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 4 - APPORTIONMENT › Subpart 4-3 - RECEIPTS FROM THE SALE OF, RENTAL OF, LICENSE TO USE, AND GRANTING OF REMOTE ACCESS TO DIGITAL PRODUCTS AND DIGITAL SERVICES › Section 4-3.11 - Examples

Current through Register Vol. 46, No. 28, July 10, 2024
For purposes of these examples, it can be assumed that
						the corporation has met all the requirements of due diligence, unless otherwise
						provided, and that the business address presumption does not apply.
Example 1: Software Corp sells tax preparation software
						to individuals through its website. When individual customers purchase the
						software, Software Corp provides the software on a disk shipped to the
						customer's address. Customer A purchases the software and has it shipped to her
						billing address in New York State. Software Corp ships a box to Customer A that
						contains the software on a disk and a user manual explaining how the software
						works and troubleshooting tips. Computer software by whatever means delivered
						is considered to be a digital product and therefore receipts from the software
						are sourced under the rules in this Subpart. Because the product is purchased
						online, it does not qualify for the special rule for computer software sold at
						a retail location. Although the sale of the software to Customer A includes the
						user manual, which is tangible personal property, the user manual is incidental
						to the actual sale of the software and, therefore, the entire receipt is
						sourced as a digital product. It is presumed that Customer A primarily uses the
						software at the billing address, which is located within New York State.
						Software Corp includes the receipt in New York receipts and everywhere
						receipts.
Example 2: Develop Corp, a software development
						corporation located in State A, enters into a contract with a business
						customer, Purchaser Corp, which is physically located in both New York and
						State A, to develop custom software to be licensed to Purchaser Corp's
						business. Develop Corp delivers the software electronically from its office in
						State A to Purchaser Corp. Purchaser Corp will primarily use the software at
						the location where its employees utilize the software. As no special rules
						apply to this receipt, Develop Corp must use its books and records to determine
						where the software will be primarily used. Based on Develop Corp's records, it
						is providing Purchaser Corp 100 licenses to use the software at Purchaser
						Corp's New York State location and 300 licenses to use the software at
						Purchaser Corp's State A location. As a result, 25% of the receipt (100/400) is
						included in New York receipts. 100% of such receipt is included in everywhere
						receipts.
Example 3: Movie Corp sells movies for personal use to
						individual customers that either may be downloaded from the internet or
						received via DVD, a physical medium. Customer A purchases a digital download
						for a movie (a digital product) and pays with a credit card that has a billing
						address in State A. As no special rules apply, Movie Corp must use its books
						and records to determine where the movie will be primarily used. The general
						rule presumes that the digital product is primarily used at Customer A's
						billing address in State A. Therefore, the receipt from this sale is not
						included in New York receipts. The receipt from this sale is included in
						everywhere receipts.
Customer B purchases a DVD and requests it be shipped to
						an address in New York State. A DVD is not one of the methods of delivery
						specifically provided for in section 210-A(4), so the movie on a DVD is not
						considered a digital product. Therefore, Video Corp's receipt from Customer B
						is a receipt from the sale of tangible personal property and, as such, should
						be sourced pursuant to the rules for receipts from the sale of tangible
						personal property.
Example 4: Cable TV Corp, a corporation that is located
						outside of New York State, sells monthly subscriptions for cable television to
						individual customers in New York State and other states. Cable TV Corp provides
						cable television through cables that are installed at the location of each
						customer's television that will be receiving content. Cable TV Corp also has a
						billing address on file for each of its customers. While most of Cable TV
						Corp's customers have cable installed at their billing address, a number of
						Cable TV Corp's customers have cable installed at an address other than their
						billing address. The cable television subscription sold by Cable TV Corp is a
						digital product. As no special rules apply, the general rule presumes that the
						digital product is primarily used at an individual customer's billing address.
						However, either Cable TV Corp or the commissioner can overcome this presumption
						through clear and convincing evidence as to where the cable is installed, which
						better reflects where the digital product is primarily used.
Example 5: Security Corp sells cyber security software to
						200 business customers, including a Federal agency XYZ. XYZ has its
						headquarters located in Washington D.C., and 12 regional offices relatively
						similar in size located in 12 different states, one of which is New York State.
