2023 New York Laws › TAX - Tax › Article 9-A - Franchise Tax on Business Corporations › 209 - Imposition of Tax; Exemptions.

§  209.  Imposition  of  tax;  exemptions. 1. (a) For the privilege of
exercising  its  corporate  franchise,  or  of  doing  business,  or  of
employing  capital,  or of owning or leasing property in this state in a
corporate or organized capacity, or of maintaining  an  office  in  this
state,  or  of deriving receipts from activity in this state, for all or
any part of each of its fiscal or  calendar  years,  every  domestic  or
foreign  corporation,  except corporations specified in subdivision four
of this section, shall annually pay a franchise tax, upon the  basis  of
its  business income base, or upon such other basis as may be applicable
as hereinafter provided, for  such  fiscal  or  calendar  year  or  part
thereof,  on  a  report  which  shall  be  filed,  except as hereinafter
provided, on or before the fifteenth day of March  next  succeeding  the
close  of  each  such  year,  for taxable years beginning before January
first, two thousand sixteen, and on or before the fifteenth day of April
next succeeding the close of each such year, for taxable years beginning
on or after January first, two thousand sixteen, or, in the  case  of  a
corporation  which reports on the basis of a fiscal year, within two and
one-half months after the close of such fiscal year, for  taxable  years
beginning  before  January first, two thousand sixteen, and on or before
the fifteenth day of the fourth month after the  close  of  such  fiscal
year,  for  taxable  years  beginning  on  or  after  January first, two
thousand sixteen, and shall be paid as hereinafter provided.
(b) A corporation is deriving receipts from activity in this state  if
it  has receipts within this state of one million dollars or more in the
taxable year. For purposes of this section, the  term  "receipts"  means
the  receipts  that  are subject to the apportionment rules set forth in
section two hundred ten-A of this article, and the term "receipts within
this state"  means  the  receipts  included  in  the  numerator  of  the
apportionment  factor determined under section two hundred ten-A of this
article. For purposes of this paragraph, receipts from processing credit
card transactions for merchants include merchant discount fees  received
by the corporation.
(c) A corporation is doing business in this state if (i) it has issued
credit  cards  to  one  thousand  or  more  customers who have a mailing
address within this state as of the last day of its taxable  year,  (ii)
it  has  merchant customer contracts with merchants and the total number
of locations covered by those contracts  equals  one  thousand  or  more
locations  in  this  state to whom the corporation remitted payments for
credit card transactions during the taxable year, or (iii)  the  sum  of
the  number of customers described in subparagraph (i) of this paragraph
plus the number of locations  covered  by  its  contracts  described  in
subparagraph (ii) of this paragraph equals one thousand or more. As used
in  this  subdivision,  the  term  "credit  card" includes bank, credit,
travel and entertainment cards.
(d)(i) A corporation with less than one million dollars but  at  least
ten  thousand  dollars  of  receipts within this state in a taxable year
that is part of a unitary group that  meets  the  ownership  test  under
section  two  hundred  ten-C  of  this article is deriving receipts from
activity in this state if the receipts within this state of the  members
of the unitary group that have at least ten thousand dollars of receipts
within  this  state  in  the  aggregate  meet the threshold set forth in
paragraph (b) of this subdivision.
(ii) A corporation that does not meet any of the thresholds set  forth
in  paragraph (c) of this subdivision but has at least ten customers, or
locations, or customers and locations, as described in paragraph (c)  of
this  subdivision,  and  is  part  of  a  unitary  group  that meets the
ownership test under section two hundred ten-C of this article is  doing
business  in  this  state  if  the  number  of  customers, locations, or

customers and locations, within this state of the members of the unitary
group that have at least ten  customers,  locations,  or  customers  and
locations,  within  this  state  in  the  aggregate  meets  any  of  the
thresholds set forth in paragraph (c) of this subdivision.
(iii)  For  purposes  of  this paragraph, any corporation described in
paragraph (c) of subdivision two of section two hundred  ten-C  of  this
article shall not be considered.
