New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter A - Business Corporation Franchise Tax › Part 1 - IMPOSITION OF TAX › Subpart 1-2 - CORPORATIONS SUBJECT TO TAX › Section 1-2.13 - Examples

Current through Register Vol. 46, No. 28, July 10, 2024
The following are examples of foreign corporations that
						either are subject to tax under article 9-A because they are doing business, or
						employing capital, or owning or leasing property in a corporate or organized
						capacity, or maintaining an office or deriving receipts from activity in New
						York State, or are not subject to tax. Each of these examples is intended for
						illustration purposes only and to be applicable only to the specific activity
						as identified in each example.
Example 1: A foreign corporation in another state
						operates or is organized for the purposes of buying and selling securities. It
						does not maintain a physical office anywhere, other than a statutory office in
						the state of its incorporation. Regular and continuous purchases of securities
						are directed by its officers or agents located in New York State. The
						corporation is subject to tax.
Example 2: A foreign corporation participates in a joint
						venture that carries on business in this State, but the foreign corporation is
						not otherwise engaged in any activities in New York State. The corporation is
						subject to tax.
Example 3: A foreign holding corporation coordinates and
						supervises in New York State activities of a subsidiary that is taxable in New
						York State. It also makes loans to its subsidiary and guarantees loans obtained
						by the subsidiary from sources other than the parent. The corporation is
						subject to tax.
Example 4: A foreign manufacturing corporation has its
						factories and offices located outside New York State. Its sole activity in New
						York State consists of holding or storing goods in a warehouse owned by an
						unrelated party. The corporation is subject to tax.
Example 5: A foreign corporation that has no office or
						other place of business in New York State leases automobiles to customers in
						New York State, with receipts from this activity equaling less than $1 million.
						The corporation is subject to tax.
Example 6: A foreign corporation formerly engaged in
						manufacturing in another state discontinues such business and transfers its
						office to New York State, where its activities consist solely of the
						acquisition of bonds and the receipt of interest on such bonds and the holding
						of directors' meetings. The corporation is subject to tax.
Example 7: A foreign corporation issues credit cards to
						500 customers with a mailing address in New York State as of the last day of
						its taxable year and has contracts with merchants covering 500 locations in New
						York State to which it remits payments during the taxable year. Since the
						corporation issues credit cards to customers with a mailing address in New York
						State and has merchant customer contracts that cover locations in New York
						State to which it remits payments for credit card transactions, and the sum of
						the number of customers and the number of locations is 1,000, the corporation
						is subject to tax.
Example 8: Three foreign corporations are part of the
						same unitary group that meets the ownership test under section 210-C and
						Subpart 6-2 of this Subchapter, all of the members of which each have at least
						$10,000 of receipts from activity in New York State. They are a bank, a
						broker-dealer, and an insurance company subject to tax under article 33. The
						bank and the broker-dealer together have $900,000 of receipts from activity in
						New York State. The insurance company has $300,000 of receipts from activity in
						New York State. Since the insurance company is a corporation that cannot be
						included in a combined report under section 210-C(2)(c) and section
						6-2.6  of this Subchapter, its New
						York receipts will not be included for purposes of determining whether the
						unitary group is deriving receipts from activity in New York State. Therefore,
						the bank and the broker-dealer are not subject to tax in New York State.
Example 9: A foreign corporation organized as a bank in
						another state has interest income from Federal funds, but no other New York
						receipts. Since the corporation's only New York receipts are from interest
						income from Federal funds, the corporation is not subject to tax.