of tangible personal property, gas,
electricity, refrigeration or steam for sale, by manufacturing,
processing, generating, assembling, refining, mining or extracting, or
telephone central office equipment or station apparatus or comparable
telegraph equipment for use directly and predominantly in receiving at
destination or initiating and switching telephone or telegraph
communication, but not including parts with a useful life of one year or
less or tools or supplies used in connection with such machinery,
equipment or apparatus over (B) the amount of any credit for such sales
and compensating use taxes allowed or allowable against the taxes
imposed by subchapter two of chapter eleven of this title for any
periods embraced within the taxable year of the taxpayer under this
subchapter.
(b) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded, without interest, in accordance with the
provisions of section 11-677 of this chapter.
(c) Where the taxpayer receives a refund or credit of any tax imposed
under section eleven hundred seven of the tax law for which the taxpayer
had claimed a credit under the provisions of this subdivision in a prior
taxable year, the amount of such tax refund shall be added to the tax
imposed by subdivision one of section 11-603 of this subchapter, and
such amount shall be subtracted in computing entire net income for the
taxable year.
13. (a) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
subchapter to be credited or refunded without interest, in the manner
hereinafter provided in this section.
(1) Where a taxpayer shall have relocated to the city from a location
outside the state, and by such relocation shall have created a minimum
of one hundred industrial or commercial employment opportunities; and
where such taxpayer shall have entered into a written lease for the
relocation premises, the terms of which lease provide for increased
additional payments to the landlord which are based solely and directly
upon any increase or addition in real estate taxes imposed on the leased
premises, the taxpayer upon approval and certification by the industrial
and commercial incentive board as hereinafter provided shall be entitled
to a credit against the tax imposed by this subchapter. The amount of
such credit shall be: An amount equal to the annual increased payments
actually made by the taxpayer to the landlord which are solely and
directly attributable to an increase or addition to the real estate tax
imposed upon the leased premises. Such credit shall be allowed only to
the extent that the taxpayer has not otherwise claimed said amount as a
deduction against the tax imposed by this subchapter.
The industrial and commercial incentive board in approving and
certifying to the qualifications of the taxpayer to receive the tax
credit provided for herein shall first determine that the applicant has
met the requirements of this section, and further, that the granting of
the tax credit to the applicant is in the "public interest". In
determining that the granting of the tax credit is in the public
interest, the board shall make affirmative findings that: the granting
of the tax credit to the applicant will not effect an undue hardship on
similar taxpayers already located within the city; the existence of this
tax incentive has been instrumental in bringing about the relocation of
the applicant to the city; and the granting of the tax credit will
foster the economic recovery and economic development of the city.
The tax credit, if approved and certified by the industrial and
commercial incentive board, must be utilized annually by the taxpayer
for the length of the term of the lease or for a period not to exceed
ten years from the date of relocation whichever period is shorter.
(2) Definitions: When used in this section, "employment opportunity"
means the creation of a full time position of gainful employment for an
industrial or commercial employee and the actual hiring of such employee
for the said position.
"Industrial employee" means one engaged in the manufacture or
assembling of tangible goods or the processing of raw materials.
"Commercial employee" means one engaged in the buying, selling or
otherwise providing of goods or services other than on a retail basis.
"Retail" means the selling or otherwise disposing or furnishing of
tangible goods or services directly to the ultimate user or consumer.
"Full time position" means the hiring of an industrial or commercial
employee in a position of gainful employment where the number of hours
worked by such employees is not less than thirty hours during any given
work week.
"Industrial and commercial incentive board" means the board created
pursuant to part three of subchapter two of chapter two of this title.
(b) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded, without interest, in accordance with the
provisions of section 11-677 of this chapter.