(e)  At  the  end  of  each  year,  the  commissioner shall review the
cumulative  percentage  change  in  the  consumer   price   index.   The
commissioner  shall  adjust  the  receipt  thresholds  set forth in this
subdivision if the consumer price index has changed by  ten  percent  or
more  since  January first, two thousand fifteen, or since the date that
the thresholds were last adjusted under this subdivision. The thresholds
shall be adjusted to reflect that cumulative percentage  change  in  the
consumer  price  index.  The adjusted thresholds shall be rounded to the
nearest one thousand dollars. As used in this paragraph, "consumer price
index" means the consumer price index for all  urban  consumers  (CPI-U)
available  from  the  bureau  of  labor  statistics of the United States
department of labor. Any adjustment shall  apply  to  tax  periods  that
begin after the adjustment is made.
(f)  If  a partnership is doing business, employing capital, owning or
leasing property in this state, maintaining an office in the  state,  or
deriving receipts from activity in this state, any corporation that is a
partner  in  such partnership shall be subject to tax under this article
as described in the regulations of the commissioner.
2. A foreign corporation shall not be deemed  to  be  doing  business,
employing  capital, owning or leasing property, or maintaining an office
in this state, or deriving receipts from activity in this state, for the
purposes of this article, by reason  of  (a)  the  maintenance  of  cash
balances  with  banks  or  trust  companies  in  this  state, or (b) the
ownership of shares of stock or securities kept in this state,  if  kept
in  a  safe  deposit box, safe, vault or other receptacle rented for the
purpose, or if pledged as collateral security, or if deposited with  one
or  more  banks  or  trust  companies,  or  brokers who are members of a
recognized security exchange, in safekeeping or custody accounts, or (c)
the taking of any action by any such bank or trust  company  or  broker,
which is incidental to the rendering of safekeeping or custodian service
to  such  corporation, or (d) the maintenance of an office in this state
by one or more officers or directors of  the  corporation  who  are  not
employees  of  the corporation if the corporation otherwise is not doing
business in this state, and does not employ  capital  or  own  or  lease
property  in  this  state,  or  (e) the keeping of books or records of a
corporation in this state if such books  or  records  are  not  kept  by
employees of such corporation and such corporation does not otherwise do
business, employ capital, own or lease property or maintain an office in
this state, or (f) any combination of the foregoing activities.
2-a.  An  alien  corporation shall not be deemed to be doing business,
employing capital, owning or leasing property, maintaining an office  in
this  state,  or  deriving receipts from activity in this state, for the
purposes of this article, if its activities in this  state  are  limited
solely  to (a) investing or trading in stocks and securities for its own
account within the  meaning  of  clause  (ii)  of  subparagraph  (A)  of
paragraph  (2)  of subsection (b) of section eight hundred sixty-four of
the internal revenue code or (b) investing or trading in commodities for
its own account within the meaning of clause (ii) of subparagraph (B) of
paragraph (2) of subsection (b) of section eight hundred  sixty-four  of
the internal revenue code or (c) any combination of activities described
in paragraphs (a) and (b) of this subdivision. An alien corporation that

under  any  provision  of  the internal revenue code is not treated as a
"domestic corporation"  as  defined  in  section  seven  thousand  seven
hundred one of such code and has no effectively connected income for the
taxable  year  pursuant  to  clause  (iv)  of  the  opening paragraph of
subdivision nine of section two hundred eight of this article shall  not
be subject to tax under this article for that taxable year. For purposes
of  this  article, an alien corporation is a corporation organized under
the laws of a country, or any political subdivision thereof, other  than
the  United  States,  or  organized  under  the  laws  of  a possession,
territory or commonwealth of the United States.
3. Any receiver, referee, trustee, assignee or other fiduciary, or any
officer or agent appointed by any court, who conducts  the  business  of
any  corporation, shall be subject to the tax imposed by this article in
the same manner and to the same extent as if the business were conducted
by the agents or officers of such corporation. A  dissolved  corporation
which  continues  to  conduct  business shall also be subject to the tax
imposed by this article.
4. Corporations liable to tax under sections one hundred  eighty-three
to  one  hundred  eighty-four-a,  inclusive,  corporations taxable under
article thirty-three of this chapter, any trust company organized  under
a  law of this state all of the stock of which is owned by not less than
twenty savings banks organized under a law of this state, a captive REIT
or a captive RIC filing a  combined  return  under  subdivision  (f)  of
section  fifteen  hundred fifteen of this chapter, and housing companies
organized and operating pursuant to the provisions  of  article  two  or
article  five of the private housing finance law and housing development
fund companies organized pursuant to the provisions of article eleven of
the private housing finance law shall not be subject to tax  under  this
article.