						Security Corp generally conducts business with a person at XYZ's headquarters,
						but Security Corp provides cyber security software to XYZ's entire network,
						which is utilized by XYZ employees at all of the 13 locations. As no special
						rules apply, Security Corp must use its books and records to determine the
						primary use location of the software. After making reasonable inquiries to
						Federal agency XYZ, it does not have more detailed information, such as the
						number of computers or the distribution of licenses among the locations.
						Security Corp uses reasonable approximation based on customer information to
						include 1/13 of the receipts from its cyber security software in New York
						receipts. Security Corp incudes 100% of such receipts in everywhere
						receipts.
Example 6: Office Corp, an office supply retailer, has
						physical stores located in New York and other states. Office Corp sells a
						variety of office supplies, including a multitude of prewritten computer
						software programs. When customers purchase items from Office Corp, they take
						possession of the purchased items immediately at the retail location. In the
						case of software purchases, customers can either purchase the software on a
						disk or can purchase a code to download the computer software at a later time.
						Office Corp's sale of prewritten software qualifies for the special rule for
						sales of computer software at retail locations. Therefore, Office Corp includes
						the receipts from the sale of the software in New York receipts to the extent
						the sales are made at the retail stores located in New York State. Office Corp
						includes 100% of such receipts in everywhere receipts.
Example 7: Music Corp provides music streaming services
						to individual customers for a monthly subscription fee. Customers can access
						Music Corp's service through an application on their mobile devices or by
						visiting Music Corp's website. Once in their account, individuals can listen to
						music on a variety of channels and indicate whether they like certain songs.
						Music Corp uses an algorithm to recommend songs to customers based on songs
						they have previously indicated that they like. As this service is entirely
						automated, it meets the definition of a digital service and therefore is
						sourced under the rules in this Subpart. As no special rules apply, Music Corp
						must use the general rule to determine the primary use location of its
						streaming services. Therefore, the primary use location is presumed to be at
						the billing addresses of its customers. To the extent that customers have
						billing addresses located in New York State, receipts from such customers are
						included in New York receipts. Music Corp must include 100% of its receipts
						from customers in everywhere receipts.
Example 8: Webapp located in State A sells subscription
						plans to its web-based video/voice conferencing service. This service allows
						its customers to hold meetings remotely using video and voice transmitted
						through a web browser. Meetings can be joined by attendees in multiple
						locations. When a customer purchases a subscription to Webapp's service, the
						customer may log into its online account to use the service at any location
						where it can access a web browser. Customers also can use this service to
						conduct meetings with parties who are not subscribers simply by sending the
						attendee an invitation to the meeting; this can be done from any location as no
						specialized software is required. Webapp's service is provided entirely online,
						without any human intervention by Webapp. Therefore, it is considered a digital
						service. Development Studio subscribes to Webapp's digital service and uses
						Webapp's service to hold numerous meetings with its customers and employees
						that access the service throughout the country. As no special rules apply,
						Webapp must use its books and records to determine the primary use location of
						its digital service. It determines that Development Studio's subscription for
						Webapp's digital service is used by employees of Development Studio's New York
						State office. Webapp includes 100% of this receipt in New York receipts and in
						everywhere receipts.
Example 9: Website Corp designs custom software and Web
						applications for use by various businesses. Travel Corp, located in State A,
						operates hotels in New York and other states and rents rooms to its customers.
						Travel Corp wants to make the ability to book a room accessible to its
						customers via the internet, so Travel Corp contracts with Website Corp to
						design a custom website using Travel Corp's name and methodology, which will
						allow Travel Corp's customers to book hotel rooms online for a fee. Under the
						contract, Travel Corp will pay Website Corp a flat annual fee to maintain and
						host the website. Website Corp is providing a digital service related to the
						facilitation of a room rental, which is a digital service related to real
						property. As Website Corp receives a flat annual fee, it must use reasonable
						approximation based on customer information to apportion the receipt under the
						special rule for digital services related to real property to the various real
						property locations. Therefore, Website Corp multiplies the receipt it receives
						from Travel Corp by a fraction, the numerator of which is the number of rooms
						rented in New York State via the website and the denominator of which is the
						number of rooms rented everywhere via the website. Website Corp includes 100%
						of such receipt in everywhere receipts.