14. (a) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
subchapter to be credited or refunded without interest, in the manner
hereinafter provided in this section. The amount of such credit shall
be:
(1) A maximum of three hundred dollars for each commercial employment
opportunity and a maximum of five hundred dollars for each industrial
employment opportunity relocated to the city from an area outside the
state. Such credit shall be allowed to a taxpayer who relocates a
minimum of ten employment opportunities. The credit shall be allowed
against employment opportunity relocation costs incurred by the
taxpayer. Such credit shall be allowed only to the extent that the
taxpayer has not claimed a deduction for allowable employment
opportunity relocation costs. The credit allowed hereunder may be taken
by the taxpayer in whole or in part in the year in which the employment
opportunity is relocated by such taxpayer or either of the two years
succeeding such event, provided, however, no credit shall be allowed
under this subdivision to a taxpayer for industrial employment
opportunities relocated to premises (A) that are within an industrial
business zone established pursuant to section 22-626 of this code and
(B) for which a binding contract to purchase or lease was first entered
into by the taxpayer on or after July first, two thousand five.
The commissioner of finance is empowered to promulgate rules and
regulations and to prescribe the form of application to be used by a
taxpayer seeking the credit provided hereunder.
(2) Definitions: When used in this section, "employment opportunity"
means the creation of a full time position of gainful employment for an
industrial or commercial employee and the actual hiring of such employee
for the said position.
"Industrial employee" means one engaged in the manufacture or
assembling of tangible goods or the processing of raw materials.
"Commercial employee" means one engaged in the buying, selling or
otherwise providing of goods or services other than on a retail basis.
"Retail" means the selling or otherwise disposing of tangible goods
directly to the ultimate user or consumer.
"Full time position" means the hiring of an industrial or commercial
employee in a position of gainful employment where the number of hours
worked by such employee is not less than thirty hours during any given
work week.
"Employment opportunity relocation costs" means the costs incurred by
the taxpayer in moving furniture, files, papers and office equipment
into the city from a location outside the state; the costs incurred by
the taxpayer in the moving and installation of machinery and equipment
into the city from a location outside the state; the costs of
installation of telephones and other communications equipment required
as a result of the relocation to the city from a location outside the
state; the cost incurred in the purchase of office furniture and
fixtures required as a result of the relocation to the city from a
location outside the state; and the cost of renovation of the premises
to be occupied as a result of the relocation provided, however, that
such renovation costs shall be allowable only to the extent that they do
not exceed seventy-five cents per square foot of the total area utilized
by the taxpayer in the occupied premises.
(b) The credit allowed under this section for any taxable year shall
be deemed to be an overpayment of tax by the taxpayer to be credited or
refunded without interest in accordance with the provisions of section
11-677 of this chapter.
17. (a) In addition to any other credit allowed by this section, a
taxpayer that has obtained the certifications required by chapter six-B
of title twenty-two of the code shall be allowed a credit against the
tax imposed by this subchapter. The amount of the credit shall be the
amount determined by multiplying five hundred dollars or, in the case of
a taxpayer that has obtained pursuant to chapter six-B of such title
twenty-two a certification of eligibility dated on or after July first,
nineteen hundred ninety-five, one thousand dollars or, in the case of an
eligible business that has obtained pursuant to chapter six-B of such
title twenty-two a certification of eligibility dated on or after July
first, two thousand, for a relocation to eligible premises located
within a revitalization area defined in subdivision (n) of section
22-621 of the code, three thousand dollars, by the number of eligible
aggregate employment shares maintained by the taxpayer during the
taxable year with respect to particular premises to which the taxpayer
has relocated; provided, however, with respect to a relocation for which
no application for a certificate of eligibility is submitted prior to
July first, two thousand three, to eligible premises that are not within
a revitalization area, if the date of such relocation as determined
pursuant to subdivision (j) of section 22-621 of the code is before July
first, nineteen hundred ninety-five, the amount to be multiplied by the
number of eligible aggregate employment shares shall be five hundred
dollars, and with respect to a relocation for which no application for a
certificate of eligibility is submitted prior to July first, two
thousand three, to eligible premises that are within a revitalization
