NY Tax L § 210-A (2021)
2021 New York Laws TAX - Tax Article 9-A - Franchise Tax on Business Corporations 210-A - Apportionment.

§ 210-A. Apportionment.  1. General. Business income and capital shall be  apportioned  to  the  state  by  the apportionment factor determined pursuant to this section.   The  apportionment  factor  is  a  fraction, determined  by including only those receipts, net income, net gains, and other  items  described  in  this  section  that  are  included  in  the computation of the taxpayer's business income (determined without regard to  the  modification provided in subparagraph nineteen of paragraph (a) of subdivision nine of section two hundred eight of  this  article)  for the  taxable  year. The numerator of the apportionment fraction shall be equal to the sum of all the amounts  required  to  be  included  in  the numerator pursuant to the provisions of this section and the denominator of  the  apportionment  fraction  shall  be  equal to the sum of all the amounts required to be included  in  the  denominator  pursuant  to  the provisions of this section.   2.   Sales  of  tangible  personal  property,  electricity,  and  real property.  (a) Receipts from sales of tangible personal  property  where shipments  are made to points within the state or the destination of the property is a point in the state shall be included in the  numerator  of the  apportionment  fraction.  Receipts  from sales of tangible personal property where shipments are made to points within and without the state or the destination is within and without the state shall be included  in the denominator of the apportionment fraction.  (b)  Receipts from sales of electricity delivered to points within the state shall be included in the numerator of the apportionment  fraction. Receipts  from  sales  of  electricity  delivered  to  points within and without  the  state  shall  be  included  in  the  denominator  of   the apportionment fraction.  (c)  Receipts from sales of tangible personal property and electricity that are traded as commodities, as the term "commodity"  is  defined  in section   475  of  the  internal  revenue  code,  are  included  in  the apportionment fraction in accordance with clause (I) of subparagraph two of paragraph (a) of subdivision five of this section.  (d) Net gains (not less than zero) from the  sales  of  real  property located  within  the  state  shall  be  included in the numerator of the apportionment fraction. Net gains (not less than zero) from the sales of real property located within and without the state shall be included  in the denominator of the apportionment fraction.   3.  Rentals  and  royalties.  (a)  Receipts  from  rentals of real and tangible personal property located within the state are included in  the numerator  of  the apportionment fraction. Receipts from rentals of real and tangible personal property located  within  and  without  the  state shall be included in the denominator of the apportionment fraction.  (b)  Receipts  of  royalties  from  the  use  of  patents, copyrights, trademarks, and similar intangible personal property  within  the  state are included in the numerator of the apportionment fraction. Receipts of royalties  from  the  use of patents, copyrights, trademarks and similar intangibles within and without the state are included in the denominator of the apportionment fraction. A patent, copyright, trademark or similar intangible property is  used  in  the  state  to  the  extent  that  the activities thereunder are carried on in the state.  (c)  Receipts  from  the  sales of rights for closed-circuit and cable television transmissions of an event (other than events occurring  on  a regularly  scheduled basis) taking place within the state as a result of the rendition of services by employees of the corporation, as  athletes, entertainers  or performing artists are included in the numerator of the apportionment fraction to the extent that such receipts are attributable to such transmissions received or exhibited within the  state.  Receipts from  all  sales  of  rights  for  closed-circuit  and  cable television  transmissions of an  event  are  included  in  the  denominator  of  the apportionment fraction.   4. Digital products. (a) For purposes of determining the apportionment fraction  under  this  section,  the  term  "digital  product" means any property  or  service,  or  combination  thereof,  of  whatever   nature delivered  to the purchaser through the use of wire, cable, fiber-optic, laser, microwave, radio wave, satellite or similar successor  media,  or any  combination  thereof.  Digital product includes, but is not limited to, an audio work, audiovisual work, visual work, book or literary work, graphic work, game, information or  entertainment  service,  storage  of digital  products and computer software by whatever means delivered. The term "delivered to" includes furnished or provided to or accessed by.  A digital   product   does   not   include   legal,  medical,  accounting, architectural, research, analytical, engineering or consulting  services provided by the taxpayer.  (b)  Receipts  from the sale of, licence to use, or granting of remote access to digital products within the state, determined according to the hierarchy of methods set forth in  subparagraphs  one  through  four  of paragraph (c) of this subdivision, shall be included in the numerator of the  apportionment  fraction. Receipts from the sale of, license to use, or granting of remote access to digital products within and without  the state  shall  be  included  in  the  denominator  of  the  apportionment fraction. The taxpayer must exercise due  diligence  under  each  method described  in  paragraph (c) of this subdivision before rejecting it and proceeding to the next method  in  the  hierarchy,  and  must  base  its determination  on  information known to the taxpayer or information that would be known to the taxpayer upon reasonable inquiry. If  the  receipt for  a  digital  product  is  comprised of a combination of property and services,  it  cannot  be  divided  into  separate  components  and   is considered  to  be  one  receipt  regardless of whether it is separately stated for billing purposes. The entire receipt  must  be  allocated  by this hierarchy.  (c)  Hierarchy  of  sourcing  methods.  (1) The customer's primary use location of the digital product;  (2) The  location  where  the  digital  product  is  received  by  the customer,  or  is  received  by  a  person designated for receipt by the customer;  (3) The apportionment fraction determined pursuant to this subdivision for the preceding taxable year for such digital product; or  (4) The apportionment fraction in the current taxable year  for  those digital  products  that  can  be sourced using the hierarchy of sourcing methods in subparagraphs one and two of this paragraph.   5. Financial transactions. (a) Financial  instruments.    A  financial instrument  is  a  "nonqualified  financial  instrument"  if it is not a qualified financial instrument. A qualified financial instrument means a financial instrument that is of a type described in any of clauses  (A), (B), (C), (D), (G), (H) or (I) of subparagraph two of this paragraph and that has been marked to market in the taxable year by the taxpayer under section  475  or section 1256 of the internal revenue code.  Further, if the taxpayer has in the  taxable  year  marked  to  market  a  financial instrument  of  the  type described in any of the clauses (A), (B), (C), (D), (G), (H) or (I) of subparagraph two of  this  paragraph,  then  any financial  instrument  within that type described in the above specified clause or clauses that has not been marked to  market  by  the  taxpayer under  section  475  or  section  1256 of the internal revenue code is a qualified financial instrument in the taxable year. Notwithstanding  the two  preceding  sentences, (i) a loan secured by real property shall not be a qualified financial instrument, (ii) if the  only  loans  that  are  marked  to  market  by the taxpayer under section 475 or section 1256 of the internal revenue code are loans secured by real  property,  then  no loans  shall  be  qualified  financial  instruments, (iii) stock that is investment  capital  as  defined in paragraph (a) of subdivision five of section two hundred eight of this  article  shall  not  be  a  qualified financial  instrument, and (iv) stock that generates other exempt income as defined in subdivision six-a of section two  hundred  eight  of  this article  and  that  is not marked to market under section 475 or section 1256 of the internal revenue  code  shall  not  constitute  a  qualified financial  instrument with respect to the income from that stock that is described in such subdivision six-a. If a corporation is included  in  a combined  report, the definition of qualified financial instrument shall be determined on a combined basis. In the case of a RIC or a  REIT  that is not a captive RIC or a captive REIT, a qualified financial instrument means  a  financial  instrument  that  is  of a type described in any of clauses (A), (B), (C), (D), (G), (H) or (I) of subparagraph two of  this paragraph,  other  than  (i) a loan secured by real property, (ii) stock that is investment capital as defined in paragraph  (a)  of  subdivision five  of section two hundred eight of this article, and (iii) stock that generates other exempt income as defined in subdivision six-a of section two hundred eight of this article with respect to the income  from  that stock that is described in such subdivision six-a.  (1)  Fixed  percentage  method for qualified financial instruments. In determining the inclusion of  receipts  and  net  gains  from  qualified financial instruments in the apportionment fraction, taxpayers may elect to  use  the  fixed percentage method described in this subparagraph for qualified financial instruments. The election is irrevocable, applies to all qualified financial instruments, and must be made on an annual basis on the taxpayer's original, timely filed return, determined with  regard to  extensions  of  time  for  filing.  If the taxpayer elects the fixed percentage method, then all income, gain or loss,  including  marked  to market  net  gains  as defined in clause (J) of subparagraph two of this paragraph, from qualified  financial  instruments  constitutes  business income,  gain  or  loss. If the taxpayer does not elect to use the fixed percentage method, then receipts and  net  gains  are  included  in  the apportionment  fraction  in accordance with the customer sourcing method described in  subparagraph  two  of  this  paragraph.  Under  the  fixed percentage  method, eight percent of all net income (not less than zero) from qualified financial instruments is included in the numerator of the apportionment fraction.  All  net  income  (not  less  than  zero)  from qualified  financial  instruments  is included in the denominator of the apportionment fraction.  (2) Customer sourcing method. Receipts and net  gains  from  qualified financial  instruments, in cases where the taxpayer did not elect to use the fixed percentage  method  described  in  subparagraph  one  of  this paragraph,  and  from nonqualified financial instruments are included in the apportionment fraction in accordance  with  this  subparagraph.  For purposes of this paragraph, an individual is deemed to be located in the state  if  his or her billing address is in the state. A business entity is deemed to be located in the  state  if  its  commercial  domicile  is located in the state.  (A)  Loans.  (i)  Receipts constituting interest from loans secured by real property  located  within  the  state  shall  be  included  in  the numerator  of the apportionment fraction. Receipts constituting interest from loans secured by real property located within and without the state shall be included in the denominator of the apportionment fraction.  (ii) Receipts constituting interest from loans  not  secured  by  real property  shall  be  included  in  the  numerator  of  the apportionment  fraction if the borrower is located in the state. Receipts  constituting interest  from  loans not secured by real property, whether the borrower is located within or  without  the  state,  shall  be  included  in  the denominator of the apportionment fraction.  (iii)  Net  gains  (not less than zero) from sales of loans secured by real property  are  included  in  the  numerator  of  the  apportionment fraction as provided in this subclause. The amount of net gains from the sale  of loans secured by real property included in the numerator of the apportionment fraction is determined by multiplying the net gains  by  a fraction  the  numerator  of  which is the amount of gross proceeds from sales of loans secured by real property located within the state and the denominator of which is the gross proceeds from sales of  loans  secured by  real  property within and without the state. Gross proceeds shall be determined after the deduction of any cost incurred to acquire the loans but shall not be less than zero. Net gains (not  less  than  zero)  from sales of loans secured by real property within and without the state are included in the denominator of the apportionment fraction.  (iv) Net gains (not less than zero) from sales of loans not secured by real  property  are  included  in  the  numerator  of  the apportionment fraction as provided in this subclause. The amount of net gains from the sale of loans not secured by real property included in the numerator  of the apportionment fraction is determined by multiplying the net gains by a  fraction, the numerator of which is the amount of gross proceeds from sales of loans not secured by real property to purchasers located within the state and the denominator of which is the amount of  gross  proceeds from  sales  of loans not secured by real property to purchasers located within and without the state. Gross proceeds shall be  determined  after the deduction of any cost incurred to acquire the loans but shall not be less  than  zero. Net gains (not less than zero) from sales of loans not secured by  real  property  are  included  in  the  denominator  of  the apportionment fraction.  (v)  For  purposes  of  this  subdivision,  a  loan is secured by real property if fifty percent or more of the value of the collateral used to secure the loan, when valued at fair market value as  of  the  time  the loan was entered into, consists of real property.  (B) Federal, state, and municipal debt. Receipts constituting interest and  net  gains  from  sales  of  debt  instruments issued by the United States, any state, or political subdivision of  a  state  shall  not  be included  in  the  numerator  of  the  apportionment  fraction. Receipts constituting interest and net gains (not less than zero) from  sales  of debt  instruments  issued by the United States and the state of New York or its political subdivisions shall be included in  the  denominator  of the  apportionment  fraction. Fifty percent of the receipts constituting interest and  net  gains  (not  less  than  zero)  from  sales  of  debt instruments issued by other states or their political subdivisions shall be included in the denominator of the apportionment fraction.  (C)  Asset  backed  securities and other government agency debt. Eight percent of the interest income from asset  backed  securities  or  other securities  issued  by government agencies, including but not limited to securities  issued  by  the  Government  National  Mortgage  Association (GNMA),  the  Federal  National Mortgage Association (FNMA), the Federal Home  Loan  Mortgage  Corporation  (FHLMC),  or   the   Small   Business Administration,  or  asset  backed  securities  issued by other entities shall be included in the numerator of the apportionment fraction.  Eight percent  of  the  net gains (not less than zero) from (i) sales of asset backed securities or other securities  issued  by  government  agencies, including  but not limited to securities issued by GNMA, FNMA, or FHLMC, the Small Business Administration, or (ii) sales of other  asset  backed  securities  that  are  sold  through  a  registered securities broker or dealer or  through  a  licensed  exchange,  shall  be  included  in  the numerator  of  the  apportionment fraction. The amount of net gains (not less  than  zero)  from  sales  of  other  asset  backed  securities not referenced in subclause (i) or (ii)  of  this  clause  included  in  the numerator  of  the  apportionment  fraction is determined by multiplying such net gains by a fraction, the numerator of which is  the  amount  of gross  proceeds  from  such sales to purchasers located in the state and the denominator of which is the amount of gross proceeds from such sales to  purchasers  located  within  and   without   the   state.   Receipts constituting  interest from asset backed securities and other securities referenced in this clause and net gains (not less than zero) from  sales of  asset  backed  securities  and  other  securities referenced in this clause are included in the denominator of  the  apportionment  fraction. Gross  proceeds  shall  be determined after the deduction of any cost to acquire the securities but shall not be less than zero.  (D) Corporate bonds. Receipts  constituting  interest  from  corporate bonds are included in the numerator of the apportionment fraction if the commercial  domicile  of  the issuing corporation is in the state. Eight percent of the net gains (not less than zero) from  sales  of  corporate bonds sold through a registered securities broker or dealer or through a licensed  exchange  is  included  in  the numerator of the apportionment fraction. The amount of net gains (not less than zero) from other  sales of  corporate  bonds  included  in  the  numerator  of the apportionment fraction is determined by multiplying such net gains by a fraction,  the numerator  of  which  is the amount of gross proceeds from such sales to purchasers located in the state and the  denominator  of  which  is  the amount  of  gross  proceeds  from sales to purchasers located within and without the state. Receipts constituting interest from corporate  bonds, whether  the  issuing  corporation's  commercial  domicile  is within or without the state, and net gains (not less  than  zero)  from  sales  of corporate  bonds to purchasers within and without the state are included in the denominator of the apportionment fraction. Gross  proceeds  shall be  determined  after the deduction of any cost to acquire the bonds but shall not be less than zero.  (E) Reverse repurchase agreements and securities borrowing agreements. Eight percent of net interest income (not less than zero)  from  reverse repurchase  agreements  and  securities  borrowing  agreements  shall be included in the numerator of the apportionment  fraction.  Net  interest income  (not  less  than  zero)  from  reverse repurchase agreements and securities borrowing agreements is included in the  denominator  of  the apportionment  fraction.  Net  interest  income  from reverse repurchase agreements  and  securities  borrowing  agreements  is  determined   for purposes of this subdivision after the deduction of the interest expense from   the  taxpayer's  repurchase  agreements  and  securities  lending agreements but cannot be less  than  zero.  