2023 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.