area, if the date of such relocation as determined pursuant to
subdivision (j) of such section is before July first, nineteen hundred
ninety-five, the amount to be multiplied by the number of eligible
aggregate employment shares shall be five hundred dollars, and if the
date of such relocation as determined pursuant to subdivision (j) of
such section is on or after July first, nineteen hundred ninety-five,
and before July first, two thousand, one thousand dollars; provided,
however, that no credit shall be allowed for the relocation of any
retail activity or hotel services; provided, further, that no credit
shall be allowed under this subdivision to any taxpayer that has elected
pursuant to subdivision (d) of section 22-622 of the code to take such
credit against a gross receipts tax imposed by chapter eleven of this
title; and provided that in the case of an eligible business that has
obtained pursuant to chapter six-B of such title twenty-two
certifications of eligibility for more than one relocation, the portion
of the total amount of eligible aggregate employment shares to be
multiplied by the dollar amount specified in this subdivision for each
such certification of a relocation shall be the number of total
attributed eligible aggregate employment shares determined with respect
to such relocation pursuant to subdivision (o) of section 22-621 of the
code. For purposes of this subdivision, the terms "eligible aggregate
employment shares," "relocate," "retail activity" and "hotel services"
shall have the meanings ascribed by section 22-621 of the code.
(b) The credit allowed under this subdivision with respect to eligible
aggregate employment shares maintained with respect to particular
premises to which the taxpayer has relocated shall be allowed for the
first taxable year during which such eligible aggregate employment
shares are maintained with respect to such premises and for any of the
twelve succeeding taxable years during which eligible aggregate
employment shares are maintained with respect to such premises; provided
that the credit allowed for the twelfth succeeding taxable year shall be
calculated by multiplying the number of eligible aggregate employment
shares maintained with respect to such premises in the twelfth
succeeding taxable year by the lesser of one and a fraction the
numerator of which is such number of days in the taxable year of
relocation less the number of days the eligible business maintained
employment shares in the eligible premises in the taxable year of
relocation and the denominator of which is the number of days in such
twelfth succeeding taxable year during which such eligible aggregate
employment shares are maintained with respect to such premises. Except
as provided in paragraph (d) of this subdivision, if the amount of the
credit allowable under this subdivision for any taxable year exceeds the
tax imposed for such year, the excess may be carried over, in order, to
the five immediately succeeding taxable years and, to the extent not
previously deductible, may be deducted from the taxpayer's tax for such
years.
(c) The credit allowable under this subdivision shall be deducted
after the credit allowed by subdivision eighteen of this section, but
prior to the deduction of any other credit allowed by this section.
(d) In the case of a taxpayer that has obtained a certification of
eligibility pursuant to chapter six-B of title twenty-two of the code
dated on or after July first, two thousand for a relocation to eligible
premises located within the revitalization area defined in subdivision
(n) of section 22-621 of the code, the credits allowed under this
subdivision, or in the case of a taxpayer that has relocated more than
once, the portion of such credits attributed to such certification of
eligibility pursuant to paragraph (a) of this subdivision, against the
tax imposed by this chapter for the taxable year of such relocation and
for the four taxable years immediately succeeding the taxable year of
such relocation, shall be deemed to be overpayments of tax by the
taxpayer to be credited or refunded, without interest, in accordance
with the provisions of section 11-677 of this chapter. For such taxable
years, such credits or portions thereof may not be carried over to any
succeeding taxable year; provided, however, that this paragraph shall
not apply to any relocation for which an application for a certification
of eligibility was not submitted prior to July first, two thousand
three, unless the date of such relocation is on or after July first, two
thousand.
17-a. (a) In addition to any other credit allowed by this section, a
taxpayer shall be allowed a credit against the tax imposed by this
subchapter to be credited or refunded in the manner hereinafter provided
in this subdivision. The amount of such credit shall be equal to the
amount of sales and compensating use taxes imposed by section eleven
hundred seven of the tax law during the taxpayer's taxable year (and the
amount of any interest imposed in connection therewith) which was paid
after January first, nineteen hundred ninety-five, less any credit or
refund of such taxes (or such interest), with respect to the purchase or
use by the taxpayer of the services described in subdivision (b) of
section eleven hundred five-b of the tax law.
