New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter F - Tax On The Furnishing Of Utility Services › Part 45 - Gross Income › Section 45.13 - Interest, dividends and royalties

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The law provides that there shall be
				  included in gross income "receipts from interest, dividends and royalties,
				  derived from sources within this state other than such as are received from a
				  corporation a majority of whose voting stock is owned by the taxpaying utility,
				  without any deduction therefrom for any expenses whatsoever incurred in
				  connection with the receipt thereof".
(b) Where the corporation paying the dividend
				  or interest conducts all of its business within this State, no problem as to
				  the source of the dividend or interest is presented. The entire amount of the
				  dividend or interest received from such corporation is from a source within
				  this State and required to be included in gross income. Where, however, the
				  corporation paying the dividend or interest conducts its business both within
				  and without the State, and has physical assets located both within and without
				  the State, the proportion of the dividend or interest received, to be included
				  in gross income, will be such portion thereof as the physical assets of the
				  dividend or interest paying corporation within this State bears to all its
				  physical assets, wherever located. However, the total amount of the dividend or
				  interest should be reported and a deduction taken for the portion not allocated
				  to this State.
Question 49:A utility, owning stock in the A corporation,
					 receives dividends on such stock amounting to $20,000. All of the physical
					 assets of the A corporation are within this State. Should the total amount of
					 such dividends be included in its gross income? Answer: Yes.
Question 50:In the preceding question, if the A corporation
					 conducts its business both within and without this State and only 50 per cent
					 of its physical assets are within the State, is the entire amount of such
					 dividends taxable? Answer: No. There should be included in gross income the sum
					 of $20,000 and a deduction of $10,000 taken with the proper explanation.
Question 51:A utility owns 51 per cent of the voting stock
					 of a corporation and receives dividends on such stock. Are such dividends or
					 any part thereof taxable? Answer: No.
Question 52:A utility receives interest on bonds of the
					 United States and of the State of New York. Is such interest taxable? Answer:
					 No, interest received from bonds of the United States and of the States of New
					 York is exempt.
Question 53:A utility receives interest on bonds of the
					 Republic of France, the State of Massachusetts and the city of Chicago, Ill. Is
					 such interest taxable? Answer: No, such interest is not from sources within
					 this State.
(c) Royalties
				  from lease of gas wells are required to be included in gross income subject to
				  tax if the wells are located within this State.
Question 54:A gas company leases a gas well in New York to
					 a Pennsylvania company on a royalty basis. Are such royalties to be included in
					 gross income subject to tax? Answer: Yes.