Example 10: Room Corp operates a website that acts as a
						digital marketplace to facilitate the short-term rental of apartments and
						houses between individual homeowners and individuals looking for short-term
						rentals. Individual homeowners are able to list their homes on Room Corp's
						website and will pay Room Corp a small commission if someone books their
						property via Room Corp's website. In return Room Corp provides a variety of
						services to the homeowners automatically via their website, such as payment
						processing, liability insurance, and ID verification of renters. The digital
						service Room Corp is providing is related to the facilitation of a real
						property rental that is a digital service related to real property. Therefore,
						Room Corp must include the receipts from facilitating real property rentals in
						New York receipts to the extent the real property is located in New York State.
						Room Corp must include 100% of the receipts in everywhere receipts.
Example 11: Ticket Corp operates a website that allows
						individuals to purchase tickets to various live events. Sports Corp enters into
						a contract with Ticket Corp to list tickets for its sporting events on Ticket
						Corp's website and Ticket Corp retains a small commission for every ticket that
						is purchased through its website under this contract. Ticket Corp's fully
						automated website is providing the digital service of facilitating the purchase
						of an in-person service because the ticket sales are for a live sporting event
						and a live sporting event meets the definition of in-person service. Therefore,
						Ticket Corp should source its receipts from the commissions it receives for
						facilitating in-person services to the location of the venue hosting the
						event.
Example 12: Game Co, an online gaming company based in
						New York State, sells monthly subscriptions to individual customers. The
						majority of Game Co's customers do not pay with a credit card. They instead use
						an online payment transfer service to pay their monthly subscription fee and,
						therefore, do not provide Game Co with a billing address. To subscribe,
						individuals need to provide only a first name, screen name, password, and
						online payment information. As such, Game Co does not have enough information
						to determine the primary use location and, because Game Co's customers are
						individuals, Game Co does not need to make reasonable inquiries as to
						individuals' billing addresses. Although Game Co does not have address
						information for most of its subscribers, it can use IP address information to
						determine where the individual customers log into the website. Therefore, Game
						Co can use this information to reasonably approximate based on customer
						information the primary use location of its game and must include receipts from
						subscribers logging into its game from IP addresses located within New York
						State in New York receipts. Game Co includes 100% of such receipts in
						everywhere receipts.
Example 13: Marketplace Corp hosts a website that
						facilitates the sale of tangible personal property by unrelated individuals.
						Marketplace Corp does not take title to any of the tangible property posted on
						its website. Item sellers can create accounts on Marketplace Corp's website and
						list property for sale. Individual buyers can visit Marketplace Corp's website
						to view pages containing tangible property that item sellers are offering for
						sale. Marketplace Corp makes these pages readily available for consumer access
						at the request of the item sellers. Marketplace Corp receives two primary
						revenue streams from the item sellers:
(1) a small fee for listing tangible property
					 on Marketplace Corp's website, regardless of whether it sells; and
(2) a small commission for every sale of
					 tangible property made via Marketplace Corp's website. Both revenue streams are
					 services related to tangible personal property and, therefore, the special rule
					 applies.
Marketplace Corp receives the first revenue stream
						directly from the item seller when the item seller lists the tangible property
						on Marketplace Corp's website. In fact, Marketplace Corp receives this receipt
						regardless of whether the property is sold or the seller removes it from the
						website without a sale. Therefore, although it is a service related to tangible
						personal property, Marketplace Corp does not have information on where the
						tangible personal property is received by a buyer because, at the time the fee
						is received by Marketplace Corp, the property has not yet been and, in fact,
						may never be, sold. Furthermore, the service Marketplace Corp provided to
						generate this receipt is complete at the time the tangible property is listed
						and there is not yet a consumer in the transaction, so this receipt is not
						generated in an intermediary transaction. Receipts from listing fees are
						included in New York receipts using the general rule based on the primary use
						location of the item seller. Marketplace Corp includes all receipts from
						listing fees generated via its website in everywhere receipts.
In contrast, Marketplace Corp is receiving the second
						revenue stream from item sellers at the time the tangible personal property is
						sold and, as such, Marketplace Corp has information on where the tangible
						personal property will be delivered to the consumer.
Marketplace Corp includes receipts from its second
						revenue stream for commissions in New York receipts to the extent the
						commission was received for facilitating the sale of tangible personal property
						delivered into New York State. Marketplace Corp includes all receipts from
						commissions received via its website in everywhere receipts.