(b) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded, without interest, in accordance with the
provisions of section 11-677 of this chapter.
(c) Where the taxpayer receives a refund or credit of any tax imposed
under section eleven hundred seven of the tax law (or of any interest
imposed in connection therewith) for which the taxpayer had claimed a
credit under the provisions of this subdivision in a prior taxable year,
the amount of such tax (or such interest) refund or credit shall be
added to the tax imposed by subdivision one of section 11-603 of this
subchapter, and such amount shall be subtracted in computing entire net
income for the taxable year.
17-b. (a) For taxable years beginning on or after January first, two
thousand six, in addition to any other credit allowed by this section,
an eligible business that first enters into a binding contract on or
after July first, two thousand five to purchase or lease eligible
premises to which it relocates shall be allowed a one-time credit
against the tax imposed by this subchapter to be credited or refunded in
the manner hereinafter provided in this subdivision. The amount of such
credit shall be one thousand dollars per full-time employee; provided,
however, that the amount of such credit shall not exceed the lesser of
actual relocation costs or one hundred thousand dollars.
(b) When used in this subdivision, the following terms shall have the
following meanings:
"Eligible business" means any business subject to tax under this
subchapter that (1) has been conducting substantial business operations
and engaging primarily in industrial and manufacturing activities at one
or more locations within the city of New York or outside the state of
New York continuously during the twenty-four consecutive full months
immediately preceding relocation, (2) has leased the premises from which
it relocates continuously during the twenty-four consecutive full months
immediately preceding relocation, (3) first enters into a binding
contract on or after July first, two thousand five to purchase or lease
eligible premises to which such business will relocate, and (4) will be
engaged primarily in industrial and manufacturing activities at such
eligible premises.
"Eligible premises" means premises located entirely within an
industrial business zone. For any eligible business, an industrial
business zone tax credit shall not be granted with respect to more than
one eligible premises.
"Full-time employee" means (1) one person gainfully employed in an
eligible premises by an eligible business where the number of hours
required to be worked by such person is not less than thirty-five hours
per week; or (2) two persons gainfully employed in an eligible premises
by an eligible business where the number of hours required to be worked
by each such person is more than fifteen hours per week but less than
thirty-five hours per week.
"Industrial business zone" means an area within the city of New York
established pursuant to section 22-626 of this code.
"Industrial business zone tax credit" means a credit, as provided for
in this subdivision, against a tax imposed under this subchapter.
"Industrial and manufacturing activities" means activities involving
the assembly of goods to create a different article, or the processing,
fabrication, or packaging of goods. Industrial and manufacturing
activities shall not include waste management or utility services.
"Relocation" means the physical relocation of furniture, fixtures,
equipment, machinery and supplies directly to an eligible premises, from
one or more locations of an eligible business, including at least one
location at which such business conducts substantial business operations
and engages primarily in industrial and manufacturing activities. For
purposes of this subdivision, the date of relocation shall be (1) the
date of the completion of the relocation to the eligible premises or (2)
ninety days from the commencement of the relocation to the eligible
premises, whichever is earlier.
"Relocation costs" means costs incurred in the relocation of such
furniture, fixtures, equipment, machinery and supplies, including, but
not limited to, the cost of dismantling and reassembling equipment and
the cost of floor preparation necessary for the reassembly of the
equipment. Relocation costs shall include only such costs that are
incurred during the ninety-day period immediately following the
commencement of the relocation to an eligible premises. Relocation costs
shall not include costs for structural or capital improvements or items
purchased in connection with the relocation.