For  this  calculation,  the amount  of such interest expense is the interest expense associated with the sum of the value of the taxpayer's repurchase agreements where it is the seller/borrower plus the value of the taxpayer's securities  lending agreements  where  it  is  the  securities  lender, provided such sum is limited to the sum of the value of  the  taxpayer's  reverse  repurchase agreements  where  it  is  the  purchaser/lender  plus  the value of the taxpayer's securities lending agreements  where  it  is  the  securities borrower.  (F)  Federal  funds.  Eight percent of the net interest (not less than zero)  from  federal  funds  is  included  in  the  numerator   of   the apportionment  fraction.  The  net  interest  (not  less than zero) from federal funds is  included  in  the  denominator  of  the  apportionment  fraction.  Net interest from federal funds is determined after deduction of interest expense from federal funds.  (G)  Dividends  and  net  gains  from  sales  of  stock or partnership interests. Dividends from stock, net gains (not  less  than  zero)  from sales  of  stock  and  net  gains  (not less than zero) from the sale of partnership interests are  not  included  in  either  the  numerator  or denominator  of  the  apportionment  fraction  unless  the  commissioner determines pursuant to subdivision eleven of this section that inclusion of such dividends and net gains (not less than  zero)  is  necessary  to properly reflect the business income or capital of the taxpayer.  (H)  Other  financial  instruments. (i) Receipts constituting interest from other financial instruments shall be included in the  numerator  of the  apportionment  fraction  if  the  payor  is  located  in the state. Receipts constituting interest from other financial instruments, whether the  payor  is  within  or  without  the  state,  are  included  in  the denominator of the apportionment fraction.  (ii)  Net  gains  (not  less  than zero) from sales of other financial instruments and other income (not less than zero) from  other  financial instruments  where  the  purchaser  or payor is located in the state are included in the numerator of the apportionment fraction, provided  that, if the purchaser or payor is a registered securities broker or dealer or the  transaction is made through a licensed exchange, then eight percent of the net gains (not less than zero) or other  income  (not  less  than zero)  is  included  in the numerator of the apportionment fraction. Net gains (not less than zero) from sales of other financial instruments and other income (not less than zero) from other financial  instruments  are included in the denominator of the apportionment fraction.  (I)  Physical  commodities. Net income (not less than zero) from sales of  physical  commodities  are  included  in  the   numerator   of   the apportionment  fraction  as  provided  in this clause. The amount of net income from sales of physical commodities included in the  numerator  of the  apportionment  fraction is determined by multiplying the net income from sales of physical commodities by a fraction, the numerator of which is the amount of receipts from sales of  physical  commodities  actually delivered  to points within the state or, if there is no actual delivery of the physical commodity, sold to purchasers located in the state,  and the  denominator  of  which  is  the  amount  of  receipts from sales of physical commodities actually delivered to points within and without the state or, if there is no actual delivery of the physical commodity, sold to purchasers located within and without the state. Net income (not less than zero) from  sales  of  physical  commodities  is  included  in  the denominator  of  the  apportionment  fraction. Net income (not less than zero) from  sales  of  physical  commodities  is  determined  after  the deduction of the cost to acquire or produce the physical commodities.  (J)  Marked to market net gains. (i) For purposes of this subdivision, "marked to market" means that a financial instrument is,  under  section 475  or  section  1256  of  the  internal  revenue  code, treated by the taxpayer as sold for its fair market value on the last business  day  of the  taxpayer's  taxable year. "Marked to market gain or loss" means the gain or loss recognized by the taxpayer under  section  475  or  section 1256  of  the  internal revenue code because the financial instrument is treated as sold for its fair market value on the last  business  day  of the taxpayer's taxable year.  (ii)  The  amount  of  marked to market net gains (not less than zero) from each type of financial instrument that is marked to market included in  the  numerator  of  the  apportionment  fraction  is  determined  by multiplying the marked to market net gains (but not less than zero) from such  type  of  the financial instrument by a fraction, the numerator of  which is the numerator of the apportionment fraction for the  net  gains from  that  type of financial instrument determined under the applicable clause of  this  subparagraph  and  the  denominator  of  which  is  the denominator  of  the  apportionment  fraction for the net gains for that type of financial instrument determined under the applicable  clause  of this subparagraph.  Marked to market net gains (not less than zero) from financial  instruments  for  which  the  numerator  of the apportionment fraction is determined under  the  immediately  preceding  sentence  are included in the denominator of the apportionment fraction.  (iii)  If the type of financial instrument that is marked to market is not otherwise sourced by the taxpayer under this subparagraph, or if the taxpayer has a net loss  from  the  sales  of  that  type  of  financial instrument  under the applicable clause of this subparagraph, the amount of marked to market net gains (not less than zero)  from  that  type  of financial  instrument  included  in  the  numerator of the apportionment fraction is determined by multiplying the marked  to  market  net  gains (but  not  less  than  zero) from that type of financial instrument by a fraction, the numerator of which is the sum of the  amount  of  receipts included  in  the  numerator of the apportionment fraction under clauses (A), (B), (C), (D), (E), (F), (G), (H) and (I) of this subparagraph  and subclause  (ii)  of this clause, and the denominator of which is the sum of  the  amount  of  receipts  included  in  the  denominator   of   the apportionment  fraction under clauses (A), (B), (C), (D), (E), (F), (G), (H) and (I) and subclause (ii) of this  clause.  