Example 14: Software Corp sells case management software
						to 200 large corporations. Business Corp purchases software from Software Corp
						to be installed on laptops used by Business Corp's employees. The contract
						between Business Corp and Software Corp is managed at Business Corp's office in
						State A, but Business Corp's employees spend the majority of their time working
						throughout the country, including in New York. As no special rules apply,
						Software Corp must use its books and records to determine where the software
						will be primarily used. Software Corp's books and records do not provide any
						information on the amount of time that Business Corp's employees spend working
						in other states to determine where the software is primarily used. Because
						Software Corp only has 200 customers, it must ask Business Corp where its
						employees utilize the software. Business Corp is not able to provide such
						information, nor would population information be relevant to software used by
						Business Corp's employees in internal operations. Therefore, Software Corp does
						not have adequate information to determine the primary use locations or
						reasonably approximate such locations. It must source the receipt to where the
						digital product is received, which is presumed to be at the location where the
						contract is managed. Business Corp manages the contract with Software Corp at
						its office in State A; therefore, the receipt is not included in New York
						receipts. Software Corp must include 100% of the receipt in everywhere
						receipts.
Example 15: Sales Corp provides only one type of digital
						product to approximately 200 business customers. In tax year 2021, all of its
						receipts were sourced under this Subpart and, as a result, 45% of Sales Corp's
						receipts were included in New York receipts. In tax year 2022, Sales Corp
						continues to provide only one type of digital product to its customers. At the
						end of tax year 2022, Sales Corp's computer system crashes and it is unable to
						recover information it had obtained on where the digital product was primarily
						used. Upon reasonable inquiries to its known customers, Sales Corp still cannot
						obtain information on where the digital products were primarily used or
						determine where they were received. Therefore, under the preceding taxable year
						method, Sales Corp includes 45% of its 2022 receipts in New York receipts.
						Sales Corp includes 100% of receipts from this type of digital product in
						everywhere receipts.
Example 16: Taxpayer A has $10,000 in receipts from a new
						type of digital product. After exercising due diligence, Taxpayer A cannot
						determine where the digital product is primarily used or where it was received.
						Further, because this is a new type of digital product, it cannot use the
						preceding taxable year method. Therefore, under the current taxable year
						method, Taxpayer A must determine the portion of the $10,000 to include in New
						York receipts based on the apportionment of the receipts for all its other
						digital products and digital services using the primary use location method and
						the apportionment of the receipts for all its other digital products and
						digital services using the where received method. In the current taxable year,
						Taxpayer A has $65,000 in digital products receipts and $85,000 in digital
						services receipts sourced using the primary use location method and the where
						received method, of which $75,000 (or 50 percent) are New York receipts.
						Therefore, Taxpayer A includes 50% of the $10,000, or $5,000, of receipts from
						the new type of digital product in New York receipts. Taxpayer A includes 100%
						of receipts from the new type of digital product in everywhere receipts.
Taxpayer B also has $10,000 in receipts from a new type
						of digital product that, after exercising due diligence, it cannot source using
						either the primary use method or the where received method. However, unlike
						Taxpayer A, Taxpayer B has been able to source all its other receipts from
						digital products and digital services using the primary use location method and
						has determined that 40 percent of all those other receipts are New York
						receipts. Therefore, under the current taxable year method, $4000, or 40%, of
						the receipts from this new digital product are included in Taxpayer B's New
						York receipts. Taxpayer B includes 100% of the receipts from the new type of
						digital product in everywhere receipts.
Example 17: App Design Corp (the taxpayer), a corporation
						located in State B, provides mobile phone application ("app") design services
						to its customer, Bank Corp (the business customer), which has branches located
						in New York and other states. Bank Corp contracts with App Design Corp to have
						App Design Corp design an app that will be readily available for free download
						by any of Bank Corp's account holders (the consumers) via a digital
						marketplace. App Design Corp also will provide periodic updates to ensure the
						app runs smoothly and the information transmitted through the app is secure.
						App Design Corp is receiving receipts from Bank Corp in an intermediary
						transaction because App Design Corp is making its digital product readily
						available to consumers at the request of Bank Corp, and App Design Corp
						maintains involvement with the app after consumers download it. As no special
						rule for determining primary use location applies, App Corp must determine
						where Bank Corp primarily uses the digital service, which is at the location
						where the consumers download and use the app.