(c) The credit allowed under this subdivision for any taxable year
shall be deemed to be an overpayment of tax by the taxpayer to be
credited or refunded without interest, in accordance with the provisions
of section 11-677 of this chapter.
(d) The number of full-time employees for the purposes of calculating
an industrial business tax credit shall be the average number of
full-time employees, calculated on a weekly basis, employed in the
eligible premises by the eligible business in the fifty-two week period
immediately following the earlier of (1) the date of the completion of
the relocation to eligible premises or (2) ninety days from the
commencement of the relocation to the eligible premises.
(e) The credit allowed under this subdivision must be taken by the
taxpayer in the taxable year in which such twelve month period selected
by the taxpayer ends.
(f) For the purposes of calculating entire net income in the taxable
year that an industrial business tax credit is allowed, a taxpayer must
add back the amount of the credit allowed under this subdivision, to the
extent of any relocation costs deducted in the current taxable year or a
prior taxable year in calculating federal taxable income.
(g) The credit allowed under this subdivision shall not be granted for
an eligible business for more than one relocation. Notwithstanding the
foregoing, an industrial business tax credit shall not be granted if the
eligible business receives benefits pursuant to chapter six-B or six-C
of title twenty-two of this code, through a grant program administered
by the business relocation assistance corporation, or through the New
York city printers relocation fund grant.
(h) The commissioner of finance is authorized to promulgate rules and
regulations and to prescribe forms necessary to effectuate the purposes
of this subdivision.
18. (a) If a corporation is a partner in an unincorporated business
taxable under chapter five of this title, and is required to include in
entire net income its distributive share of income, gain, loss and
deductions of, or guaranteed payments from, such unincorporated
business, such corporation shall be allowed a credit against the tax
imposed by this subchapter equal to the lesser of the amounts determined
in subparagraphs one and two of this paragraph:
(1) The amount determined in this subparagraph is the product of (A)
the sum of (i) the tax imposed by chapter five of this title on the
unincorporated business for its taxable year ending within or with the
taxable year of the corporation and paid by the unincorporated business
and (ii) the amount of any credit or credits taken by the unincorporated
business under section 11-503 of this title (except the credit allowed
by subdivision (b) of such section) for its taxable year ending within
or with the taxable year of the corporation, to the extent that such
credits do not reduce such unincorporated business's tax below zero, and
(B) a fraction, the numerator of which is the net total of the
corporation's distributive share of income, gain, loss and deductions
of, and guaranteed payments from, the unincorporated business for such
taxable year, and the denominator of which is the sum, for such taxable
year, of the net total distributive shares of income, gain, loss and
deductions of, and guaranteed payments to, all partners in the
unincorporated business for whom or which such net total (as separately
determined for each partner) is greater than zero.
(2) The amount determined in this subparagraph is the product of (A)
the excess of (i) the tax computed under clause one of subparagraph (a)
of paragraph E of subdivision one of this section, without allowance of
any credits allowed by this section, over (ii) the tax so computed,
determined as if the corporation had no such distributive share or
guaranteed payments with respect to the unincorporated business, and (B)
a fraction, the numerator of which is four and the denominator of which
is eight and eighty-five one hundredths, provided, however, that the
amounts computed in clauses (i) and (ii) of this subparagraph shall be
computed with the following modifications:
(I) such amounts shall be computed without taking into account any
carryforward or carryback by the partner of a net operating loss;
(II) if, prior to taking into account any distributive share or
guaranteed payments from any unincorporated business or any net
operating loss carryforward or carryback, the entire net income of the
partner is less than zero, such entire net income shall be treated as
zero; and
(III) if such partner's net total distributive share of income, gain,
loss and deductions of, and guaranteed payments from, any unincorporated
business is less than zero, such net total shall be treated as zero. The
amount determined in this subparagraph shall not be less than zero.