Marked  to  market  net gains  (not  less  than zero) for which the amount to be included in the numerator  of  the  apportionment  fraction  is  determined  under   the immediately  preceding  sentence  are included in the denominator of the apportionment fraction.  (b) Other receipts from broker or dealer  activities.  Receipts  of  a registered  securities  broker  or dealer from securities or commodities broker or dealer activities described in this paragraph shall be  deemed to  be  generated  within  the  state  as described in subparagraphs one through eight of this paragraph. Receipts from such activities generated within the state shall be included in the numerator of the apportionment fraction. Receipts from such activities generated within and without the state  shall  be  included  in  the  denominator  of  the  apportionment fraction.  For  the  purposes  of  this paragraph, the term "securities" shall have the same meaning as in  section  475(c)(2)  of  the  internal revenue  code  and the term "commodities" shall have the same meaning as in section 475(e)(2) of the internal revenue code.  (1) Receipts  constituting  brokerage  commissions  derived  from  the execution  of securities or commodities purchase or sales orders for the accounts of customers shall be deemed to be generated within  the  state if  the  mailing  address in the records of the taxpayer of the customer who is responsible for paying such commissions is within the state.  (2)  Receipts  constituting  margin  interest  earned  on  behalf   of brokerage  accounts  shall be deemed to be generated within the state if the mailing address in the records of the taxpayer of the  customer  who is responsible for paying such margin interest is within the state.  (3)(A)  Receipts constituting fees earned by the taxpayer for advisory services to a customer in connection with the underwriting of securities for such customer (such customer being the entity that is  contemplating issuing  or  is  issuing  securities) or fees earned by the taxpayer for managing an underwriting shall be deemed  to  be  generated  within  the state  if  the  mailing  address  in the records of the taxpayer of such customer who is responsible for paying such fees is within the state.  (B) Receipts constituting the primary  spread  of  selling  concession from  underwritten securities shall be deemed to be generated within the state if the customer is located in the state.  (C)  The  term "primary spread" means the difference between the price paid by the taxpayer to the issuer of the securities being marketed  and the  price  received  from  the  subsequent  sale  of  the  underwritten securities at the  initial  public  offering  price,  less  any  selling concession  and  any  fees paid to the taxpayer for advisory services or any manager's fees, if such fees are not paid by  the  customer  to  the taxpayer  separately.  The  term "public offering price" means the price agreed upon by the taxpayer and the issuer at which the  securities  are to  be  offered  to  the public. The term "selling concession" means the amount paid to the taxpayer for participating in the underwriting  of  a security where the taxpayer is not the lead underwriter.  (4)  Receipts constituting account maintenance fees shall be deemed to be generated within the state if the mailing address in  the  record  of the  taxpayer of the customer who is responsible for paying such account maintenance fees is within the state.  (5) Receipts constituting fees for management  or  advisory  services, including   fees   for  advisory  services  in  relation  to  merger  or acquisition activities, but excluding fees paid for  services  described in  paragraph  (d)  of this subdivision, shall be deemed to be generated within the state if the mailing address in the records of  the  taxpayer of  the  customer  who is responsible for paying such fees is within the state.  (6) Receipts constituting interest earned by the taxpayer on loans and advances made by the taxpayer  to  a  corporation  affiliated  with  the taxpayer  but  with  which  the taxpayer is not permitted or required to file a combined report pursuant to section two  hundred  ten-C  of  this article  shall  be  deemed  to  arise  from  services  performed  at the principal place of business of such affiliated corporation.  (7) If the  taxpayer  receives  any  of  the  receipts  enumerated  in subparagraphs  one  through  four  of  this  paragraph  as a result of a securities correspondent relationship such  taxpayer  has  with  another broker  or  dealer  with the taxpayer acting in this relationship as the clearing firm, such receipts shall be deemed to be generated within  the state  to  extent set forth in each of such subparagraphs. The amount of such receipts shall exclude the amount the taxpayer is required  to  pay to  the  correspondent  firm for such correspondent relationship. If the taxpayer receives any of the receipts enumerated  in  subparagraphs  one through   four   of   this  paragraph  as  as  result  of  a  securities correspondent relationship such taxpayer  has  with  another  broker  or dealer  with the taxpayer acting in this relationship as the introducing firm, such receipts shall be deemed to be generated within the state  to the extent set forth in each of such subparagraphs.  (8)  If,  for  purposes  of  subparagraphs  one,  two,  clause  (A) of subparagraph three, four, or five of  this  paragraph  the  taxpayer  is unable  from  its  records  to  determine  the  mailing  address  of the customer, eight percent of the receipts is included in the numerator  of the apportionment fraction.  (c)  Receipts  from  credit  card  and  similar  activities.  Receipts relating to the bank, credit, travel and entertainment  card  activities described  in  this paragraph shall be deemed to be generated within the state as described in subparagraphs one through four of this  paragraph. Receipts  from  such  activities  generated  within  the  state shall be included in the numerator of the apportionment fraction.  Receipts  from such activities generated within and without the state shall be included in the denominator of the apportionment fraction.  (1)  Receipts  constituting  interest,  and  fees and penalties in the nature of interest, from bank, credit,  travel  and  entertainment  card receivables  shall  be  deemed  to  be generated within the state if the mailing address of the card holder in the records of the taxpayer is  in the state;  (2)  Receipts  from  service charges and fees from such cards shall be deemed to be generated within the state if the mailing  address  of  the card holder in the records of the taxpayer is in the state; and  (3)  Receipts  from merchant discounts shall be deemed to be generated within the state if the merchant is located within  the  state.  