App Design Corp cannot determine information on New York
						account holders who download the app based on its own books and records because
						it does not have information on either the primary use location or where the
						app is received by the consumers and, therefore, App Design Corp must make
						reasonable inquiries to Bank Corp for location statistics on account holders
						who download the app. Bank Corp cannot provide App Design Corp with any
						information after reasonable inquiries, so App Design Corp should look to
						publicly available information, such as the number of Bank Corp's bank branches
						located within and without New York State, and use the percentage of branches
						in New York to reasonably approximate based on customer information the primary
						use location of the app.
Example 18: Website Design Corp (the taxpayer) designs
						and maintains websites for unrelated parties. Database Corp (the business
						customer) develops an internet-based information database and enters into a
						contract with Website Design Corp to create a website and sell access to the
						database to individual customers (the consumers) for a small monthly fee. The
						contract specifies that Website Design Corp will retain a commission each month
						from every consumer that pays for access to the database and remit the
						remainder to Database Corp. Website Design Corp actively maintains and updates
						the website where it makes the database readily available on the internet for
						access by consumers at the request of Database Corp.
Therefore, Website Design Corp must apportion its
						receipts from commissions based on the location of the consumers rather than
						the location of Database Corp. As no special rule for determining primary use
						location applies, Website Design Corp must use the general rule to determine
						the primary use location of its digital service. As the consumers are
						individuals, Website Design Corp presumes the digital product will be primarily
						used at the billing addresses of the consumers. To the extent that consumers
						have billing addresses located in New York State, receipts from such customers
						are included in New York receipts. Website Design Corp must include 100% of its
						receipts in everywhere receipts.
Example 19: Research Corp, a corporation located in State
						D, compiles a digital collection of treatises on a variety of subjects and
						sells a copy of its collection to University A, located in New York. However,
						Research Corp does not provide continuing support after the sale and, if
						Research Corp were to update any information, it would sell this as a separate
						product. Therefore, after Research Corp delivers the copy of the digital
						collection to University A, it maintains no interaction with the product and
						provides no further services in connection with the receipt. For this reason,
						this is not considered an intermediary transaction. As no special rules apply,
						Research Corp must use its books and records to determine if it can ascertain
						the primary use location of the digital collection. Research Corp's books and
						records indicate that University A will use the digital collection at its
						location in New York State; therefore, the entire receipt is included in both
						New York receipts and everywhere receipts.
Example 20: Images Corp, a corporation located in State
						E, maintains an online database of digital images that it licenses to customers
						to use in a variety of publications. Receipts from the license to use the
						digital database are apportioned under these rules. Newspaper Corp, located in
						New York State, enters into a contract with Images Corp whereby, in exchange
						for a monthly flat fee, Newspaper Corp receives a license to use an unlimited
						number of images from Image Corp's online database in Newspaper Corp's print
						and digital publications that will be viewed by Newspaper Corp's subscribers
						worldwide. Images Corp's database is only accessible by Newspaper Corp directly
						and not by its subscribers; therefore, this is not an intermediary transaction.
						Images Corp must apportion the receipt it receives from Newspaper Corp under
						the general rule to the primary use location of Newspaper Corp. Newspaper Corp
						uses the images it selects from the online database when composing articles;
						therefore, Newspaper Corp's primary use location is where this editorial
						control is exercised. Because Newspaper Corp makes editorial decisions at its
						office located in New York State, the entire receipt is included in both New
						York receipts and everywhere receipts.
Example 21: Exchange Corp, a security exchange located
						in New York, has contracts with 300 brokerage firms that grant digital access
						to its exchange. Under the terms of the contract, employees of the firms are
						able to digitally access the exchange for purposes of purchasing or selling
						shares of stock on the exchange for a fee. Exchange Corp's contract with Trader
						Corp, one such brokerage firm, allows Trader Corp's 120 traders based in New
						York and 80 traders based in State A to buy and sell shares of stock on the
						exchange on behalf of clients. As Exchange Corp is not a registered securities
						broker or dealer, the fees it earns from allowing customers to trade on the
						exchange cannot be apportioned under the rules in section 210-A(5)(b).