(b)(1) Notwithstanding anything to the contrary in paragraph (a) of
this subdivision, in the case of a corporation that, before the
application of this subdivision or any other credit allowed by this
section, is liable for the tax on entire net income under clause one of
subparagraph (a) of paragraph E of subdivision one of this section, the
credit or the sum of the credits that may be taken by such corporation
for a taxable year under this subdivision with respect to an
unincorporated business or unincorporated businesses in which it is a
partner shall not exceed the tax so computed, without allowance of any
credits allowed by this section, multiplied by a fraction the numerator
of which is four and the denominator of which is eight and eighty-five
one hundredths. If the credit allowed under this subdivision or the sum
of such credits exceeds the product of such tax and such fraction, the
amount of the excess may be carried forward, in order, to each of the
seven immediately succeeding taxable years and, to the extent not
previously taken, shall be allowed as a credit in each of such years. In
applying the provisions of the preceding sentence, the credit determined
for the taxable year under paragraph (a) of this subdivision shall be
taken before taking any credit carryforward pursuant to this paragraph
and the credit carryforward attributable to the earliest taxable year
shall be taken before taking a credit carryforward attributable to a
subsequent taxable year.
(2) Notwithstanding anything to the contrary in paragraph (a) of this
subdivision, in the case of a corporation that, before the application
of this subdivision or any other credit allowed by this section, is
liable for the tax on entire net income plus certain salaries and other
compensation under clause three of subparagraph (a) of paragraph E of
subdivision one of this section, the maximum credit that may be taken in
any taxable year is the amount that will reduce the tax so computed,
without allowance of any credits allowed by this section, to zero. For
purposes of this paragraph each dollar of credit shall be applied so as
to reduce such tax by sixty-six and thirty-eight one hundredths cents.
If the amount of credit allowed under this subdivision or the sum of
such credits exceeds the amount that may be taken against such tax, the
amount of the excess may be carried forward, in order, to each of the
seven immediately succeeding taxable years and, to the extent not
previously taken, shall be allowed as a credit in each of such years. In
applying the provisions of the preceding sentence, the credit determined
for the taxable year under paragraph (a) of this subdivision shall be
taken before taking any credit carryforward pursuant to this paragraph
and the credit carryforward attributable to the earliest taxable year
shall be taken before taking a credit carryforward attributable to a
subsequent taxable year.
(3) No credit allowed under this subdivision may be taken in a taxable
year by a taxpayer that, in the absence of such credit, would be liable
for the tax computed on the basis of business and investment capital
under clause two of subparagraph (a) of paragraph E of subdivision one
of this section or the fixed-dollar minimum tax under clause four of
subparagraph (a) of paragraph E of subdivision one of this section. No
credit allowed under this subdivision may be taken against the tax
computed on the basis of subsidiary capital under subparagraph (b) of
paragraph E of subdivision one of this section.
(c) For corporations that file a report on a combined basis pursuant
to subdivision four of section 11-605 of this chapter, the credit
allowed by this subdivision shall be computed as if the combined group
were the partner in each unincorporated business from which any of the
members of such group had a distributive share or guaranteed payments,
provided, however, if more than one member of the combined group is a
partner in the same unincorporated business, for purposes of the
calculation required in subparagraph one of paragraph (a) of this
subdivision, the numerator of the fraction described in clause (B) of
such subparagraph one shall be the sum of the net total distributive
shares of income, gain, loss and deductions of, and guaranteed payments
from, the unincorporated business of all of the partners of the
unincorporated business within the combined group for which such net
total (as separately determined for each partner) is greater than zero,
and the denominator of such fraction shall be the sum of the net total
distributive shares of income, gain, loss and deductions of, and
guaranteed payments from, the unincorporated business of all partners in
the unincorporated business for whom or which such net total (as
separately determined for each partner) is greater than zero.
(d) The credit allowed by this subdivision shall not be allowed to a
partner in an unincorporated business with respect to any tax paid by
the unincorporated business under chapter five of this title for any
taxable year beginning before July first, nineteen hundred ninety-four.
