2023 New York Laws › TAX - Tax › Article 33 - Franchise Taxes on Insurance Corporations › 1504 - Allocation.

§  1504.  Allocation. (a) Allocation of entire net income. The portion
of entire net income of a taxpayer to  be  allocated  within  the  state
shall  be the amount determined by multiplying such income by the income
allocation percentage determined by:
(1) ascertaining the percentage which the taxpayer's New York premiums
for the taxable year bear to  the  taxpayer's  total  premiums  for  the
taxable year, and multiplying such percentage by nine,
(2)  ascertaining the percentage which total wages, salaries, personal
service compensation and commissions for the taxable year of  employees,
agents  and  representatives of the taxpayer within New York bear to the
total wages, salaries, personal service compensation and commissions for
the  taxable  year  of  all  the  taxpayer's   employees,   agents   and
representatives, and
(3)  adding  the  amounts  determined under paragraphs one and two and
dividing the sum by ten.
(b) Definition of premiums. (1)  For  purposes  of  paragraph  one  of
subdivision  (a),  the  term  "premium" includes all amounts received as
consideration for insurance contracts, reinsurance contracts and annuity
contracts and shall include premium deposits, assessments, policy  fees,
membership fees and every other compensation for such contract. The term
"total  premiums"  means  total  gross  premiums  or deposit premiums or
assessments, less returns thereon, on all policies,  annuity  contracts,
certificates,  renewals,  policies subsequently cancelled, insurance and
reinsurance  executed,  issued  or  delivered  on  property  or   risks,
including premiums for reinsurance assumed, less dividends on such total
premiums,  including  unused  or unabsorbed portions of premium deposits
paid or credited to policyholders but not including  deferred  dividends
paid  in  cash to policyholders on maturing policies, nor cash surrender
values, and less premiums on reinsurance ceded.
(2) For purposes of  paragraph  one  of  subdivision  (a),  "New  York
premiums" shall be determined as follows:
(A) For all premiums other than premiums described in subparagraph (B)
or  (C)  of  this  paragraph,  "New York premiums" means that portion of
total premiums written,  procured  or  received  on  property  or  risks
located or resident in New York and shall also include premiums written,
procured  or  received  in  this  state  on  business  which  cannot  be
specifically assigned as located or  resident  in  any  other  state  or
states,  other  than  premiums  described  in subdivision (b) of section
fifteen hundred twelve. Provided however, in the case  of  special  risk
premiums, "New York premiums" shall include only those premiums written,
procured  or  received  in  this  state  on property or risks located or
resident in this state.
(B)  For  premiums  on  reinsurance,  "New  York  premiums"  shall  be
determined as provided in subparagraph (A) of this paragraph except that
where  the  location or residence of the property or risk covered by the
reinsurance cannot be ascertained, "New York premiums"  shall  mean  the
portion of premiums for reinsurance determined by multiplying the amount
of  premiums  from  reinsurance ceded by each company to the taxpayer by
the percentage determined under paragraph one of subdivision (a) of this
section for each such ceding company for the preceding taxable year.
(C) For premiums from marine insurance, "New York premiums" means  (i)
that  portion  of  premiums  from  such marine insurance as are written,
procured or received on property or risks located or  resident  in  this
state  and,  (ii)  to  the  extent not otherwise includible in "New York
premiums"  under  clause  (i)  hereof,  the  premiums  for  such  marine
insurance written within this state on property or risks which cannot be
specifically  assigned  as  located  or  resident  in any other state or
country, provided however, in the case of special  risk  premiums,  "New

York  premiums"  shall  include only those premiums written, procured or
received in this state on property or risks located or resident in  this
state.  For  purposes  of  this  subparagraph,  marine  insurance  means
insurance   written,  procured  or  received  upon  hulls,  freights  or
disbursements, or upon goods, wares, merchandise and all other  personal
property  and  interests  therein,  in  the  course of exportation from,
importation into any country,  or  transportation  coastwise,  including
transportation   by  land  or  water  from  point  of  origin  to  final
destination in respect to, appertaining to, or in connection  with,  any
and  all  risks  or perils of navigation, transit or transportation, and
while being prepared for, and while awaiting shipment,  and  during  any
delays, storage, transshipment or reshipment incident thereto, including
war risks and marine builder's risks.
(3)  For  the  purpose  of  paragraph  one  of subdivision (a), "total
premiums" shall not include special risk  premiums  unless  the  special
risk premium was written, procured or received in this state on property
or  risks  located  or resident in this state. "Total premiums" shall be
reported on a written basis or on a paid-for basis, consistent with  the
basis  required by the annual statement filed with the superintendent of
financial services pursuant  to  section  three  hundred  seven  of  the
insurance law.
(c)  Allocation  of  capital.  (1)  Business  capital  and  investment
capital.  The portion of the taxpayer's business and investment  capital
of  a  taxpayer  to be allocated within the state shall be determined by
multiplying the amount thereof by the allocation  percentage  determined
as provided in subdivision (a) of this section.
(2)  Subsidiary  capital.  The  portion  of  the taxpayer's subsidiary
capital to  be  allocated  within  the  state  shall  be  determined  by
multiplying the amount of subsidiary capital invested in each subsidiary
during  the  period  covered  by its return (or, in the case of any such
capital so invested during only a portion of such period,  such  portion
of  such  capital)  by the percentage, if any, of the entire capital, or
the issued capital stock, or the net income, as the case may be, of such
subsidiary required to be allocated within the state on  the  return  or
returns,  if any, required of such subsidiary under this chapter for the
preceding year, and adding the sums so obtained.
(d) If  it  shall  appear  to  the  tax  commission  that  the  income
allocation  percentage  determined  as  hereinabove  provided  does  not
properly reflect the activity, business or income of a  taxpayer  within
the state, the tax commission shall be authorized, in its discretion, to
adjust it by:
(1) excluding one or more factors therein;
(2)  including  one  or  more other factors therein, such as expenses,
purchases, receipts other  than  premiums,  real  property  or  tangible
personal property;
(3)  or  any  other similar or different method calculated to effect a
fair  and  proper  allocation  of  the  income  and  capital  reasonably
attributable  to  the  state. The tax commission from time to time shall
publish all rulings of general  public  interest  with  respect  to  any
application of the provisions of this subdivision.