						Furthermore, because the fee is for granting digital access to the exchange,
						the receipt is apportioned under the rules in this Subpart. This is not an
						intermediary transaction because Exchange Corp is not providing access to the
						exchange directly to consumers at Trader Corp's direction. Only Trader Corp's
						own employees have digital access to the exchange. For this reason, the receipt
						must be apportioned to the location where Trader Corp's traders primarily
						utilize the digital product.
Exchange Corp does not have adequate information to
						determine the exact location where the traders primarily use this digital
						product and, since Exchange Corp has more than 250 business customers that pay
						fees for substantially similar digital products, and no more than 5% of its
						receipts are from Trader Corp, Exchange Corp is not required to make reasonable
						inquiries to Trader Corp. Therefore, Exchange Corp must use its books and
						records to reasonably approximate where Trader Corp's traders primarily use the
						exchange. Since 60% of Trader Corp's traders are based in New York State, 60%
						of the receipts Exchange Corp receives from Trader Corp are included in New
						York receipts. Exchange Corp includes 100% of the receipts in everywhere
						receipts.
Example 22: Channel Corp operates a digital platform,
						available through Channel Corp's website or as a downloadable application, for
						individual subscribers to access Channel Corp's content for a monthly fee.
						Subscribers can subscribe either directly with Channel Corp. or through another
						entity.
For revenue earned directly by Channel Corp from its
						subscribers, it is presumed that an individual subscriber primarily accesses
						Channel Corp's digital content at its billing address. Therefore, receipts
						earned by subscribers with billing addresses in New York State are included in
						New York receipts. Channel Corp includes 100% of the receipts it earned from
						these subscribers in everywhere receipts.
Platform Corp (the business customer) operates a digital
						application store where individuals can download and purchase a subscription to
						various digital applications. Under the agreement between Channel Corp and
						Platform Corp, Platform Corp can sell subscriptions to Channel Corp's service
						in its marketplace for a fee set by Channel Corp in exchange for a commission.
						In addition, the agreement requires that Platform Corp receive all payments
						from individual subscribers for access to Channel Corp's service and must remit
						the fees, after retaining its commission, to Channel Corp.
While subscribers download Channel Corp's digital
						application from Platform Corp's platform, the subscribers access Channel
						Corp's service directly through its digital application to view content.
						Channel Corp actively maintains and updates the digital application, which is
						readily available for access by subscribers who pay for the service through
						Platform Corp. Platform Corp forwards these receipts, minus its commission, to
						Channel Corp. Therefore, these are receipts from an intermediary transaction
						and Channel Corp must apportion them based on the location of the subscribers
						(the consumers) rather than the location of Platform Corp. Channel Corp's books
						and records do not have information on the consumer's billing address.
						Therefore, Channel Corp must make reasonable inquiries to Platform Corp to
						determine where the subscribers access Channel Corp's digital application.
						After making such inquiries, Channel Corp still does not know the subscriber
						location so it reasonably approximates that location using third-party
						data.
Example 23: Channel Corp operates a digital platform,
						available through Channel Corp's website or as a downloadable application of
						digital content that can be accessed by users. Phone Corp sells phone
						subscription plans, some of which bundle access to various digital platforms of
						movies and TV shows operated by different providers as part of the package.
						Channel Corp enters into an agreement with Phone Corp (the business customer)
						that allows Phone Corp to bundle access to Channel Corp's digital platform in
						exchange for a fee set by Channel Corp. Under the agreement, Phone Corp may
						decide what fee to charge (or even not charge) its customers for the bundled
						service. After individual consumers purchase a phone plan that provides access
						to Channel Corp's digital content, the consumers access Channel Corp's digital
						platform through its website or by downloading Channel Corp's
						application.
Channel Corp actively maintains and updates the
						application, which is readily available for access by subscribers who pay for
						service through Phone Corp. Therefore, these are receipts from intermediary
						transactions and Channel Corp must apportion based on the location of the Phone
						Corp's users rather than the location of Phone Corp. It is presumed that the
						users primarily access the digital content at their billing address. Channel
						Corp's books and records do not contain the billing address of Phone Corp's
						users and, upon inquiries, Phone Corp did not provide this information.
						However, if Channel Corp collects location information when subscribers create
						an account to access Channel Corp's service, then Channel Corp may use such
						information to reasonably approximate use. To the extent the location is in New
						York State, the receipts are included in New York receipts. All receipts that
						Channel Corp receives from Phone Corp are included in everywhere
						receipts.