(e) Notwithstanding any other provision of this subchapter, the credit
allowable under this subdivision shall be taken prior to the taking of
any other credit allowed by this section. Notwithstanding any other
provision of this subchapter, the application of this subdivision shall
not change the basis on which the taxpayer's tax is computed under
paragraph E of subdivision one of this section.
19. Lower Manhattan relocation and employment assistance credit. (a)
In addition to any other credit allowed by this section, a taxpayer that
has obtained the certifications required by chapter six-C of title
twenty-two of the code shall be allowed a credit against the tax imposed
by this chapter. The amount of the credit shall be the amount determined
by multiplying three thousand dollars by the number of eligible
aggregate employment shares maintained by the taxpayer during the
taxable year with respect to eligible premises to which the taxpayer has
relocated; provided, however, that no credit shall be allowed for the
relocation of any retail activity or hotel services; provided, further,
that no credit shall be allowed under this subdivision to any taxpayer
that has elected pursuant to subdivision (d) of section 22-624 of the
code to take such credit against a gross receipts tax imposed under
chapter eleven of this title. For purposes of this subdivision, the
terms "eligible aggregate employment shares," "eligible premises,"
"relocate," "retail activity" and "hotel services" shall have the
meanings ascribed by section 22-623 of the code.
(b) The credit allowed under this subdivision with respect to eligible
aggregate employment shares maintained with respect to eligible premises
to which the taxpayer has relocated shall be allowed for the taxable
year of the relocation and for any of the twelve succeeding taxable
years during which eligible aggregate employment shares are maintained
with respect to eligible premises; provided that the credit allowed for
the twelfth succeeding taxable year shall be calculated by multiplying
the number of eligible aggregate employment shares maintained with
respect to eligible premises in the twelfth succeeding taxable year by
the lesser of one and a fraction the numerator of which is such number
of days in the taxable year of relocation less the number of days the
taxpayer maintained employment shares in eligible premises in the
taxable year of relocation and the denominator of which is the number of
days in such twelfth taxable year during which such eligible aggregate
employment shares are maintained with respect to such premises.
(c) Except as provided in paragraph (d) of this subdivision, if the
amount of the credit allowable under this subdivision for any taxable
year exceeds the tax imposed for such year, the excess may be carried
over, in order, to the five immediately succeeding taxable years and, to
the extent not previously deductible, may be deducted from the
taxpayer's tax for such years.
(d) The credits allowed under this subdivision, against the tax
imposed by this chapter for the taxable year of the relocation and for
the four taxable years immediately succeeding the taxable year of such
relocation, shall be deemed to be overpayments of tax by the taxpayer to
be credited or refunded, without interest, in accordance with the
provisions of section 11-677 of this chapter. For such taxable years,
such credits or portions thereof may not be carried over to any
succeeding taxable year.
(e) The credit allowable under this subdivision shall be deducted
after the credits allowed by subdivisions seventeen and eighteen of this
section, but prior to the deduction of any other credit allowed by this
section.
* 20. Film production credit. (a)(1) allowance of credit. A taxpayer
which is a qualified film production company, and which is subject to
tax under this subchapter, shall be allowed a credit against such tax,
pursuant to the provisions in subdivision (c) of this section, to be
computed as hereinafter provided.
(2) The amount of the credit shall be the product of five percent and
the qualified production costs paid or incurred in the production of a
qualified film, provided that the qualified production costs (excluding
post production costs) paid or incurred which are attributable to the
use of tangible property or the performance of services at a qualified
film production facility in the production of such qualified film equal
or exceed seventy-five percent of the production costs (excluding post
production costs) paid or incurred which are attributable to the use of
tangible property or the performance of services at any film production
facility within and without the city of New York in the production of
such qualified film. However, if the qualified production costs
(excluding post production costs) which are attributable to the use of
tangible property or the performance of services at a qualified film
production facility in the production of such qualified film are less
than three million dollars, then the portion of the qualified production
costs attributable to the use of tangible property or the performance of
services in the production of such qualified film outside of a qualified
film production facility shall be allowed only if the shooting days
spent in the city of New York outside of a film production facility in
the production of such qualified film equal or exceed seventy-five
percent of the total shooting days spent within and without the city of
New York outside of a film production facility in the production of such
qualified film. The credit shall be allowed for the taxable year in
which the production of such qualified film is completed.