5.  For  any taxable year of a real estate investment trust as defined
in section eight hundred fifty-six of the internal revenue code in which
such trust is subject to federal income  taxation  under  section  eight
hundred  fifty-seven  of such code, such trust shall be subject to a tax
computed under either paragraph (a) or (d) of subdivision one of section
two hundred ten of this chapter, whichever is greater, and shall not  be
subject to any tax under article thirty-three of this chapter except for
a  captive REIT required to file a combined return under subdivision (f)
of section fifteen hundred fifteen of this chapter. In the case of  such
a  real  estate investment trust, including a captive REIT as defined in
section two of this chapter, the term "entire net  income"  means  "real
estate  investment  trust taxable income" as defined in paragraph two of
subdivision (b) of section eight hundred  fifty-seven  (as  modified  by
section eight hundred fifty-eight) of the internal revenue code, subject
to the modifications required by subdivision nine of section two hundred
eight of this article.
6. For any taxable year of a DISC, not exempt from tax under paragraph
(i)  of  subdivision  nine of section two hundred eight of this article,
the taxes imposed by subdivision one of this section shall  be  computed
only under either paragraph (b) or (d) of subdivision one of section two
hundred ten of this chapter, whichever is greater.
7. For any taxable year, beginning on or after January first, nineteen
hundred  eighty of a regulated investment company, as defined in section
eight hundred fifty-one of the internal  revenue  code,  in  which  such
company  is  subject  to  federal  income  taxation  under section eight
hundred fifty-two of such code, such company shall be subject to  a  tax
computed under either paragraph (a) or (d) of subdivision one of section
two  hundred ten of this chapter, whichever is greater, and shall not be
subject to any tax under article thirty-three of this chapter except for

a captive RIC required to file a combined return under  subdivision  (f)
of  section fifteen hundred fifteen of this chapter. In the case of such
a regulated investment company, including a captive RIC  as  defined  in
section  two  of  this  chapter,  the  term  "entire  net  income" means
"investment company taxable income"  as  defined  in  paragraph  two  of
subdivision  (b)  of  section  eight  hundred  fifty-two, as modified by
section eight hundred fifty-five, of the internal revenue code plus  the
amount taxable under paragraph three of subdivision (b) of section eight
hundred  fifty-two of such code subject to the modifications required by
subdivision nine of section two hundred eight of this chapter.
8. For any taxable year beginning  on  or  after  January  first,  two
thousand  six, a corporation that is no longer doing business, employing
capital, or owning  or  leasing  property,  or  deriving  receipts  from
activity  in  this  state  in a corporate or organized capacity that has
filed a final tax return with the department for the last  tax  year  it
was  doing  business and has no outstanding tax liability for such final
tax return or any tax return for prior tax years shall  be  exempt  from
all  taxes  imposed  by  paragraph (d) of subdivision one of section two
hundred ten of this article for tax years following the last  year  such
corporation was doing business.
9.  For any taxable year beginning on or after January first, nineteen
hundred eighty-seven, an organization  described  in  paragraph  two  or
twenty-five  of  subdivision  (c)  of  section  five  hundred one of the
internal revenue code of nineteen hundred  eighty-six  shall  be  exempt
from all taxes imposed by this article.
10.  QSSS.  For  exemption  from  tax  of  a  qualified  subchapter  S
subsidiary, see paragraph (k) of subdivision nine of section two hundred
eight of this article.
11. Except as provided in subparagraph eighteen of  paragraph  (a)  of
subdivision  nine  of  section  two  hundred  eight  of  this article, a
corporation that is a qualified entity of a New  York  state  innovation
hot  spot  shall  be  subject only to the fixed dollar minimum tax under
paragraph (d) of subdivision one of section  two  hundred  ten  of  this
article, as provided in section thirty-eight of this chapter.
12.   All   farmers',  fruit  growers'  and  other  like  agricultural
corporations organized and operated on  a  co-operative  basis  for  the
purposes   expressed   in   and   as  provided  under  the  co-operative
corporations law  of  the  state  of  New  York,  whether  or  not  such
corporations have capital stock, shall be exempt from taxation under the
provisions of this article.