In  the case  of  a  merchant  with  locations  both within and without New York state, only receipts from merchant discounts attributable to sales  made from locations within New York state are allocated to New York state. It shall  be  presumed  that the location of the merchant is the address of the merchant shown on the invoice  submitted  by  the  merchant  to  the taxpayer.  (4)  Receipts  from credit card authorization processing, and clearing and settlement processing received by credit card  processors  shall  be deemed to be generated within the state if the location where the credit card  processor's  customer accesses the credit card processor's network is located within the state. The amount of all other  receipts  received by credit card processors not specifically addressed in subdivisions one through  nine  of  this  section deemed to be generated within the state shall be determined by  multiplying  the  total  amount  of  such  other receipts by the average of (i) eight percent and (ii) the percent of its New  York  access  points.  The percent of New York access points is the number of locations in New York from which the credit  card  processor's customers  access  the  credit  card  processor's network divided by the total number of locations in the United States  where  the  credit  card processor's customers access the credit card processor's network.  (d)  Receipts  from certain services to investment companies. Receipts received from an investment company arising from the sale of management, administration or distribution services to such investment  company  are included  in  the denominator of the apportionment fraction. The portion of such receipts included in the numerator of the apportionment fraction (such portion referred to herein as  the  New  York  portion)  shall  be determined as provided in this paragraph.  (1)  The  New  York  portion shall be the product of the total of such receipts from the sale of such services and a fraction. The numerator of that fraction  is  the  sum  of  the  monthly  percentages  (as  defined hereinafter)  determined  for  each  month  of  the investment company's taxable year for federal income tax purposes  which  taxable  year  ends within  the taxable year of the taxpayer (but excluding any month during which the investment company had no  outstanding  shares).  The  monthly percentage  for  each such month is determined by dividing the number of shares in the investment company that are owned on the last day  of  the month  by shareholders that are located in the state by the total number of shares in the  investment  company  outstanding  on  that  date.  The denominator of the fraction is the number of such monthly percentages.  (2)(A)  For purposes of this paragraph, an individual, estate or trust is deemed to be located in the state if his, her or its mailing  address on  the  records  of  the investment company is in the state. A business entity is deemed to be located in the state if its  commercial  domicile is located in the state.  (B)  For  purposes  of  this  paragraph, the term "investment company" means a regulated investment company, as defined in section 851  of  the internal revenue code, and a partnership to which section 7704(a) of the internal  revenue  code applies (by virtue of section 7704(c)(3) of such  code) and that meets the requirements of section 851(b)  of  such  code. The  preceding sentence shall be applied to the taxable year for federal income  tax  purposes  of  the  business  entity  that  is  asserted  to constitute  an  investment  company that ends within the taxable year of the taxpayer.  (C) For  purposes  of  this  paragraph  the  term  "receipts  from  an investment   company"   includes   amounts  received  directly  from  an investment company as well as amounts received from the shareholders  in such investment company, in their capacity as such.  (D)  For  purposes  of  this paragraph, the term "management services" means the rendering of  investment  advice  to  an  investment  company, making  determinations  as to when sales and purchases of securities are to be made on behalf  of  an  investment  company,  or  the  selling  or purchasing  of  securities constituting assets of an investment company, and related activities, but only where such activity or  activities  are performed  pursuant  to  a  contract with the investment company entered into pursuant to section 15(a) of the federal investment company act  of nineteen hundred forty, as amended.  (E)  For  purposes of this paragraph, the term "distribution services" means  the  services  of  advertising,   servicing   investor   accounts (including  redemptions),  marketing  shares  or  selling  shares  of an investment company, but, in the case of advertising, servicing  investor accounts  (including  redemptions)  or marketing shares, only where such service is performed by a person who is (or was, in the case of a closed end company) also engaged in the service of selling such shares. In  the case  of  an  open  end  company, such service of selling shares must be performed pursuant to a contract entered into pursuant to section  15(b) of  the  federal  investment  company  act of nineteen hundred forty, as amended.  (F) For purposes of this paragraph, the term "administration services" includes clerical, accounting, bookkeeping,  data  processing,  internal auditing, legal and tax services performed for an investment company but only if the provider of such service or services during the taxable year in  which  such  service  or  services are sold also sells management or distribution  services,  as  defined  hereinabove,  to  such  investment company.  (e)  For  purposes  of  this  subdivision,  a  taxpayer  shall use the following hierarchy to determine the commercial domicile of  a  business entity,  based  on  the information known to the taxpayer or information that would be known upon reasonable inquiry: (i) the seat of  management and  control of the business entity; and (ii) the billing address of the business entity in the taxpayer's records. The  taxpayer  must  exercise due  diligence  before  rejecting the first method in this hierarchy and proceeding to the next method.  (f) For purposes of this subdivision, the term "registered  securities broker  or  dealer"  means  a broker or dealer registered as such by the securities and exchange commission or a broker or dealer  registered  as such by the commodities futures trading commission, and shall include an OTC  derivatives  dealer  as defined under regulations of the securities and exchange commission at title 17, part 240, section 3b-12 of the code of federal regulations (17 CFR 240.3b-12).   5-a. Global intangible low-taxed income. (a) Notwithstanding any other provision of this section, global intangible low-taxed income  shall  be included in the apportionment fraction as provided in this subdivision.  (b)  For  New  York C corporations, global intangible low-taxed income shall not be included in the numerator of  the  apportionment  fraction. Five  percent of global intangible low-taxed income shall be included in the denominator of the apportionment fraction.  (c) For New York S corporations, global  intangible  low-taxed  income shall  not  be  included in the numerator of the apportionment fraction. Global intangible low-taxed income shall be included in the  denominator of the apportionment fraction.  (d)  For  purposes  of  this  subdivision, the term "global intangible low-taxed income" means the  amount  required  to  be  included  in  the taxpayer's  federal  gross  income pursuant to subsection (a) of section 951A of the internal revenue code.   6. Receipts from railroad and trucking  business.  Receipts  from  the conduct  of  a railroad business (including surface railroad, whether or not operated by steam, subway railroad, elevated railroad, palace car or sleeping car business) or  a  trucking  business  are  included  in  the numerator  of  the  apportionment  fraction  as  follows.  The amount of receipts from the conduct of a railroad business or a trucking  business included in the numerator of the apportionment fraction is determined by multiplying the amount of receipts from such business by a fraction, the numerator of which is the miles in such business within the state during the period covered by the taxpayer's report and the denominator of which is  the  miles in such business within and without the state during such period. Receipts from the conduct of the railroad business or a trucking business are included in the denominator of the apportionment fraction.   6-a. Receipts  from  the  operation  of  vessels.  Receipts  from  the operation  of vessels are included in the numerator of the apportionment fraction as follows. The  amount  of  receipts  from  the  operation  of vessels  included  in  the  numerator  of  the apportionment fraction is determined by multiplying the amount of such receipts by a fraction, the numerator of which is the  aggregate  number  of  working  days  of  the vessels  owned  or  leased  by the taxpayer in territorial waters of the state during the  period  covered  by  the  taxpayer's  report  and  the denominator  of  which  is  the  aggregate number of working days of all vessels owned or leased by the taxpayer  during  such  period.  Receipts from  the  operation  of  vessels are included in the denominator of the apportionment fraction.   7. Receipts  from  aviation  services.  (a)  Air  freight  forwarding. Receipts  of  a  taxpayer  from  the  activity of air freight forwarding acting as principal and like indirect air carrier receipts arising  from such  activity  shall  be included in the numerator of the apportionment fraction as follows: one hundred percent of such receipts  if  both  the pickup  and delivery associated with such receipts are made in the state and fifty percent of such receipts if  either  the  pickup  or  delivery associated  with  such  receipts  is  made in this state. Such receipts, whether the pickup or delivery associated with the receipts is within or without  the  state,  shall  be  included  in  the  denominator  of  the apportionment fraction.  (b)  Other  aviation  services.  (1)(A)  The  portion of receipts of a taxpayer from  aviation  services  (other  than  services  described  in paragraph  (a)  of  this  subdivision,  but  including the receipts of a qualified air freight forwarder) to be included in the numerator of  the apportionment  fraction  shall be determined by multiplying its receipts from such aviation services by  a  percentage  which  is  equal  to  the arithmetic average of the following three percentages:  (i)  the  percentage  determined  by  dividing  sixty  percent  of the aircraft arrivals and departures  within  this  state  by  the  taxpayer during  the  period covered by its report by the total aircraft arrivals and departures  within  and  without  this  state  during  such  period; provided,  however,  arrivals  and  departures solely for maintenance or repair, refueling  (where  no  debarkation  or  embarkation  of  traffic occurs), arrivals and departures of ferry and personnel training flights  or  arrivals  and  departures in the event of emergency situations shall not be included in computing  such  arrival  and  departure  percentage; provided, further, the commissioner may also exempt from such percentage aircraft  arrivals  and  departures of all non-revenue flights including flights involving the transportation of officers or employees  receiving air  transportation  to  perform maintenance or repair services or where such officers or  employees  are  transported  in  conjunction  with  an emergency  situation or the investigation of an air disaster (other than on a scheduled flight); provided, however, that arrivals and  departures of   flights   transporting   officers   and   employees  receiving  air transportation for purposes other than specified above  (without  regard to  remuneration)  shall  be  included  in  computing  such  arrival and departure percentage;  (ii) the percentage  determined  by  dividing  sixty  percent  of  the revenue  tons  handled  by  the  taxpayer  at airports within this state during such period by the total revenue tons handled by it  at  airports within and without this state during such period; and  (iii)  the  percentage  determined  by  dividing  sixty percent of the taxpayer's originating revenue within this state for such period by  its total originating revenue within and without this state for such period.  (B)  As  used herein the term "aircraft arrivals and departures" means the number of landings and takeoffs of the aircraft of the taxpayer  and the  number  of  air  pickups  and  deliveries  by  the aircraft of such taxpayer; the term "originating revenue" means revenue to  the  taxpayer from the transportation or revenue passengers and revenue property first received  by the taxpayer either as originating or connecting traffic at airports; and the  term  "revenue  tons  handled"  by  the  taxpayer  at airports  means the weight in tons of revenue passengers (at two hundred pounds per  passenger)  and  revenue  cargo  first  received  either  as originating  or connecting traffic or finally discharged by the taxpayer at airports;  (2) All such receipts of a taxpayer from aviation  services  described in  this  paragraph are included in the denominator of the apportionment fraction.  (3) A corporation is a qualified air freight forwarder with respect to another corporation:  (A) if it owns or controls either directly or indirectly  all  of  the capital  stock of such other corporation, or if all of its capital stock is owned or controlled either  directly  or  indirectly  by  such  other corporation,  or  if  all  of  the capital stock of both corporations is owned or controlled either directly or indirectly by the same interests,  (B) if it is principally  engaged  in  the  business  of  air  freight forwarding, and  (C)  if  its air freight forwarding business is carried on principally with the airline or airlines operated by such other corporation.   8. Receipts from sales of advertising. (a) The amount of receipts from sales of advertising  in  newspapers  or  periodicals  included  in  the numerator of the apportionment fraction is determined by multiplying the total  of  such  receipts  by  a fraction, the numerator of which is the number of newspapers and periodicals  delivered  to  points  within  the state  and  the  denominator  of  which  is the number of newspapers and periodicals delivered to points within and without the state. The  total of  such receipts from sales of advertising in newspapers or periodicals is included in the denominator of the apportionment fraction.  (b) The amount of receipts from sales of advertising on television  or radio  included  in  the  numerator  of  the  apportionment  fraction is determined by multiplying the total of such receipts by a fraction,  the numerator  of  which  is  the  number of viewers or listeners within the  state and the denominator of which is the number of viewers or listeners within and without the state. The total of such receipts from  sales  of advertising  on  television  and radio is included in the denominator of the apportionment fraction.  (c)  The amount of receipts from sales of advertising not described in paragraph (a) or (b) of this subdivision that is furnished, provided  or delivered  to,  or accessed by the viewer or listener through the use of wire, cable, fiber-optic, laser, microwave,  radio  wave,  satellite  or similar  successor  media  or  any  combination thereof, included in the numerator of the apportionment fraction is determined by multiplying the total of such receipts by a fraction, the  numerator  of  which  is  the number  of  viewers or listeners within the state and the denominator of which is the number of viewers  or  listeners  within  and  without  the state. The total of such receipts from sales of advertising described in this  paragraph  is  included  in  the  denominator of the apportionment fraction.   9. Receipts from transportation or transmission of gas through  pipes. Receipts  from  the  transportation or transmission of gas through pipes are included in the numerator of the apportionment fraction as  follows. The  amount  of  receipts from the transportation or transmission of gas through pipes included in the numerator of the apportionment fraction is determined by multiplying  the  total  amount  of  such  receipts  by  a fraction,  the numerator of which is the taxpayer's transportation units within the  state  and  the  denominator  of  which  is  the  taxpayer's transportation units within and without the state. A transportation unit is  the  transportation  of one cubic foot of gas over a distance of one mile.  The  total  amount  of  receipts  from  the   transportation   or transmission  of gas through pipes is included in the denominator of the apportionment fraction.   10. (a) Receipts from other  services  and  other  business  receipts. Receipts from services not addressed in subdivisions one through nine of this   section  and  other  business  receipts  not  addressed  in  such subdivisions shall be included in the  numerator  of  the  apportionment fraction  if  the  location  of  the  customer is within the state. Such receipts from customers within and without the state are included in the denominator of the apportionment  fraction.  Whether  the  receipts  are included  in  the  numerator of the apportionment fraction is determined according to the hierarchy of method set forth in paragraph (b) of  this subdivision.  The taxpayer must exercise due diligence under each method described in such paragraph (b) before rejecting it  and  proceeding  to the  next  method  in  the hierarchy, and must base its determination on information known to the taxpayer or information that would be known  to the taxpayer upon reasonable inquiry.  (b) Hierarchy of methods. (1) The benefit is received in this state;  (2) Delivery destination;  (3)  The  apportionment  fraction  for  such receipts within the state determined pursuant to this subdivision for the preceding taxable  year; or  (4)  The apportionment fraction in the current taxable year determined pursuant to this subdivision for those  receipts  that  can  be  sourced using  the hierarchy of sourcing methods in subparagraphs one and two of this paragraph.   11. If it shall appear  that  the  apportionment  fraction  determined pursuant  to  this section does not result in a proper reflection of the taxpayer's business income or capital within the state, the commissioner is authorized in his or her discretion to adjust it, or the taxpayer may request that the commissioner adjust it, by (a) excluding  one  or  more items  in  such  determination, (b) including one or more other items in  such determination,  or  (c)  any  other  similar  or  different  method calculated  to  effect  a  fair and proper apportionment of the business income and capital reasonably attributed to the state. The party seeking the  adjustment  shall  bear the burden of proof to demonstrate that the apportionment fraction determined pursuant  to  this  section  does  not result  in  a  proper  reflection  of  the taxpayer's business income or capital  within  the  state  and  that  the   proposed   adjustment   is appropriate.