(3) No qualified production costs used by a taxpayer either as the
basis for the allowance of the credit provided for under this
subdivision or used in the calculation of the credit provided for under
this subdivision shall be used by such taxpayer to claim any other
credit allowed pursuant to this title.
(b) Definitions. As used in this subdivision, the following terms
shall have the following meanings:
(1) "Qualified production costs" means production costs only to the
extent such costs are attributable to the use of tangible property or
the performance of services within the city of New York directly and
predominantly in the production (including pre-production and post
production) of a qualified film.
(2) "Production costs" means any costs for tangible property used and
services performed directly and predominantly in the production
(including pre-production and post production) of a qualified film.
"Production costs" shall not include (i) costs for a story, script or
scenario to be used for a qualified film and (ii) wages or salaries or
other compensation for writers, directors, including music directors,
producers and performers (other than background actors with no scripted
lines). "Production costs" generally include technical and crew
production costs, such as expenditures for film production facilities,
or any part thereof, props, makeup, wardrobe, film processing, camera,
sound recording, set construction, lighting, shooting, editing and
meals.
(3) "Qualified film" means a feature-length film, television film,
television pilot and/or each episode of a television series, regardless
of the medium by means of which the film, pilot or episode is created or
conveyed. "Qualified film" shall not include (i) a documentary film,
news or current affairs program, interview or talk program, "how-to"
(i.e., instructional) film or program, film or program consisting
primarily of stock footage, sporting event or sporting program, game
show, award ceremony, film or program intended primarily for industrial,
corporate or institutional end-users, fundraising film or program,
daytime drama (i.e., daytime "soap opera"), commercials, music videos or
"reality" program, or (ii) a production for which records are required
under section 2257 of title 18, United States code, to be maintained
with respect to any performer in such production (reporting of books,
films, etc. with respect to sexually explicit conduct).
(4) "Film production facility" shall mean a building and/or complex of
buildings and their improvements and associated back-lot facilities in
which films are or are intended to be regularly produced and which
contain at least one sound stage.
(5) "Qualified film production facility" shall mean a film production
facility in the city of New York, which contains at least one sound
stage having a minimum of seven thousand square feet of contiguous
production space.
(6) "Qualified film production company" shall mean a corporation which
is principally engaged in the production of a qualified film and
controls the qualified film during production.
(c) Application of credit. (1) The credit allowed under this
subdivision for any taxable year shall not reduce the tax due for such
year to less than the amount prescribed in clause (4) of subparagraph
(a) of paragraph E of subdivision one of this section. Provided,
however, that if the amount of the credit allowable under this
subdivision for any taxable year reduces the tax to such amount, fifty
percent of the excess shall be treated as an overpayment of tax to be
credited or refunded in accordance with the provisions of section 11-677
of this chapter; provided, however, the provisions of section 11-679 of
this chapter notwithstanding, no interest shall be paid thereon. The
balance of such credit not credited or refunded in such taxable year may
be carried over to the immediately succeeding taxable year and may be
credited against the taxpayer's tax for such year. The excess, if any,
of the amount of the credit over the tax for such succeeding year shall
be treated as an overpayment of tax to be credited or refunded in
accordance with the provisions of section 11-677 of this chapter.
Provided, however, the provisions of section 11-679 of this chapter
notwithstanding, no interest shall be paid thereon.
(2) Notwithstanding anything contained in this section to the
contrary, the credit provided by this subdivision shall be allowed
against the taxes authorized by this chapter for the taxable year after
reduction by all other credits permitted by this chapter.
* NB Expires August 20, 2008